Maritime Security Companies – Legal Framework

maritime security
Maritime Security Contractors Legal Framework - Dr. Bimal Patel

Maritime Security – Evolving Legal Regime and Governance for Private Maritime Security Companies (PMSC)

Private Maritime Security Companies (PMSC) model has become a necessity in view of emergence of piracy and armed robbery at sea. What otherwise navies and police do in their respective geographical domain is performed by the Private Maritime Security Companies, namely, deterrence and ward off attacks, providing risk assessment, advise on improvement of security of vessels practical advice, providing anti-piracy training for crew members and provision of armed or unarmed guards to protect / escort vessel. What also they can do is more interesting? Transportation of arms and ammunition unknown to everyone, some may provide services for the entire voyage and some for certain passage, some embark in territorial sea and continuous zone and disembark in the same manner, there is a possibility and I am sure investigations may reveal possibility of inappropriate disposal of weapons by contractors just before entering territorial sea and continuous zone. An operational danger on the security of coastal states, namely floating detachments is also an issue, these floating armouries are exploited for various aims, the example of Nigerian navy intercepting Russian security vessel with hundreds of rifles on board comes to mind.
Let us look at the home front. The famous MT Enrica Lexie incident which occurred on 5 February 2012, 20.5 nautical mile from the Indian baseline. We all know that MT Enrica Lexie did not report firing incident apparently due to non-mandatory regulation. In this regard, it is important to note that the Ministry of Shipping Guidelines SR-13020/6/2009-MG dated 29 Aug 2011 make it mandatory for all Indian and foreign commercial merchant vessels with armed guards and military weapons to obtain a pre-arrival notification for security (PANS) clearance prior to entrance and transit through the Indian Exclusive Economic Zone and Indian Search and Rescue Region (ISRR). This was an obvious example of lack of compliance with the coastal state regulations. The second case pertains to MV Seamen Guard Ohio, the Sierra Leone Flagged vessel, US private firm owned, private security patrol vessel which was detained on 12 Oct 2013 off Tuticorin within the Indian contiguous zone, carrying 35 automatic weapons and 5,700 rounds of ammunition. The Vessel in addition to PANS violation, did not have any authorisation from the flag state to carry out duties of armed escort. Furthermore, crew were without documentation and without the log of duties performed. As you may know, after 9 months Madras High Court set free the crew declaring it as unintentional and accidental act and not a criminal conspiracy.
These two isolated but I am sure there are dozens more serious than these two incidents show how vessels could easily violate coastal state regulations and how without inadequate documentation carry a large number of weapons with little or perhaps no oversight at all.
2008 attacks forced shipping companies and ship-owners to find ways to reduce risk, rapidly increase “exception’ insurance premium for routes in the Gulf of Aden and the Indian Ocean. PMSC was born and apparently no successful hijacking in 2013 and 2014 but I am sure all intelligence people can agree that ships and security companies through word of mouth spread that due to PMSC there have been no hijacking. The truth remains to be investigated.
Private Maritime Security Companies has indeed emerged as an organised industry. The most important reasons are, due to no ship with Private Maritime Security Contractors ever hijacked and the accrual of financial savings from hiring Private Maritime Security Companies. Is Private Maritime Security Companies the only solution? Navy too can perform the task as vessel protection detachments (VPDs) and as we know Italy and Japan provide military personnel on merchant ships, under government regulations.
Let’s look at some facts and figures to put the legal and regulatory framework in a proper context. After all, we international lawyers do economic analysis of international law.
Estimates and reports suggest that Somali piracy used to cost 18 billion USD annually. In, 2008, 47 vessels were hijacked and 84 were reported incidents which decreased to 7 vessels and 32 incidents in 2012 respectively. 42,000 vessels transit through the Gulf of Aden, with a quarter with Private Maritime Security Companies and cost per PMSC team is $50,000 per transit. The market is booming. As per Stratfor, the cost for a typical four-man team on a normal 40-day rotation would be $56,000-64,000 plus whatever the security company needs to make a profit from the trip. Bypassing the Gulf of Aden, adding three thousand miles and from two to three weeks to voyages, incurring additional fuel costs of $3.5 million per year for tankers and $74.4 million per year for the liner trades. The nexus suggests that you can pay exorbitant insurance premiums which used to be $500 in 2007 has sky rocketed to $20,000 per ship/voyage, excluding injury, liability, and ransom coverage. But the industry is booming for businesses of UK and the Northern Europe – 630 companies taking almost the entire business. Private Maritime Security Companies in these countries were earning more than pirate themselves perhaps. According to one estimate Private Maritime Security Companies earn approximately $52 million from 1500 escorted journeys per month.

