Shippers mull armed guard ramifications

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The Baltic and International Maritime Council (BIMCO), which represents (65%) of the world’s shipping, says it is proceeding with the development of a standard contract for the employment of armed guards on board ships and says this is aimed at weeding out “second rate” security firms.

“With the increasing use of armed guards on ships and the fear that second-rate security firms may take advantage of the piracy situation, BIMCO is forging ahead with the development of a standard contract for the employment of armed guards,” the organisation said in a statement.

The new contract, which will be drafted by a team of experts of shipowners, lawyers and underwriters, and with the assistance of the International Group of P&I [Protection and Indemnity] Clubs (IG), will require private security firms offering armed guards to follow the International Maritime Organisation guidelines for owners on the use of privately contracted armed security personnel on board ships.
“Of major importance is ensuring that security contractors have in place proper and sufficient public and employers’ liability insurance – which is a concern recently raised by the IG. While much of the new BIMCO contract will deal with operational aspects of employing armed security guards, issues of liability and responsibility will be of prime importance,” BIMCO said.

It added that new private maritime security firms are springing up almost daily to meet ship owners’ growing demands for their services for vessels operating in high risk areas. “It is very important that this new sector is regulated and that harmonised terms are developed and agreed. BIMCO has given this project the highest priority so that the standard contract can be published as soon as possible – most likely within the next two months.”

Among security firms now seeking to provide armed guards to ships sailing pirate-infested Somali waters is British-based G4S. The company provides services ranging from airport and sports event security to prison management and cash transportation, has been in the vessel security market since 2003, but only recently switched to using armed guards.
“We’ve been doing it at an increasing level basically as a response to customer demand because of the threat posed off the coast of Somalia and the Indian Ocean generally,” a G4S spokesman told Reuters, adding that the FTSE 100 firm sees combating pirates as a big commercial opportunity, Reuters reports. G4S is the world’s largest security company measured by revenues and has operations in more than 125 countries, including South Africa. With over 630 000 employees, it is the world’s second-largest private sector employer after WalMart.

G4S, currently providing services to two large Far Eastern shipowners, says it may also offer armed protection to shipping off the west coast of Africa and the Strait of Malacca, off Malaysia, both scenes of increasing pirate activity. It is providing armed protection, as well as tactical and strategic advice on board large vessels such as oil tankers and container ships. The company says it has averted a number of attempted pirate attacks in the Indian Ocean in recent months.

The switch in favour of armed vessel security comes after Britain and the United States last month reversed their opposition to it amid growing acceptance that weapons could be the best deterrent to Somali gangs who have been seizing ships and holding their crews and cargo to ransom for the last five years. Traditionally, shipping companies and their insurers have fretted that having armed personnel onboard boats could escalate violence in the event of a pirate attack.

Other private security contractors offering protection against pirates include Typhon, a start-up chaired by Simon Murray, the ex-military chairman of commodities trading giant Glencore. Typhon, backed by two major Asian shipping companies, plans to protect convoys of up to ten ships with an armed vessel complete with helicopter, chief executive and founder Anthony Sharpe told Reuters. “There are some guys that say they don’t like arms because it escalates the situation, but sadly it’s a necessary evil. It does deter piracy,” Sharpe said.



A report earlier this year estimated that maritime piracy costs the global economy between US$7 billion and US$12 billion through higher shipping costs and ransom payments.