32
Port State Control Inspection
Deficiencies
Pierre Cariou, François-Charles Wolff and
Maximo Q. Mejia, Jr.
32.1 Introduction
Port state control (PSC) is a regime of unan-
nounced safety inspections on board foreign
ships, conducted by designated PSC author-
ities in a given port or offshore terminal, to
verify compliance with international regula-
tions relating to manning, equipment,
maintenance and operations. These regula-
tions are contained in provisions under the
International Convention for the Safety of
Life at Sea, 1974, as amended (SOLAS), the
International Convention on Standards of
Training, Certification and Watchkeeping
for Seafarers, 1978, as amended (STCW),
the International Convention for the
Prevention of Pollution from Ships, 1973,
as amended (MARPOL), the Internati-
onal Convention on Load Lines, 1966
(Load Lines), the International Conven-
tion on Tonnage Measurement of Ships,
1969 (Tonnage 69), the Convention on
The Blackwell Companion to Maritime Economics, First Edition. Edited by Wayne K. Talley.
© 2012 Blackwell Publishing Ltd. Published 2012 by Blackwell Publishing Ltd.
the International Regulations for Prevent-
ing Collisions at Sea, 1972, as amended
(COLREG 72), and the Merchant Shipping
(Minimum Standards) Convention, 1976
(ILO Convention No. 147).
While the PSC regime is not a panacea
to prevent all accidents ( Jin, Kite Powell and
Talley 2008), it has played an active role in
reducing substandard shipping. Indeed, PSC
inspections provide many advantages.
Firstly, they represent a credible regime that
balances flag state responsibility against a
port state mandate. Secondly, public infor-
mation on results from inspections allows
shippers, maritime administrations and
maritime stakeholders to assess a vessel’s
safety records. Thirdly, PSC inspections help
towards the understanding of factors that
explain the likelihood of having a substand-
ard vessel, that is, a vessel whose probability
of being detained for being hazardous to
safety, health or the environment is high.
 PORT STATE CONTROL INSPECTION DEFICIENCIES
These factors are reflected in target factors
used by most PSC regional memoranda of
understanding (MoUs).
This chapter outlines what these targets
factors are, and how deficiencies detected
during a control either are corrected or
recur over time. To do this, we use a data
set of 42,071 vessels/inspections carried out
from 2002 to 2009 by 18 state members of
the Indian Ocean MoU (IO-MoU). The
selection of the IO-MoU is motivated by the
importance of the Indian Ocean in ship-
ping, since it is one of the world’s largest
oceans, where major sea routes connect the
Middle East, Africa and East Asia to Europe
and America, and where strategic trades
such as crude oil and oil products from the
Persian Gulf and Indonesia transit.1 From
an empirical perspective, the IO-MoU pro-
vides a unique exhaustive data set, starting
in 2002, on the inspection and detention of
vessels, including information on deficien-
cies detected over time.
32.2 Substandard Vessels Using
PSC Data: A Survey
PSC traces its origins from a memorandum
of understanding signed in The Hague by
eight North Sea states in 1978. Since then,
nine regional MoUs have been established,
involving almost all the maritime coun-
tries.2 One of their main contributions has
been to set up, at a regional level, common
target criteria for selecting vessels to be
inspected;3 selection is necessary because
the resources, personnel and time made
available to inspectors are limited (Knapp
2007). Naturally, the inspecting authorities
then concentrate their efforts on substand-
ard vessels – those with a high probability
of being detained because of hazards to
657
safety, health and the environment – using
target systems based on generic and historic
factors (Paris MoU 2010). Since January
2011, the seven criteria in the new Paris
MoU inspection regime have been ship
type, age, flag, recognized organization,
company performance, and numbers of
deficiencies and of detentions recorded
within the last 36 months.
Economic analyses of PSC regimes often
question the focus of target factors on
vessels that are not compliant with interna-
tional regulations when one might expect a
focus on vessels more likely to be involved
in accidents. This has led to studies on the
potential relationship between black-listed
flags of registry and casualty data (Knapp
2007; Degré 2008), on the relevance of
target factors (Knapp 2007; Cariou, Mejia
and Wolff 2007, 2008a, 2008b, 2009; Li,
Tapiero and Yin 2009), and on differences
between the results of inspections amongst
countries of inspection (Knapp and Franses
2007, 2008; Cariou and Wolff 2010). If most
criteria, such as the age, type and classifica-
tion society of a vessel, are found relevant,
a concern remains on the relative weight to
be assigned to these factors; apart from the
Australian Maritime Safety Agency (2008),
which uses its Shipsys database to calculate
a numerical risk for individual ships, PSC
authorities assign weight to risk factors
mainly on the basis of experts’ ad hoc judg-
ment. A recent area of research looks at
opportunistic behavior, such as flag- and
class-hopping, exhibited by shipowners to
avoid controls (Cariou and Wolff 2011).
This chapter provides a contribution that
focuses on the relevance of target factors
when a dynamic approach is used. It aims
at estimating, for a given vessel, how the
