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Certificate in Maritime Security 2013 (FLP2329) 1-1

CONTENTS

Page No.

LEARNING OUTCOMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2. HISTORICAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3. THE REGULATORY FRAMEWORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3.1 Flag States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3.2 Coastal, Port or Littoral States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.3 Classification Societies (Class) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4. MARITIME ECONOMICS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.1 Shipping and the Global Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.2 Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.3 Top 20 Merchant Fleets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.4 Ship Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4.5 Cargo Carried . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4.6 The Global Pattern of Maritime Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4.7 Shipping Choke Points. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

4.8 Marine Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

4.9 P&I Clubs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

4.10 Piracy and Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

5. INTRODUCTION TO THE MAIN THREATS TO SHIPPING . . . . . . . . . . . . . 24

5.1 Piracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5.2 Piracy Today. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

5.3 Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

1-2 Certificate in Maritime Security 2013 (FLP2329)

Contents Module 1

5.4 Maritime Terrorism before 9/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5.5 Maritime Terrorism after 9/11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5.6 Maritime Terrorism and International Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

5.7 2005 Protocol to the SUA Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

5.8 Crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

5.8.1 Cargo Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

5.8.2 Smuggling Drugs, Contraband, and Arms . . . . . . . . . . . . . . . . . . . 30

5.8.3 Stowaways and Human Trafficking . . . . . . . . . . . . . . . . . . . . . . . . . . 32

5.8.4 Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

5.9 Cyber Crime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

6. INTERNATIONAL AND REGIONAL ORGANISATIONS AND REGULATORY BODIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

7. MARITIME TRADE BODIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

8. ISO 28000 A SUPPLY CHAIN SECURITY STANDARD . . . . . . . . . . . . . . . 43

9. OTHER SUPPLY CHAIN SECURITY INITIATIVES . . . . . . . . . . . . . . . . . . . 44

10. COUNTER-PIRACY SECURITY INITIATIVES . . . . . . . . . . . . . . . . . . . . . . . 47

10.1 The ReCAAP Information Sharing Centre (ReCAAP ISC) . . . . . . . . . . . . . . 4810.2 Djibouti Code of Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

11. NAVAL ANTI-PIRACY ORGANISATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 51

12. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Module 1 Contents


LIST OF FIGURES

Figure 1: Maritime zones pursuant to the UN Convention on the Law of the Sea. Source: after Symonds et al., 1998 . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 2: General Purpose Carrier (Photo: Dirk Steffen 2007) . . . . . . . . . . . . . . . . . 13Figure 3: Chemical Oil Tanker (Photo: Dirk Steffen 2007) . . . . . . . . . . . . . . . . . . . . . 14Figure 4: Bulk Carrier (Photo: Dirk Steffen 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Figure 5: Caribbean Cruise Liner (Authors private collection). . . . . . . . . . . . . . . . . . 15Figure 6: Container Ship (Photo Credit: Author Juergen Lehle. Wikimedia

Commons: GNU Free Documentation License) . . . . . . . . . . . . . . . . . . . . . 16Figure 7: Greek Fast Ferry (Authors private collection). . . . . . . . . . . . . . . . . . . . . . . 17Figure 8: The complex network of global cargo ship movements Pablo

Kaluza, Andrea Klzsch, Michael T. Gastner and Bernd Blasius, J. Royal Society: Interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 9: Panamanian motor vessel Gatun during the largest cocaine seizure in United States Coast Guard history (20 tons), off the coast of Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Figure 10: Major cocaine and heroin routes. Source: Washingtonpost.com . . . . . . . 31Figure 11: Over a thousand men, smuggled into Oman, return to Pakistan

by boat after they were arrested and imprisoned (Picture by Ansar Burney Trust: http://www.ansarburney.org) . . . . . . . . . . . . . . . . . . . . . . . . 32

Figure 12: Example of ReCAAP ISC Incident Reporting Map . . . . . . . . . . . . . . . . . . 48

Figure 13: Signatories of the Djibouti Code of Conduct. . . . . . . . . . . . . . . . . . . . . . . 49

Copyright IIR Limited 2013. All rights reserved. These materials are protected by international copyright laws. This manual is only for the use of course participants

undertaking this course. Unauthorised use, distribution, reproduction or copying of these materials either in whole or in part, in any shape or form or by any means electronically, mechanically, by photocopying, recording or otherwise, including, without limitation, using the manual for any commercial purpose whatsoever is strictly forbidden without prior written consent of IIR Limited.

