Ince & Co Shipping e-Brief: Piracy – update and overview
There have been frequent attacks by pirates during this past September and, with the monsoons abating, it does not take a soothsayer to predict an increase in the intensity of those attacks over the next few weeks. At the time of writing, there are four ships under pirate control. The latest to be hijacked, on 2 October, was the Alakrana, a Spanish trawler, which took the hijacked number to five, but this small increase lasted only until the next day, when the Horizon 1 was released.
The summer lull has seen renewed efforts on the part of the international community, which are discussed below. The pirates have begun to appear on Youtube, interviewed by various news outlets and we have learned a little more about what motivates them (apart from money). They have confirmed that they see piracy as a business but, worryingly, that crews from Europe are more highly prized. The death of the Syrian master of the Barwaqo, whatever the circumstances, was a tragic reminder that crew safety cannot be taken for granted and that they remain very much in the front line.
In the past, we have seen the pirates prepared to adapt their tactics to meet the threat they face from the naval forces. The recent attack on the French supply vessel, the Somme, caused some mirth in the press but is more understandable because it happened in the dead of night when attacks have usually taken place in daylight. We have seen attacks in the past (such as on the Tanit) that appear almost desperate; operating hundreds of miles off shore, the lack of water and food has driven pirates to take risks they may otherwise have avoided. The concern must be that any more failed attacks may lead to more extreme measures on the part of the pirates. This may manifest itself by way of attacks in areas unaffected to date, such as off the coast of Oman or attacks being pressed home by a greater number of skiffs.
Furthermore, whilst the headlines are dominated by Somalia, we must not overlook the continued problems both in the South China Seas and the Gulf of Guinea.
International initiatives
The Best Management Practice (“BMP”) guidelines have been revamped and received international recognition when the US, UK, Japan and Cyprus, amongst others, showed their commitment by signing the New York Declaration. The BMP has no legal standing, but it is at least an affirmation of the intent of those countries to deal with the problem. Some commentators (particularly in the US) see the BMP as “soft”, but they miss the point. It is not meant to be a charter for the absolute defence of a ship but a template for good practice, ensuring that owners and their crews are in the best position to avoid capture and to stay safe. For example, BMP advises the crew to surrender if the pirates board (although the crew of the Zhen Hua 4 would no doubt have something to say about that).
Contrast that with the advice issued by the US Maritime Administration (“MARAD”) which implores ships to defend themselves and to “….not surrender at the first sign of a threat”. A cry for ships to toughen up. In May this year, it became compulsory for US flagged vessels to have a USCG approved plan for the transit of the Gulf of Aden, including a requirement to have a security team on board.
The BMP and the MARAD guidelines will no doubt become the benchmark against which vessel operators will be measured when it comes to cargo and chartering interests looking at seaworthiness issues and examining whether owners have exercised due diligence.
It is said that the risk reward ratio is heavily weighted in favour of the pirates. Ransom payments hover around the US$2m mark and some efforts have been made to increase the risk to pirates. Yet less than 50% of all pirates captured by naval forces are actually brought to face charges. Some pirates have been transferred to non-African jurisdictions such as the US, France and Holland, but Kenya is still being asked to bear the brunt of the prosecutions. At present, some 112 pirates are in Shimo El Tewa prison awaiting trial. Kenya has demanded financial help and has made it clear that it cannot take many more pirates. The UNODC has taken steps to improve conditions in the prisons, but other governments are going to have to show more political will to prosecute pirates under national laws.
Therein lies the issue. The international conventions which should allow prosecution, not only for attacks but also for demonstrating an intention to attack, are in place. However, several nations have still not enacted local law incorporating, for example, the Suppression of Unlawful Acts Convention (1988) or the Hostage Taking Convention (1979). Even in the UK, the Transport Security Bill formalising the Royal Navy’s powers of detention in this area has not yet reached the statute books. Without that political will, pirates will continue to be released more often than not, free to re-arm themselves and go back out to sea. Having said that, there is still the issue of timing. We shall have to see whether the two pirates involved in the hijacking of the Alakrana recently arrested by Spain become an aggravating factor in the negotiations for the vessel’s release. The pirates on board are already reported to be refusing to negotiate until their two friends are released.
Kenya has now enacted its own Maritime Shipping Act, which formalises its laws on hijacking. However, this is not retrospective and in repealing the relevant piracy provision of their penal code, there are some who believe that Kenya may have inadvertently removed piracy as an offence from its statute books.
