MARITIME SECURITY | PIRACY | 2013
ARIES Risk Group | 1
CONTENTS FOrward Game Changer
INduSTry uPdaTES Piracy Activity: Global Trends
04 05
Guardcon: 12 Months on New RUF: An international model ISO 2800: New industry standards West Africa: Escalating Hijack Threat
FEaTurE rEPOrT: wEST aFrICa
12
Gulf of Guinea Piracy: Looking beyond the Statistics
LEgaL: PMSC and ruF
19
Regulatory Vacuum Guardcon: Who Protects the Master? Civil liability: Minimizing the Risk
INSuraNCE Aspen launches West Africa Kidnap and Ransom Cover
27
P&I Club Backed K&R Insurance
PIraCy
30
rEguLaTION
32
arIES uPdaTE
34
The Human Consequences of Somalian Piracy
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Mixed Security Teams
dISCLaIMEr The information and any commentary contained in this industry report are for general purposes only and any findings, opinions, statements, and other information or content expressed or made available by parties other than Aries Risk Group, are those of the author(s) and not of Aries Risk Group. Whilst every effort has been made when producing this report, no liability is accepted for any error or omission and under no circumstances can Aries Risk Group be held responsible for any loss or damage caused by the reader’s reliance on information obtained in this report.
FOrWard
gaME CHaNgEr
Nick Little Aries Risk Group
A sobering shift from the unseemly profiteering by the Marsec industry on a shipping community caught in the perfect storm of mafia style ransoms and casino level insurance premiums, to a very different playing field. Insurance costs are down and security companies are struggling to stay in business
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elcome to our first Industry Update for 2013 which is focused on maritime security issues that Aries Risk Group consider is at the forefront of the industry today. As specialist security brokers dealing on a daily basis with procurement and compliance issues for our shipping clients, we have a close insight on the issues confronting and challenging the security companies and how this will impact the service they provide to the shipping industry. There is no question that 2013 will be a turning point. As our report highlights in several of the articles, the maritime security landscape will be changed by a combination of competition and pricing pressures; question marks over professional standards and the use of hybrid teams; the emergence of 100 Series RUF and implementation of the new ISO 28007 voluntary quality management system; and not least the questions over the future of Indian Ocean piracy risks verses West Africa. Translated into winners and losers, it seems to us that whilst the security business is in a state of flux, the shipping industry is finally coming out on top. The market may still be floundering in recession but at least the shipping companies have finally faced down an epidemic period of outrageous criminality and cruelty to seafarers (and if you need reminding of the suffering experienced by the hostages just read the firsthand accounts in Paul Smith’s article). The knock - on benefit has been a sobering shift from the unseemly profiteering by the Marsec industry on a shipping community caught in the perfect storm of mafia style ransoms and casino level insurance premiums, to a very different playing field. Insurance costs are down and security companies are struggling to stay in business. The new equilibrium is a game changer. In our world as brokers dealing with a pool of pre vetted PMSC’s, who are mostly medium size operators, we are seeing a paradigm shift in cost and service ethos. Providing the PMSC’s quality standards are kept in check, the client now has a significant and measurable cost return benefit: war insurance premiums are discounted by 40%; K&R premiums
are on the floor; fuel savings are considerable; charterers and cargo underwriters are happy and the crew feel safe. The “check” caveat is finding the optimal price to quality and compliance standards acceptable to the industry stakeholders. Buying in the cheapest three man team, which taken in the round (especially the caliber of the guards) falls below acceptable compliance standards, compromises the stakeholder chain and may expose the ship owner to serious losses and damages. Once the new ISO 28007 voluntary quality management system is rolled out, the industry will have another game changer. Accredited companies competing with sharp prices will not be stigmitised by the perception of compromising on quality standards. More to the point the likely service model will have all the hallmarks of the 21st century business game changer: Facility Management or FM for short. Don’t be surprised if your PMSC describes itself “as specialising in integrated hard and soft facilities management and specialist support services for secure and critical environments”. The International Facility Management Association defines facility management as a profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process, and technology. In plain english, FM companies provide and manage people, premises, and equipment to support the efficient delivery of a customer’s core business activities. These might include anything from services in critical environments to cleaning, catering, security (courts, policing and front line public services to critical national infrastructure), to front of house, technical support, space planning and procurement. Several established PMSC’s already come from an FM stable. Delivering competitive PMSC services with standards conforming to rigorous industry kite marks will be challenging. The future could well lie with multi - service FM organisations who have the critical mass in terms of business diversity and economies of scale to deliver compliant and competitive maritime security services. With the advent of the Maritime Labour Convention (MLC) 2006 we may even see the FM companies bolting on ship catering services. Another game changer.
industry updates
industry updAtEs: piracy activity: global Trends Guardcon: 12 Months On new ruF: an International Model isO 2800: New Industry Standards West Africa: Escalating Hijack risk
PIraCy aT FIvE yEar LOw ARIES Risk Group | 5
updates: PIrAcy At FIve yeAr Low
Piracy activity: global Trends P
iracy on the world’s seas has reached a five-year low, with 297 ships attacked in 2012, compared with 439 in 2011, the International Maritime Bureau global piracy report has revealed.
Worldwide figures were brought down by a huge reduction in Somali piracy, though East and West Africa remain the worst hit areas, with 150 attacks in 2012. Globally the figures breakdown as follows: • • • •
174 ships were boarded by pirates last year, 28 were hijacked and 28 were fired upon. There were 67 attempted attacks. The number of people taken hostage onboard fell to 585 from 802 in 2011, • But 26 were kidnapped for ransom in Nigeria. • 6 crew members were killed and 32 were injured or assaulted.
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“IMB’s piracy figures show a welcome reduction in hijackings and attacks to ships. But crews must remain vigilant, particularly in the highly dangerous waters off East and West Africa,” said Pottengal Mukundan, director of IMB. In Somalia and the Gulf of Aden, just 75 ships reported attacks in 2012 compared with 237 in 2011, accounting for 25% of incidents worldwide. The number of Somali hijackings was halved from 28 in 2011 to 14 last year. IMB says navies are deterring piracy off Africa’s east coast, with pre-emptive strikes and robust action against mother ships. So too are private armed security teams and crews’ application of “Best Management Practices”. But the threat and capability of heavily armed Somali pirates remains strong.
“The continued presence of the navies is vital to ensuring that Somali piracy remains low,” said Mr Mukundan. “This progress could easily be reversed if naval vessels were withdrawn from the area.”
In Somalia, and elsewhere, vessels most commonly attacked are container ships, bulk carriers and tankers loaded with oil, chemicals and other products. Fishing vessels and other smaller boats are also at risk.
Pirate mother ships and skiffs were reported in the Gulf of Oman, southern Red Sea and the Somali basin, with a number of attacks close to the Straits of Hormuz and the energy routes out of the Arabian Gulf. As of 31 December 2012, Somali pirates still held 104 hostages on eight ships and 23 more were detained on land, pending negotiations for their release. In Somalia, and elsewhere, vessels most commonly attacked are container ships, bulk carriers and tankers loaded with oil, chemicals and other products. Fishing vessels and other smaller boats are also at risk. As for West Africa, piracy is rising in the Gulf of Guinea, with 58 incidents recorded in 2012, including 10 hijackings and 207 crew members taken hostage. Pirates in this area are particularly violent, with guns reported in at least 37 of the attacks. Benin is an exception, showing a sharp fall from 20 incidents (including eight hijackings) in 2011 to two (including one hijacking) in 2012. Nigeria accounted for 27 incidents in 2012, with four vessels hijacked, 13 vessels boarded, eight fired upon and two attempted attacks. Only 10 incidents were reported in 2011, including two hijackings. Togo has also seen an increase from five reports in 2011 to 15 in 2012, including four hijackings. Off the Ivory Coast, five incidents were reported in 2012, up from one in 2011. In the last quarter of 2012, a panamax product tanker was hijacked by suspected Nigerian pirates off Abidjan, the first such recorded vessel hijacking off the Ivory Coast. This shows the increased range of Nigerian pirates.
Commentary from ICC International Maritime Bureau’s “2012 Piracy and Armed Robbery Against Ships”
Elsewhere, in Southeast Asia four vessels were hijacked, including a Malaysian tanker which was subsequently recaptured in Vietnam in the last quarter of 2012.Across the Indonesian archipelago, there were 81 reports of petty theft, accounting for more than a quarter of global incidents in 2012. Thirty vessels were attacked in the last quarter of 2012. Reports from Indonesia have increased yearly since 2009. Vessels were boarded in 73 incidents and 47 crew members taken hostage. Fourteen incidents were reported at Belawan by ships anchored or berthed. ARIES Risk Group | 7
updates: PIrAcy At FIve yeAr Low
PIraCy by NuMbErS A
recent paper from academic economists Tim Besley, Thiemo Fetzer and Hannes Mueller put the cost of piracy to the shipping industry at just $1.5bn. Costs broke down into nine categories:
• Actual ransom payments declined by some 80% to $31.7m, with a smaller number of vessels taken and released. Eight ransoms averaging just shy of $4m were paid. However, additional costs such as ransom delivery, damage to vessels during captivity and fees for lawyers and negotiators gave an overall total under the ransoms and recovery heading of $63.5m.
• The bill for military operations came in at $1.1bn, including use of spotter planes, vessel protection detachments and administrative costs for naval operations. • Security equipment and guards set the industry back by a sum in the region of $1.6bn-$2.1bn. Although the cost of security equipment fell 11%, the cost of private armed guards was up to $1.1bn-$1.5bn. • Rerouting along the Arab Peninsula and Indian coast to avoid the high-risk area cost shipping companies $290.5m, a decline of just over 50% on 2011, although the number of ships rerouting dropped just 10%. • The largest cost decrease was associated with fast steaming in the high-risk area, which dropped 43.3% to $1.5bn. • Increased compensation to maritime labour, including hazard pay and compensation for captivity, amounted to $471.6m. • Prosecutions and imprisonment cost an estimated $14.9m, a fall of 9%, while insurance costs related to piracy declined 13%, from $635m in 2011 to $550.7m in 2012. • Finally, expenses for counterpiracy organisations, including UN agencies and non-governmental organisations, totalled $24.1m.
