It's Two Lanterns for the Maritime PSC Industry

Remember Paul Revere's famous midnight ride? As Henry Wadsworth's famous poem put it:

He said to his friend, "If the British march,

By land or sea from the town to-night,

Hang a lantern aloft in the belfry arch

Of the North Church tower as a signal light...

Well, if Revere were alive today and was observing the private security sector he would definitely be calling for two lanterns to be hung on the church belfry to signal a victory for the private security contracting (PSC) industry, or in seafaring terms, privately contracted armed security personnel (PCASP).

In case you haven't noticed, all of a sudden maritime security contracting seems to have turned a corner in gaining both industry, and more importantly, governmental approval. The latter is more important because without governmental approval for carrying weapons aboard ship, PSCs face daunting legal and administrative obstacles.

Although the debate over whether and how to use private security contractors to protect commercial shipping against the threat of piracy, notably Somali pirates, has been brewing for years, all of a sudden a number of events seem to signal that the debate is largely ended and the PSC industry has emerged victorious.

The biggest sign was when the Somali Report reported on Nov. 4 that it had obtained an unclassified document from the U.S. State Department that orders American embassy staff to promote the use of armed security guards on commercial vessels around the coast of Somalia.

The five page document is a "demarche" request which encourages "the use of privately contracted armed security personnel on merchant vessels to deter or prevent pirating off the Horn of Africa." What is more surprising is that this October 27, 2011 memo is straight from the desk of Secretary of State Hillary Clinton.

It is a stunning reversal of opinion for Clinton, a well known opponent of the use of private security companies and a political appointee who has openly discussed taking steps to eliminate them. As a presidential candidate running against President Obama she sponsored legislation entitled H.R.4102 "Stop Outsourcing Security Act". The suggested legislation was created in November of 2007 proposed banning the use of security contractors.

But that was then and this is now. According to the Somali Report:

"Drawing on talking points in paragraph 9, Post is requested to demarche host governments and/or members of host country's shipping industry to encourage the responsible use of Privately Contracted Armed Security Personnel (PCASP) on merchant vessels transiting high-risk waters off the Horn of Africa, in addition to other counter-piracy measures."

Clinton specifically requests diplomats to promote the use of PCASP on "merchant vessels transiting the high-risk waters off the Horn of Africa, in addition to other counter-piracy measures." The "Sensitive" document goes on to present the 'no ship taken while under armed guard' mantra to overcome the shipping industries lack of enthusiasm for armed men on board. The document then provides a series of talking points to convince nations to support the use of private security guards on board ships and offers to work with these nations to work through the various ITAR restrictions related to weapons on board.

Indeed, on November 9, Andrew J. Shapiro, Assistant Secretary, Bureau of Political-Military Affairs, U.S. State Department, speaking to the plenary session of the Defense Trade Advisory Group said:

With so much water to patrol it is difficult for international naval forces in the region to protect every commercial vessel. Working with industry, we recently established a national policy encouraging countries to allow commercial ships transiting high-risk waters to have armed security teams on board. The reason for this is simple: to date no ship with an armed security team aboard has been successfully pirated. We believe that the expanded use of armed security teams by commercial vessels is a major reason why we have seen a decline in the number of successful pirate attacks this year. Therefore, we have recently demarched countries to permit the use of privately contracted armed security personnel on commercial vessels. And we are also working with industry and transit countries to make it less onerous for privately contracted security personnel to transit foreign ports with weapons intended for the self-defense of ships.

Although many in the maritime industry are still reluctant to put armed guards aboard ship, it too has been moving in that direction.

In May 2011, various industry associations such as the Baltic and International Maritime Council (BIMCO), the International Chamber of Shipping (ICS), International Group of P & I Clubs (IGP&I), and INTERTANKO, along with others, submitted a set of suggested guidelines to IMO's Maritime Safety Committee (MSC) before their 89th session "in the form of what is known as a "J" paper to provide assistance to the MSC 89 maritime security working group" on the use of Private Maritime Security contractors (PMSC). Among other outcomes, the meeting resulted in the establishment of three documents:

1. MSC.1/Circ.1405 - 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
2. MSC.1/Circ.1406 - Interim Recommendations For Flag Sates Regarding The Use of Privately Contracted Armed Security Personnel On Board Ships In the High Risk Area
3. MSC.1/Cir. 1408 - Interim Recommendations For Port and Coastal States Regarding the Use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

In September 2011, IMO revised the first two documents, (MSC.1/Circ.1405/Rev.1 and
MSC1/Circ.1406/Rev.1) and approved all three documents. Although IMO has established these recommendations, they emphasize that the circulars should be seen as guidelines and not as an endorsement to employ armed guards.