results of inspections evolve over time and
whether deficiencies are recurrent.
658 P. CARIOU, F.-C. WOLFF AND M. Q. MEJIA, JR.
32.3 Descriptive Statistics
The PSC IO-MoU data set provides results
for 42,071 inspections carried out from
January 1, 2002 to December 31, 2009 by 18
countries.4 Every PSC boarding results in a
written report containing the following
information: vessel’s name, IMO number,
flag of registry, recognized organization,
type, gross tonnage, deadweight tonnage,
year of delivery, type of control (new or
follow-up), date of inspection, date of
detention, date of release, place of inspec-
tion, inspecting authority, and nature of
deficiencies detected. As reported in Table
32.1, bulk carriers (46.5% of vessels
inspected), general cargo ships (16.8%),
tankers (10.2%), and container ships (9%)
are the vessel types subjected to the greatest
proportion of inspections. Australia, with
23,674 inspections or 56.2% of all inspec-
tions from 2002 to 2009, is the country that
has undertaken the most number of inspec-
tions in the regional MoU.
Figure 32.1 presents the mean number of
deficiencies (as a bar) and the detention rate
(as a line) by year of inspection and by type
of vessel. The mean number of deficiencies
is 2.9, ranging for all vessels from a minimum
of 2.3 in 2002 to a maximum of 3.4 in 2008.
The detention rate is between 5% and 10%.
Figure 32.1 also shows that general cargo/
multi-purpose ships, Ro-Ro cargo ships and
refrigerated cargo carriers record higher
detention rates, specifically since 2006.
We generated eight generic categories of
deficiencies (see Table 32.2) to aid in analyz-
ing potential differences in deficiencies
detected in controls taking place within the
Indian Ocean MoU. These categories are
certificates, working and living conditions,
safety-and fire-fighting appliances, stability
and structure, ship and cargo operations,
equipment and machinery, navigation and
communication, and management-related
deficiencies. Safety- and fire-fighting
appliances-related deficiencies are the most
recurrent type of deficiencies detected
(28.6%), followed by stability and structure
(18.8%) and navigation/communication
(17.6%). Safety- and fire-fighting appliances-
related deficiencies are found for 34.7% of
vessels inspected.
Figure 32.2 presents results on the types
of deficiencies detected, according to port
state control authorities, vessel age at
inspection, and flag of registry. On board
ships visiting Australian ports, deficiencies
relating to safety and fire-fighting appliances
constituted the most recurring type (31.8%),
followed by navigation and communication
(19.8%). In India, deficiencies related to
safety and fire-fighting appliances were less
likely (13.6%) than those related to stability
and structure (23%). It was found that
vessels of 25 or more years in age had pro-
portionately more deficiencies related to
certificates, while those that were less than
five years old tended to have more deficien-
cies related to navigation/communication.
Finally, deficiencies related to stability/
structure proved to be more common for
vessels flying the Russian flag.
32.4 Determinants of
Deficiencies
What follows is an attempt to explain how
the characteristics of a vessel influence the
probability that a specific deficiency, defined
as a dichotomous variable, will be recorded.
We therefore exclude vessels without defi-
ciency5 and estimate a set of Probit models.
The factors influencing the probability of a
deficiency being detected during an inspec-
tion are as follows:
Table 32.1 Characteristics of vessels inspected (2002–2009)
Variables Australia India Iran South Others Total
Africa
Age at PSC inspection
0–4 18.9 14.5 14.2 17.3 9.8 16.9
5–9 26.2 12.2 10.8 17.3 10.5 20.2
10–14 20.7 9.4 12.4 13.7 10.6 16.8
15–19 15.8 10.0 14.6 14.8 8.5 14.4
20–24 13.6 22.0 21.8 20.2 14.4 16.7
25+ 4.9 31.8 26.2 16.8 46.2 15.0
Type of ship
Bulk carrier 58.3 44.7 19.8 44.0 15.4 46.5
General cargo/multi-purpose ship 6.6 33.9 29.4 25.4 29.1 16.8
Oil tanker 6.9 3.4 27.2 3.7 14.3 10.2
Container ship 9.0 7.8 6.0 10.9 20.6 9.0
Chemical tanker 3.1 4.7 5.5 2.5 4.0 3.7
Vehicle carrier 4.9 0.1 0.1 2.1 1.3 3.0
Woodchip carrier 2.5 0.0 0.0 2.1 0.0 1.6
Refrigerated cargo carrier 0.3 0.0 3.8 5.3 0.7 1.4
Ro-Ro cargo ship 0.5 1.0 2.8 0.7 5.1 1.2
Gas carrier 1.7 0.3 0.9 0.3 1.1 1.3
Others 6.3 4.1 4.4 3.1 8.3 5.5
Flag of registry
Panama 31.3 25.3 23.8 23.2 22.5 28.1
Liberia 7.1 4.1 6.6 11.4 7.8 7.0
Hong Kong China 8.2 6.5 2.8 4.6 3.0 6.5
Bahamas 5.1 2.4 3.5 7.9 2.9 4.6
Cyprus 4.0 4.8 3.6 5.5 3.4 4.1
Singapore 5.5 5.9 3.5 4.5 5.6 5.1
Russian Federation 0.4 0.3 14.4 0.2 0.3 2.9
Malta 3.2 5.9 6.3 6.0 5.6 4.4
Greece 3.5 1.9 2.2 2.9 1.6 2.9
Others 31.7 42.9 33.3 33.8 47.5 34.3
Recognized organization
Nippon Kaiji Kyokai 37.7 24.6 18.1 25.4 14.5 30.4
Lloyd’s Register 14.6 14.3 13.8 16.1 11.4 14.4
Det Norske Veritas 10.0 6.4 9.8 10.5 7.0 9.4
American Bureau of Shipping 9.2 8.3 7.6 9.6 8.6 8.8
Germanischer Lloyd 7.4 8.7 6.9 15.4 14.8 8.5
Bureau Veritas 7.5 8.9 7.8 11.4 8.1 8.1
Russian Maritime Register 0.6 3.3 18.7 2.4 2.2 4.4
China Classification Society 3.9 6.1 2.9 2.0 2.7 3.7
Korean Register of Shipping 5.2 3.8 2.9 1.8 1.6 4.1
Others 4.1 15.7 11.6 5.3 28.9 8.1
Total number 23,674 5,120 7,484 3,777 2,016 42,071
Source: own calculation. Indian Ocean MoU 2002–2009.
 Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection
0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6

