Rod Lingard, Joint Managing Director, Thomas Miller War Risks Services Ltd, focused on war risks hot topics as his presentation. Mr. Lingard began by reminding delegates of the War Risks Additional Premium areas and then went on to look briefly at incidents and recent developments in a number of areas including, the Gulf of Guinea, particularly Nigeria, Somalia, Yemen and the Bab el-Mandeb Strait, Asia particularly the Sulu Sea and some incidents in other areas. Mr. Lingard concluded his presentation with a brief look at Cyber Attack Exclusion Clauses.
The main three Additional Premium Areas are: Africa including the Indian Ocean, the Middle East and Venezuela. The types of war risk that are seen in Venezuela are more related to detention and confiscation than traditional war risks.
In the Gulf of Guinea and Nigeria, hijackings and abductions continue. The IMB reports 5 incidents in the first 6 months of this year and 31 sailors abducted. Underreporting continues to be an issue particularly in the Gulf of Guinea as not all the incidents are reported to the IMB or make the international shipping press. More recently there was an incident early in August, 5 crew members were abducted and then again around about the middle of September another incident and again 5 seafarers were abducted.
The Association continues to experience claims in this area, 2 in the last 12 months, both cases involving the kidnapping of 3 seafarers.
Regarding recent learning points; the first is that obtaining large amounts of the local currency, Naira, outside Lagos, to pay the ransom, is quite difficult. You need to consider that it may take time to get cash in local currency from the local banks in order to be able to do the handover of the cash for the seaman to be released. Another thing is that over the last couple of years, in addition to the cash ransom demand, the pirates now customarily request high specification IT kit as well. Such as Hewlett-Packard laptops, iPads, iPhones, Samsung Galaxy smartphones etc., typically 20 of each and getting that short of high spec kit in Nigeria is difficult. The IT kit needs to be negotiated as well as the ransom. There is need for a schedule as to what needs to be done, what you agree with the pirates and when you do the handover.
Five months ago, we noticed that Somalia had a spike in activity when the ARIS 13 was hijacked on the 13th of March but was released after few days. At that time, there was a bit of a worry that the activity in Somalia was picking up but at the moment it seems to be quieter again.
The UKMTO issued a notice highlighting the emerging threat in the Bab el Mandeb and informing that within the area, there is a risk to merchant vessels from misidentification and miscalculation from the ongoing conflict in Yemen. UKMTO assess that it is highly unlikely that international shipping is being directly targeted but that there remains a risk. Two non-piracy related attacks over the last months, led UKMTO to assess that there is an increases threat to vessels transiting Bab el Mandeb and the Gulf of Aden. The threat is from skiffs, which have followed vessels, before attacking with small arms fire and rocket propelled grenades. One of the attacking skiffs exploded although this was at a distance which did not inflict significant damage on the merchant vessel. It is likely that the attackers were attempting to detonate explosives in close proximity to the hull of the merchant vessels.
The Combined Maritime Forces have established a maritime security transit corridor which consists of the internationally recognized transit corridor and then the two separation schemes, the one in the Babel Mandeb strait and the other that’s to the west of the Hanish islands and then a two way route connecting the two. The intention, as with the internationally recognized transit corridor, is for the naval forces to be able to concentrate their activities in certain areas.
In Asia and the Sulu Sea, the news is positive. To date incidents are down from 2016; however, there have been, incidents, abductions and several deaths. On September 6th, we saw a hijack for cargo theft. It has been a long time since the last cargo theft. Fortunately, the pirates tend to attack smaller local trading coasters and bigger tankers that are transiting the area have not been threatened.
Regional cooperation in south-east Asia is good, patrols have increased and that has certainly had an effect on keeping the number of incidents down. However, armed robbery is common in south-east Asia in a lot of the ports. We see ships even being attacked whilst they are underway. The circumstances are frequently similar; there are 4-6 criminals who board the vessels in the early hours of the morning, from the stern or the port or starboard quarter, they make their way to engine room. If there is a duty engineer he will be overpowered and they then take what they can carry, stores, spare parts, tools etc.
The following chart is from the Recap review of July 2017 that identifies the incidents so far this year in the Sulu Sea. The small red dots are actual incidents that involved abductions of seafarers, in these 3 cases fairly small local traffic were involved, but the green triangles are attempted incidents, involving bigger ships that were transiting the area.
It’s not only these well-known trouble spots where incidents happen. For example, in early August this year a ship 30 miles off Mauritania was approached by a small craft holding itself out to be the Mauritania Navy and asked the ship to stop saying they wanted to board. The Master was suspicious, increased speed, took evasive maneuvers and fortunately the ship and crew are safe. However, you need to be vigilant everywhere.
Concluding, Rod looked at the difference between the war market’s Cyber Attack Exclusion Clauses (CL 380) and the Association’s Computer Virus Exclusion Clause. The Association’s clause only applies once claims on the Association in the 2017 Policy Year that would otherwise have been excluded by the clause, have exceeded US$100,000,000 in the aggregate (2016 Policy Year, US$50,000,000 in the aggregate) and the Association’s clause is also much narrower (i.e. less is excluded) than the market.
In addition the second edition of Guidelines on Cyber Security Onboard Ships has now been released, compiled by a joint industry group which is led by BIMCO. The second edition includes information on insurance issues and how to effectively segregate networks, as well as new practical advice on managing the ship to shore interface and how to handle cyber security during port calls and when communicating with the shore side.
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, Joint Managing Director, Thomas Miller War Risks Services Ltd
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.