Dear All,

Greetings from Beacon!! In our effort to keep on updating you on the various changes in the industry or insurance related news, please see a recent update below which gives the information about Marine Insurance cover.

We would like to inform you to recheck the following covers under your existing policies:

1. Review your existing marine policy. Sometime piracy is not covered or limited cover.
2. General Average Cover
3. If you taken the Insurance cover under Kidnap and Ransom policy, please review the coverage.

This gist of the NEWS is as below:

The GoG Declaration or to give it its full form ‘The Gulf of Guinea Declaration on Suppression of Piracy’ was signed recently by 246 organisations connected with the shipping industry. These included shipping companies, charterers, Tanker operators, P & I club, Shipping Registries, etc. Incidentally the Indian Register of Shipping & the Great Eastern Shipping Company from India are signatories to this declaration. It would be in the fitness of things if we understand what was the background which led to the signing of this declaration and what does it seek to achieve.

The Gulf of Guinea lies on the west coast of Africa, an extension of the Atlantic Ocean. The important countries forming its basin include Nigeria, Ghana, Togo, Liberia, Cameroon, Gabon, Cote d’Ivoire, etc. There are many islands in the gulf too, the major one being Sao Tome & Precipe. Geographically, The Prime Meridian (Zero degrees longitude) & The Equator (Zero degrees latitude) meet in the Gulf of Guinea.

Piracy reared its ugly head in the Gulf of Guinea around 2009. A combination of factors are cited as reasons for this — Large-scale unemployment/poverty among the youth in many of the surrounding countries, weak maritime security, conflicting or contrasting laws in the surrounding countries, corruption, and above all the movements of large oil tankers especially from Nigeria. So, is this close to Somalia and is there any link between the pirates here and the Somali pirates? Not at all. Somalia is on the Horn of Africa in the north and the Somali pirates operated around the Gulf of Aden and parts of the Indian Ocean. The modus operandi and the scale too are markedly differently. The Somali pirates seize vessels along with cargo and crew and demand huge ransoms. Once the ransom is paid, the vessel with the cargo and crew are released, largely unharmed. The methods of the Gulf Of Guinea pirates are different. They started off by seizing tankers, forcing the crew to take them to different locations where the oil was transferred to other vessels and sold off. Gradually they moved to stealing other types of cargo and valuables on board too. Then came the small demands for ransom for release of the vessels and crew in some cases. However, these pirates in the Gulf of Guinea are extremely violent and brutal. Killing of crew in ships has become common thereby heightening the problem — Human lives being more valuable any day than the cargo and vessels.

Another aspect of this problem is that, strictly on the basis of law, these violent acts of stealing and killing do not fall under the definition of ‘Piracy’. Article 101 of the United Nations Convention on The Laws of the Sea reads as below:

Piracy consists of any of the following acts –

1. 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 or private aircraft and directed (i) on the HIGH SEAS against another ship or aircraft or against persons or property on board such ship or aircraft (ii) against a ship, aircraft, persons or property in a place outside the jurisdiction of any State.
2. b) Any act of voluntary participation in the operation of a ship or of an aircraft with knowledge of facts making it a pirate ship or aircraft.
3. c) Any act of inciting or of intentionally facilitating an act described in sub-paragraphs (a) and (b).

What happens in the Gulf of Guinea is termed EDR or Extended Duration Robbery. The vessel, seized along with the crew remains in the custody of the ‘pirates’ as they steal the cargo over a period of days/weeks. At the end, the crew and vessel may be released or the crew members killed. In March 2021, MT Davide B was attacked by pirates and the 15-member crew abducted. A month later, the crew was released unharmed. What transpired behind the scenes will never be known but kidnapping of crew alone for ransom now appears to have picked up. Around May 19th, 2021, i.e. less than a week back, a Ghanaian vessel MV Atlantic Princess was attacked by Nigerian pirates and the 5-member crew kidnapped. It may be noted that almost all these acts of kidnapping or EDR do not happen in the High Seas but within the territorial waters of one country or the other. In fact, when cargo is stolen under EDR, the disposal happens simultaneously on land too across countries. So in the narrowest legal sense, they do not fall under ‘Piracy’. Criminal gangs from different countries are involved in these activities.

The ICC International Maritime Bureau in its report states that the Gulf of Guinea has become extremely dangerous for seamen and attributed 43% of all piracy-related incidents in 2021 to this region. After considering the kidnapping of the Atlantic Princess crew, Dryad reports that the total number of seamen kidnapped in 2021 so far is 56. Although there is a thin presence of the French and US Navy in the area, it is insufficient to deter these criminals. Cohesive naval action by all the surrounding countries is required but the biggest handicap is resources. The International Maritime Organization (IMO) in its resolution has called upon all members states, the United Nations and other organizations to strengthen law enforcement for capture and punishing of these ‘pirates’ and also make available improved protection solutions. Nigeria has started a program called Deep Blue which aims at providing coastal and inland waterways security by close co-ordination between the Ministries of Defense, Maritime Safety Agency, Police and the Army. Deep Blue has received international support in the form of resources for defense and communications.