There is some anecdotal evidence that the use of PSC aboard ships to prevent pirate attacks works. These include an incident involving a freighter in the Indian Ocean on 15 August and a chemical tanker in the Gulf of Aden on 29 August. The Associated Press published an article describing an aborted attack by Somali pirates on a Danish product tanker in September of this year. The pirates allegedly aborted the attack when warning shots were fired by the tankers' security guards. In October, Reuters described an incident involving an oil and gas exploration ship, Ocean Rig Poseidon, which was able to thwart an attack with the assistance of on-board security personnel and with the support of the Tanzanian Navy. Another success story includes the container ship MV Kota Nasrat, which was attacked on October 6th, about 220 nautical miles south east of Mombasa, Kenya.

The downside is that since armed guards have had a good success rate in deterring Somali pirate attacks and preventing hijackings, a greater number of security companies are emerging on the international scene, but they are not necessarily qualified companies. In other words we may have the maritime equivalent of the gold rush era back in the early days after the U.S invaded Iraq when any company with a letterhead and website could angle for and usually receive a contract.

To put it politely, there is reluctance by much of the international shipping industry to use armed guards on board merchant vessels due to concerns about the level of training, lack of industry regulation and a drastic increase in the number of security companies over the years.

To fix that, several companies are working on establishing certain standards and overarching guidelines in order to mitigate some of these apprehensions. One example of this is the Gray Page, a specialist maritime intelligence, investigation and crisis management company, which provides an Armed Maritime Security Provider Vetting (AMSP) page as a resource for shipowners seeking information on potential security providers.

Another example is the International Association of Maritime Security Professionals ( IAMSP), which is geared towards the maritime security industry and was founded by several companies within the industry to establish "standards of best practice." Furthermore, the International Code of Conduct for Private Security Service Providers (ICoC), is committed to setting industry standards with which its members comply.

Similarly, the Security Association for the Maritime Industry (SAMI) focuses on providing guidance and standards for maritime security companies and aims to help shipping companies find the "very best maritime security providers in the industry." SAMI has also established the SAMI Accreditation Programme, which includes several stages and the process can take up to six months to complete.

Finally, in order to provide certain standards for maritime security companies, the German government is looking into developing certifications to ensure that certain safety standards are met.

The United Kingdom is also in the process of changing its policy on the use of armed guards. On October 12, UK Foreign Office Minister Henry Bellingham gave a speech to the British Chamber of Shipping providing a brief overview of piracy and its human impact, steps the UK has taken to counter Somali piracy, including the involvement of the Royal Navy and the upcoming policy changes with regards to the use of armed guards. On October 30, UK Prime Minister David Cameron confirmed the policy changes allowing for the use of armed guards.

An increasing number of shipping companies, such as the China Ocean Shipping Company (COSCO), Danish Torm A/S, as well as Maersk Tankers, have announced that they will start hiring armed guards to protect their vessels from pirates.

Perhaps most tellingly some ship insurers would like to see an increase in the use of PCASPs to protect merchant vessels. A recent article in Lloyd's List stated that although not directly confirmed by insurers, "some form of discount" was applied.

The marine insurance industry is following piracy trends closely and is looking at prevention strategies, according to a recent interview by Insurance Journal with the head of Catlin Group Ltd., Peter Dobbs. According to Dobbs, there will now be three classes of vessels transiting through dangerous waters; armed, hardened or enhanced security measures, and no precautionary measures. He suggested that it will be important to ensure private security companies are registered and qualified, with the stance of many flag states now changing to allow the use of armed guards.

The bottom line seems to be that the use of PCASP remains controversial and several aspects have to be considered, including legal aspects and the safety of seafarers. The IMO emphasizes that the circulars it approved are guidelines and "are not intended to endorse or institutionalize the use of armed guards" or to replace Best Management Practices. According to the IMO, while traveling through high risk waters, BMPs should continue to guide initial steps before any other measures are considered. The majority of shipowner associations such as the International Chamber of Shipping and the International Shipping Federation have made it clear that they prefer to use international military personnel over the hiring of armed guards to protect their ships and cargo.

But, ultimately, given the current situation for ships traveling through pirate-prone areas, certain provisions have to be made. As Kiran Khosla, ICS Director of Legal Affairs and secretary of the ICS' maritime law and insurance committees said, "to engage armed guards, whether military or private, is a decision to be made by the ship operator." Based on the growing trend for the use of armed security guards and success in deterring pirate attacks, it seems that more countries are contemplating a change in legislation to allow armed security guards.