Private Maritime Security Companies : Existing Legal and Regulatory Framework

Private Maritime Security Companies is largely and if not entirely unregulated industry. Neither UNCLOS provisions 100 to 107, nor the UN Security Council Resolution 1918 of 27 April 2010, nor the Guidelines of the International Maritime Organisation cover most critical aspects of regulation of this industry. As we know, UNCLOS and UN Resolutions provisions are mainly applicable for government and military and not for the Private Maritime Security Companies.
In addition to above, there is a regional instrument for private security companies, the Montreaux document which provides a framework for Private Maritime Security Companies, however, it has an important limitation – applicable only in case of recognised armed conflicts or internationally recognised war zones. Thus, for Private Maritime Security Companies, it is inapplicable.
In the absence of hard-law, a framework of soft-law has emerged, mainly in form of Private Maritime Security industry-led regulations, codes of conduct and certification schemes, oversight and accountability to this industry. Private Maritime Security Companies industry would certainly like and I fully agree with them that it is better to create controls by the industry itself instead of new government regulations to prevent the industry from bringing to a halt. Why I advocate because self-made regulations are less costly, more efficient meetings to discuss the issues, few procedures and almost no bureaucracy. This is an excellent way to provide guidelines, develop interests and build momentum to evaluate program effectiveness before rolling out a hard-law package. However, the disadvantage of soft law is that it does not require compliance by states or parties who do not want to change, which ironically are often the targets of the instrument.
As far as IMO is concerned, IMO MISC/Circ. 1130 dated 14 Dec 2004 provides for Guidance to masters, companies and duly authorised officers on the requirements relating to the submission of security related information prior to the entry of a ship into port, supplementing ISPS code, no mention of carrying weapons on board.
Let us go into international law details: First, states have more extensive powers and obligations to prevent and repress piracy than Private Maritime Security Companies do. Second, under customary international law and UNCLOS (treaty law), states have rights such as to interdict suspected pirate vessel, arrest and detain suspected pirates, confiscate weapons, ships and assets. UNCLOS provides for regulation of the activity on the high seas generally, rather than the carriage of weapons in particular. Instead, Article 94(1) of UNCLOS stipulates that each State must exercise jurisdiction and control over vessels flying its flag. Accordingly, it is up to each individual State to legislate on this matter. So the regulations governing the carriage of weapons are those laid down by the flag state, but a vessel must also comply with the law within the waters of each coastal state it enters. A state may therefore prohibit the carriage of any weapons into its territory, even though there is no contravention of the law of the ship’s flag state.
In this regard, the practice of some states is worth noting. As of February 2012, France, Spain (where a licence is also required), Saudi Arabia, Kenya and Brazil required prior notice that a ship was carrying weapons. Australia required registration with a number of government agencies. In South Africa all firearms must be registered, which in practice means that foreign vessels cannot bring guns into the country. It is important to note that two masters were arrested and charged under the South African Firearm Control Act in 2011. Although national requirements change, and this is far from being a comprehensive list, it does highlight the fact that the carriage of weapons on board merchant ships is not straight-forward. In fact, Private Maritime Security Companies may hide weapons on board a ship which may create a potential legal problem for the Master and the ship’s owners.
Although increasingly flag-state allow Private Maritime Security Companies on their vessels, not all. If it is prohibited, like in India, it is the duty of flag state to police and enforce the prohibition.
An important issue is the use of force which I will deal later but at this stage it is important to note that under the US law, warning shots can be fired, but not under the UK law. While referring to firing of the shots, a judgment by the International Tribunal for the Law of the Sea (Hamburg, Germany) in the Saiga case is very important. The Tribunal adjudicated that ‘a warning shot does not constitute a use of force’. ITLOS went on to pronounce that ‘the normal practice used to stop a ship at sea is first to give an auditory or visual signal to stop, using internationally recognized signals. Where this does not succeed, a variety of actions may be taken, including the firing of shots across the bows of the ship. It is only after the appropriate actions fail that the pursuing vessel may, as a last resort, use force. Even then, appropriate warning must be issued to the ship and all efforts should be made to ensure that life is not endangered’.
