Transcript SFN - Connecticut Maritime Association

Connecticut Maritime Association
20 May 2010
Combating Modern Piracy
James Henry Bergeron
Political Advisor, Striking Force NATO
Steering Committee, Int'l Transportation Committee, American Bar Association
(Comments are personal and do not necessarily reflect US or NATO policy)
The Role of the Political Advisor
Advisor to the Commander on politicalmilitary issues, Int’l Affairs, and
inter-agency process.
Primary liaison to the inter-agency,
civilian MOD, and other MFAs – the
‘civilian link to Policy’
Diplomatic representative of the
Commander to governments, IO’s
NGOs – the ‘inter-agency’
Resource for the Staff in operations
and policy areas
A ‘different set of eyes on the problem’
The Background to Somali Piracy
State formed in 1960 from merger of British and Italian colonies
Last effective government 1991; civil war between rival warlords Somaliland
declares independence; UN/US debacle in Somalia 1993-95; Puntland
declares autonomy 1998, TFG established 2000; Clan fighting breaks out in
2006, Union of Islamic Courts seize Mogadishu and the South; Ethiopia
invades and disperses the UIC. Islamists regroup as Al Shabaab and fighting
continues.
1991-2006; failed state syndrome; warlordism; no recognized EEZ;
allegations of poaching of Somali EEZ fisheries stocks and toxic dumping
2004 – 'National Volunteer Coast Guard' militias appear, sailing out to
demand 'taxes' from commercial fishers – evolving into kidnapping and
ransom demands; warlords and financiers get into the act; piracy escalates
and professionalizes into an industry.
Somali Piracy 2008: the year the
world took notice
92 attacks in Gulf of Aden
19 attacks off Somalia
42 Vessels Hijacked
815 crew taken hostage
On 31 December 2008,
13 vessels with 242 crew
held hostage for ransom
US$ 18–30 million paid 2008
Sirius Star
15 Nov 2008 - Saudi‐owned VLCC Sirius Star captured by pirates 450 miles
offshore, 25 crew members on board
2M barrels crude oil, value £68 million
Pirates anchored off Somali coast of Somalia
$25M ransom demanded, ship released 9 Jan 09 after $3M paid
MV Faina
25 Sep 2008 – Belize-flagged MV Faina, Ukrainian operator, captured off
Somali coast with 21 crew members on board, large number of Russianmade tanks and ammunition
Surrounded by warships off Somali coast
Released on 6 Feb 2009 after payment of $3.2 million ransom
Somali piracy 2009
217 attacks, 47 vessels hijacked, 867 crew taken
prisoner
April 2009 – US Flagged MV Maersk Alabama attacked
by pirates; 5 day standoff with USN leading to killing of
three pirates by USN.
Shared Awareness and Deconfliction (SHADE)
develops as coordination forum
NATO, EU, TF151 in operation, notable interdictions,
attack and hijack rate rising
Somali Piracy 2010
- 23 ships held, half used as
mother ships; 400+
prisoners
- Interdiction rates up; 40
pirate groups disrupted
- Attacks moving far
outside transit lane; Indian
Ocean, Seychelles
Impact on Somalia
Destabilization of local communities;
new culture of gang wealth;
boomtowns; revival of local fishing
Growing linkages to international
financial crime networks
Small but developing linkage to al
Shabaab insurgency
Complex impact on TFG relations with
Puntland government, warlords and the
region
Strategic Strait in an important part of
the world: US national interests and
values are at stake
Defining Piracy: UNCLOS 101
Piracy consists of any of the following acts:
(a) any illegal acts of violence or detention,
or any act of depredation, committed for
private ends by the crew or the passengers
of a private ship . . , and directed:
on the high seas, against another ship . . .
(b) any act of voluntary participation in the
operation of a ship .
. . with knowledge of facts making it a pirate
ship . .
(c) any act of inciting or of intentionally
facilitating an act
described in sub-paragraph (a) or (b).
Other Applicable International
Regimes
Convention for the Suppression of Unlawful Acts against the Safety of
Maritime Navigation (SUA) 1988 – an offense to seize control of a ship
by use or threat of force. Grants no right of action. Obligation to
criminalize, establish jurisdiction, prosecute or extradite.
SUA 2005 Protocol: added offenses related to maritime terrorism and
WMD trafficking, or transporting by sea anyone in violation of SUA
1988; boardings permissible on high seas and with permission of flag
state under optional expedited procedure – 8 ratifications.
1979 International Convention against the Taking of Hostages;
obligations to establish jurisdiction, prosecute or extradite similar to
SUA, based on presence in the territory
The International Mandate
UNCLOS/Customary International Law: piracy as an ius
cogens offense, creating universal jurisdiction and power
to act against pirates on the high seas.