02
02
02
02

03
03
03
03

04
04
04
04

05
05
05
05

06
06
06
06

Oil tanker
All vessels

Year of inspection
Year of inspection
Year of inspection
Year of inspection

Vehicle carrier

07
07
07
07

Ro-Ro cargo ship

08
08
08
08

type of vessel and year.

09
09
09
09
0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30
Rate of detention (in %) Rate of detention (in %) Rate of detention (in %) Rate of detention (in %)
Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection
0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6

02
02
02
02

03
03
03
03

04
04
04
04

05
05
05
05

06
06
06
06

Gas carrier
Bulk carrier

Year of inspection
Year of inspection
Year of inspection
Year of inspection

Container ship

07
07
07
07

Woodchip carrier

08
08
08
08

09
09
09
09

Source: own calculations. Indian Ocean MoU 2002–2009.

0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30
Rate of detention (in %) Rate of detention (in %) Rate of detention (in %) Rate of detention (in %)
Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection Nb of deficiencies / inspection
0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6 0 1 2 3 4 5 6

02
02
02
02

03
03
03
03

04
04
04
04

05
05
05
05

Others

06
06
06
06

Year of inspection
Year of inspection
Year of inspection
Year of inspection

Chemical tanker

07
07
07
07

Refrigerated cargo carrier

08
08
08
08
General cargo/multi-purpose ship

09
09
09
09

0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30 0 5 10 15 20 25 30

Figure 32.1 Mean number of deficiencies (bar) and detention rates (line) over time, by
Rate of detention (in %) Rate of detention (in %) Rate of detention (in %) Rate of detention (in %)
 PORT STATE CONTROL INSPECTION DEFICIENCIES 661