Commentary and graphics from Oceans Beyond Piracy: Economic Cost of Somali Piracy 2012 8 | ARIES Risk Group
updates: GUArDcoN
guardCON 12 MONTHS ON B
IMCO GUARDCON was introduced in 2012 and is the industry accepted standard form contract for the employment of Private Maritime Security Companies (PMSC) on board ships.
It was drafted by shipowner representatives, marine underwriters (including the International Group of P&I Clubs) and maritime lawyers, in response to the emergence of numerous PMSCs - all with their own, often unclear, contractual terms and conditions on which their services are provided. The terms of these contracts varied greatly with differing levels of liability and authority for shipowners - with terms that could potentially have an adverse affect on a shipowners’ insurance cover.
One potential solution is a variation of the Guardcon terms to accommodate any obligatory military personnel and indeed this evolution is already occurring. This could however raise the same pre-Guardcon problem of potential liabilities that could compromise insurance cover. PMSCs, who wish to provide this service, will need to take measures to ensure their terms will not prejudice either their own or the shipowners’ insurance cover.
The creation of Guardcon has standardised the terms of armed guard contracts and ensured that they are acceptable to shipowners as well as, critically, being insurable. A shipowner can contract on an unamended Guardcon and be assured that at least their P&I cover should remain unaffected – so in this regard Guardcon is a big step forward. For transits in the Gulf of Aden and Indian Ocean, the benefits of Guardcon are clear. However, almost a year since its inception, it is becoming apparent that Guardcon may not suit all voyages. Statistics show that piracy attacks are increasing and becoming more violent in the Gulf of Guinea and Nigeria and we have seen that the advantages of Guardcon do not necessarily transfer into West Africa. This is due to some countries, presently Nigeria, Togo and Benin, insisting on the deployment of their own military personnel on board ships in their territorial waters. The question is then posed “on whose terms and conditions are the local military engaged?” In addition, how can a PMSC underwrite the potentially unpredictable level of service from such personnel? It may, therefore, prove impossible for a PMSC to comply with the terms of an unamended Guardcon agreement they have with a shipowner as they may not have complete control over the orders under which the military personnel on board are operating.
Commentary by Andrew Glenn of North Insurance Management Ltd ARIES Risk Group | 9
updates: rUF
100 SErIES ruF bIMCO HaS dECIdEd TO baCk THE 100 SErIES ruLES FOr THE uSE OF FOrCE, THE FIrST INTErNaTIONaL COMMErCIaL guIdELINES FOr SuCH a PurPOSE, HavINg rESOLvEd ITS CONCErNS abOuT “PrESuMPTIvE LaNguagE” IN THE OrIgINaL draFT. By Liz McMahon and reproduced from Lloyd’s List
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nitial concerns voiced by BIMCO centred on the description of the 100 Series RUF as an “international benchmark standard rules for the use of force” that would protect privately contracted armed security personnel in the event of a trial.
BIMCO chief maritime security officer Giles Noakes said that those concerns had now been resolved, allowing the shipping industry association to lend collaborative support to further development of a document that will now be described as an international model set of maritime rules for the use of force. “BIMCO has always supported the concept of a common set of rules for the use of force but to be viable they would need to be recognised internationally,” he said. The 100 Series RUF has now been presented to the International Standards Organisation, for consideration to supplement the recently published international standard for armed guards, ISO PAS 28007. Mr Noakes stressed, however, that the 100 Series RUF provides no indemnity or immunity against civil or criminal liability in cases where force has been used unlawfully. “The ISO PAS 28007 has been developed to provide guidelines for private maritime security companies providing privately contracted armed security personnel on board ships and it annexes, as an example of a pro-forma contract, the BIMCO Guardcon and its extant guidance on drafting RUF — both extensively in use.” The 100 Series RUF is intended to complement the ISO PAS 28007 and, Mr Noakes said, once approved for use, ISO will present this model to the International Maritime Organization for information.
national guidance as determined by their respective governments and competent authorities.”
“Importantly, flag states can then consider either endorsing them or taking them away for use within their administrations as a sound example set of RUF for use by all registered ships that use armed guards,” he said.
“After 18 months work, we feel we have a robust international model set of RUF that provides an international objective and lawful test for the use of force, is fully supportive of the maritime security industry and wider shipping community and provides for consideration and respect for human rights, the latter being an aspect that is much spoken about, but rarely dealt with in such a direct manner related to use of force.”
“The 100 Series Rules will not bind flag states as to their use, but instead provide a choice for their potential incorporation into
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David Hammond, head of maritime practice at 9 Bedford Row International Chambers, said the detailed support from BIMCO, International Chamber of Shipping, Security Association for the Maritime Industry and the Marshall Islands flag registry was instrumental in completing the final draft sent to ISO.
updates: ISo
isO/pAs 28007:2012
By Liz McMahon and reproduced from Lloyd’s List
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SO/PAS 28007 is the new International Standard, which deals with PCASP on commercial vessels. This ISO award contains vital information for PMSC’s and the vessels in which they service by outlining the specific requirements for security management systems and the supply chain. The document focuses on subjects such as planning, training and awareness, communications and documentation. On an operational scale it covers crime scene and forensic management, casualty management, customer focus and as always health and safety. In addition, the ISO/PAS 28007 is backed by major international corporations and intelligence and law enforcement agencies such as the IMO, INTERPOL, the European Commission, the Contact Group established by the UN Security Council Resolution 1851 and the UK appointed SCEG (Security in Complex Environments Group). SS Global, a Certification Body that specializes in supporting the private security industry for complex environments, and are part of the UK Accreditation Service (UKAS) pilot for both ISO PAS 28007 (maritime) and PSC 1 (land), have already commenced a pilot certification programme with. Port2Port Maritime Security and Castor Vali Security Risk Management. MSS Global chose a smaller company, and a midlarge company; the aim being to best capture the breadth of market demands so that the certification model developed through the pilot best fits the PMSC market that supports the commercial shipping industry. Tony Chattin, the Managing Director of MSS Global said, “We are
delighted to be working with Port2Port and Castor Valli through this UKAS sponsored pilot to deliver this important ISO which has been designed specifically for this emergent maritime security market. This international standard will establish a clear capability benchmark, that will allow PMSCs to provide assurance to their clients through the impartial third party accredited certification regime for management systems, enshrined in the ISO framework.” The Security Association for the Maritime Industry (SAMI) has been at the vanguard of the advancement of international maritime security standards and has played a key role in the development of ISO PAS 28007 (maritime). SAMI is firmly of the view that this is a pivotal, vital and significant development. Commenting on the launch of the MSS Global pilot audit, Peter Cook, Founder and Security Director of SAMI said, “The association is delighted that two of SAMI’s certified members have been selected to participate in this next stage of development for ISO PAS 28007 and fully support them in this process.” Giles Noakes, the Chief Maritime Security Officer of BIMCO said, “It is excellent to see this pilot scheme kick off so soon after the introduction of ISO PAS 28007 – there have been a number of ‘doubting Thomas’s’. It confirms entirely our view that a PMSC’s professional credibility and safety standards need endorsing through a recognized, independent, third party audit system in an area where seafarers lives are at risk and there is no room for mistakes. We are confident this pilot will validate our involvement and support for the ISO PAS and the development and implementation of the GUARDCON contract now extensively in use with the industry.
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Feature repOrt: weSt AFrIcA
guLF OF guINEa PIraCy: LOOkINg bEyONd THE STaTISTICS
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ccording to Rick Nelson, director of the homeland security and counter terrorism programme of the Washington-based Center for Strategic and International Studies (CSIS), and his colleague Aaron Ware, who wrote a paper in August last year on the piracy threat in West Africa, “the Gulf of Guinea is, in many ways, a perfect incubator for piracy, providing both resources and safe haven. Surrounded by some of Africa’s leading oil producers, including Nigeria, Angola, Gabon, Ghana, and Equatorial Guinea, the Gulf is a major transit route for oil tankers on their way to international markets. `These tankers have proven valuable prey for pirates.” According to Nelson and Ware, “unlike Somali pirates who focus on the ransom of captured crew members, pirates in the Gulf of Guinea derive much of their income from the theft of oil. These pirates will frequently hijack a tanker, siphon the oil to another vessel, and resell it on the local black market.” The pirates also hijack cargo ships containing goods such as cocoa and minerals, and this, in addition to stolen fuel from oil tankers, provides pirates in the Gulf of Guinea with a lucrative source of income. Nelson and Ware pointed out that because pirates in West Africa derived their profits from the sale of stolen oil and other goods, they have proven to be significantly more violent than their Somali counterparts. “Vessels are frequently sprayed with automatic weapons fire, and the murder
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of crew members is not uncommon,” said Nelson and Ware. “Recent events indicate that these pirates are even willing to attack vessels with security personnel aboard, evidenced by the recent killing of two Nigerian sailors guarding an oil barge. Given that pirates are now adopting heavier weapons and more sophisticated tactics, this violence is only likely to increase.” The danger does not stop there. “Beyond the bloodshed” the two authors reported, “the expansion of piracy in the Gulf of Guinea poses a dire threat to local economies, potentially undermining what little stability currently exists in the region. Oil revenue, which many countries in the region rely upon, is seriously threatened by pirate activity - 7 % of Nigeria’s oil is believed lost due to such criminality. “Additionally, instability in the Gulf has sharply decreased revenue collected from trade: Benin, whose economy depends on taxing ships entering the port of Cotonou, has experienced a 70% decline in shipping activity due to piracy. Furthermore, as piracy drives up insurance premiums for shipping companies, the price of imported goods in the region could spike, further imperiling economies. If these local economies falter, development and stability in the region could quickly deteriorate”. And then came the rub: “’The effects of piracy in the Gulf of Guinea,” Nelson and Ware said, “could well extend far beyond Africa, with potential ramifications for the larger global economy, and the US in particular.
vessels are frequently sprayed with automatic weapons fire, and the murder of crew members is not uncommon
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Feature repOrt: weSt AFrIcA
the exPANSIoN oF PIrAte GANGS INto the wAterS oF NeIGhborING StAteS exPLAINS why AttAckS MAy hAve DecreASeD IN NIGerIA, bUt It IS ALSo NoteD thAt the totAL FIGUre oF AttAckS IN weSt AFrIcAN wAterS hAS FALLeN FroM 116 IN 20II to 89 IN 2012.