This manual shall not affect the legal relationship or liability of IIR Limited with, or to, any third party and neither shall such third party be entitled to rely upon it. All information and content in this manual is provided on an as is basis and you assume total responsibility and risk for your use of such information and content. IIR Limited shall have no liability for technical errors, editorial errors or omissions in this manual; nor any damage including but not limited to direct, punitive, incidental or consequential damages resulting from or arising out of its use.


LEARNING OUTCOMES

On successful completion of this module, you will be able to:

Explain the Regulatory framework of the maritime industry

Understand the importance of the maritime industry in the global economy

Identify the different types of ship and the patterns of global trade

Identify the main security threats to shipping

Discuss the roles of international and regional organisations, regulatory bodies and maritime trade bodies

Describe the various supply chain security standards and initiatives

State the main international and regional counter piracy security initiatives


1. INTRODUCTION

This course is designed both for those who have some experience in either 1-001 security or the maritime industry or both. It assumes a position of no knowledge from the student to begin with and so some students may already be familiar with some of the content.

Maritime security then is usually associated with ships and with ports but it 1-002 should not be forgotten that the maritime industry is part of a larger security field, that of supply chain security which seeks to secure goods through the life of a product from producer to end user. The total value of goods stolen in transit worldwide is estimated to be in the order of $3050 billion, about 8% of which are in maritime transit.1 Of these over 90% of maritime cargo theft occurs in ports. Maritime security, in the sense of the security of ships at sea and in port, has always existed but has tended to be low profile and geographically specific. In Europe and the United States generally the security of ships at sea has not been a major issue since the days of European and Barbary piracy. Consequently the security of ships both in port and at sea in the past was largely casual or virtually non-existent.

In some parts of the world however a very different security regime was required. 1-003 For example ships that travelled the Malacca Straits and West African ports were all too familiar with the dangers of piracy and robbery at sea and developed various measures to mitigate those threats. But often there was little security methodology beyond the experience and wits of the master and crew. Occasionally other threats emerged that required mitigation. The hijacking of ships by large numbers of refugees rescued at sea was one threat, and terrorism another with the high profile attacks on the QE2 and Achille Lauro as shall be discussed later. But the organisation and standardisation of security beyond single ships or specific fleets was virtually unknown.

It took 9/11 and the threat of potential attacks on ships or using ships as 1-004 weapons before international legislation, the International Ship and Port Facility Security Code (ISPS Code), created the first ever common framework and principles for ship and port facility security. It also marked for the first time ever the expansion of IMO authority beyond the hull of a ship and into ports, previously areas of national sovereignty. To what degree the ISPS Code has helped individual seamen or ships is arguable but whatever it has done or not done, it has created the beginnings of a far-reaching international organisation that enables the control and tracking of ships more than ever before, together with the potential to react to attacks upon them.

This course is aimed primarily at ship security but it would be remiss to totally 1-005 ignore the associated port facility and port security which has grown out of the ISPS Code and this is covered where appropriate.

1 The Detection and Prevention of Cargo Theft, Trends and Issues in Crime and Criminology No. 214 (September

2001), published by the Australian Institute of Criminology.