Table 32.2 Type of deficiency by year of inspection

2002 2003 2004 2005 2006 2007 2008 2009 All
% of deficiencies
Certificates 7.2 6.3 5.9 4.5 4.2 4.4 4.9 4.9 5.2
Working/living 7.1 6.0 6.5 7.5 8.5 6.2 7.4 7.0 7.1
conditions
Safety/fire 30.7 28.4 28.5 29.2 28.1 29.1 28.4 27.0 28.6
fighting
appliances
Stability/ 18.6 22.8 21.9 19.0 19.0 18.0 16.5 15.8 18.8
structure
Ship/cargo 13.2 13.1 12.3 13.7 12.0 12.3 12.3 12.3 12.6
operations
Equipment/ 4.4 4.3 4.2 6.2 5.3 6.7 6.9 7.0 5.7
machinery
Navigation/ 16.5 15.9 16.3 14.4 18.8 18.6 18.6 20.3 17.6
communication
Management 2.3 3.3 4.4 5.6 4.2 4.8 5.1 5.6 4.5
% of vessels
Certificates 12.2 10.4 9.9 7.6 8.0 8.9 10.2 10.1 9.7
Working/living 10.6 11.0 11.6 14.5 16.3 13.2 15.6 15.0 13.5
conditions
Safety/fire 30.0 32.5 34.0 35.9 36.5 36.0 36.5 36.9 34.7
fighting
appliances
Stability/ 21.7 26.6 27.6 25.6 26.4 26.5 26.0 24.8 25.6
structure
Ship/cargo 19.4 21.1 20.9 22.9 21.4 23.1 22.9 23.0 21.8
operations
Equipment/ 6.7 7.6 7.9 10.9 10.9 13.3 13.8 13.6 10.5
machinery
Navigation/ 21.6 23.2 25.2 24.4 28.8 28.6 29.8 31.4 26.6
communication
Management 4.4 6.7 8.9 11.4 10.2 10.7 12.4 12.8 9.7
Number of 5431 5072 5642 5180 5087 4791 5593 5275 42071
vessels
inspected
Source: own calculations. Indian Ocean MoU 2002–2009.

Type of deficiency = f ( Age at inspection,
Flag of registry, Type of ship,
Recognized organization, Country
of inspection, Year of inspection) (1)
Marginal effects are reported in Table 32.3.
The estimated probability of a vessel having
safety- and fire-fighting appliances-related
deficiencies is 28.4% (28.6% for observed
data in Table 32.2), 18.1% for stability and
 By inspection country

100
Distribution of deficiencies (in %)
80
60
40
20
0

Australia India Iran South Africa Other countries

By age at inspection
100
Distribution of deficiencies (in %)
80
60
40
20
0

0-4 5-9 10-14 15-19 20-24 25+

By flag
100
Distribution of deficiencies (in %)
80
60
40
20
0

PNM LIB HK-CH BAH CYP SNG RUS MLT GR Others

Certificates Working/living conditions Safety/fire appliances Stability/structure