The estimated three million barrels of oil produced daily by the nations of the Gulf of Guinea ultimately feed the North American and European markets. Nigeria alone is the fifth-largest supplier of oil to the US, and by 2015 could account for a quarter of US oil consumption. However, given the rate at which attacks on oil tankers are increasing the ability of these nations to reliably provide oil to the international market could be in question. Early 2012 saw a doubling in the number of attacks on oil tankers, with as many as eight hijackings in a month. If this dramatic trend continues, the flow of oil from the Gulf of Guinea to the US and the West [in general} could slow considerably.” More glooMy figures If Nelson and Ware did not frighten the West and Central Africans enough, the Brusselsbased International Crisis Group (ICG) had a further concern for them. Combined, the Gulf of Guinea states supply around 40% of Europe’s oil consumption and 29% of the USA’s. But the ICG’s latest report on piracy in the Gulf of Guinea, issued on 12 December 2012, had ample food for thought. “Within a decade,” the ICG said, “the Gulf of Guinea has become one of the most dangerous maritime areas in the world. Maritime security is a major regional problem that is compromising the development of this strategic economic area and threatening maritime trade in the short term and the stability of coastal states in the long term. Initially taken by surprise, the region’s governments are now aware of the problem. . . [So] in order to avoid violent transnational
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crime destabilizing the maritime economy and the coastal states, as it has done on the East African coast, these states must fill the security vacuum in their territorial waters and provide a collective response to this danger. Gulf of Guinea countries must press for dynamic cooperation between the Economic Community of Central African States (ECCAS) and the Economic Community of West African States (ECOWAS), take the initiative in promoting security, and adopt a new approach based on improving not only security but also economic governance.” But, as the ICG knows, that is easier said than done, especially when, apart from Nigeria and possibly Ghana and Cote d’lvoire, coastal states in the Gulf do not have any really strong navies to do the job. Nigeria, it is said, is the only country that has a frigate, corvette and aerial surveillance capabilities, even though Ghana’s chief of navy Rear-Admiral Quarshie, said on 5 February 2013 that the Ghana Navy, which was recently beefed up with six new fast patrol boats’, was now in a position to fight against piracy and other crimes Ghana s waters. So, if this is the state of the navies in the region, how do the Gulf of Guinea countries expect to be able to fight the pirates without international help? Why didn’t the international community ask the same from the coastal states in East Africa and the Gulf of Aden when Somali piracy was at its height in 2007? Why did all the world’s most powerful navies combine to fight the piracy in that region? Is the UN Security Council being fooled by the latest figures on global
piracy (including in the Gulf of Guinea), which shows a slight decline ? According to James Bridger, a Vienna-based maritime security consultant and piracy specialist, writing on 1 February 2013, “the top story is that global pirate attacks have hit a five-year low- [this is] explained by a sharp decline in the activities of Somalia’s notorious marauders. When this trend is reported, it is almost always followed by the caveat that a ‘new’ piracy epicenter has ‘emerged’ in Nigeria and that the criminal enterprise is now increasing and expanding across the Gulf of Guinea ... The 27 pirate attacks reported in Nigeria in 2012 represents an increase over the past two years, but falls well short of the 42 attacks the International Maritime Bureau [IMB] recorded in 2007.” Bridger warns that one must be careful about reporting an absolute “increase” in the total number of pirate attacks in West Africa over the past year. “The IMB’s figures,” Bridger says, “display a clear trend: attacks off Nigeria increased from 10 to 27, while those for the region as a whole rose from 44 to 51. These numbers are incomplete, however, as they only include incidents that were directly reported to the IMB; whereas an estimated 50-80% of pirate attacks go unreported.” Viewed against data published by the Danish consultancy firm, Risk Intelligence (which revealed a decrease in Nigerian and West African piracy in 2012- Risk reported 48 attacks in Nigerian waters), the ICG’s 12 December report appears to dwell a bit on hyperbole.
ten attacks were recorded off the Niger Delta in April and five in May. Although most attacks took place 20-30 miles off bayelsa and rivers states, three attacks were reported far out to sea, setting new records for the offshore reach of pirates in the bight of bonny bergen risk Solutions Togo is now an AWRP area
Putting the two reports in context, Bridger writes: “The expansion of pirate gangs into the waters of neighboring states explains why attacks may have decreased in Nigeria, but it is also noted that the total figure of attacks in West African waters has fallen from 116 in 20II to 89 in 2012.” But then Bridger adds a caveat: “An overall decline in the total number of pirate attacks in the Gulf of Guinea does not mean that the problem is being solved. The 16 January [2013] hijacking of the Panamanian-flagged product tanker, Itri, off the port of Abidjan, Cote d’Ivoire, attests that the threat remains high, but has shifted in terms of its targets and scope... “One manner in which this is evident is target selection. Attacks against support vessels operating close to shore have declined over the last five years (and with them, the total number of incidents), but this has coincided, since 2010, with a surge in tanker hijackings. According to the records of one corporate security manager operating in Nigeria, there were 42 attacks against supply vessels in 2008 (one of the worst years of the Niger Delta insurgency), but only 15 in 2012. Conversely, there were just eight attacks against tankers and cargo ships in 2008, but 42 in 2012. In total, Risk Intelligence has recorded 78 attempted attacks on product rankers and 27 short¬ duration hijackings since December 2010.”
NIgerIa: CorruptIoN aNd terrorIsm spurs ChaNges The practice of “bunkering” - illegal export of crude oil - always prevalent, has become epidemic, costing the country about US$7 billion per year. Smoke rises over the Delta from hundreds of unofficial oil refineries, and leaks and spills contaminate the creeks where local villagers fish. The major oil companies are not blameless of pollution, but much of the ecological disaster is beyond their control. The Nigerian armed forces sometimes destroy illegal refineries or detain bunkering vessels - but the military, government and oil companies are riddled with accomplices. President Jonathan has been trying to reform the sector. The Petroleum Investment Bill (PIB) is a kind of Nigerian version of the interminable court case in Charles Dickens’s Bleak House. In the works for 15 years, it has been wending its way between parliament and government for the past five. It is meant to overhaul regulation and taxation, create a true national oil company beyond the opaque Nigeria National Petroleum Corporation, establish a sovereign wealth fund, finally unlock Nigeria’s gas wealth and rebalance revenue-sharing with the non-oil producing regions. Now the Boko Haram insurgency in Nigeria’s north has thrown up yet another hurdle to the PIB. Even an unlucky former oil minister,
aged 87, was kidnapped in the north this month. President Jonathan declared a state of emergency in three affected states, but angry northern governors believe the bill offers too much to his south-eastern base and will probably block its passage this year. Nigeria’s light crude competes directly with US shale oil - its share of the American market has fallen from 11 per cent in 2011 to just 5 per cent last year. This means fiscal rectitude, attracting foreign investment, fixing fuel subsidies, restarting exploration and solving the country’s electricity crisis are more important than ever. Nigerians have seen $400bn of oil money go missing since 1960, but the zero-sum struggle to carve up the golden goose continues
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Feature repOrt: weSt AFrIcA This shift in targets, according to Bridger, might explain why commentators incorrectly refer to rising levels of piracy in the Gulf of Guinea, because the hijacking of tankers owned by international companies gets far greater media attention than the robbing of supply ships, even though supply ships are attacked more frequently than tankers. Bridger, however, explains that “while boarding a supply vessel and robbing it of valuables is a relatively low-tech affair, hijacking a product ranker and pilfering vast quantities of fuel over several days requires a high degree of organisation and sophistication ... “According to one testimony, Nigerian criminal syndicates are ‘sponsored by powerful people’, including government officials and oil industry executives, who provide advanced payment and information about the cargo, route, and security derails of ships that have been targeted. These intelligence-led operations have become increasingly multinational with gangs based in Nigeria planning attacks off the coasts of Benin, Togo and Cote d’Ivoire, often with the assistance of nationals of
these countries.”Bridger adds that “once the ship has been hijacked, pirates have been known to go to great lengths to make sure that the ship ‘disappears’ while preparation s are made to offload the cargo. For example, the gang that hijacked the Panama flagged product tanker MT Anuket Emerald on 25 January 2013 off Togo, made sure to damage all the ship’s communication equipment and loading computer, repaint its funnel, change the tanker’s name, and remove its IMO number.
$17,000 for new recruits to over $6o,ooo for ‘commanders’. The value of large-scale oil theft exceeds many of the ransom sums made by Somali pirates and is acquired without months of hostage negotiations. Piracy in the Gulf of Guinea, notes piracy expert Marrin Murphy, is now ‘the most lucrative in the world’.”
The offloading and black market sale of stolen products is equally complex, requiring a network of “ oil mafia” insiders who facilitate fuel storage a t numerous depots across Nigeria and then organize for onward distribution.”
According to maritime experts, it is difficult to fight West African piracy because of graft in Nigeria, where most of the pirates are based, which assures that even if pirates are caught, they are unlikely to face serious consequences. “Bribes to [government] agencies, ac¬cording to captured pirates, are set aside as an operational expense, meaning most suspects are released without charge,” Bridger reveals.
According to Bridger: “Though fewer ships are being attacked , the current crop of West African pirates (and their financial backers) are seeing greater returns. The group that recently hijacked the Itri was able to siphon off the ship’s entire cargo of fuel, valued at $5 m. Captured pirates involved in tanker hijackings claim that pay-offs range from
Thus, he adds, “in terms of numbers, overall pirate attacks may be declining in the Gulf of Guinea, but the gangs responsible appear to have increased both their operational sophistication and target selectivity. Given the increased value of each operation and the small risk of punishment, their crimes show no signs of disappearing.”
