PIRACY UPDATE
This article considers and summarises some of the recent regulatory changes governing armed guards and the challenges that hijackings in West Africa present.
PIRACY UPDATE: ARMED GUARDS, WEST AFRICAN HIJACKINGS AND GUARDCON REVISITED
Piracy (and more recently terrorism) remains a thorn in the side of modern shipping. With incidents in the Indian Ocean dwindling to almost nothing, focus has shifted during the past 12 months back on to West Africa, where there has been an increase in hijackings and, in particular, in Extended Duration Robberies (“EDR”) involving attacks on vessels and the theft of oil cargoes.
Most Flag States are working with existing legislation or have brought in new laws to allow vessels to deploy operators supplied by Private Maritime Security Companies (“PMSCs”). Some countries, for example Italy and Holland, continue to allow only military Vessel Protection Detachments (“VPDs”), despite pressure from their own shipping communities, who are frustrated by the inflexibility of VPDs, to go down the PMSC route. Other countries, including Japan, are in the process of introducing legislation to allow armed guards.
This article considers and summarises some of the recent regulatory changes governing armed guards and the challenges that hijackings in West Africa present.
The regulatory system that is now being constructed around the maritime security sector has arisen primarily to meet the threat off East Africa. It is worth reminding ourselves where we are in that respect. Even as that threat recedes, some 80% of ships continue to register with the Maritime Security Centre Horn of Africa (“MSCHOA”). According to MSCHOA, around a third of those ships are declaring the presence of armed guards. Interestingly, that figure has held pretty steady over the past six months and, if correct, (and assuming that none of the 20% that are not registering has weapons on-board) that means about 28% of all ships transiting the area have armed guards on-board, which is lower than the 40% estimated by the Security Association for the Maritime Industry (“SAMI”).
The IMO series of Interim Guidances on the Use of Armed Guards (1405-1443), aimed at Flag States and shipowners, are well understood and GUARDCON (issued by BIMCO in March 2012) has proved a great success. With over 4,000 downloads, GUARDCON is the third most used BIMCO form, after the GENCON and Supplytime charterparty forms.
As at the time of writing (mid-September 2013), the High Risk Area (“HRA”) and the Joint War Committee (“JWC”) additional premium risk area remain unchanged. Activity in the whole of the High Risk Area has fallen to levels not seen since pre-2008 and, anecdotally, seems to be largely confined to opportunistic approaches, perhaps by people smugglers or by others plying their trade across the Gulf of Aden. No ship has been hijacked since April 2012, but, as the military would say, the situation is “permissive”. The fact is that the circumstances within Somalia have not changed significantly and, if we have learned anything, it is that the Somali pirates are very patient. They can afford to wait until the coalition forces are pulled back to home waters or diverted to other tasks. The advice from industry bodies is that Best Management Practice (“BMP”) is still very important and, indeed, aspects of it (such as the deployment of razor wire) are encouraged through insurance policy wordings.
From a legal point of view, there are two strands of authority where the courts have considered the concept of risk and danger to shipping. Most recently, in the context of the CONWARTIME clause, in an Ince case, the Triton Lark [2012] EWHC 70 (Comm), the Court looked at the Owners’ right to refuse an order to transit the Gulf Of Aden in 2008, where there was a risk of attack from pirates. As a result of that decision, the Court now asks whether there is a real likelihood that the area is or will become dangerous (i.e. something beyond a mere possibility of attack) and, if so, then considers the extent of the prevalence of the risk, along with the severity and nature of the consequences of a successful attack. The second strand of authority stems from unsafe port cases, such as the Saga Cob [1992] 2 Lloyds 545, in which the Court looked at whether an attack was a characteristic of the port and not just an isolated or abnormal event. It is difficult to see how a case could be made at the present time such that an owner could refuse a similar order to pass through the High Risk Areas off East Africa.
As stated above, most Flag States have now enacted legislation to allow armed guards. The arguments about this leading to an escalation of violence by the Somali pirates have fallen away in the light of the practical experience of those on-board (although the same arguments are now being repeated as justification, certainly by the UK at least, for not allowing PMSCs on UK vessels off West Africa, of which see further below).
West Africa
In general terms, the littoral states of West Africa (which are now moving to a regional cooperation agreement to deal with piracy, maritime crime and illegal fishing) do not allow PMSCs to operate with weapons inside territorial waters. Further, the fact that most vessels are not in transit with obvious embarkation and disembarkation points makes the logistics of operating in the region difficult. Some countries, such as the UK, do not allow weapons to be deployed on UK-flagged vessels anywhere other than in the HRA in the Indian Ocean, unless they are military personnel placed on-board by the state in whose territorial waters the vessel is. Clearly, a state mandating the presence of its security forces on-board a vessel is not something that the Flag State could do much about. The UK position accords with that. Much less certain is the situation in which UK owners have the same military guards on-board as a result of a commercial relationship under which the military personnel have been arranged through an independent PMSC. Logically, there should be no difference, but this has not been clarified.
Whilst Nigeria, Benin and Togo now have designated safe anchorages for ships, it remains the case that, in the past year, a slightly greater number of attacks have taken place outside the 12 mile limit than within, although attacks have taken place as far west as Abidjan and as far south as Port Gentil in Gabon. The danger is that, as in-shore security increases, more piracy will be pushed towards the High Seas. The unique selling point, that no ship off Somalia has been hijacked with armed guards on-board, holds good for West Africa. It would seem inconsistent to allow UK vessels to be unguarded on the High Seas in the Gulf of Guinea.