Ship/cargo operations Equipment/machinery Navigation/communication Management

Figure 32.2 Type of deficiency detected by port state control authority, vessel age at
inspection and flag of registry.
Source: own calculations. Indian Ocean MoU 2002–2009.
Table 32.3 Probability of detecting a deficiency: marginal effects
Explanatory variables Certificates Working/living Safety/fire- Stability/ Ship/cargo Equipment/ Navigation/ Management
conditions fighting appliances structure operations machinery communication
Age at PSC inspection
0–4 Ref Ref Ref Ref Ref Ref Ref Ref
5–9 −0.014*** +0.008* +0.038*** +0.033*** −0.014*** +0.016*** −0.017*** −0.009***
10–14 −0.015*** +0.025*** +0.041*** +0.093*** −0.030*** +0.030*** −0.048*** −0.016***
15–19 −0.020*** +0.039*** +0.046*** +0.122*** −0.044*** +0.045*** −0.068*** −0.017***
20–24 −0.027*** +0.047*** +0.051*** +0.134*** −0.049*** +0.047*** −0.079*** −0.022***
25+ −0.021*** +0.045*** +0.037*** +0.138*** −0.054*** +0.046*** −0.079*** −0.025***
Flag of registry
Panama −0.001 −0.004* −0.000 −0.001 +0.002 −0.002 −0.001 +0.006***
Liberia −0.005 −0.005 +0.013 −0.006 −0.010* −0.002 +0.010 +0.003
Hong Kong China −0.012*** +0.014*** −0.001 +0.003 −0.009* +0.007* −0.006 +0.004
Bahamas +0.001 −0.003 +0.016* −0.003 −0.009 +0.005 −0.010 +0.005
Cyprus +0.006 −0.002 +0.015* −0.004 −0.003 −0.005 −0.012* +0.004
Singapore −0.009*** +0.005 +0.009 +0.027*** −0.013** +0.003 −0.014** −0.000
Russian Federation +0.005 +0.046*** −0.049*** +0.023* +0.031** −0.031*** −0.023** −0.002
Malta +0.003 −0.002 +0.011 −0.004 −0.011** −0.001 +0.001 +0.004
Greece +0.003 −0.028*** +0.001 −0.025** +0.000 +0.009 +0.025** +0.015***
Others Ref Ref Ref Ref Ref Ref Ref Ref
Type of ship
Bulk carrier −0.048*** +0.008** +0.025*** +0.049*** −0.033*** −0.002 +0.003 +0.013***
General cargo/ −0.029*** +0.005 +0.013 +0.034*** −0.025*** +0.001 +0.010 +0.014***
multi-purpose ship
Oil tanker −0.022*** +0.004 +0.038*** −0.013 +0.014** −0.000 −0.019** +0.020***
Container ship −0.028*** +0.009 +0.036*** +0.038*** −0.025*** +0.018*** -0.021** +0.007
Chemical tanker −0.024*** +0.002 +0.060*** −0.013 +0.003 +0.007 −0.025*** +0.019***
Vehicle carrier −0.028*** +0.033*** +0.048*** −0.063*** +0.014 −0.000 −0.007 +0.014**
Woodchip carrier −0.024*** +0.010 +0.099*** +0.017 −0.023** −0.024*** −0.031** +0.004
(Continued)
Table 32.3 (Continued)
Explanatory variables Certificates Working/living Safety/fire- Stability/ Ship/cargo Equipment/ Navigation/ Management
conditions fighting appliances structure operations machinery communication
Refrigerated cargo −0.030*** −0.019*** +0.033* −0.016 +0.047*** +0.033*** −0.023* +0.017**
carrier
Ro-Ro cargo ship −0.008 +0.000 +0.011 −0.022 −0.033*** +0.010 +0.035** +0.004
Gas carrier −0.024*** −0.001 +0.065*** +0.002 −0.044*** +0.032* +0.006 +0.002
Others Ref Ref Ref Ref Ref Ref Ref Ref
Recognized organization
Nippon Kaiji −0.019*** +0.015*** −0.002 +0.007 −0.001 +0.005* +0.004 −0.007***
Kyokai
Lloyd’s Register −0.011*** +0.008** +0.006 +0.001 −0.005 +0.021*** −0.009 −0.005**
Det Norske −0.012*** +0.002 +0.013* +0.006 −0.001 +0.019*** −0.008 −0.009***
Veritas
American Bureau +0.001 +0.010** +0.002 +0.002 −0.007 +0.008** −0.007 −0.006**
of Shipping
Germanischer −0.009*** +0.006 +0.006 −0.016** −0.004 +0.015*** 0.006 −0.001
Lloyd
Bureau Veritas −0.008*** +0.004 −0.005 +0.011 +0.000 +0.011*** −0.004 −0.004
Russian Maritime −0.016*** +0.028*** +0.003 +0.017 −0.013* +0.027*** −0.029*** −0.012***
Register
Explanatory variables Certificates Working/living Safety/fire- Stability/ Ship/cargo Equipment/ Navigation/ Management
conditions fighting appliances structure operations machinery communication
China −0.025*** +0.037*** +0.008 +0.044*** −0.022*** +0.017*** −0.037*** −0.015***
Classification
Society
Korean Register −0.021*** +0.004 +0.015* +0.021** −0.016*** +0.012** −0.007 −0.002
of Shipping
Others Ref Ref Ref Ref Ref Ref Ref Ref
Inspecting authority
Australia −0.075*** −0.024*** +0.094*** −0.067*** +0.043*** +0.006 +0.047*** +0.011*
Iran −0.019*** −0.012 +0.017 −0.031** +0.069*** +0.057*** −0.023* −0.011*
India −0.021*** −0.037*** +0.050*** −0.021* +0.012 +0.027*** +0.066*** −0.022***
South Africa −0.023*** −0.030*** +0.063*** 0.017 +0.018 −0.000 +0.044** −0.029***
Others Ref Ref Ref Ref Ref Ref Ref Ref
Estimated probability +0.041 +0.068 +0.284 +0.181 +0.124 +0.051 +0.171 +0.039
Probit regressions also include a set of year dummies.
Ref denotes the reference category.
For dummy variables, the marginal effect is for discrete change of dummy variable from 0 to 1.
The size of the sample is N = 121319 deficiencies.
Standard errors are clustered at the vessel level and significance levels are 1% (***),
5% (**) and
10% (*).
Source: own calculations. Indian Ocean MoU 2002–9.
666 P. CARIOU, F.-C. WOLFF AND M. Q. MEJIA, JR.
structure (instead of 18.8%), and 12.4% for
ship and cargo operations (instead of
12.6%). Results show the influence of age,
flag, vessel type, recognized organization,
inspecting authority and year (not reported).
The reference category of age (0–4-year-
old vessels) exhibits higher probabilities
(negative signs for other age categories
reported) of certificates, ship and cargo
operations, navigation and communication,
and management-related deficiencies. Age
has a positive influence on the likelihood of
finding deficiencies related to working and
living conditions, safety and fire-fighting
appliances, stability and structure, and
equipment and machinery. The flag of reg-
istry plays a limited role. The probability of
a vessel having a deficiency for safety and
fire-fighting appliances is higher when this
vessel is a woodchip carrier (+9.9%), a gas
carrier (+6.5%) or a chemical carrier (+6%).
This result could be explained either by
inspectors making a greater effort when
inspecting vessels for which an incident
might have more severe consequences, or
by differences in the complexity of systems
aboard various vessels. Another illustration
involves refrigerated cargo carriers, for
which ship and cargo operations (+4.7%)
and equipment and machinery (+3.3%) are
essential to insure the continuity of the
“cold chain,” but which also induce more
complex equipment.
Reported recognized organizations
achieve better performance than smaller
societies gathered in the “others” category.
The probability of a vessel having deficien-
cies in safety and fire-fighting appliances is
higher when inspections are carried out in
Australia (+9.4%), South Africa (+6.3%) or
India (+5%), while opposite conclusions
hold for stability and structure in Australia
(−6.7%). This country-specific effect is puz-
zling, though it could simply suggest that
port state control authorities have different
priorities or that the characteristics of
vessels calling at Australian ports are differ-
ent (Cariou and Wolff 2010).
32.5 Recurrent Deficiencies and
State Dependence Effects
Earlier studies did not pay too much atten-
tion to potential state dependence effects in
a vessel condition (Cariou, Mejia and Wolff
2008a being an exception). In this section,
we seek to estimate how results of past
inspections may influence the probability of
a given deficiency in t being detected. The
permanent effect for a vessel is captured by
a dummy variable equal to 1 when the same
deficiency is reported in t-1 and in t (and 0
otherwise). Therefore, vessels inspected
only once were dropped, reducing the
sample from 42,071 to 28,330 vessels.
Results on transitional states between
two successive inspections (t-1 and t) are
presented in Figure 32.3. For a vessel
without deficiency in t, two initial states
exist in t-1: either no deficiency (Nt = Nt-1),
or more (Nt > Nt-1). Now, for a vessel with
deficiencies in t, three possibilities exist in
t-1: fewer (Nt < Nt-1), the same (Nt = Nt-1),
or more (Nt > Nt-1) deficiencies. Vessels
without deficiency in t were without defi-
ciencies in t-1 for 55% of them, while for
vessels with deficiencies in t, more than 60%
had less, 10% the same number and 30%
more in t-1. These results are evidence of
improvements in vessels’ condition over
time.
We next perform an analysis by catego-
ries of deficiencies (see Figure 32.4). We
again find evidence of a state dependence
 All vessels Bulk carrier General cargo/multi-purpose ship
70

