Introduction
Piracy in the Gulf of Guinea has emerged as a significant threat to global maritime security, affecting shipping companies, shipowners, and insurers alike. The region accounts for the highest number of piracy incidents worldwide, particularly involving kidnapping for ransom, armed robbery, and hijacking of vessels.1 In 2023, the International Maritime Bureau ("IMB") reported a slight increase in incidents compared to 2022, with the region accounting for three of the four globally reported hijackings, all 14 crew kidnappings, 75% of reported crew hostages, and two injured crew members. Although the number of piracy incidents dropped from 14 in 2023 to 10 in the first half of 2024, the threat to crew safety and wellbeing remains a critical concern. The Gulf of Guinea continues to be the epicentre of global crew kidnappings, accounting for all 11 crew members kidnapped in the first half of 2024 across two separate incidents, and 21 crew members taken hostage in a single incident.2
Given the severity of this risk, it is essential for shipping companies and Protection and Indemnity (P&I) clubs to adopt proactive measures, including seeking legal advice to manage and mitigate the threat of piracy. Engaging experienced legal professionals is crucial for stakeholders to navigate the complex landscape of international maritime laws and regulations, ensuring they are adequately prepared to address potential piracy-related claims and liabilities. This article explores the key areas of legal assistance available to stakeholders, including risk assessment and management, drafting security and contractual agreements, ensuring insurance coverage, and adhering to international conventions. This article also aims to equip shipping companies and P&I clubs with the necessary tools to reduce their vulnerability to piracy, while ensuring that they are prepared for any legal and operational challenges that may arise.
Risk Assessment and Management
In piracy-prone regions like the Gulf of Guinea, conducting detailed risk assessments is essential for shipping companies to safeguard their vessels, cargo, and crew. These assessments help identify potential threats, prioritize safer routes, and implement preventive measures that minimize exposure to piracy. Risk assessments are not only vital for operational security but are also mandatory under international frameworks. For instance, Clause 1.2.2 of the International Safety Management Code 2010 ("ISM Code"), mandates that shipping companies assess all identified risks to their ships, personnel and the environment, and establish appropriate safeguards.3 Likewise, industry guidelines such as the BMP West Africa- Best Management Practices to Deter Piracy and Enhance Maritime Security off the Coast of West Africa including the Gulf of Guinea ("BMP-WA"), make it a fundamental requirement for shipping companies to conduct risk assessment and identify ship protection measures.4
Effective risk management strategies reduce the likelihood of piracy incidents through collaboration between maritime security experts and legal professionals. These plans often focus on strengthening vessel security, optimizing crew safety protocols, and ensuring compliance with international and regional regulations such as the United Nations Convention on the Law of the Sea (UNCLOS) and the ISM Code. As threats evolve, these strategies must adapt, with ongoing legal guidance ensuring companies remain compliant with regulatory changes, maintain operational safety, and reduce litigation risks. In the event of piracy, legal contingencies provide a structured framework for notifying local or international authorities like the International Maritime Bureau (IMB) or Lagos Regional Maritime Rescue Coordination Centre, ensuring insurance compliance, and fulfilling regulatory reporting obligations. Legal professionals play a critical role in both pre-incident preparations and post-incident legal actions, ensuring companies maintain operational efficiency and legal compliance across jurisdictions.
Contractual Agreements
When embarking on a voyage to any region that is prone to piracy, shipping companies need to pay careful attention to the terms of their charterparty as well as the bills of lading if the cargo owners are different from the charterers. This is because if the charterparty, as well as the bill of lading where necessary, is not well drafted to include for example, the required privacy-specific war risk clause and a proper general average clause that sufficiently covers the risk associated with piracy or other related acts in the Gulf of Guinea, the shipping companies may be forced to bear the liability that would have ordinarily passed to the charterers or bill of lading holders in case of any incident. In Herculito Maritime Ltd v Gunvor International BV (the Polar) [2024] UKSC 2, the Supreme Court of the United Kingdom found that cargo interests were liable for a general average (GA) contribution relating to a ransom payment made to pirates following the vessel's hijacking in the Gulf of Aden in 2010. This was only possible because the Supreme Court found that even though general average is regulated by contract, it is a legal right under common law. For the shipowner to have given up this valuable right in relation to well-known kidnap and ransom risks, there must be a clear intention to that effect. So, shipping companies need to pay careful attention to their contracts of carriage or bills of lading because common law principles may not always be available to rescue them if the terms of the contract of carriage or bills of lading where necessary are not well drafted.