2. HISTORICAL OVERVIEW

Shipping is an exciting business, surrounded by many false beliefs, misconceptions, even taboos the facts of the matter are straightforward enough and, when stripped of their emotional and sentimental overtones in clinical analysis, are much less titillating than the popular literature and maritime folklore lead one to expect.2

International trade among all the nations and regions of the world is nothing new. 1-006 From the Phoenicians, Egyptians, Greeks, Carthaginians, Chinese, Vikings, Polynesians, Celts, Spanish, Portuguese, Italians, British, French and Dutch, the history of the world is a history of exploration, trade and conquest by sea. The effects of the growth of sea trade still resonate in modern war and diplomacy too. Afghanistan was a prosperous hub for the trade routes between east and west for centuries until the great Silk Road was made obsolete by the ships of European empires. Even

in the Golden Age of maritime piracy a merchant ship would face better odds on the high seas than by trying to sneak a caravan through the rapacious emirs of Transoxiana.3

Today, international trade has evolved to the point where no nation can be fully 1-007 self-sufficient and around 90% of all trade is carried by ship. Every country is involved in the process of selling what it produces and buying what it lacks: none can be dependent only on its own resources. Modern ships are technologically advanced, sophisticated and often huge. Containerships nudge the 14,000 TEU4 barrier, too big to navigate the Panama Canal yet capable of speeds of 25 knots; huge oil tankers and bulk carriers carry vast quantities of fuel, minerals, and grain and other commodities around the world. Ships themselves are high value assets, some costing over US$100 million to build.

2 Helmut Sohnen, What Bankers always wanted to know about shipping but were afraid to ask, Address to the Foreign

Banks Representatives Association, Hong Kong, 27 June 1985. Reprinted in Fairplay, London 1 August 1987.3 Tanner, S., Afghanistan, a Military History from Alexander the Great to the Taliban, Revised Edition, Da Capo Press,

Philadelphia, USA, 2009.4 Twenty-foot Equivalent Unit, a measure used for capacity in container transportation, i.e., a Twenty-foot long container

equals 1 x TEU, a forty-foot long container equals 2 x TEU.


3. THE REGULATORY FRAMEWORK

It is a commonly held view among some (particularly some of those who 1-008 advocate the use of firearms against piracy) that the high seas are a kind of lawless wilderness where anything goes because there are no laws and usually no witnesses.

In fact the maritime industry is one of the most highly regulated industries in the 1-009 world. Ships are subject to a range of laws and regulations, international, national and regional. In addition ships no longer operate in isolation. They are nowadays, through satellite communications and tracking, connected constantly and directly to shipping companies and government agencies as well as being part of a wider supply chain organisation. From construction through to breaking the history of a ship is now traceable and transparent.

There are three regimes that regulate shipping;1-010

The Flag State (the Flag) Coastal (or Littoral or Port) States Classification Societies.

3.1 FLAG STATES

Every ship or vessel, subject to some qualification on size or type, must be 1-011 registered with a state. This state then becomes the Flag state and the ship is then subject to its municipal (domestic) laws as well as the international maritime regulatory regime. Flag states have different rules for registering ships. Most require some connection with the state but this requirement varies. For example in the United Kingdom (UK) it is sufficient to register as a UK company, with a UK registered address, even if the company or ship has no British employees.

Other countries require much closer ties with the state. For example a US Flag 1-012 vessel is required to employ an American crew, will probably pay higher taxes and fees, requires more rigid training for crews, and more stringent licensing requirements for crew documents. The regulations regarding fire fighting, life saving, safety, navigation, and communication equipment are often more rigorous than other flag states and the procedures regarding the stowage and carriage of hazardous goods are more restrictive than international laws.

At the other end of the scale are the Open registries, once called Flags of 1-013 Convenience of which Panama and Liberia are the two biggest and best known. Open or International registries registered just over a 55% share of the worlds fleet in 2009. These are states which register ships essentially as a business, although it should be noted that in a spirit of market liberalism nearly all registries now compete for business with each other. In return for a fee ships

The Regulatory Framework Module 1


can be registered, often more cheaply and under less stringent conditions (although all ships have to comply with minimum international standards) than some other flags. These states do not have to be maritime states (even Mongolia has a ship registry) or sovereign nations (the Isle of Man has its own registry).War and politics affect the shipping industry just as much, perhaps more, than 1-014 other industries. Panama became an open registry because the Second World War and the US Neutrality Act kept American flagged ships away from Europe. The US Government gave its permission and American ships reflagged to stay in business. The Panama Flag was born.