70

70
60

60

60
50

50

50
Proportion (in %)

Proportion (in %)

Proportion (in %)
40

40

40
30

30

30
20

20

20
10

10

10
0

0
No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1

Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1

Oil tanker Container ship Chemical tanker

70

70

70
60

60

60
50

50

50
Proportion (in %)

Proportion (in %)

Proportion (in %)
40

40

40
30

30

30
20

20

20
10

10

10
0

0
No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1

Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1

Vehicle carrier Woodchip carrier Refrigerated cargo carrier

70

70

70
60

60

60
50

50

50
Proportion (in %)

Proportion (in %)

Proportion (in %)
40

40

40
30

30

30
20

20

20
10

10

10
0

No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1

Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1

Ro-Ro cargo ship Gas carrier Other vessels

70

70
70
60

60
60
50

50
50
Proportion (in %)

Proportion (in %)

Proportion (in %)
40

40
40
30

30
30
20

20
20
10

10
10
0

No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1 No deficiency in t-1 Deficiencies in t-1

Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1 Nt<Nt-1 Nt=Nt-1 Nt>Nt-1

Figure 32.3 Change in number of deficiencies detected between two successive

inspections, by type of vessel.
Source: own calculations. Indian Ocean MoU 2002–2009.
 Certificates Working/living conditions Safety/fire appliances Stability/structure

80
80
80
80

70
70
70
70

60
60
60
60

50
50
50
50

40
40
40
40

Proportion (in %)
Proportion (in %)
Proportion (in %)
Proportion (in %)

30
30
30
30

20
20
20
20

10
10
10
10

0
0
0
0
Never Only in t Never Only in t Never Only in t Never Only in t

Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t

Ship/cargo operations Equipment/machinery Navigation/communication Management

80
80
80
80

70
70
70
70

60
60
60
60

50
50
50
50

40
40
40
40

Proportion (in %)
Proportion (in %)
Proportion (in %)
Proportion (in %)

30
30
30
30

20
20
20
20

10
10
10
10

0
0
0
0

Never Only in t Never Only in t Never Only in t Never Only in t

Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t Only in t-1 Both in t-1 and t