Additionally, shipping companies are increasingly relying on Private Maritime Security Companies (PMSCs) and Security Escort Vehicles (SEV) to safeguard their vessels.5 A well-drafted security contract is essential for defining the roles and responsibilities of these PMSCs, particularly concerning the scope of services, communication protocols, compliance with international regulations, and protecting the shipowners and their P & I clubs against liability. To standardize these agreements, The Baltic and International Maritime Council (BIMCO) has developed GUARDCON, a widely adopted contract template to assist the industry and, in particular, shipowners and their P&I Clubs, by providing a clearly worded and comprehensive standard contract on which they can conclude agreements for security services.6 GUARDCON ensures that key elements, such as insurance coverage, permits, rules of engagement, and the use of force are integrated into the contracts, helping to raise industry standards and mitigate risk. Additionally, BIMCO introduced SEV-GUARDCON, a new contract for Security Escort Vessels (SEVs), which mirrors GUARDCON's structure and provisions but is specifically designed for SEVs accompanying merchant ships across Exclusive Economic Zones (EEZ) or territorial waters of multiple states.7
Although BIMCO's GUARDCON and SEV-GUARDCON contracts provide a solid framework for maritime security agreements, they are not substitute for thorough due diligence, which is crucial for shipowners as failure to do so can cause exposure to legal disputes. Therefore, it is important for contracts with PMCS to clearly define the qualifications, licensing, and insurance coverage of the providers to ensure that only well-equipped companies are engaged. Additionally, they should establish strict rules of engagement and acceptable use of force to mitigate the risk of liabilities. These contracts must comply with laws such as UNCLOS and BMP-WA
Insurance Guidance
Understanding and securing appropriate insurance coverage is vital in mitigating piracy-related risks. Securing the right insurance coverage is critical for shipping companies operating in piracy-prone regions. Various types of insurance — such as hull and machinery insurance, war risk policies, and kidnap and ransom (K&R) coverage—can provide financial protection against piracy-related losses, including ransom payments, cargo loss, and legal liabilities. When assessing the necessary coverage, shipping companies should ensure that their contractual arrangements accurately reflect how the parties intend to allocate risks for piracy losses, considering specific voyage risks and obligations in the charter party and bill of lading agreements.
Compliance with Regulations
Compliance with international and national regulations is essential for mitigating piracy risks and avoiding significant legal liabilities. The UNCLOS serves as a cornerstone of the international legal framework addressing piracy, outlining the rights and obligations of states regarding ocean use. Articles 100–107 of UNCLOS mandate that states implement measures to prevent and suppress piracy, necessitating that shipping companies adhere to these regulations and collaborate with global enforcement efforts. Complementing UNCLOS is the 1988 Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation (SUA), which establishes a legal framework for addressing unlawful acts against ships, such as forceful seizures and violence against passengers. Together, UNCLOS and the SUA Convention define piracy, outline the universal jurisdiction of states to combat it, and detail the responsibilities of nations in apprehending and prosecuting offenders, ensuring that maritime operations adhere to international legal standards.
In Nigeria, the Suppression of Piracy and Other Maritime Offences (SPOMO) Act of 2019 reflects the country's commitment to combating piracy and other maritime security threats. This Act effectively domesticates international conventions, including both the SUA and UNCLOS, and applies to ships, aircraft, and fixed and floating platforms, extending jurisdiction to all individuals aboard these vessels, whether within Nigerian territorial waters or those of other signatory nations. Prior to the SPOMO Act, prosecuting suspected piracy offenders in Nigeria faced challenges due to a lack of explicit legislation. The legal principle of "no punishment without law" complicated the prosecution process. The Act now clearly defines piracy and establishes legal obligations for various stakeholders, including shipowners and P&I clubs. The Act mandates that individuals with knowledge of piracy incidents—such as the ship's master, owners, crew representatives, and insurers—report these incidents immediately to the relevant authorities.8 Non-compliance can lead to significant penalties, highlighting the importance of adhering to these reporting requirements. These individuals or entities must report piracy incidents without delay, and in a prescribed format. Failure to disclose critical information that could assist in preventing piracy or prosecuting offenders is an offence and can be liable, on conviction, to a fine of at least N5,000,000 (Five Million Naira).9 Given the legal complexities surrounding piracy incidents, it is crucial to have legal professionals available to provide guidance and ensure compliance with international laws like UNCLOS and the SUA Convention, as well as national laws such as the SPOMO Act. Legal experts can help safeguard the company's interests, fulfil legal obligations, and facilitate appropriate responses to piracy incidents, ultimately contributing to enhanced maritime security.
Incident Response Planning
Shipping companies operating in the Gulf of Guinea must develop detailed incident response plans that incorporate both local and international legal requirements to address piracy attacks. Legal professionals are crucial in helping companies create these frameworks, which ensure swift and compliant responses to piracy incidents. Key elements include emergency action protocols, real-time communication systems, and clear guidelines for managing crew safety and coordinating with maritime security. Additionally, companies must understand their legal responsibilities under international maritime laws to avoid escalating situations or breaching conduct standards.
