In accordance with Bimcos GUARDCON (Parag 7)
The International Group’s list of Frequently Asked Questions (FAQs) on piracy was recently updated, principally to take account of Bimco’s GUARDCON (Parag 7) and the importance of ensuring that the providers of armed guards are operating lawfully (Parag 5). Members are reminded of the arrangements made with Flag Victor in this respect.
The FAQs now read as follows:
1. Do clubs cover piracy?
Club rules contain no definition or exclusion of piracy. The usual liabilities insured by the clubs remain covered when arising out of incidents of piracy.
These liabilities are potentially most likely to involve loss of life/personal injury/illness, trauma/stress treatment and counseling, crew substitution and repatriation, and crew/passenger loss of effects. Liabilities could also extend to pollution, possible wreck removal, and potentially cargo liabilities/General Average (GA) in the case of a shipowner’s contributory fault or negligence. In relation to strict liability claims under International Conventions, the “intentional act” defence may provide some protection where/if applicable.
Such liabilities are however excluded from cover if caused by the use/engagement of certain “weapons of war” specifically named in the club rules or “other similar weapons of war” to those specifically named. Also, whereas P&I liabilities arising from acts of piracy are not an excluded risk, those arising from terrorism are excluded (and would fall under the shipowner’s war risk cover). Furthermore, where primary war risk P&I underwriters include piracy as a specific named peril, there may be overlap between P&I liabilities arising from piracy covered by the war risk P&I underwriters and those covered by the Group clubs.
2. What does “similar weapons of war” mean?
“Weapons of war” are identified as being mines, torpedoes, bombs, rockets, shells and explosives. While Club rules have no definition of “similar weapons of war”, the specifically identified weapons of war indicate that something more than guns/rifles/conventional ammunition would be needed to trigger the operation of the exclusion.
The arms typically used by pirates to date (hand guns, rifles, AK47s, and RPGs) have generally been treated by Group clubs as not triggering the exclusion. However, the increased use of armed guards on ships could result in pirates resorting to heavier weapons of a type that triggers the exclusion. In this event, the liabilities will usually be covered by the owner’s war risks P&I policy.
3. What do hull underwriters cover and what do war risk underwriters cover?
Depending on the shipowners’ particular insurance arrangements, hull and machinery (H&M) underwriters and war risk underwriters will between them provide property cover (H&M/GA/Salvage etc.) and war risk P&I cover. If a piracy incident triggers the club war exclusion (by virtue of the weapons of war provision), the consequent liabilities are likely to be covered by war risk underwriters. Also, as stated in FAQ 1 above, some primary P&I war risk underwriters also cover piracy as a specific named peril.
4. Should shipowners carry guards?
There is no cover restriction or prohibition per se on the deployment of convoy escort protection or on-board security personnel and appropriately trained and competent personnel may well assist in enhancing on board security procedures and response.
In each case, it is an operational decision for shipowners, which should be based on a specific voyage risk assessment, whether to carry guards, unarmed or armed.
If on-board security is deployed, proper care and diligence should be exercised in relation to the selection of the appointed security company.
Consideration should be given to the appropriate number of guards required. BIMCO’s GUARDCON provides for a minimum team of four persons. This is thought to be a good starting point for most vessels but the minimum number is best determined through a risk assessment that takes into account the relevant characteristics of the vessel (speed, freeboard, hull length, any areas vulnerable to boarding, etc.) as well as local factors in the High Risk Area to be transited (history of recent attacks, reports of suspicious vessels, anticipated weather conditions, etc.). Whilst failure to use a prescribed or recommended minimum number of guards will not automatically result in any restriction on cover, this could depending upon specific circumstances and causation potentially impact on cover.
There are some private and State sponsored initiatives to develop systems for accreditation of private security providers which initiatives are being monitored and, to the extent appropriate, supported by the industry, including the Group. However, as far as the Group is aware, no such initiative is yet sufficiently developed for accreditation to be of much help to shipowners in the task of choosing competent, safe and professional security providers.
The deployment of armed or unarmed security should not be a substitute for, but in appropriate cases, a supplement to effective compliance with the latest version of the joint industry Best Management Practices (BMP).
A key part of compliance with the BMP is the liaison with naval forces, who can provide valuable intelligence and in some cases physical help to ships whose owners have followed the BMP procedures to make contact with MSCHOA (Maritime Security Centre Horn of Africa) and with UKMTO (UK Maritime Trade Office Dubai) before entering the High Risk Area. Contact details are easy to find in the BMP and where armed guards are to be carried shipowners should make this known to MSCHOA and UKMTO.
5. Should guards be armed?
It remains the firm view of States and industry associations that crew should not be armed.
The previous strong opposition of industry associations to the use of armed guards has softened in the light of increasing levels of piracy activity in areas distant from naval protection and against a background of increasing aggression against crews. There has been a shift from general opposition to more neutrality, and in high risk cases, positive support for the deployment of armed personnel.
The underlying reasons against arming security personnel remain the risks inherent in use of arms by untrained/improperly trained persons, the enhanced risk of loss of life/injury through armed engagement, and the risk of encouraging the escalation of armed engagement and the use of more potent and warlike weaponry.
Flag State and Port State restrictions, and licensing requirements or prohibitions on placing and transporting security personnel and arms on board vessels, must also be carefully considered in any decision relating to the deployment of armed personnel on board vessels. It is important to ensure that armed guards are able to demonstrate that their weapons have been purchased, stored, exported, and transferred in accordance with the laws of all relevant State(s) supported by contemporaneous documentation in each case clearly identifying the relevant issuing authority. The Group is advised that the International Chamber of Shipping (ICS) is maintaining a table of “Flag State Rules and Requirements on arms and private armed guards on board vessels” which may be considered helpful in this regard.
Where armed guards are used, if there is a choice between Vessel Protection Detachments (VPDs) made up of serving members of a military force, or privately contracted armed security personnel (PCASPs), the former should be preferred other things being equal.
A thorough voyage risk assessment should be carried out in deciding whether to deploy armed security personnel on board. In the event that the decision is to deploy armed security personnel, shipowners should have regard to the IMO’s “Interim Guidance to Shipowners, Ship Operators, and Shipmasters on the use of privately contracted armed security personnel on board ships in the High Risk Area”, which was based upon industry guidelines and was issued by IMO as Circular 1405 on 23 May 2011. Circular 1405 was subsequently revised in September 2011 and May 2012. A copy can be downloaded from the Group’s website (www.igpandi.org).
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Source : The West of England P&I Club