Figure 32.4 Change in number of deficiencies detected between two successive inspections, by type of deficiency.
Source: own calculations. Indian Ocean MoU 2002–2009.
 PORT STATE CONTROL INSPECTION DEFICIENCIES
effect. Vessels never record any deficiency
related to certificates in more than 80% of
cases. Similar conclusions hold for working
and living conditions, equipment and
machinery, and management. We find more
contrasted patterns for safety and fire-
fighting appliances and for navigation and
communication. The proportion of vessels
without deficiency in both t-1 and t is
around 50%, while those with deficiencies
in both t-1 and t is 10%. To further under-
stand the transition from one state to
another, we estimated for the eight catego-
ries of deficiencies several Probit regres-
sions on the probability of a vessel having a
specific deficiency, including a lagged value
of past deficiencies. Marginal effects are
reported in Table 32.4.
Estimates confirm the existence of a
strong state dependence over time, detected
by the lagged value on deficiency.6 This per-
sistence effect is more likely in deficiencies
in working and living conditions (+16.4%),
safety and fire-fighting appliances (+16.9%),
stability and structure (+15.7%), and ship
and cargo operations (+15.6%), and is not
significant for administrative deficiencies
such as in certificates or management. This
could be explained by the presence of more
volatility in these deficiencies, which can be
relatively easily corrected over time. As
expected, older vessels have a higher prob-
ability of recording deficiencies related to
seaworthiness in general, with +40.4% for
stability and structure and +30.6% for equip-
ment and machinery when vessels are more
than 25 years old. These latter are also more
likely to keep deficiencies over time in cer-
tificates (+6.8%), safety and fire-fighting
appliances (+11.1%), and navigation and
communication (+13.8%). Such deficiencies
are indeed expensive to correct and it might
not be economical to do so when vessels are
669
reaching the end of their economic life.
Finally, for bulk carriers, the negative coef-
ficients of Deft−1 for safety and fire-fighting
appliances (−7.6%), stability and structure
(−7.3%), and ship/cargo operations (−5.9%)
suggest that their condition is likely to
improve over time.
32.6 Summary
Studies on the PSC regime and its use in
identifying substandard vessels reach a con-
sensus on factors influencing the probabil-
ity of a vessel being detained during an
inspection. However, several issues remain
unresolved. The weight to be assigned to
these factors and the increased harmoniza-
tion in controls amongst various PSC
regional MoUs are some of them. This
chapter provides an original contribution
on other potential issues: factors influenc-
ing the likelihood of detecting a given defi-
ciency and the existence of persistence
effects over time. If factors influencing the
probability of a vessel with a given defi-
ciency being detected during a control are
similar to those of a vessel being detained
– with a strong influence exerted by age,
type, classification society, flag etc. – esti-
mates suggest that a state dependence effect
exists and changes with the type of defi-
ciency and vessel. Therefore, to set in
advance a fixed period of time between two
inspections, as in the inspection regime of
Paris MoU, regardless of the type of vessel
and deficiency, might not be relevant.
Furthermore, when carrying out inspection
campaigns focusing on one specific defi-
ciency, PSC regional MoUs should probably
consider this persistence effect, because
some deficiencies might not be persistent
Table 32.4 Probability of transition in deficiencies from t-1 to t : marginal effects
Explanatory variables Certificates Working/ Safety/ Stability/ Ship/cargo Equipment/ Navigation/ Management
living fire-fighting structure operations machinery communication
conditions appliances
Existence of the same deficiency
Def t-1 (lagged value) +0.061* +0.164*** +0.169*** +0.157*** +0.156*** +0.111* +0.072** +0.061
Age at inspection
0–4 Ref Ref Ref Ref Ref Ref Ref Ref
5–9 +0.005 +0.061*** +0.115*** +0.118*** +0.051*** +0.057*** +0.039*** +0.022***
10–14 +0.020*** +0.115*** +0.176*** +0.224*** +0.075*** +0.105*** +0.064*** +0.021***
15–19 +0.042*** +0.157*** +0.233*** +0.307*** +0.100*** +0.155*** +0.090*** +0.048***
20–24 +0.082*** +0.224*** +0.272*** +0.358*** +0.138*** +0.220*** +0.124*** +0.040***
