Sanctions, the situation in Arabian Gulf, Gulf of Guinea and Western Indian Ocean, as well as cyber security are five current challenging topics for the maritime industry.
First of all, for sanctions; from a war risk perspective, Venezuela and Iran are both Additional Premium [“AP”] areas. For Venezuela a premium is payable but for Iran the ship’s call is declarable but there is no Additional Premium payable. Owners need to exercise extreme caution but it is possible to still do legal trade with Venezuela and Iran, however, there needs to be no US nexus and the cargo and the parties that the Owner is dealing with shouldn’t be sanctioned.
I can’t stress enough the need for Owners to do proper due diligence before the voyage or before the fixture and if you are wondering what proper due diligence looks like then OFAC has recently provided some guidance; a sanctions compliance programme. Essentially, there are five main elements to a sanction’s compliance programme:
Management commitment- a top down approach; OFAC expect senior management to have reviewed and approved the sanctions compliance programme; there should be promotion of a culture of compliance and ensuring adequate staffing as well.
The second area is risk assessment. This should be ongoing to identify potential issues.
The third aspect is internal controls. This is about having written policies and procedures and keeping records and communicating.
The fourth aspect is testing and auditing to ensure the effectiveness of the programme.
The final aspect is training. This should be annual training for the relevant personnel.
It is not actually a requirement to have a sanctions compliance programme but OFAC has said that they will look favourably if an Owner has a sanctions compliance programme if an Owner does fall foul of sanctions. OFAC has also helpfully identified some weaknesses that they found in the past; things such as not understanding the regulations or not doing proper due diligence.
The final point I would make on sanctions is; don’t rely on somebody else’s due diligence, no matter how blue chip they are, always do your own.
The second area that I will look at is the Arabian Gulf. A war risk talk wouldn’t be complete without mentioning the Arabian Gulf at the moment. Obviously, it’s been very well publicised, we had the attacks off Fujairah in the middle of May; then the two ships attacked in the Gulf of Oman in the middle of June and then the seizure of the STENA IMPERO, amongst other incidents. The Stena ship has recently been released. War risk underwriters responded by creating new, Additional Premium areas; Oman, the UAE, the Arabian Gulf and then differentiating between Saudi Arabia Red Sea Coast and Saudi Arabian Gulf Coast.
The risks in the Arabian Gulf are different to those in the Indian Ocean and therefore, as you might expect, some protective measures are different as well. Protective measures suggested by Intertanko and OCIMF for the Arabian Gulf include:
- Making location, status and transit plans known
- Monitoring threat alerts/advisories
- Ship and voyage specific threat risk assessment
- Deck patrols
- On board lighting
- Communications watch
- Firefighting equipment available for immediate use
- Consider UMS
- Security/ damage control exercises
Next, the Gulf of Guinea where pirates are still very active in the area. There were thirty-three attacks in the Gulf of Guinea in the first six months of this year. Note that there is a cluster, which we see every year, off the Niger Delta. Of those thirty-three incidents 21 of the incidents were off Nigeria including 14 kidnapping incidents. When it comes to trends in the Gulf of Guinea I can identifying three. The first is that the pirates are going further afield. They are finding it more difficult to kidnap crew off Nigeria and therefore we are finding incidents off Benin and particularly, recently, off Douala. A number of ships have been boarded at the anchorage off Douala. To be fair, the authorities in Douala have done something about the problem and are now putting marines on board. They board at the sea buoy and are on board whilst the ship is at anchor and they leave once the ship berths.
The other trend, or continuing trend, is more crew being kidnapped. With previous kidnappings it used to be two, three, maximum four crew kidnapped. However, we are now seeing ten and sometimes even twelve crew being kidnapped. In two recent incidents off Douala, seventeen crew were kidnapped.
The third trend is the increased activity that we tend to see at the end of the year through in to January when the rainy season ends in the Gulf of Guinea. You need to take care during this period in ‘pirate alley’.
Protective measures to be taken in the Gulf of Guinea
- Adhere to BMP5
- Follow the ‘Guidelines for owners, operators and Masters for protection against piracy in the Gulf of Guinea region’
- Prepare ship/voyage specific risk assessment
- Report to MDAT- GOG
- Access doors secured
- Limiting external communications with third parties
There have been a number of recent cyber incidents reported. First a US MARAD Advisory recently stated, “Vessels operating in the Persian Gulf straight of Hurmuz and the Gulf of Oman may also encounter GPS interference, bridge to bridge communications spoofing and/or other communications jamming with little or no warning” while a royal navy’s fleet commander commented, “We are seeing more state and non-state actors getting involved in things like GPS denial.” Also in the news, we have recently witnessed an attack by the US on the Islamic Revolutionary Guard Court (IRGC) databases. In turn, we’ve seen allegations that Iran is pursuing cyber operations against the US. The Norwegian National Security Authority also advised of increased cyber campaigns.
Recommended cyber counter- measures include:
- Take note of the published guidance from IMO and others
- Cyber security awareness training
- The crew to be human firewalls
- Crew should take care when using social media
- Review your insurance cover
Crew training is important so that the crew can be human firewalls. The most common problem is still crew inadvertently introducing viruses on board. Insurance cover is also part of the solution; knowing what is covered or what is excluded. The London market typically uses the clause CL 380 to exclude cyber and computer virus risks.
Finally, the Western Indian Ocean. Like other underwriters the Hellenic reduced the payable AP area in the Indian Ocean a little bit earlier this year. Now the area is bounded by 12 degrees south and 65 degrees east which is declarable but there is no Additional Premium payable. An Owner only pays premium if the ship goes into the green area shown on the chart.
What’s it like on the ground in the Western Indian Ocean? Somalia is still unstable. In Yemen there is still widespread fighting despite the ceasefire. However, there have been no reports of piracy incidents recently and no conflict-related incidents against shipping recently either but we do hear reports of ships being approached by skiffs. The use of on-board security is dropping; there’s a realistic possibility that piracy activity could resume when the southwest monsoon ends and there is still a threat to shipping as a result of the conflict in Yemen.
However, it’s not just about just the main headline areas that I’ve touched upon. You need to be vigilant everywhere.
Above text is an edited version of Rod Lingard’s presentation during the 2019 SAFETY4SEA Athens Forum.
View his presentation herebelow
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
Rod Lingard, Director, Hellenic War Risks
Rod is a Master Mariner and has degrees in, Nautical Studies, Law and an MBA. After 11 years at sea, mainly on bulk carriers, Rod worked as a cargo superintendent for a short while before joining the Sunderland P&I Club in 1987 and then Thomas Miller/The UK P&I Club in 1991. Rod became a Syndicate Manager with Thomas Miller in 1995 and he managed several different Syndicates, including Thomas Miller (Hellas) Ltd from 2008 to 2014, providing claims handling and advisory services to UK P&I and UK Defence Club Members. Rod returned from Greece to London in 2014 to become the joint Managing Director of Thomas Miller War Risk Services Limited the consultants to the Managers of the Hellenic Mutual War Risks Association (Bermuda) Limited and in April 2016, in addition to keeping his war role, Rod moved to the Isle of Man and recently became Chairman of Thomas Miller (Isle of Man) Limited.