NIGERIA: NEW REGULATION Local restrictions mean that foreign private maritime security companies are unable to operate in West African territorial waters without employing the services of the local government security forces. However the capabilities of such personnel can be unpredictable and there are questions over the viability of insurance and contractual requirements when there are so many unknown quantities. Now regulation changes in Nigeria means that maritime security services in Nigeria is about to be turned on its head. Non-legal actors will be forced out of the country and the Nigerian Navy and National Security Agency will begin to play an even more important role in regulating the industry.
According to the source, the Nigerian Government is not only angered over the flaunting of laws but strongly objects to the loss of tax revenues. The practice of ‘piggybacking’- a non-legal form of sub-contracting, means that only a small proportion of a contract’s value is awarded to a Nigerian registered company. In those cases where a foreign company is supplying services no taxes are paid in Nigeria at all.
As reported recently by Mark Lowe of The Maritime Security Review, plans for a radical shakeup of the maritime security industry’s activities in Nigeria are further ahead than most have suspected.
Who those companies are remains to be seen, but Lee Kirton, Global Maritime Manager for LGS Nigeria, one of Nigeria’s leading maritime security firms, explained that achieving a fully operational legal status was only possible after having completed a thorough and rigorous due diligence process. Operating licenses are only issued to wholly Nigerian owned and managed companies that are registered in the country. The application process involves a series of ministries and authorities and, given the audits and controls that have to be conducted, can take a considerable amount of time.
Speculation within the industry suggests that the Nigerian Navy will play the lead role in introducing a series of measures that will force those operating without licences to leave the country while placing the legitimate players under stricter controls and monitoring.
To counter this practice it seems that the Nigerian Navy has drawn up plans to “collaborate” with a limited number of approved private contractors under a partnership arrangement.
“Clients must insist on seeing copies of a company’s licences,” says Kirton. “You can be banned from using Nigerian ports for 12 months; your vessel could be seized and the crew detained. In a worst case scenario, the outcome of an attack on a vessel could be your insurance policy being considered null and void, your vessel and cargo being seized and your commander arrested. It’s not a pleasant thought but it’s a possibility that all CSO’s need to consider.”
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To be fair, the Nigeria government, working with its counterparts in Benin, has intensified patrols in the waters of the two countries in recent months. This has forced the Nigeriabased criminal syndicates to move westward to find easier pickings in the waters of neighboring countries. As such, Togo, which has only 34 miles of coastline and no navy to write home about , has become West Africa’s piracy hotspot – the IMB recorded 15 attacks in Togolese waters in 2012. Ghana and Cote D’Ivoire now marks the furthest point the Nigerian based pirates have expanded their activities. The international connections involved in this criminal activity also make it difficult to fight it. Maritime experts say bunkering has become part of a larger international web as Lebanese and Eastern European criminal interests reportedly arrange the black market sale of stolen crude oil and refined cargoes. Recent attacks, the experts add, appear to be the result of intellegence-led planning” where tankers are “targeted in very well coordinated and executed operations”.
According to captured pirates bribes to [government] agencies are set aside as an operational expense, meaning most suspects are released without charge
“In this sense,” says Bridger, “maritime crime is now a transnational emergency in the Gulf of Guinea. Already spreading from Nigeria to Benin, Togo, and Cote d’Ivoire, it is Likely that Liberia, Cameroon and Equatorial Guinea will come under increased stress from pirates and oil thieves this year.” In 2012 alone, five incidents were reported off the Ivorian coast. And on 4 February 2013, a French tanker under a Luxembourg flag was hijacked off Cote d ‘Ivoire, although port authorities in Abidjan insisted that “the boat was hijacked in international waters”, 300km from the Ivorian coast. In another incident in January, the ranker MT Orfeas was hijacked off Cote d’Ivoire and then taken 6oo nautical miles to Nigerian waters where the pirates siphoned off 3,000 tons of gasoline. In total, Bridger estimates that piracy costs the littoral states of the Gulf of Guinea an annual $2bn in stolen cargo, rising insurance premiums, and other security costs. “As the menace expands,” he writes, “the export of oil, metals, cocoa, and agricultural products - vital to both local development and world markets - will also come under threat.” It is clear that the Gulf of Guinea states, like their counterparts in East Africa and the Gulf of Aden, cannot fight the problem alone. It needs a coordinated international response.
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Feature repOrt: weSt AFrIcA
WEsT AfRIcA: GROWING HIjAckING RIsk
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hilst the threat from piracy is receding, violent robberies and even hijackings are becoming more common on the West Coast of Africa (see feature report). The dangers off Nigeria, especially in the Niger Delta, are well known, but pirate activities are fanning out. The first hijacking off Ivory Coast was reported in October 2012 when men armed with knives and sub machine guns boarded a tanker carrying 30,000 tons of gasoline. In January this year armed men hijacked the Panamanian tanker ITRI carrying oil to Abidjan and siphoned off $5million worth of fuel. In April there was a spate of Hijackings. The Antigua and Barbudaflagged MV City of Xiamen container ship was attacked late on April 25 off the coast of oil-producing Bayelsa state. According to the IMB 14 heavily armed pirates attacked the container ship, breached its citadel designed to protect the crew from attack. The pirates took five crew captive before escaping with cash taken from the ship and the crew.
Another container ship, the Liberia-flagged, Hansa Marburg, was attacked and boarded by pirates 105nm South of the Nigerian coast on 23 April. Four crew were kidnapped as the pirates escaped. This was followed by an attack in the same Bayelsa region on the Nigerian-flagged MT Matrix during which a number of crew were abducted. In its latest report on piracy in West Africa, Bergen Risk Solutions noted a huge rise in attacks this year on international shipping off the Niger Delta with five attacks in May. According to Bergen although most attacks took place 20-30 miles off Bayelsa and Rivers states, three attacks were reported far out to sea, setting new records for the offshore reach of pirates in the Bight of Bonny
– see Bergen piracy map in West Africa Feature Report. Figures released by the IMB for 2012 suggest that while hijacking and hostagetaking are not the principal aim of pirates in the Gulf of Guinea, 206 people (21% of those attacked) were held captive by pirates who were seeking to steal refined oil. There were also reports of five people kidnapped in 2012 and held onshore until a ransom could be secured. However there is a much higher boarding rate in the Gulf of Guinea region than off the coast of Somalia. As reported in its publication Human Cost of Maritime Piracy, 2012, the authors point out that in the Gulf of Guinea 83% of attacks lead to boardings. It may be related to the fact that many vessels are attacked while at anchor, drifting, or conducting ship-to-ship transfers of refined products cargo. Only 33% of vessels were attacked while actively in transit in the Gulf of Guinea region. In contrast, attacks off Somalia almost always occur while they are underway. Furthermore, the geography of the Gulf of Guinea region and the fact that vessels must stop at or near a port to offload or load cargo provides criminals with greater opportunity to gain access to vessels. It also removes the ability of vessels to reduce the risk of being boarded or hijacked by travelling at increased speeds, which is one of the key recommended self-defense measures for minimizing the possibility of being boarded while transiting the Gulf of Aden and Western Indian Ocean.
Commentary and graphics from Oceans Beyond Piracy: Economic Cost of Somali Piracy 2012
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LeGaL
PrIvaTE MarITIME SECurITy COMPaNIES aNd THE uSE OF FOrCE in tHis rEpOrt: 100 series: Filling the regulatory vacuum Guardcon: who Protects the Master Civil liability: Minimizing the risk
LeGaL: reGULAtory vAccUM
rEguLaTOry vaCuuM L
ast year, a drafting group consisting of private security associations, flag states and maritime industry associations began working on the so-called 100 Series Rules “for the establishment of a clear and concise model set of Rules for Use of Force that may be used by Privately Contracted Armed Security Personnel in the maritime domain.� Until the recent endorsement by Bimco (see industry Update in this report) this effort has been bogged down by disagreements and competing initiatives, illustrating the difficulty in arriving at an agreed standard. The discussion surrounding this issue must take into account the multi-faceted, complex nature of counter-piracy vessel protection activities. Despite multiple attempts to provide guidance on the matter, no single solution has been accepted as universal or authoritative. Under the current system, Private Maritime Security Companies (PMSC) are responsible for abiding by rules for the use of force (RUF) in accordance with the laws of the Flag State of the vessel on which they are embarked, and if applicable, the laws of the port state or territorial waters. Variance between Flag State laws and policies, and lack of robust oversight has made it difficult to ensure accountability in the proper and ethical use of force. The increasingly complex nature and greater geographic proliferation of PMSCs makes the conversation about RUF more important than ever. Additionally, proposed private navy initiatives such as Typhon might further challenge the boundaries between the public and private security and military apparatuses charged with protecting merchant vessels (MVs). The fully civilian composition of PCASP teams differentiates them from Vessel Protection Detachments (VPD). A VPD is a team of military personnel, usually from the Marine force of the flag state. Several Flag States prefer the use of VPD over PCASP as they are generally more
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professional, accountable, and as military personnel, subject to significant oversight. The primary drawback to VPDs is the cost difference between a VPD team and a PCASP team. This discussion also necessitates that we distinguish between the two types of rules that govern the use of force at sea, Rules on the Use of Force (RUF) and Rules of Engagement (ROE). RUF are explicitly defensive in their mandate. In this way they differ substantially from Rules of Engagement (ROE). Rules of Engagement outline appropriate parameters for offensive action (though they may also contain defensive provisions as well), and are only applicable to legitimate, state military forces.
The purpose and need for ruf RUF serve a twofold purpose: protecting potentially innocent bi-standers against the inappropriate, indiscriminate or abusive use of force, and protecting security and military personnel by outlining the legitimate parameters for the use of force in self-defense and the defense of others. Demonstrated compliance with the RUF serves as a potential defense in the event of litigation. Though PCASP operate in a quasi-military capacity they are civilians, working under a civilian mandate. This civilian mandate should inform RUF by permitting the use of force only in self-defense and the defense of others. The rights to preemptive force, boarding operations, and detention of suspects are held exclusively by military forces. Self-defense for a PCASP team, however, falls into two categories: l
l
Individual self-defense, which gives the individual the right to use force to defend his person from an attack or imminent attack. Use of force in the protection of others, the right to defend specific persons against attack or imminent attack with the use of force.