Thus the flag of a ship is no guide to either ownership (which can be difficult to 1-015 establish through a complex system of chartering) or nationality of the crew. Registering ships has become a part of business and owners change Flag (and Class, see below) to suit the political and economic circumstances.Under Articles 90 and 91 of the United Nations Convention of the Law of the Sea 1-016 (UNCLOS) Flag States have been given the right to sail ships on the high seas and the right to fix conditions for registering ships under their flag and giving their nationality to these ships. Under Article 94 the Flag State is under the duty to exercise effective jurisdiction and control over administrative, technical and social matters on their ships on the high seas.

The flag of a ship has never been a total guarantee of security but a hundred 1-017 years ago the flag of a ship provided some protection. A British flagged ship could trade relatively secure in the knowledge that if attacked, retribution from the Royal Navy would be swift and decisive. Since the Second World War the degree of protection of ships by Flag States changed, not just because of the decline of British sea power, but because of a massive swing to open registries which by their very nature are often unable to protect their ships or even provide consular support to crews in trouble. But Open Registers can also surprise. According to the International Chamber of Shipping (ICS) top performing flags in maritime safety include the Bahamas, Cyprus, Liberia and the Marshall Islands, as well as national flags, e.g. Norway and the UK. But they also note the worst flags include Cambodia and Mongolia, who simply take registration fees.5 Most open registers rely almost totally on Classification Societies acting on their behalf as Recognized Organizations to verify the vessels compliance with international and/or national statutory regulations and it is in this role that Classification Societies are often responsible for approving and verifying ship security plans and procedures.

3.2 COASTAL, PORT OR LITTORAL STATES

Every state with a coastline is a coastal or littoral or port state. All foreign 1-018 ships are entitled to a right of innocent passage through the territorial waters of a coastal state (special conditions apply to government ships, warships and submarines), but are subject to that states laws for the safety of navigation, the

5 Simon Bennett, Secretary, International Chamber of Shipping Experiences and Challenges in Maritime Safety UN ICP,

24 June 2008, www.un.org/Depts/los/consultative.../9_bennett_presentation.pdf. accessed 09 July 2009.

Module 1 The Regulatory Framework


regulation of maritime traffic and other relevant laws regarding environment and so on, and may be detained or arrested for breaching the coastal states laws.

So where do territorial waters begin and end?1-019

Figure 1Maritime zones pursuant to the UN Convention on the Law of the Sea

Source: after Symonds et al., 1998

Historically, territorial or national waters extended up to 3 nautical miles (nm) 1-020 from the baseline, the low water line (as depicted on large scale charts recognised by the coastal state) of the coastal state. In recent years and for a variety of reasons this has now generally been extended to 12 nm. But some states have claimed territorial rights over waters up to 200 nm from the baseline. Not every other state recognises these limits. Essentially each nation can declare its own limit, and enforce it if it can.

Coastal States also have limited authority in the other Maritime Zones defined 1-021 by UNCLOS. The Contiguous zone extends a further 12 nautical miles or 24 nautical miles from the territorial sea baselines limit, the contiguous zone, in which a Coastal state could continue to enforce laws in four specific areas: pollution, taxation, customs, and immigration.

