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PIRACY – AN INTRODUCTION TO THE EFFECT UPON MARINE SHIPPING INSURANCE

In recent years few topics have caused as much concern in the shipping industry as the impact of piracy. Pirate attacks on ships have most frequently focused in the Red Sea, the Gulf of Guinea and in South East Asia.

Thanks to the efforts of various nations and inter-governmental organisations, the deployment of naval vessels and surveillance aircraft has acted as a deterrent to piracy, particularly in the Red Sea. In addition, the shipping industry has taken steps to protect itself. Broadly speaking, this has taken two forms: the introduction of Best Management Practices (BMPs) and the use of guards (armed and unarmed).

BMPs have been developed by the industry with the aim of ensuring that comprehensive planning and self-protection measures (ship “hardening”) reduce the risk of a successful pirate attack. The latest version is“BMP5”.This should be read together with Global Counter Piracy Guidance for Companies, Masters and Seafarers.

Adherence to BMPs has frequently been augmented by the employment of guards on board ships trading in areas where there is a risk of pirate attack.  In modern times, commercial ships have generally not carried armed personnel or weapons (other than as cargo) and so the laws of many flag states have not permitted their employment. However, in recent years a number of governments have relaxed their laws so as to make it possible, or easier, for armed guards to be carried in certain circumstances on ships sailing under their flag.

International shipping industry organisations maintain a website (www.maritimeglobalsecurity.org) to provide security related guidance to the industry, including regional guidance.

THE CLUB’S POSITION

The decision whether to employ guards is an operational one for shipowners.  Nevertheless the Clubs in the International Group appreciate the wish of many shipowners to carry guards on board their ships in the circumstances.  Therefore, although the International Group, following BIMCO, does not endorse or recommend the use of guards (armed or unarmed), it does not object to them either as long as certain requirements are met. These are the detailed in the International Group’s Piracy FAQs.

The International Group and BIMCO have also recognised that  guards have been employed under  a considerable variety of contracts which are often poorly drafted. BIMCO has, therefore, developed the  GUARDCON  contract for the employment of guards in the waters off East Africa with a view to this becoming the industry standard. As BIMCO does not feel that the GUARDCON contract is an appropriate contract for the employment of guards on board ships in the Gulf of Guinea, the International Group has produced an amended version of GUARDCON called GUARDCON  West Africa for this purpose.

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