While discussing international law provisions, the internal law of the IMO provides important directions. IMO in May 2011 approved interim guidance to ship-owners, ship operators and shipmasters on the use of private armed security personnel on ships. This guidance was revised and issued by the IMO as MS.1/Circ. 1405 on the 25 May 2012. Other guidance documents were also issued to flag states. The IMO did not endorse the use of armed guards. However, it observed that the absence of applicable regulation and industry self-regulation coupled with complex legal requirements governing the legitimate transport, carriage and use of firearms gives cause for concern. This situation is further complicated by the rapid growth in the number of private maritime security companies  and doubts about the capabilities and maturity of some of these companies. The IMO added that, ‘the use of Privately Contracted Armed (Maritime) Security Personnel (PCASP) should not be considered as an alternative to Best Management Practices (BMP) and other protective measures. Placing armed guards on board as a means to secure and protect the ship and its crew should only be considered after a risk assessment has been carried out. It is also important to involve the Master in the decision making process. IMO guidelines stress the importance of undertaking a risk assessment and, if it is decided to use armed guards, to undertake a full evaluation before selected a supplier. IMO affirms that, ‘as the quality of the service delivery depends to a very great extent on the quality and experience of the individuals that make up the on-board PCASP team, the quality of the selection and vetting of that team is essential. PMSC should demonstrate that they have verifiable, written internal policies and procedures for determining suitability of their employees.’ The guidelines also deal with insurance issues, the licensing and control of firearms, the composition of the armed team, command and control issues, training, record-keeping and rules for the use of force. These guidelines represent a logical and sensible approach to the deployment of armed guards, although it will be a long time before all ship-owners follow them.
This interim guidance is not legally binding and is not in itself a set of certifiable standards. It does, however, provide minimum recommendations on the competencies and abilities a professional Private Maritime Security Companies is expected to have.
One further needs to note that although IMO cannot issue binding regulations (a subject whether an IO except the Security Council can bind member states with obligations is a whole different issue), it has issued regulations guiding and advising flag states (IMO / MSC.1 / Circ. 1406), port and coastal states (IMO / MSC.1 / Circ.1408), ship-owners, shipmasters, and ship operators (MSC.1 / Circ.1405), and private maritime security companies (IMO / MSC.1 / Circ.1443) on best practices and reaffirming their oversight responsibilities in international law. IMO through these guidelines has urged port and coastal states to clarify their laws regarding embarkation, disembarkation and carriage of PCASP, their weapons, ammunition and other security-related equipment along with flag states to decide whether or not they will allow PCASP aboard their vessels, and if so under what conditions. India is yet to do. It shall do at the earliest.
National Legal Regime
Now let’s look at national law and practice. First of all during an important hearing in 2012, the UK House of Commons Foreign Affairs Committee noted that PMSC do not always meet professional standards as companies have varying standard of service and operation. As per UK laws, it is lawful to use force in self-defence or in the prevention of crime so long as the force used was necessary in the circumstances as individual believed them to be. Furthermore, use of lethal force to protect property is unlikely to be found to be reasonable to be jury. Following the piracy emergence, the UK issued Guidelines in 2011 for PMSC operating on UK-flagged ships: Lethal force can generally be used in the context of self-defences or defence of others. The decision to use lethal force must lie with the person using force where they believe there to be a risk to human life. Neither the master nor the security team leader can command a member of the security team against that person’s own judgment to use lethal force or not to use the lethal force. PMSC personnel must use the minimum force necessary to prevent the illegal boarding and protect lives of those on board; procedure should be graduated response each stage of which is considered to be reasonable and proportionate to the force used by the attackers. The Guidelines warn, though, that adherence to these rules would not in itself serve as a defence if criminal charges were brought, and that the applicable laws on self-defence ‘will depend on the court where charges are brought, which may depend on where the offence took place and/or where the victim (or possibly the alleged perpetrator) is from.
If we look at the US law, we can refer Resistance of pirates by merchant vessels, 33 US Code 383, which codifies the right to use of force to deter unlawful attacks on the US-owned vessel, vessels. The master or crew (which would include PMSC personnel) ‘of any merchant vessel of the United States, owned wholly, or in part, by a citizen thereof’ is authorized to ‘oppose and defend against any aggression, search, restraint, depredation, or seizure, which shall be attempted upon such a vessel’.
Furthermore, the US Coast Guard and Homeland Security Port Security jointly issued a Port Security Advisory in 2009 entitled Guidance on Self-defence and Defence of Others by U.S. Flagged Commercial Vessels Operating in High Risk Waters. The Guidance, which is provided for all personnel on board US-flagged vessels, including contracted security personnel, sets out the current United States rules for defence against piracy. Use of lethal force is permitted in self-defence or defence of others where there is reason to believe that there is an imminent danger of death or great bodily harm. Non-deadly use of force is permitted in self-defence or defence of others as well as in defence of the vessel and its cargo from theft or damage. In the latter regard, force used in defence of the vessel and its cargo can only be used on the authorization of the vessel’s master.
Although we deal with hard-core issues of Private Maritime Security Companies and piracy, it is important to observe that the US Jones Act US Code 688 (2002) provides employees (read PMSC personnel) right to safe place to work. We need to be aware of this as this Act provides for relationship between employer and crew member on us-flag vessel, higher liability on employer which would be applicable for Private Maritime Security Companies too.