UNSCR 1814 (May 08): welcomes WFP escorts, support
contingent on TFG request
UNSCR 1816 (Jun 08): Chapter VII resolution; TFG
concurrence required; authorization to act 'using all
necessary means' under international law within Somali
TTW to repress armed robbery at sea; cured 'defect' in
TFG recognition; extended law of piracy into TTW
UNSCR 1838 (Oct 08): Chapter VII resolution but no
additional mandated powers, 'calls on' – political
necessity for EU Op Atalanta
UNSCR 1846 (Dec 08): Extends 1816 mandate to Dec
09
The International Mandate
UNSCR 1851 (Dec 08) – encourages
establishment of detention and trial facilities, and
local 'shipriders'; expands mandate to include land
operations on request of TFG and notification to
UNSG
Jan 09 US-Kenya agreement on the transfer of
pirates
Mar 09 EU-Kenya agreement on the transfer of
pirates
UNSCR 1897 (Nov 2009); extends mandate
Mar 10 – Kenya resists further transfers
BOTTOM LINE: INTERNATIONAL MANDATE IS
ROBUST
The International Response
Jun 08 – UNSCR 1816
Oct 08 - EU announces Op Atalanta
Oct-Dec 08 - NATO offers Op Allied Provider
to cover gap until Atalanta begins
Dec 08 - Op Atalanta Commences
Mar-Aug 09 NATO Op Allied Protector
Jan 09 - US establishes Task Force 151;
Contact Group convenes (CGPCS), Djibouti
Code of Conduct agreed
NATO Op Ocean Shield September 2009
Russia, Japan, Singapore, Malaysia, India,
China, Iran launch independent missions
Operation Atalanta
First Maritime European Union ESDP
mission.
Focus on protection of WPF shipping
and counter-piracy in Gulf of Aden
Largest counter-piracy mission in
region: 10 frigates, 3 patrol aircraft, 1
submarine.
Robust rules of engagement: authority
to arrest, detain and transfer suspected
pirates, seize pirate vessels, captured
vessels and cargos.
2010: HMNS Johan De Wit: CP “mother
ship” strategy effective
NATO Operation Ocean Shield
Counter-Piracy mission off Somalia; 3
frigates, 1 support ship
Employs the NATO Standing NATO
maritime groups
Objective of deterring and responding
to pirate attacks and partner -nation
capacity building
Coalition Maritime Forces TF151
Counter-Piracy mission off Somalia,
establish Jan 09
Coalition lead, US, Turkish
Currently 3-4 frigates or support ships
Provides a valuable compliment to EU and
NATO operations; brings in partners
preferring a less close tie to either
organization.
Operational Challenges
Legal and Political concerns over jurisdiction and trial
often mean guns are dumped overboard and pirates
released
If pirates seized, they need to be taken somewhere –
ship is out of the mission during that time.
Information and intelligence sharing is critically
important.
Waterspace is about the size of the Mediterranean,
with 20 odd ships to patrol it – MPA assets critical.
Coordination at sea has improved dramatically over the
past 12 months. SHADE forum and bridge-to-bridge;
most ships in region exercising mutual support.
Lessons Identified
Transit Corridor approach is proving effective for ships
within the Corridor; most hijackings now happening
outside.
Best practices substantially reduce the risk of a
successful attack; all shipowners and mariners need to
make best efforts.
Regular update, use of EUNAVFOR, TF151 and other
info sharing portals for awareness.
Ships structurally at risk should consider armed
security.
Ability of the crew to shield themselves in a secure
space has proven of value where naval forces are in
the vicinity
Major Legal Issues for international forces
- The Authority to deploy naval forces to
combat crime on the high seas: national
internal legal question
- The authority to exercise universal
jurisdiction – limited by some national laws
- The definition and nature of the force used:
military or constabulary paradigms?
- The questions of arrest and detention by
naval forces
- Trial and Incarceration – willingness to
incarcerate is the largest problem
Is Piracy still a universal crime?
Piracy the doyen of ius cogens crimes, attracting universal jurisdiction
Custom is based on the custom and practice of states, including their
opinio iuris, sense that their act is legal
Custom can override codified law (UNCLOS)
2008-10, several states have refused to arrest pirates on grounds that no
nexus to their state existed or no confidence that a successful
prosecution at home was possible:most common response is to disarm
and allow to return to shore
Remarkably few pirates have been arrested and brought home for trial;
and almost none where no nexus existed with the apprehending state
18 May – Somali Gov. representative denied US jurisdiction to try
Abdiwali Abdiqadir Muse for the MAERSK ALABAMA hijacking.