25+ +0.130*** +0.282*** +0.263*** +0.404*** +0.181*** +0.306*** +0.133*** +0.061***
Age at inspection * Def t-1
5–9 * Def t-1 +0.032 −0.022 +0.023 −0.002 −0.018 −0.031 +0.034 −0.008
10–14 * Def t-1 +0.029 −0.032 +0.019 +0.004 −0.009 −0.041* +0.042* 0.022
15–19 * Def t-1 +0.032 −0.007 −0.001 −0.000 −0.009 −0.031 +0.021 −0.023
20–24 * Def t-1 +0.027 −0.039* +0.009 +0.005 −0.030 −0.034 +0.004 −0.010
25+ * Def t-1 +0.068** −0.027 +0.111*** +0.064* +0.023 −0.018 +0.135*** −0.010
Type of ship
Bulk carrier −0.023*** +0.047*** +0.106*** +0.136*** +0.031** +0.036*** +0.070*** +0.039***
General cargo/multi-purpose +0.027*** +0.050*** +0.061*** +0.119*** +0.036** +0.055*** +0.057*** +0.010
ship
Oil tanker +0.003 −0.024** −0.036* −0.016 −0.045*** −0.001 −0.080*** −0.024**
Container ship −0.019** −0.002 +0.003 −0.003 −0.029* +0.035*** −0.028 +0.000
Chemical tanker −0.001 +0.042** +0.069*** +0.063** +0.033 +0.058*** +0.003 +0.010
Explanatory variables Certificates Working/ Safety/ Stability/ Ship/cargo Equipment/ Navigation/ Management
living fire-fighting structure operations machinery communication
conditions appliances
Vehicle carrier −0.045*** +0.004 +0.003 −0.100*** −0.023 −0.016 −0.030 +0.008
Woodchip carrier −0.033*** +0.014 +0.101*** +0.030 −0.011 −0.032** −0.048* −0.012
Refrigerated cargo carrier −0.038*** −0.049** −0.019 +0.014 +0.021 +0.077*** −0.049 −0.029
Ro-Ro cargo ship +0.022 +0.014 −0.043 −0.054* −0.026 +0.002 −0.043 −0.021
Gas carrier −0.034*** −0.072*** −0.083** −0.076** −0.111*** −0.012 −0.095*** −0.069***
Others Ref Ref Ref Ref Ref Ref Ref Ref
Type of ship * Def t-1
Bulk carrier* Def t-1 −0.023* −0.036* −0.076*** −0.073*** −0.059*** +0.011 −0.022 −0.003
General cargo* Def t-1 −0.001 +0.002 −0.034 −0.002 −0.011 +0.058* +0.014 +0.047
Oil tanker* Def t-1 +0.025 +0.029 −0.028 +0.039 +0.067* +0.137*** +0.095** +0.065
Container ship* Def t-1 −0.021 −0.008 +0.016 −0.016 −0.064** +0.008 −0.021 +0.046
Chemical tanker* Def t-1 +0.007 −0.044 +0.011 +0.039 −0.037 +0.040 +0.026 +0.020
Vehicle carrier* Def t-1 −0.014 −0.050 −0.083** −0.000 −0.055 −0.081*** +0.008 −0.089***
Woodchip carrier* Def t-1 −0.006 −0.064 −0.129*** −0.093** −0.004 +0.062 +0.017
Refrigerated cargo * Def t-1 +0.019 −0.058 −0.132** −0.062 −0.013 +0.027 +0.106 +0.042
Ro-Ro cargo ship* Def t-1 +0.058 +0.019 −0.015 +0.096 +0.031 +0.198** +0.143** −0.017
Gas carrier* Def t-1 +0.012 −0.069 +0.044 −0.062 +0.052 −0.005 +0.088
Estimated probability +0.071 +0.129 +0.360 +0.245 +0.214 +0.092 +0.269 +0.103
Probit regressions also include a set of year dummies.
Ref denotes the reference category.
For dummy variables, the marginal effect is for discrete change of dummy variable from 0 to 1.
The sample is N = 28330 vessels subject to repeated inspections.
Standard errors are clustered at the vessel level and significance levels are 1% (***),
5% (**) and
10% (*).
Source: own calculations. Indian Ocean MoU 2002–9.
672 P. CARIOU, F.-C. WOLFF AND M. Q. MEJIA, JR.
over time. To be conclusive, however, these
preliminary findings should be supported
by further analysis on larger inspection data
sets from other PSC regional MoUs.
Notes
1 It is estimated that 40% of the world’s off-
shore oil production originates from coun-
tries bordering the Indian Ocean.
2 The nine MoUs are: Paris MoU – Europe
and the North Atlantic; Tokyo MoU – Asia
and the Pacific; Acuerdo de Viña del Mar –
Latin America; Caribbean MoU – Caribbean
Sea region; Abuja MoU – West and Central
Africa; Black Sea MoU – Black Sea region;
Mediterranean MoU – Mediterranean Sea
region; Indian Ocean MoU – Indian Ocean
region; Gulf Cooperation Council (GCC)
MoU – Arab States of the Gulf.
3 The final choice still remains in the hand of
sovereign states, which may have different
priorities.
4 In June 2011, the 18 countries were: Australia,
Bangladesh, Djibouti, Eritrea, Ethiopia
(observer), India, Iran, Kenya, Maldives,
Mauritius, Mozambique, Myanmar, Oman,
Seychelles, South Africa, Sri Lanka, Sudan,
Tanzania and Yemen. For more information
see www.iomou.org/.
5 Each deficiency is accounted as one observa-
tion in our sample: 121,319 deficiencies/
observations for 42.071 inspections under-
taken from 2002 to 2009. Standard errors are
clustered at the vessel level when the regres-
sions are estimated.
6 The lagged value associated is introduced
exogenously in regressions.
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