100 sEriEs rulEs FOr tHE usE OF FOrCE (ruF) The long awaited 100 Series Rules for the Use of Force (RUF) have finally been released after a 20-month consultation period across the shipping industry. With the support of SAMI, BIMCO, ICS, and UNICRI, the author David Hammond, a UK barrister-at-law and maritime lawyer, said the 100 Series RUF is intended to be the first international model set of RUF for the benefit of and use by the entire maritime industry. However the rules will not provide any form of indemnity or immunity against civil or criminal liability when force has been used unlawfully. The 100 Series have been developed to provide a model against which privately contracted armed security personnel may be professionally trained; companies may be audited and operator actions measured and judged by competent authorities. The rules set out a threshold to start using force. Soft measures come first, then escalating to aimed warning shots, finally rule 103 allows use of lethal force. The laying out of the steps is key. Before there was simply guesswork. At the core of the 100 Series is the basic principle of the individual right of selfdefence; itself a universal concept and during the development of the rules, the legal team researched the legislation relating to force across 76 different nations. The rules have undergone stringent operator, commercial and legal scrutiny from across the maritime industry and over a long period of time, and with the 100 series in place stakeholders can make informed decisions when reviewing and comparing RUF. The 100 Series will be assessed over the coming months by the insurance industry to see if it addresses long standing concerns over potential liability problems relating to the use of force. According to underwriters the unpredictable liability was a major reason that shipowners had been so resolutely anti-armed guards for so long.
Without comprehensive, enforceable, and properly administered RUF, PCASP teams will continue to operate in what amounts to a regulatory vacuum. PCASP’s must operate within a legitimate and thoughtful regulatory scheme
events demonstrating the need for standardized ruf The importance of understanding RUF and the discussion surrounding its proper application have been highlighted by events such as: (1) the Enrica Lexie incident, involving the alleged killing of two Indian fisherman by an embarked VPD of Italian Marines; (2) footage of a PCASP team on board the MV Avocet shooting at an approaching pirate skiff, which calls into question accepted standards for escalation of force and proportionality; and (3) questions associated with an encounter involving the MV Almezaan. During this incident, EU naval forces came across a pirate skiff after the Almezaan issued a distress call about a piracy attack. The skiff was shot full of holes and taking on water, with one occupant dead. During questioning, the Ship’s Master denied having security and weapons on board, and claimed the pirates were deterred by pen flares.
the means and opportunity to inflict great bodily harm or death on the individual or others in the vicinity.” This guidance provides an example of how an RUF requirement could clearly define imminent threat, the activities it authorizes, and the limits it establishes.
ongoing regulatory attempts While not yet endorsed by the International Maritime Authority, the International Standardization Organization (ISO) Standard for Guidelines for Private Maritime Security Companies (PMSC) providing privately contracted armed security personnel (PCASP) on board ships (and pro forma contract)- also known as the ISO 28007 – requires that the MV Master and the PMSC contracted to provide a PCASP team must agree on an RUF policy. This policy must be in accordance with Flag State and International law and provide for: Reasonable steps to avoid the use of force l A graduated deterrent approach including non-lethal methods and warning shots l Force being used only in self-defense (necessary to deter a perceived threat and proportionate to that threat) l The master possessing final fire/cease fire authority l Written incident reports being provided to “appropriate international liaison,” the flag state, the client, and the insurer l “Where possible and practicable, a visual (and audio) record of any attack” As stated at the beginning of this article, several large Flag States, industry l
In the absence of sufficient incentives to adhere to rigorous RUF, some PMSC have begun adopting more lax standards, exemplified by policies where PMSCs have designated 350m “no skiff zones.” Such policies operate under the premise that deadly force is authorized by virtue of proximity. This exceeds the US Coastguard’s definition of imminent threat: “aiming or firing weapons at a …vessel with individuals embarked, or an attempted armed, nonconsensual boarding, … or brandishing weapons directed at crewmembers or security personnel, where there is a reasonable belief that the attacker(s) also has
associations, and industry actors have participated in the drafting of the 100 Series Rules for the Use of Force. The 100 Series will draw on UNCLOS, the Montreux Document, the International Code of Conduct, Industry Best Management Practices (Version 4) and a range of other documents to inform the drafting of an RUF that is both consistent with international law and complementary to ISO 28007. Like other RUF documents and standards, implementation, compliance certification, and enforcement will be the primary challenges. The willingness of Flag States and the shipping industry to require compliance by PMSCs will be key to the success or failure of the 100 Series. The 100 Series is expected to be released sometime in mid 2013. Without comprehensive, enforceable, and properly administered RUF, PCASP teams will continue to operate in what amounts to a regulatory vacuum. Given the greatly expanded number and geographic range of armed security teams at sea, the stakes to local fishermen and seafarers are potentially life and death. The human cost of piracy includes not only the life, health, and freedom of the seafarers taken captive by pirates, but also any who may be victims of wrongful or indiscriminate use of force by PCASP teams. PCASP serve a vital function in protecting seafarers and cargo from the threats that evade the international naval presence, but they must operate within a legitimate and thoughtful regulatory scheme. The professional, international naval forces function within the constraints of Rules of Engagement, military law, and humanitarian principles; PMSC should follow suit.
- Matt Walje is a Project Coordinator at Oceans Beyond Piracy | @PiracyOBP ARIES Risk Group | 21
LeGaL:
guardCON: wHO PrOTECTS THE MaSTEr?
By Rhys Clift – Partner Hill Dickinson
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here the Guardcon contract faces one of its biggest challenges is how to define and protect the role of the Master in a situation that may require the use of force or RUF (rules on the use of force).
on a ‘graduated’ response recognises the fact that RUF does not necessarily imply the use of lethal force or, indeed, of any actual force by the security guards. The mere sight of a visible armed presence on a vessel may prove sufficient to deter a potential attack.
A master is not necessarily an expert in dealing with armed situations, nor trained in the necessary expertise to command a team of armed guards in the use of firearms, or necessarily to decide upon situations where a graduated response by the guards is appropriate. However, his authority onboard his vessel is, and has always been paramount and the Guardcon contract makes no attempt to derogate from this traditional, and arguably unassailable, position.
However, in terms of the actual use of force, sub-clause 8(c) clearly allocates the decision on the scale of the force employed to the individual security guards alone. For practical and legal reasons the master cannot order a guard to shoot; each guard must act in accordance with RUF and national law in deciding upon the appropriate use of force and will be held liable for the consequences.
Clause 8 deals precisely with the division of responsibility between the master and the PCASP in high–risk situations. The contract is unequivocal on the position and authority of the master: ‘under no circumstances should there be a derogation of the master’s authority – he retains at all times full command of and responsibility for the vessel.’ How, then, to allow the master to maintain and exercise this authority in situations where the expert decision on RUF must inevitably lie with the PCASP? Sub-clause 8(b) deals with the assessment by the security team leader of threats to the vessel. If, in the team leader’s professional opinion, the threat warrants a graduated response from the security guards, he has to advise the master or, in the master’s absence, the officer of the watch, that he intends to invoke the RUF. It should be noted here that the emphasis
The varying provisions of national laws mean that, however desirable, Guardcon cannot define what an appropriate level of force might be in any given situation. However, although the master does not himself invoke RUF or order the use of force by the security guards, he retains the right under all circumstances to order the guards to stop firing, although that right is set against the individual right of each guard to exercise reasonable self-defence. Why does the contract allow the master full authority in respect of the conduct of operations on board the vessel, but reserve judgement on the exercise and actual deployment of RUF to the PCASP? The answer lies in the particular legal liabilities that surround such decisions and use of force and makes clear the importance the Guardcon contract places on protecting the master from any liability, principally, criminal liability where RUF is exercised. How far this will and can be successful remains open to question.
however, although the master does not himself invoke rUF or order the use of force by the security guards, he retains the right under all circumstances to order the guards to stop firing, although that right is set against the individual right of each guard to exercise reasonable self-defence. ARIES Risk Group | 23
LeGaL: who ProtectS the MASter?
Self-defence is not purely about lethal force, as the force used in self-defence must be reasonable, graduated and proportionate and must only be that which is necessary in the circumstances (including if force was necessary at all – hence the graduated response).
The guidance notes to Guardcon acknowledge that the concept of providing for the use of force, including lethal force, in a commercial contract is unique in the maritime field. In most countries the police are subject to strict regulation, with procedures for the deployment of weapons assessed and recorded in a decision log at every step. The maritime security industry does not currently offer anything like the same level of scrutiny. The position of the master was of especial concern here and, in developing the Guardcon regime, the issue was discussed with the UK Crown Prosecution Service (CPS). Ever cautious, the CPS declined to provide a formal response or issuing their own guidelines, but they have confirmed that the approach in Guardcon is right at least as a matter of English Law, where force used to prevent a potential hijacking must be proportionate and necessary. The CPS advised that the master should not be involved in the decision to open fire. If he should become involved in that decision, the danger is that he may fall foul of the rules on ‘joint enterprise’, under which he could share liability for any consequent actions of the security personnel. The CPS also advised there should be a point at which it can be clearly established that a decision has been made to employ RUF in dealing with an escalating or existing threat, although responsibility for defining this moment of decision is not stipulated anywhere in the contract. Arguably this must lie with the master.
