* Ports can't afford to inspect every vessel that enters
* Inspections are annoying and costly for owners even if their vessel passes
* But, left to their own devices the Flag States may skimp on inspections, causing a Race to the Bottom where ships registered with Flags of Convenience are mostly awful and the port states end up absorbing the cost (atrocious labour conditions, deaths and injuries, pollution)
So the Paris MOU randomly inspects ships, but it has an intelligent and adaptive model controlling the probability of any particular ship being inspected when it arrives in a port.
If (say) Panamanian flagged vessels all keep passing their Paris MOU inspections, the rate at which vessels with a Panamanian flag are inspected falls.
On the other hand if, say, Venezuelan flagged vessels keep failing inspection, rates of inspection for that flag go up.
This encourages owners interested in an "Open registry" (Flag of convenience) to pick one that's doing a good enough job at inspecting vessels to attract the lowest rate of Paris MOU inspections. Which in turn pressures the flag states to either do good quality inspections of their own, or get out of the "Open registry" game instead, either of which suits the Paris MOU signatories just fine.
So, governments should have their own small number of specialist auditors, and they should randomly re-audit some fraction of public companies, with the chance depending on which Audit firm that company hired and how many re-audits of other firms audited by that company found problems. The cost of doing all this would be paid by the audit firms, as both a fixed levy AND fines whenever something is wrong.