Private Maritime Security Companies : Issues – Legal

Having analysed the existing international, inter-organisational and national framework, let me analyse few important legal issues which shall guide drafting of any guidelines and regulations and international and national cases.
First of all, the issue of enforcement and jurisdiction. Jurisdiction in cases where private navies use force incorrectly against pirates is another challenge. Many different nations are often involved in operating and protecting merchant ships, making it unclear which laws should be applied and respected by the parties involved. Second, we also know that there is no command structure over them, deter threats and operate in defensive capacity for the PMSC.
Apart from enforcement and jurisdictional issue, the human rights and humanitarian laws are having significant impact on the way the Private Maritime Security Companies function and can be held liable. Fundamental HR laws are directly binding on Private Maritime Security Companies. For example, what happens to human rights of suspected pirates, if their skiff drowns or they give up arms and surrender – not only human rights but also provisions of the Torture Convention too apply. Furthermore, As Douglas Guilfoyle notes, ‘there is nothing magical about the maritime environment’. If an individual injures or kills another with a licensed weapon, it does not generally invoke the responsibility of the state. This equally applies to the action of a licensed Private Maritime Security Contractors. With regard to PMSCs operating on vessels flagged by states parties to the 1950 European Convention on Human Rights, and in situations where lethal force has been used by Private Maritime Security Companies personnel, the European Court of Human Rights has said that the deprivation of life must be subjected to the most careful scrutiny, taking into consideration not only the acts in question but also all of the surrounding circumstances. According to the European Court of Human Rights, the acquiescence or connivance of the authorities of a Contracting State in the acts of private individuals which violate the Convention rights of other individuals within its jurisdiction may engage that State’s responsibility under the Convention. Any different conclusion would be at variance with the obligation contained in Article 1 of the Convention.
Use of Force is another most important legal issue. Regulation of and accountability for the PMSC forceful action is must. We all know that hostile and volatile environment against PMSC leading to use of excessive force, however, their accountability is not absolved at least in the existing legal framework, although one may have sympathy in such cases. While talking of sympathy, we must not lose a sight that case like MV Almezaan, March 2010 in which exchange of fire by the Private Maritime Security Companies led to one suspected pirates wounded, fatal and the surviving suspected were captured by the EUNAVFOR but no investigation took place into the lethal force used by the Private Maritime Security Companies. In another case,  Avocet. Marshal-Islands flag state, in 2011, again Private Maritime Security Companies using force for a skiff. The Trident Group (Private Maritime Security Company) amended that only team leaders can fire warning shots, International Maritime Bureau described as armed security team aboard fires warning shots…no investigations took place here as well.
Let us look at the lawful use of force in self-defense that can be resorted by the Private Maritime Security Companies. Private Maritime Security personnel are governed by national law (unless explicitly operate on state behalf) applicable laws would be flag-state vessel law, law of nationality and law of territorial state (if in territorial waters) involving the question of claim of multiple national jurisdiction. If Private Maritime Security Contractor use force beyond deemed lawful, they are liable to criminal prosecution.