These response plans must also address the specific reporting obligations required after piracy incidents, including notifying the IMB and relevant local authorities like the Lagos Regional Maritime Rescue Coordination Centre. Immediate communication with insurers, especially P&I clubs, is essential to initiate claims for ransom payments, cargo losses, or damages. A well-prepared legal framework helps companies minimize liability and ensures they meet all legal and insurance-related requirements, reducing the risks and complications associated with piracy.
Negotiation and Mediation
In the event of a vessel hijacking or crew kidnapping, negotiation and mediation are often necessary to secure their release. When all other attempts to prevent the hijacking of the ships have failed, negotiations are the last resort.10 Legal professionals play a vital role in these delicate situations, ensuring that negotiations are conducted within the bounds of the law and avoiding legal and financial pitfalls. For instance, international sanctions may restrict ransom payments, and legal counsel can help shipping companies navigate these regulations to avoid potential violations. When a vessel is hijacked, the urgency of the situation often leads to rapid negotiations for the crew's release. However, these negotiations must be conducted within the framework of international and national law. In the 2020 MV ELOBEY VI Case, ransom demand and negotiation was held to be illegal, although, ransom payment can be the only way out.11 Navigating this path requires careful precautions so as not to be found guilty under maritime laws.
In 2017, the hijacking of the oil tanker Aris 13 off the coast of Somalia required negotiations for the crew's release.12 Legal experts were crucial in guiding the shipping company through the intricacies of negotiations, considering applicable sanctions imposed by various countries. The European Union, for instance, had sanctions that could complicate direct payments to pirates, which could have resulted in severe legal repercussions for the shipping company.
According to statistics, hijack targets of modern pirates mainly focus on product tankers, bulk carriers, container ships, general cargo ships and crude oil tankers.13 Once the ship is hijacked, shipowner, shipper and insurance company tend to suffer significant losses. Legal support becomes crucial in mediation processes when shipping companies are dealing with insurance claims, disputes with charterers, or any other contractual disagreements that may arise from piracy incidents. For example, mediation can facilitate settlements in cases where an insurer disputes coverage for damages incurred during a hijacking.
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Footnotes
1. Central European Journal of International and Security Studies: 'The Role of the UN Security Council in the Fight Against Piracy in the Gulf of Guinea', https://cejiss.org/the-role-of-the-un-security-council-in-the-fight-against-piracy-in-the-gulf-of-guinea accessed on 8th October 2024.
2. International Maritime Bureau, Piracy and Armed Robbery Against Ships: Annual Report 2023, available at https://www.icc-ccs.org accessed on 27th September 2024.
3 Revised ISM Code 2015 available at https://www.classnk.or.jp/hp/pdf/activities/statutory/ism/ISM_Cd/ISM-Code-e.pdf accessed on 27th September, 2024.
4. Maritime Global Security, 'BMP West Africa, Best Management Practices to Deter Piracy and Enhance Maritime Security off the Coast of West Africa including the Gulf of Guinea' available at https://www.maritimeglobalsecurity.org/media/zjyawjjj/bmp-wa-hi-res.pdf accessed on 27th September, 2024.
5. Section 5 of the BMP West Africa – Best Management Practices to Deter Piracy and Enhance Maritime Security off the Coast of West Africa including the Gulf of Guinea" (BMP WA) does not recommend or endorse the use of a PMSC OR SEV. Its use is a decision taken by individual ship operators after carrying out a thorough risk assessment and with permissions from the ship's Flag State, the hull and cargo insurance, P& I club and any other littoral states.
6. BIMCO, 'GUARDCON' available at https://www.bimco.org/contracts-and-clauses/bimco-contracts/guardcon# accessed on 27th September 2024.
7. BIMCO, 'SEV- GUARDCON' available at https://www.bimco.org/contracts-and-clauses/bimco-contracts/sev-guardcon accessed on 27th September 2024.
8. Section 16 SPOMO Act.
9. Section 16(5) SPOMO Act.
10. Centre for International Maritime Security, 'How to Negotiate with Pirates' available at https://cimsec.org/how-to-negotiate-with-pirates/ accessed on 3rd October 2024.
11. Okafor-Yarwood, I. M., & Onuoha, F. C. (2023). Whose security is it? Elitism and the global approach to maritime security in Africa. Third World Quarterly, 44(5), 946– 966. Available at https://doi.org/10.1080/01436597.2023.2167706 accessed on 3rd October, 2024.
12. The Guardian, 'Somali pirates release oil tanker and crew after first hijack for five years'available at https://www.theguardian.com/world/2017/mar/16/somali-pirates-release-oil-tanker-and-crew-after-first-hijack-for-five-years accessed on 3rd October, 2024.
13. Qiong Xi, 'Ransom negotiation with Somali Pirates based on bargaining' (2013) World Maritime University, available at https://commons.wmu.se/cgi/viewcontent.cgi?article=2653&context=all_dissertations accessed on 3rd October, 2024.
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