Palau’s current contract with the Palau International Ship Registry (PISR) is facing scrutiny, amid the rising frustration from the government on how the management of the registry is “contributing to significant, continuing embarrassment to the Republic of Palau.”
Presidential Chief of Staff Secilil Eldebechel said the government is giving PISR a “final window of opportunity” to improve the terms of its ongoing contract with Palau.
Eldebechel said the government has expressed numerous times its frustration with the management style of the PISR and has warned the company that it is ready to terminate its contract with them if changes are not made.
Eldebechel said that he is positive that a mutually beneficial terms will be reached by both parties with the ongoing negotiation with PISR.
“PISR has made an oral counteroffer that will most likely be accepted by Palau,” he said.
The government also stressed that Palau’s concern is not so much about the profit but on “sustainable growth and responsible international participation.”
Eldebechel said the priority in the review of the PISR contract is for the government to be able to bring in more money for the country and that it complies with UN resolutions and international started in registering vessels under the Palau flag.
President Tommy Remengesau Jr. last week, in a leadership meeting, shared a March 27 letter sent by Minister of Public Infrastructure, Industries, and Commerce (MPIIC) Charles Obichang to PISR CEO Panos Kimidis, which cited government concerns with the company.
The government has expressed concern about public “black-listings” under the international state Port Control MOU’s, implications for international sanctions regime violations and the registration of dangerous and unseaworthy vessels.
In the letter, the government also took exception to the move of the PISR to license two sanctioned vessels, Billions 18 and Nadine.
Billions 18 was in the United States list of vessels banned from international ports due to links with North Korea.
“We understand that Billions 18violated DPRK sanctions under a Panama flag. But we also understand that your choice to license this vessel under its removal from the Panamanian registry caused your widespread international criticism of Palau, while we were in the middle of a major environmental protection publicity campaign,” the letter stated.
Nadine meanwhile was on watch for violations of sanctions regarding Libya.
“The fact that you chose to license Nadine, and simply restrict it from operating during the specific period ordered by the UN Security Council authorities showed a clear disregard for the concerns we have expressed during the negotiations, and for the spirit of the Security Council resolutions as well,” the letter said.
PISR representative Alan Seid in an email, when sought for comments on the issue, said that the company is “making huge improvements with the process and information sharing regarding the vetting process for ships that are listed in the UN sanctions for North Korea and others.”
In regards to revenue sharing, Seid that Palau and PISR are still in final negotiations and is confident that the two parties will able to reach a “win-win” agreement with the government.
Palau also said the allocations in revenue is imbalanced. In the current allocations, the government gets 30 percent share of the revenues, with PISR retaining the 70 percent.
In the leadership meeting, President Remenegsau told officials that he wants the terms to increase to 50-50 sharing.
Seid in an interview agrees that the new contract will be improved which will ensure long term benefits for both parties.
Seid said since 2011, PISR have registered about 400 ships. (Bernadette H. Carreon)