Reproduced from Hill Dickinson’s Marine Newsletter
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The way a situation is anticipated to develop under the Guardcon rules, then, are as follows: 1. an actual/perceived threat of pirate attack materialises; 2. the leader of the PCASP reports to the master (or, absent the immediate presence of the master, the officer currently with authority of command); 3. if the leader of the PCASP deems it necessary, he will advise that he intends to deploy RUF; 4. the master may express an opinion on this, but cannot make the ultimate decision; 5. RUF is deployed at the decision and command of the leader of the PCASP; 6. at any point the master may order that any armed response cease, but the response to such an order is subject to
the individual security guard’s perception of their individual personal danger in complying. Until such time as the 100 Series comes into force it’s important to also note the significance of the RUF stating clearly the following: “Notwithstanding any other statement in this document, in the event the Team Leader has decided there is an actual, perceived or threatened attack the Team Leader shall advise the Master, or in his absence the office of the watch, that he intends to invoke the RUF. The Master of the vessel shall at all times have overall control of the vessel and any decisions made by the Master shall be binding. However, notwithstanding the aforementioned, each security personnel will always have an individual right of selfdefence in accordance with the applicable national law.” There should also be a definition of selfdefence, so that the guards are all fully aware of this fundamental aspect of the Rules of Force. Self-defence is not purely about lethal force, as the force used in self-defence must be reasonable, graduated and proportionate and must only be that which is necessary in the circumstances (including if force was necessary at all – hence the graduated response). When defending the vessel and crew against an attack by pirates the security personnel can only rely on the legal principal of selfdefence to justify their use of any force; they have the same, and no additional, rights as civilians when attacked With the Guardcon contract BIMCO has clearly been at pains to protect the position of the master around the liability that accompanies the decisions to use armed force against attack. However, it is impossible to anticipate what the actual consequences of such an occurrence will be. To quote Steve Jones of SAMI – the Security Association for the Maritime Industry: ‘The control of engagement with pirates has been important, but as the issues evolve, it is increasingly the case that the rules for disengagement are becoming significant too.’ However, protective owners or the provisions of BIMCO’s Guardcon contract may be, the master’s decisions remain, as traditionally they always have been, of considerable importance for ship, crew (PCASP), and the master himself.
LeGaL:
PMSC’S aNd CIvIL LIabILITy
By Greg A. Keef
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hilst it is true to say the maritime industry and Flag States have scrambled to write guidelines relating to the selection and operation of PMSC providing Anti-Piracy services, it is also true that the maritime industry has been forced to learn about the laws governing firearms, and use of force. One of the most challenging areas to address is the legality relating to the use of force by a PMSC.
piracy is a criminal event, often occurring in international waters, subject to International law. The importance of this understanding has to do with the response utilized in preventing the pirate attack. The rules governing the use of force must comply with the applicable laws within the jurisdiction of the crime, and the Flag State of the vessel. This is fairly straight forward, but already we are starting to expand beyond the scope of military training.
What would happen if a PMSC uses deadly force to defend a vessel or its crew in International Waters? Will the presence of PMSC cause an escalation of weaponry and tactics on the part of the pirates? Which country has jurisdiction over the PMSC, with respect to licensing and the carriage of arms? These are all legitimate questions and, not withstanding the pending BIMCO endorsed 100 Series RUF, there is still some confusion.
Now, in the event justifiable force is utilized in defense of the vessel and crew, there will be an active crime scene. What are the policies of the PMSC with respect to crime scenes? Do their personnel have proper training with respect to processing a crime scene, evidence collection, and report writing? Why is this even important?
If you were to look at the scope of experience and training a person would have with an elite military background, and compare that to the needed skill set of a PCASP onboard a vessel providing Anti-Piracy Services, there is a major difference. I would suggest one first consider the elements of a piracy attack on a vessel. We all know that the pirates are utilizing automatic weapons, RPG’s, and GPS as basic tools of the trade. However, just because the weaponry utilized by the pirates have military applications, does not classify the attack as a military event in a conflict zone. The act of
Going back to the previous statement, the classification of piracy is a criminal event. Criminal events are subject to an investigation by the appropriate law enforcement agency. It would certainly benefit the shipping company and PMSC if there was proper documentation of the crime scene, along with the collection of evidence, using procedures that would stand up in a court of law. The next area worth discussing could very well be one of the most important, Civil Liability. A punitive judgment can quickly exceed the sums of money a shipping company would expect to pay for a ransom demand if their ship were to be taken. At this point in time, it appears everyone is only focusing on events up to a pirate attack, and
not beyond the attack. There does not appear to be a legitimate focus on the mitigation of civil liability involving PCASP and the use of force. I know from past experience, this will become a hot topic as soon as a shipping company is summoned by a court of law due to a claim of excessive force utilized by PCASP. The mitigation of liability following a use of force appears to be absent from risk assessments due to the lack of experience in this area on the part of PMSC. Being prepared for a civil lawsuit requires you to predict what may occur well into the future. The defense of your actions are challenging even when you have done everything correctly. Proper training, mindset, report writing, policies and procedures, command and control, court room testimony, and an in depth knowledge on the use of force in a civilian application are critical if you are going to survive a civil lawsuit. In a civil lawsuit, the individual PCASP can also be held liable for punitive damages. The attorneys, who will take civil lawsuits on behalf of their clients, have all the time in the world to find things wrong with your operation. They will subpoena training records and scrutinize personnel records looking for anything that will bring discredit to the individuals involved in the use of force incident. This will inevitably expose the shipping company to possible liability if they have hired, what a jury deems, an inadequately trained PMSC.
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LeGaL: cIvIL LIAbILIty
vessel owners need to demand from their PMSc specific training and experience relating to civil liability
Imagine the owner of a vessel receiving notification that they are being sued for an incident that occurred nine months ago. The suit alleges one of the security team members on their vessel shot an innocent fisherman in the leg approximately 400 nautical miles offshore from Somalia. The complaining party has evidence of a gunshot wound to his upper left leg, which is supported by medical records and photographs. The dates given in the suit correspond with the ship’s position nine months ago. Had the above incident actually occurred, what type of documentation would the PMSC present? Would the documentation be thorough enough to provide accurate details to counter the claim, or support the use of force utilized? Does the PMSC have well documented training records that support proper utilization of force? Does the PMSC have procedures for command and control involving an incident as described? Do they have policies and procedures involving a crime scene, and the ability to document and collect evidence per court standards? This described event could add up to millions of dollars in punitive damages if the PMSC did not have the training and experience relating to the use of force as it pertains to a civilian security operator. It is imperative PMSC’s are prepared beyond a pirate attack, and can defend their actions competently in a courtroom setting. Risk assessments need to include possible events beyond a pirated
attack. This is the reason experience with the use of force, as it applies to PCASP, is so important. There needs to be specific training and experience relating to civil liability on the part of your PMSC. Without this training and experience, a shipping company may be simply moving risk from one area of their operation to another area, instead of reducing the risk all together. Vessel owners and managers need to demand this level of expertise from their PMSC, ensuring the expertise goes beyond the ability to provide force protection. This
article is not written in an attempt to discredit military training, as I am a veteran myself. The intent is to bring attention to the real threat of civil liability involved with the use of force in a civilian application. I have testified in both criminal and civil cases involving the use of force, and recognize the importance of this experience. There is a real possibility of a PCASP being sued as an individual, along with the PMSC, and the vessel owners. Even if there is not a deployment of force, one has to be prepared to defend allegations of wrong doing.
liCEnCinG rEGulAtiOn: WHO ApprOVEs A pMsC? Due to the minimal standards governing PMSC’s, licensing requirements are fairly lenient. Even some of the larger prominent security companies from the U.S. and Britain have obtained their security licensing from foreign countries where the criteria is minimal. Military experience alone will often meet the minimum requirements for a security license.
licensed as a security company, there is a strict vetting process governed by the State where the company will be licensed. For example, in California, you will need to file an application and submit finger prints to the FBI for a thorough background check. Then there is a written examination covering employment law, business law, civil liability, tax laws, contract laws, and security operations.
Some companies have obtained their corporation status or LLC formation under general guidelines for a standard company in the U.S. or Britain, and then obtained a security license from a foreign country, and market themselves as a “licensed security company.” This is creating a false sense of security for the Maritime Industry. If a company in the United States wants to be
Upon verification of required experience, passing the background check, and a passing score on the written test, a security license is issued. Once a license is issued, there will be audits by the State to ensure ongoing compliance with the required regulations. This type of oversight is not always required by some of the foreign countries that have issued security licensing to some PMSC’s.
About the Author: Greg Keef is a retired Law Enforcement Officer with more than two decades of experience. Mr. Keef spent the majority of his career involved with Special Weapons and Tactics. He has held various positions on the SWAT Team as an operator, assistant team-leader, teamleader, and team-commander assignments. Mr. Keef has testified in court on various use of force incidents, and recognized as a use of force expert. Mr. Keef is now the President and CEO of Triton Global Services, Inc., located in Irvine California
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insurance
AspEn lAunCHEs
wEST aFrICa kIdNaP aNd raNSOM COvEr
aSPEN HaS rELEaSEd a NEw kIdNaP aNd raNSOM PrOduCT TO TaCkLE THE dIFFErENT rISkS THaT ExIST IN THE guLF OF guINEa aNd TO addrESS THE rISk THaT SHIPOwNErS OPEraTINg THErE TakE OuT uNNECESSary COvEr.
A
spen kidnap and ransom underwriter Henry MacHale said the company had a dominant market share, estimated at 35%-40%, of existing piracy premiums. He said the Gulf of Guinea product was unique and had taken nine months to develop. However, he added that as the product was released to brokers , he expected people to offer alternatives in due course. “In the Indian Ocean, piracy cover has been a serious product for around four years but this is slowly melting away,” he said. “Activity in the Gulf of Guinea has been present for some time but the threat is very different. The only similarity is that both acts are referred to as piracy.” Mr MacHale said there were five major markets writing marine K&R. “They write cover for the Indian Ocean and Gulf of Guinea but at a cheaper rate. However this doesn’t work as it doesn’t address the different elements of risk,” he said. “Aspen has created an entirely new product tailored to the risks in West Africa. It addresses several key points differently, one being ransom demand.”