Floating armouries and Open General Trade Control Licences (“OGTCL”)
Under the OGTCL, weapons can be moved between the approved armouries of third party countries. Until July 2013, those armouries had to be shore-based and did not include floating armouries. This potentially meant that the UK PMSCs using floating armouries were acting outside their licences and, therefore, that their activities were illegal, with potential consequences in respect of their liability insurance policies. The UK government has now begun to give approval for floating armouries on a case-by-case basis. There is still little transparency on this and no list of those vessels that have been approved for the storage of weapons. The relevant UK ministry says that, in reaching a decision, they will apply the same Consolidated EU and National Arms Export Licensing Criteria as they do for the export licences themselves. In general terms, these Criteria relate to the UK’s international commitments and whether the request could affect the national security of the UK or its allies. In other words, they are broad strategic criteria related to the UK’s foreign policy objectives.
Coupled to that is a questionnaire that seeks basic details of the vessel and its operation. These questions are aimed at the security of the weapons and the vessel itself, access, replenishment and risk assessments where there is leasing of space to other PMSCs.
Approved armouries are operating off East Africa and are situated primarily off the UAE and in the Red Sea. Some PMSCs are looking at doing the same thing off West Africa, outside the territorial limits but within the EEZ. There is nothing as a matter of international law which precludes that, but, in any event, this comes with some risk. Any such operation is vulnerable to interdiction by the local naval forces, who are unlikely to sit back and tolerate weapons being stored and moved in such a way.
Maritime security certification: ISO/PAS 28007
There has been a drive toward raising PMSC standards, which, again, has been UK-led. The latest is the ISO 28007 standard, which has been published, and the only accrediting companies able to carry out the audits are UK-based. A few companies have been audited as part of the pilot scheme and are marketing themselves on that basis. The standard robustly tests the PMSC management system and its ability to deliver security services using qualified personnel with the requisite qualifications. It was hoped that this would be a one-stop shop that would then avoid PMSCs having to be audited by individual states. That has not happened yet, but, if the IMO gets behind it more emphatically, that may change. In the meantime, Flag States have set their own criteria, which they continue to apply.
One issue is whether passing an audit, thereby demonstrating that the PMSC can deliver the right quality of people on board ships off East Africa, means that the PMSC can do the same off West Africa, where the guards are local military of unproven quality and training. In other words, is there a geographical limit that requires a formal extension to the scope of the original certificate? The answer is uncertain and that means that owners (and indeed their insurers), as part of their due diligence, must look at the certificate issued and probably liaise with the certifying body in order to understand whether there are any restrictions. It does not mean there would be doubts about the PMSC management system, but there is a danger that the existence of a 28007 certificate may, in the minds of some, be seen as a kitemark of quality for all guards, including the local military. No doubt, as the system becomes more widely used, it will be better understood. This is also relevant to the proposed amendments that BIMCO is considering for the use of GUARDCON off West Africa.
GUARDCON
Guardcon is designed to be used anywhere in the world. However, in effect, it is designed to be used in circumstances in which the PMSC provides and is responsible for the team on-board, who are led by a designated team leader. That has meant that everyone has understood where the risk lies and insurance products have been developed to meet those potential commercial and contractual liabilities. However, the reality off West Africa is that the team on-board are provided by the local military or security forces and will adopt their own Rules for the Use of Force. The model there is to have a designated and independent liaison man from the PMSC who will liaise with the master and, in that sense, will act as he would do if he were a team leader. In reality, however, he has no formal control of the team on board. Indeed, under the Nigerian MOU (which governs the use of their military personnel, who are often in their own craft) there is a suggestion that the military are also not bound by the instructions of the master. No-one will want to see any dilution of the master’s authority, as provided for in Clause 8, but there has to be a degree of realism about the level of negotiation that is possible with those military commanders on the ground. The amended Guardcon must deal with this type of model.
That exercise is on-going. There is no intention to have a separate contract, but there will be a version with pre-printed suggested amendments that allow a distinction to be drawn between the guards and team leader supplied by the PMSC and those that are supplied, and indeed are employed, by the local military. Some owners will want to contract directly with the military, but BIMCO does not want Guardcon to be a form of agency agreement. It is intended to be an agreement between owners and a PMSC. If there is no PMSC, Guardcon is unlikely to be the right contract.
Comment
Recent reports suggest that the Nigerian navy has had some success in disrupting pirate gangs at sea, with a number of pirates having been killed. The limitations of the local naval assets has led to some calls for an international coalition presence, as seen in the Indian Ocean. That seems unlikely, for good reason. Most naval commanders and commentators quickly acknowledge that piracy has to be solved ashore. For Somali piracy, that was a real problem, but the lawlessness of that country must be differentiated from countries such as Nigeria, Benin and Togo. Those countries no doubt have their challenges, but there are well-developed state security assets that can be used, as well as functioning governments on which pressure can be exerted by the international community. The desire for inward investment will no doubt ensure that progress is made more quickly than off Somalia. However, until that time, the economic need to diversify will see more PMSCs look to West Africa as a place to expand. In doing so, there will be continued tension between their role and that of the local military. However, for shipowners, it is important that they have a sensible contractual regime in place and that there is a clear understanding across the industry as to the commercial risks involved and how they are insured.
Article by Stephen Askins in Ince & Co’s Autumn 2013 Shipping E-Brief, ‘Piracy-Update: Armed Guards West African Hijackings and Guardcon Revisited.’