Private Maritime Security Companies : Insurance Issues

Although I am not really willing to discuss insurance aspect, it is important to observe few remarks. There a number of insurance issues which ship-owners need to concern themselves with. The first relates to insurance against damage, death or injury, caused by the armed guards and the second relates to compliance with the provisions of the insurance contracts which cover the vessel and its cargo. For example, Section 41 of the UK Marine Insurance Act 1906 implies into every contract of insurance a warranty that the voyage is lawful and that, so far as the assured can control the matter, the voyage will be carried out in a lawful manner. If the assured decides to undertake self-defence involving lethal weapons, this could amount to carrying out the voyage in an unlawful manner. For public policy reasons, a breach of the implied warranty of legality cannot be waived by underwriters. If the ship-owner’s self-defence measures are not lawful, then underwriters will be automatically discharged from liability under the policy from the breach onwards. As a further point, many contracts will contain provisions which will oblige owners to waive their right of recourse against the security company, should they have caused damage or loss to the vessel. In view of this, hull and war risks underwriters need to review and approve the ship’s insurance contract when armed guards are carried.

Private Maritime Security Companies: Challenges

  1. Government ability to prevent and repress risks at sea is becoming less and governments are coming up with such solutions, which also may mean they are unable to uniformly adhere to international law governing maritime laws.
  2. Private Maritime Security Companies is a self-regulated industry with no reporting accountability, choice of self defense methods in high seas, management setting its own standards and competitive forces outsmarting each other to rise to the top.
  3. There are a range of questions, especially for coastal states that are weak and their seafarers go for fishing in deep waters. Can shots be fired across the bow of a suspected pirate vessel in warning? Can Private Maritime Security personnel even lawfully fire warning shots? Can they seek to immobilise the suspected pirate ship by firing into the engine block? If so, in what situation and at what point can such actions be taken? In the absence of clear regulations and case-law (only emerging in view of Ohio and Enrica Lexie), the situation may remain volatile. Can private armed guard on board an Indian flagged vessel sees an armed skiff approaching at high speed, can the guard open fire – government must provide clear direction on what is permissible, guidance to use lethal force cannot be left to Private Maritime Security Companies.It is very important that the Private Maritime Security Companies be protected by a clause that nothing in IPC requires a victim of pirate attack to await an aggressor’s first blow before acting in self-defence.
  4. The extent to which national legislation allows weapons to be carried into the respective national territory (especially ports) or through territorial waters also differs. India does not allow private citizens to carry weapons, so this could be an important question.
  5. UNCLOS allows a right of ‘innocent passage’ through territorial waters (Article 17), but the extent to which the carriage of weapons to be used in self-defence violates the constraints upon that right (as set out in Articles 19 and 21) is not clear.
  6. Different national jurisdictions require that either the weapons or the personnel carrying them, or both, be licensed under the law of the transiting state. There may also be import or export restrictions relating to the disembarkation of weapons in port.
  7. In March 2012, for instance, it was reported that PMSCs were storing their guns aboard floating armouries in international waters so ships that want armed guards for East Africa’s ‘pirate-infested waters’ could cut costs and circumvent national laws limiting the import and export of weapons. India does not allow such practice, and it is possible that some Private Maritime Security Companies may not inform even the governments of the flag their ship is flying. Eighth, institutional legitimacy is also an issue. Availability of Private Maritime Security Companies and violence and use of force used by them can enable states to engage in behaviours that is not supported by their citizens. The use of Private Maritime Security Contractors by corporations and few big corporations of the world – institutions which are lacking legitimacy, not backed by people nor democratically controlled – may only enable operations not supported by citizens to a great degree. Private Maritime Security Companies would like to participate in rule-making process without attendant responsibility. Any regulation from an institutional and moral legitimacy point of view shall have accountability, transparency, professionalism and dignity included for Private Maritime Security Companies.
  8. PMSC may also engage in violence against each other under the absence of a clear authorisation by states.
  9. Last but not the least, Private Maritime Security Contractors like PSCs in Afghanistan, Iraq and other places will have to answer the question about their legal status and applicability of civil and military law or civilian vs military law, once the clarification is there, they can do enforcement activities.