In the Indian Ocean, ransom demands are rarely less than $5m and can be higher than $15m, the main problem for an Indian Ocean transit. In the Gulf of Guinea it is not possible to hold a vessel for long and K&R generally involves individual expatriate crew being taken ashore and ransom demands are between $1m-$2m. “At the moment K&R packages are providing cover for ransoms that is not necessary,” Mr MacHale said. He said Aspen’s new product was tailored to the lower ransom demands. “The biggest driver for piracy is the theft of bunkers; 51% of attacks in the Gulf of Guinea result in a significant loss of bunkers,” he said. “In a normal K&R policy, there is a sub-limit of $250,000, which covers the vessel for fuel if it goes off course. “In the Gulf of Guinea, a vessel that is hijacked will go off course but pirates will also offload as much oil as they can. Therefore the Aspen product covers both, with a sub-limit of $1m.” The product includes personal accident as a result of an insured event, reflecting the fact that pirates are significantly more violent in the Gulf of Guinea. ARIES Risk Group | 27
insurance: ASPeN k & r
Pirates here are not always afraid to attack a vessel with armed guards on it. taking the restrictions of using local armed guards as well, the discounts offered will not be as substantial as they have been for indian ocean transits. “Pirates regularly kill people as they feel like it,” Mr MacHale said. “Somali pirates tended to hold people in horrible conditions for long periods of time, but they were generally less violent. “We now offer $250,000 per insured person with this going up to $1m in the aggregate. Indian Ocean K&R policies did check in personal accident but only as an afterthought.” Another area of note is damage to vessels. Hijackings in the Gulf of Guinea tend to see the vessel held for two to three days. In this time there will be damage to the vessel in the region of $50,000-$70,000, Mr MacHale said. “Pirates will focus on damaging the bridge and electronics, basically anything to stop the ship being tracked. The result is more of a nuisance to the shipowner than anything else. “The loss is not that significant but it is likely the owner will need to claim on their hull policy. There is likely to be a deductible here of around $50,000 or they may lose a no-claims bonus of the same amount. “Either way they will be out of pocket. Therefore this aspect of the cover is not competing with hull; it is just protecting the owner from having to claim unnecessarily.” The Aspen product keeps aspects such as loss of hire the same as its K&R cover in the Indian Ocean as the standard has not really changed. In terms of pricing, cover is offered per transit in the Indian Ocean. The owner will say where the vessel is travelling to and from and it will cost X amount for five to 15 days, for example, depending on how long the journey takes. “Aspen West Africa K&R cover is offered on a per day basis as this allows insureds to tailor their own exposure,” Mr MacHale said. “Some vessels have to wait in the high-risk area for offshore terminals and may need five days of cover for this. “A middle bulker operating in the region may need two weeks, while the most extreme example could be an offshore supply vessel that will be in the region for 12 months moving between oil rig and land. “Therefore the per day prices would be multiplied by 365 as this truly reflects the risk — the longer a vessel is operating there, the more risk there is.” Security requirements are also very important, of course, and discounts can be offered for security guards. However, Mr MacHale
By Liz McMahon and reproduced from Lloyd’s List 28 | ARIES Risk Group
added: “The level of organisation from pirate groups is concerning and often backed by groups in the Niger Delta. “Pirates here are not always afraid to attack a vessel with armed guards on it. Taking the restrictions of using local armed guards as well, the discounts offered will not be as substantial as they have been for Indian Ocean transits.” Mr MacHale said that under-reporting in the Gulf of Guinea was more significant than in the Indian Ocean. “The problem spans the whole coastline and a number of vessels have been attacked well outside the Joint War Committee’s high-risk area. The product covers the whole of the Gulf of Guinea,” he said. “In the Indian Ocean, piracy has been a victim of its own success. There is one failed state and pirates asked for large ransoms, which made the international shipping community wake up and do something about it.” Mr MacHale argued that in the Gulf of Guinea just one unstable country would allow pirates to operate the length of the coastline. “Losses of $1m are not on the international radar,” he said. “It is a better business model hijacking a vessel and stealing its cargo, then getting rid of it within 48 hours. “In Somalia, pirates are left negotiating for two years. There will be losses in the Gulf of Guinea but it is an area worth investing time and effort in.”
insurance: cLUb k & r
P&I club Backed k&R Insurance
H
ard on the heels of Aspen’s K&R product for the Gulf Of Guinea – which Aspen say is tailored specifically to addressing lower ransom demands, per day cover needs and damage to the vessel - two P&I clubs have now launched their own K&R products. Standard’s cover is backed by Hiscox whilst Skuld’s product is co-venture with Griffin. Skuld also offer charterers cover though its alliance with Transmarine for hire obligations payable under the BIMCO Piracy clause. Both Clubs offer the cover to their members only but Standard will consider cover for vessels owned by members that are entered with another P&I club under a split entry. Both Clubs are likely to view the cover as another means to harness the captive insurance potential of their membership. With reinsurance provided by existing major K&R underwriters – Hiscox and Griffin – it’s unlikely that the Club product will deliver a cost advantage, but it will provide a seamless club style service. The choice of cover in the market will of course have a price impact. A decrease in piracy activity is having an effect on K&R premiums, but a major influence on rating is the market competition among the insurers offering piracy cover. Rates are now 50% less than 18 months ago and with the entrée of Skuld and Standard it will only heighten the competition for business. The salient cover features are explained by both Clubs In their issued circulars which are quoted below.
standard K&r Cover
skuld K&r Cover
Club-style service at a time of crisis is the distinguishing feature of this new cover. It is designed to ensure that members of the club benefit from a more joined-up approach to the placing and servicing of this risk and the resolution of piracy incidents. Ransom negotiations, a key dynamic in the successful resolution of piracy incidents, are handled by Control Risks and the club will coordinate support for the member with the usual claims philosophy of proactivity and close communications.
Skuld’s Kidnap & Ransom insurance is a co-venture with Griffin Underwriting who has long experience in K&R products. The security is 100% in Lloyd’s and A+ rated.
What is Covered? • Kidnap and ransom and associated expenses including • loss of hire • Loss of ransom in transit • Liabilities to crew arising from piracy incidents • Legal expenses and the costs of ransom negotiators are • also covered Main features The cover is provided by the Standard Club and is supported by reinsurance from Hiscox. This cover is available to members of the Standard Club. However, if the member has an entry in the Standard Club and other ships insured elsewhere then we will consider providing this cover for those other ships. In the event of a hijacking the member will notify Control Risks and the club. Control Risks are the most experienced crisis responders for kidnap and ransom incidents.
The K&R cover is to provide shipowners with a “certainty” in respect of cover for mainly pirate attacks and seizure but any kidnap & ransom situation is covered. In a pirate attack, Owners face the problem of where to turn in respect of their insurance covers. Hull or Hull War Risk as well as their P&I insurance cover certain exposures. A K&R cover is specifically designed for a piracy seizure and will respond to shipowners’ requirements to have the certainty they require in such a situation. What is Covered? • Ransom – the value of actually paid ransom up to limit agreed • Ransom loss in transit • Independent negotiator • Psychiatric and medical care up 24 months • Independent legal advice • Replacement person(s) • Interests on loans for ransom • Port expenses • Bunker consumption • Personal accident • Legal liability In addition cover can be extended for Loss of Hire with Griffin and charterers’ liability for Charter Hire through Transmarine backed by SKULD 1987, a Syndicate at Lloyd’s.
ARIES Risk Group | 29
piracy: the hUMAN coSt
THE HuMaN CONSEquENCES OF SOMaLIaN PIraCy
A Having first been assaulted witH rocket propelled grenade launcHers and small arms fire (typically ak-47’s,) tHe terror tHen really escalates for tHose eventually taken Hostage.
lthough recently the level of Piracy attacks in the Indian Ocean has been suppressed it is still worth noting that there are at least 169 hostages in captivity under Somalian piracy control.
The conditions that they will be enduring will be nothing short of appalling with the very real risk that they will not survive the ordeal at all. In 2011, 35 hostages died in captivity through either being killed by pirates during the attack or after being taken captive, disease or malnutrition or during rescue efforts where they are typically used as human shields. Seafarers come from quite humble backgrounds with the majority being from the Philipines, China and India. In 2011 - 3,863 seafarers were assaulted by armed pirates seeking to hijack their vessel and kidnap them. Of these, 968 seafarers came into close contact with pirates that had managed to board their vessel. 413 of those who came into close contact with pirates were eventually rescued from safe rooms (Citadels) by Naval forces after waiting sometimes days in absolute fear with the pirates attempting to breach the safe room. Having first been assaulted with rocket propelled grenade launchers and small arms fire (typically AK-47’s,) the terror then really escalates for those eventually taken hostage.
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Hostages Released from Iceberg after three years in captivity During the takeover of the vessel the crew will be subject to a reign of rifle butts, punched, kicked and generally abused. Then they will be herded into a small confined area on the vessel, normally the bridge, where they can be easily controlled by the Piracy group. Pirates will then start to inflict the maximum amount of physical and mental abuse on the hostages with the aim of extorting the ship owners to pay as big a ransom as they can negotiate. This abuse can be very severe including threats of execution and performing mock executions. One account from a surviving hostage recalls how they were all shown a video of one pirate executing another from a rival gang by beheading him with a knife and then explaining that the same would happen to them. The crew of the Iceberg experienced some of the worst atrocities. Released in December 2012 after a period of three years in captivity, the crew were whipped with electrical cable, thrown into the sea and shot at, or trussed up and left hanging upside down. The third officer went mad seven months into the ordeal and killed himself. Another who tried to drown himself was fished out and locked in a room alone for five months as punishment. As time went on, most became sick from the poor diet, which usually consisted of one meal of dirty rice per day, and drinking water that tasted of petrol. Another crewman lost his eyesight. They were locked together in a hot, dark hold five meters square, with automatic weapons trained on them, and only rarely allowed on deck. They were permitted to make occasional desperate phone calls to the outside world to describe their plight – a way for pirates to apply pressure in the negotiating process – but for two years and nine months of captivity, nobody answered their pleas for help.
So how did most of the hostages manage to keep their sanity during such a traumatic and protracted time? Truth is that many don’t with some having committed suicide during captivity and others displaying signs of Post Traumatic Stress Disorder when finally released. Hostages tend to use prayer, meditation and reading books to pass the time where allowed and to blank out the day to day fear which is ever present. While many ship owners will endeavour to secure the release of their crew and vessels there are some who do not have the ability to do so. When the pirates’ demands are not met the hostages are subjected to further abuses so that calls and videos can be relayed to the ship owner to try and extort the maximum amount of ransom money in the shortest possible time. Typical is the plight of the Iceberg crew. By 2011- two years on from the seizure of the vessel - the pirates were frustrated, angry, and broke. They wanted to capture new vessels and demanded the help of their captives, who they believed had hidden diesel reserves on board and perhaps engine parts they could use. The pirates picked on Dhiraj Tiwari, 27, the ship’s Indian chief officer, who had a reputation for sticking up for the rest of the men.