Two funds have been set up with the backing of the UN. One, supported by Germany, is a sensible initiative designed to pay for the expenses of witnesses attending trials in Kenya. This may help persuade crew members to give evidence, although the unpredictability of the Kenyan process and the propensity to adjourn hearings at short notice make this another contentious area. Crews cannot be expected to miss out on work and future employment because they may be required to give evidence in the future. The second initiative, being pushed by Japan, is to fund “regional centres” in Djibouti, Kenya and Ethiopia to pool resources and knowledge in the fight against piracy. The prospect of an International Piracy Tribunal is often debated, but the difficulty is that some nations will not give up their right to prosecute pirates that attack their interests. Additionally, issues over where such pirates would be imprisoned make this an unrealistic option at the present time.
In the UK, a House of Lords EU Committee on money laundering looked at the issue of ransoms and confirmed that, as a matter of English law, there was nothing unlawful in paying them. It reflected on an internal report that found there was no proven connection between pirates and the militant Somalian Islamist group, Al Shabab, but suggested that this was only because the government had not looked for it. There is still no proven link between the criminal acts of the pirates and the funding of terrorism, which remains the key hurdle set by UK law in terms of determining the legitimacy of ransom payments.
Commercial and legal Developments
The issue of armed guards still polarises opinion. BIMCO and other industry bodies continue to take the line that weapons on ships should be avoided. In the UK, a poll of UK shipowners found an overwhelming number against the idea. Yet after the three attacks on Spanish trawlers in early September (including one on the Alakrana), the Spanish government gave approval for weapons to be deployed on its fishing fleet. This approval came too late for the Alakrana, although it is impossible to know if that would have made a difference. One argument used by the providers of armed security is that it deters attacks, yet the attacks on the MSC Melody in Spring 2009 and more recently on the BBC Portugal and the French fishing vessels (the Glena and the Dennak) perhaps prove this not to be the case. It is no surprise that the pirates are prepared to meet force with force despite warning shots and that they will exchange fire. In all cases so far, the pirates have backed off, but the risk of escalation remains a real one.
On the legal side, we have seen the case of the Danica White reach the courts in Denmark, where the owners were sued by the crew for a breach of their duty of care. The master but not the owner was found negligent and the action failed. However, the Danica White was hijacked early in 2008, so it may be that with the BMP now in place and the greater knowledge that is now available, a similar case would lead to a different finding. It is certainly the case that the ITF are concerned about placing what seems to be a very high burden on a ship’s crew.
Recently, a London arbitral tribunal considered whether a vessel chartered on NYPE terms where Clause 15 was unamended (i.e. where there was no “….whatsoever” inserted) was off-hire during a hijack. The issue was whether a hijacking was an “average accident” or was caused by the negligence of the crew and therefore was a “default of men”. The Tribunal concluded that the vessel remained on hire, finding that “average accident” must involve damage to the ship. The decision gives some certainty as to where the risk lies in NYPE time-chartered ships.
In the meantime, the industry waits to see what the next few weeks bring. There is no doubt that the problem shows little sign of disappearing.
About the Author
Stephen’s primary area of expertise and experience is wet and dry shipping. Whilst in Greece he headed the local Admiralty team, acting for owners and their insurers in the aftermath of maritime incidents including salvage, wreck removal, collisions and piracy. He advises on all areas of Admiralty law as well as on contractual issues arising out of charterparties and bills of lading. He acted for the owners of the Voutakos, a LOF salvage case which went to the High Court and considered the controversial issues arising out of rescue tow cases and the “disparity principle”.
Stephen has developed expertise in advising owners and port operators on crisis communication and dealing with the media in high profile cases. He regularly lectures on this and general crisis management and speaks extensively on the legal issues arising from piracy and hijacking.
He was part of the team handling the Prestige oil spill and acted for salvors in the MSC Napoli. More recently he advised the owners of the Faina during her hijacking off Somalia.
Stephen handles marine insurance cases, acting for both owners and underwriters, particularly on coverage issues arising out of major maritime accidents. In the reported case of the Kastor Too he acted for owners of a vessel that caught fire and then sank. The case examined the relationship between a CTL and an ATL and the issue of the notice of abandonment.
Stephen has acted for War Risk underwriters on issues arising out of piracy and hijacking. He advised on the Golden Lucy, which exploded during discharge in the Niger Delta and was then looted by local gun men.
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