The Commercial Dimension
Kidnap and ransom insurance is an ancient business –
rates of premium have increased substantially in 2009
4 Insurance Options: H&M, War Risks, P&I and K&R.
Shipowners paying $30K for $3M K&R cover for seven
days transit (1% premium). But there are 20K transits of
Gulf of Aden annually with 42 hijacks in 2008 - 0.2%
London insurance market – piracy is a maritime risk in
std hull and machinery clauses and all risks cargo policy
US AIMU forms treat piracy as a war risk – no deductible
but an additional premium for each transit (premium
adjusted daily with risk, freight determined weeks in
advance)
Losses from Piracy
Ransom $1-3M or more
Transaction cost of paying the ransom - $500K
50-60 day negotiation period, ship not earning
freight
Minimal crew maintenance – major machinery
needs immediate repair; cost and further delay
Risk of liability for material breach of contract
regarding the cargo
Who Pays?
Stakeholders: Vessel, Crew, Cargo and freight to be earned by
the voyage
Consensus that ransom forms the subject of General Average:
Ship Owners/Underwriters will pay ransom and recover a
contribution from cargo interests – Justinian's Digest, Rhodian
Law, Consolado del Mare, in common law Hicks v. Palington
(1590) Moore's (Q.B) R 297, approved US S.Ct. Ralli v. Troop
(1894) 157 US 386
Sometimes informal: York-Antwerp Rules 1994: GA
commission of $30K for 1.5M ransom + interest of $2K/wk
from payment until 90 days after issue of adjustment.
Informal option sometimes prohibited by reinsurance clauses
Requirements of General Average
York Antwerp Rules 1994 require 1. Peril
2. Extraordinary Loss/Expenditure
3. Voluntary incurring of such
Loss/Expenditure
4. Common Benefit/Common Maritime
Adventure
Exception – Rule D YAR: demonstrating preexisting unseaworthiness before voyage (some
claims have tried this)
Ransom: US Legal and Policy Factors
US law does not prohibit payment of ransom in situations
of maritime piracy per se. Common law policy allows but
could be overridden by statute.
Foreign Corrupt Practices Act, 15 USC S 78dd – illegal to
make payments designed to influence decisions of foreign
officials
US Treasury Office of Foreign Assets Control (OFAC)
Regulations impose US economic sanctions on states,
groups and individuals..
Bank Secrecy Act 1970 – single transfer of +$10K;
threshold of US Federal money laundering linkage
The Terrorism Question
Terrorism is considered a war risk in
insurance law, not a maritime risk
Terrorist?
Extensive national legislations and
international directives prohibit providing
financial support to terrorist organisations
– 'ransom' cannot be paid by private
parties to terrorists seizing a ship on the
high seas – and contribution cannot be
enforced
After MAERSK ALABAMA, SecState
Clinton mooted the idea at treating pirates
similarly to terrorists – if developed could
bar ransom payments by US ship owners
and insurers.
Pirate?
US Executive Order 13536
US Executive Order 13536 of 13 April 2010: Declares US national
emergency with respect to the situation in Somalia and off its coast.
- Piracy included as a threat to peace and security, but ransom
payments not prohibited per se
Order places restrictions on named persons deemed contributing to
Somali instability: 11 persons and 1 entity named; two with links to both
al Shahab and piracy,. OFAC/TR may designate others.
- Order applies to transactions by US Persons OR within the US
- Prohibited transaction must be a 'contribution for the benefit of' named
persons; due diligence expectations not yet clear
US Executive Order 13536 - Scope
Scope: Includes all US persons, corporations in US and abroad;
- Does not include foreign corporations for sole reason that they have
assets or offices in US (16 Apr briefing)
- Likely to include US insurers/reinsurers paying cover for a ransom to
named individuals
- May include US banks if part of a ransom payment or insurance chain.
Q – Law firms or attorneys negotiating or facilitating a ransom payment?
Q – Impact on General Average payments by US cargo or charter
interests. Prohibited? K of insurance void on grounds of public policy?
Q – Comity and Conflict considerations: will a UK court applying UK law
absolve a US contributor?
Q – What role for the Flag State?
US Executive Order 13536 - Impact
Application: Apr 16 Briefing; consultation with OFAC/TR urged before
making ransom payments
- Regulation not likely to be amended before the fact; may impact
insurance dimension after the fact.
– informal assurance (Apr 16 briefing) that ransom would not be
prohibited where life was at stake.
Operational Effect: Red Gaming the EO:
- Pirates will want hostages
- If ransom was prohibited and life was at stake; navies under pressure
to go offensive against mother ships and pirated vessels; would alter
current C/P operations
- Potential impact on US insurance/reinsurance market
- Potential impact on P&I and labor relations
What Lessons from Counter-Piracy?
- Cost of HVLD assets must be considered; Chicago School
approach; need to distinguish threat from cost
- Capacity building is hard without a partner
-Short missions never are
- Piracy as a 21st century phenomenon needs a clearer definition –
universal crime, commercial irritant, strategic threat, national
emergency? – and a coherent deterrent and enforcement posture
Somali maritime hijackings as piracy may be short lived; may be
entering a more problematic scenario of either insurgent or
government linkages, should Somali localism and warlordism
'normalize' the piracy phenomenon.
Discussion