Crews were regularly bound with their hand and legs behind their baCks and left in the sun with temperatures above 40C for extended periods, burnt with Cigarette ends and even having jars of urine poured over them
Other accounts from crews describe how they were regularly bound with their hand and legs behind their backs and left in the sun with temperatures above 40c for extended periods, burnt with cigarette ends, fingernails pulled out by pliers and even having jars of urine poured over them. One hostage was made to stand naked in the ship’s freezer, kept at -18c, for up to an hour whilst others have been keel hauled (tied up and dragged under the ship’s keel) and some hung over the side of the vessel with their heads just above the water line.
Mr Ahiable said the crew wept as Mr Tiwari was beaten mercilessly in front of them. Afterwards, the pirates took him away. His fate is not known but his crewmates hope he is still being held somewhere as a hostage. Calls are also allowed to family members with the sole reason of added pressure being put on the ship owners by their families to pay up. This obviously creates an extremely worrying and disturbing time for those family members involved in addition to the financial strain of not receiving the bread winner’s salary in many cases.
The pirates’ paranoia of a rescue attempt increases the discomfort experienced by the hostages and regular moves from place to place add to the disorientation and fear. Jewel Ahiable, 33, the Iceberg’s Ghanaian electrical engineer said the crew came to dread occasional “sail-pasts” from the international anti-piracy force, which would come up close to monitor the situation but never intervene.
Unfortunately, many hostages including recreational sailors and people kidnapped on land may not have a ship owner, insurance policy or other means of producing a ransom. These hostages are typically held for longer periods whilst family and friends rally round to try and raise the necessary funds. Even when the ransom is paid this is sometimes still not sufficient to get all the crew released. In one case although the pirates had released most of the crew they held, all the Indian nationals were detained in response to the Indian Navy’s arrest of 61 pirates on another ship. The Pirates intention is to then use these hostages as bargaining chips to get an exchange of these captured Somalis. By Paul Smith of Unity SPS
“When a ship or plane was nearby, we suffered a lot. They took it out on us,” said Mr Ahiable. “We often saw warships and planes. NATO must have had half its navy off the coast of Somalia. Yet none of them gave us any help and none of them ever made contact with us.”
ARIES Risk Group | 31
reGuLatiOn: MIxeD teAMS
MIxEd SECurITy TEaMS uSINg FOrEIgN NaTIONaLS IN MIxEd TEaMS HaS CrEaTEd a “TwO-SIdEd INduSTry” aNd ONE PrIvaTE MarITIME SECurITy COMPaNy SayS IT HaS STOPPEd THE PraCTICE aS a rESuLT.
s
ea Marshals chief executive Thomas Jakobsson said the company scrapped mixed teams more than six months ago, when it implemented a new, more rigorous selection policy.
“As the debate rises among the private maritime security industry over ISO 28007 and the potential for less effective security teams caused by comprising them of mixed nationalities, we will continue our British-only policy for the foreseeable future,” he said. Sea Marshals previously used a “fairly substantial” mix of former military personnel from the UK and Croatia, Ukraine and Serbia. Operations manager Steve Collins said: “In the industry of old, this worked perfectly as the requirements from our clients, and the industry at large, allowed for it. “However, it became apparent last year that the industry was
32 | ARIES Risk Group
changing, as were we. Our clients were requesting British staff, we were implementing stringent standard operating procedures, and we had our commitments to the ongoing legislation to contend with. “We asked ourselves, ‘Can we recruit, screen and train foreign nationals as well as we could for British men?’ The answer was a resounding no.” Sea Marshals moved from an off-site, email and telephone-based recruitment process to one that uses pre-screening and face-toface interviews. It also decided to vet and screen candidates before offering them employment, including its own Criminal Record Disclosure checks. Mr Jakobsson said: “I need to be sure that the training and instruction I provide is fully carried over onto the vessels we protect.
In addItIon to the knowledge, language and lIaIson benefIts, It brIngs addItIonal benefIts to our clIents, for example shorter flIghts Into the hIgh-rIsk area, whIch cuts travel costs to clIents but also Increases the speed and flexIbIlIty of mobIlIsatIon.”
“There are two sides to this industry now: on the one hand there are the PMSCs who use their own nationals to fill their security teams, and whose realistic fees reflect the cost of that and the quality of the service provided. “Then there are the PMSCs who will utilise foreign nationals to reduce their wage bill and therefore provide lower-cost services. Often they are responding to pressure from shipping companies and underwriters who simply want to keep costs down.” He questioned whether the cost-conscious approach would bear scrutiny in a worst-case scenario, if the cheaper armed security team failed to prevent a pirate attack. “Personally I am not prepared to jeopardise my client’s vessel, my security operatives or my company by cutting corners.” However, Control Risks global head of maritime security Tim Stear disagrees with Mr Jakobsson and will continue to use mixed teams. “Control Risks’ team compositions are threat- and risk-led, so at times we do provide all-western teams when asked to do so, or if we deem it necessary, but as standard we recommend western lead but mixed teams,” he said. “All of our people are highly trained and experienced ex-military, navy commandos or special forces. They all have a high standard of English and have undergone criminal record and background checks.”
people who could say the same,” he said. Mr Stear said using foreign nationals could also improve liaison with local authorities in ports, navy and coastguards, and communication with fishing fleets across the Indian Ocean for information gathering and to differentiate between friend or foe. Their use also improved communications with crews during training and briefings, Mr Stear said. “Note that this is not just our Indian naval commandos, with so many Indian crews out there, but we also have Korean team members for Korean crews and Mandarin-speaking [former] Singapore Special Forces team members for Chinese-speaking crews. “This makes a big difference and is welcomed by both the masters and crew on board but also the client at home,” he said. “In addition to the knowledge, language and liaison benefits, it brings additional benefits to our clients, for example shorter flights into the high-risk area, which cuts travel costs to clients but also increases the speed and flexibility of mobilisation.” Mr Stear does say, however, that his argument comes with a caveat. “Control Risks has taken a very threat and skill-requirements led, socially responsible approach to this, based on decades of working in other high-risk areas globally,” he said.
Mr Stear said Control Risks used foreign nationals that offer extensive local knowledge.
“This approach is borne out by being one of the first companies to pass Gray Page and one of only eight companies to pass Panama before the first deadline with mixed teams.
“For instance, we employ former Indian naval commandos and the Indian coastline runs along two-thirds of the high-risk area and most routes. Also, many will have been on anti-piracy operations with their navies off Somalia. There is a limited pool of western
“But that does not mean we condone the practice of hiring the cheapest, [least skilled] labour in the market outside the high-risk area, with no English, no vetting and training and putting them on board.”
By Liz McMahon and reproduced from Lloyd’s List ARIES Risk Group | 33
aries update
arIES uPdaTE Commander william bennett, who heads up aries risk group’s security division, reports on the company’s operations expansion over the first six months of 2013.
I
t’s been a busy Q1 and Q2 for us. New clients from Switzerland and the Middle East have recently appointed Aries Risk to manage the security procurement and compliance process. We are now handling an average of 50 tenders per month drawing from the Aries Risk pool of high quality security companies. Almost 25% of those tenders translate into commissioned contracts of which we have now managed over 300 contracts. New and established clients rely on Aries to ensure that the nominated PMSC’s are fit for purpose; hold all the necessary licenses; employ the appropriate personnel; use legitimate sources for weapons procurement; use well-established local agents and of course evaluate and benchmark the competitiveness of the PMSC’s for each contract. Aries manage the entire process from procurement of the company through to disembarkation and post transit report. A key feature of Aries’ service is verification of documents. The current hot topic in the industry is fake documents. Aries compliance department works diligently to check that nominated guards for every contract hold the International Maritime Organization’s Standards of Training, Certification and Watchkeeping for Seafarers, which spans four modules: personal survival techniques, firefighting and fire prevention, elementary first aid and personal safety and social responsibility. However, personnel also need a maritime security officer or ship security officer certificate, a weapons-handling permit, Bosiet — basic offshore safety induction and emergency training — and a medical report, criminal record checks, mental health clearance and military or police discharge. It’s a challenging task to verify the “dynamic” documents associated with a team. Organised PMSC’s have most of the documents stored electronically but last minute contracts and the use of “hybrid” 34 | ARIES Risk Group
teams where qualification checks can be difficult, present real compliance problems. Given the dire freight market it’s perhaps not surprising to report that we are working with an increasing number of charters who are taking responsibility for the procurement process in order to have a greater control on the costs. This doesn’t always sit comfortably with the owners who are obliged to discharge their compliance obligations towards flag and other stakeholders such as P&I and Hull insurers. Hence our service helps bridge the gap. We can manage the procurement and compliance requirements on behalf of the charter to ensure that the owner is fully covered with his stakeholders. Most of the inquiries we receive are for HRA transits in the Indian Ocean requesting tenders for three or four man teams for placement on chemical and oil tankers, general cargo ships and bulkers. We are seeing more inquiries for specialist ships such as LPG’s and project cargo carriers where the routing issues can be complex. Of course dealing with piracy problems in the Gulf of Guinea is a challenge for the Marsec industry including Aries. Our intention is to give a briefing note in the coming months on the security options available. Right now the claims of some of the Marsec providers on the Gulf of Guinea services can be misleading. As you would have read in this report local laws currently in force across all the Gulf of Guinea countries only allow local guards to carry arms. Despite the impression to the contrary there is absolutely no scope to employ an international team of armed guards. Deploying unarmed team leaders selected from our own pool of private maritime security companies to oversee operations is at least a compromise. To meet the growing demand for our services, we have employed additional staff in our Athens Headquarters.
arIES 2013 CONTraCTS PMSC Teams
Flag Breakdown per Contract
P&I Approvals
Athens | Dubai | Nicosia T: GR 0030 212213430 T: DXB 00971 43697287 E: info@aries-risk.com W: www.aries-risk.com