While the Private Maritime Security Companies is a welcome phenomenon for states, maritime trade among others, the Private Maritime Security Companies themselves pose some threats to the effective maritime governance by existing international law. Some of these are, Illegal arms transhipment under the pretext of anti-piracy patrol; Disregard for proportionality law while dealing with suspected pirates leading to avoidable deaths. States with weak self-policing capabilities could find it difficult to prevent Private Maritime Security Companies from using their waters illegally. Floating armouries to become gun for hire without submitting any explanation. Boats from vessels could be launched for nefarious activities too citing anti-piracy or training operations. Since no limitations on type of arms, even weapons from small arms and to shoulder launched missiles can be carried, thus could become a big illegal shipment business. Private Maritime Security Companies will demand proper recognition in keeping ship, crew and cargo safe. On the whole, the security industry is populated by military, police and trained professionals who must meet the stringent concerns of shipping companies. But the potential for missteps, such as the murder of fishermen, is high and the ability to adjudicate or gather evidence in the event of a violent event gone wrong, is lower than land-based operations. This is a real concern.

Private Maritime Security Companies: Recommendations

Where does the above discussion lead? First of all, states should have legislative and admin framework to regular Private Maritime Security Companies activities and ensure accountability (questions may be whether personnel may be armed, under what circumstances, with which weapons, when and how those weapons may be lawfully used).
Second, India can use ISO Guidelines which are helpful.
ISO PAS 28007: Part 1 – Guidelines for Private Maritime security Companies (PMSC) providing privately contracted armed security personnel (PCASP) on board ships (and pro forma contract).
Part 2 – Guidelines for Private Maritime security Companies (PMSC) providing privately contracted armed security personnel (PCASP) on board ships- International Model Set of Maritime Rules for the Use of Force (RUF)- AKA- ‘The 100 Series Rules’. Third, India can take lead for the IMO Directives: to make more binding, difficult.  Fourth, the existing ISPS code may be suitably modified for ships entering or leaving harbour with weapons / PMSC or having disembarked weapons / PMSC or who intend to embark weapons / PMSC should notify the port authorities prior to arrival / departure. Fifth, although India has guidelines on PN the Port notification data availability mainly ships data to be made online available and on port websites, accessibility of such data could be restricted to other ports and law enforcement agencies.

  • India may promulgate on-board regulations: regulations on the use of boats including carriage of weapons and Private Maritime Security Companies could be promulgated, preferably under IMO framework; Weapons carried on board: no and calibre of weapons to be restricted; shoulder launched missiles and similar weapons to be excluded; No of private security guards: normally 6, but no upper limit, cap required.
  • Floating detachment regulations need strengthening to include regulations on floating detachments that carry a large cache of arms and / large no of security personnel on-board may be promulgated including kind of authorisations from the flag state and log documentation. Although immediate reporting of weapons use is in force, better enforcement through regulations are required so that any vessel carrying firing, against confirmed or suspected pirates or armed robbery, report immediately to Indian Search and Rescue Region.
  • Furthermore, mandatory notification on automatic identification system: any vessel carrying weapons shall display the details on Automatic Identification System. It is important to have oversight responsibility regulation: flag states or states of chartered ships shall provide regulations and mechanism which enable the coastal state to know the oversight mechanism.
  • PANS review: PANS in its current form requires that carriage of weapons in the entire Indian EEZ and ISRR be reported. In the absence of resources and unless vessel is boarded or prior intelligence available, Indian Coast Guard or Navy can do little. The issue becomes critical when vessels are transiting. India might consider using navy for security as this could solve jurisdictional issue, but does our navy have enough ships small enough to aid big commercial ships.
  • IMO Secretary-General Sekimizu said on 16 May 2012 that the carriage of firearms on board merchant ships is a complex legal issue with Member States taking diverse positions. The Committee has determined that the carriage of armed personnel is a matter for flag States to authorize, however it has also accepted that their carriage has legal implications for coastal and port States, particularly with respect to the carriage, embarkation and disembarkation of firearms and security equipment in areas under the jurisdiction of such port or coastal states. Universal and uniform is the IMO spirit of regulation because vessels travel through all maritime zones under the jurisdiction of multiple countries, have crew from various countries, and therefore need to be held to relatively uniform standards. This is not a goal possible in current community of states regime.

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