Exclusive economic zones (EEZs) extend from the edge of the territorial sea out 1-022 to 200 nm from the baseline. Within this area, the coastal nation has sole exploitation rights over all natural resources. In casual use, the term may include the territorial sea and even the continental shelf. The continental shelf is defined as the natural prolongation of the land territory to the continental margins outer edge, or 200 nautical miles from the coastal states baseline, whichever is greater. A states continental shelf may exceed 200 nautical miles until the natural prolongation ends. However, it may never exceed 350 nautical miles from the baseline; or it may never exceed 100 nautical miles beyond the 2,500-metre isobath (the line connecting the depth of 2,500 metres). Coastal states have the right to harvest mineral and non-living material in the subsoil of its continental shelf, to the exclusion of others. Coastal states also have exclusive control over living resources attached to the continental shelf, but not to creatures living in the water column beyond the exclusive economic zone.

The Regulatory Framework Module 1


3.3 CLASSIFICATION SOCIETIES (CLASS)Classification Societies are major players in the maritime industry. They are 1-023 usually not for profit Non-Governmental Organisations (NGOs). Their origins lie in the second half of the 18th century when marine insurers, based at Lloyds Coffee House in London, developed a system for the independent inspection of the hull and equipment of ships presented to them for insurance cover. In 1760 a Committee was formed for this express purpose, and Lloyds Register was born. At that time, an attempt was made to classify the condition of each ship on an annual basis. The condition of the hull was classified A, E, I, O or U, according to the excellence of its construction and its adjudged continuing soundness (or otherwise). Equipment was G, M, or B: simply, good, middling or bad. In time, G, M and B were replaced by 1, 2 or 3, which is the origin of the well-known expression A1, meaning first or highest class.

More than 50 organisations worldwide define their activities as providing marine 1-024 classification. Today more than 90% of the worlds cargo-carrying tonnage is covered by the classification design, construction and through-life compliance rules and standards set by the eleven largest Classification Societies:

American Bureau of Shipping (ABS) United States Bureau Veritas (BV) France China Classification Society (CCS) Det Norske Veritas (DNV) Norway Germanischer Lloyd (GL) Germany Indian Register of Shipping (IRCLASS) Korean Register of Shipping

Lloyds Register (United Kingdom) Nippon Kaiji Kyokai (ClassNK or NK) (Japan) Registro Italiano Navale (RINA) Italy Russian Maritime Register of Shipping (RS)

Classification societies are represented by the International Association of 1-025 Classification Societies (IACS). IACS contributes to maritime safety and regulation through technical support, compliance verification and research and development.6

Classification societies contribute to the development and implementation of 1-026 technical standards for the protection of life, property and the environment. They

6 http://www.iacs.org.uk/explained/members.aspx accessed 9 July 2010.

Module 1 The Regulatory Framework


establish and apply technical requirements for the design, construction and survey of marine-related facilities, principally ships and offshore structures. These requirements are published as classification rules. Classification societies maintain significant research departments that participate in the on-going development of technical safety standards.

The owner of a ship that has been designed, built and tested in accordance with 1-027 the appropriate rules of a class society may apply for a certificate of classification from that society. The society issues this certificate if it is verified (upon completion of relevant plan approval and surveys) that the ship complies with the rules. However, classification societies are not guarantors of safety of life or property at sea or the seaworthiness of a vessel. This is because the Classification Society has no control over how a vessel is operated and maintained in between the periodic surveys which it conducts. A Classification Society does not design, build, own, operate, manage, maintain, repair, finance, insure or charter ships. Safe operation and maintenance of a ship depends principally upon the shipowner, the shipowners representatives and the crew, who operate, manage and maintain the ship on a day-to-day basis.

Classification Societies are in a unique position. They are in effect judge and jury 1-028 on just about every issue that affect ships ability to trade, and at the same time a commercial service provider, in competition with other classification societies for business. Competition is fierce. Shipowners can pick or choose which Classification Society classes which part of the ship, so for example a ship can be classed with Det Norske Veritas for its seaworthiness, but with Germanischer Lloyd for its ship security plan. Classification Society Surveyors often have little time to carry out their work, being limited to the time a ship is in port, sometimes only a few hours. The cost to shipowners of being delayed for want of Classification Society certification is significant. All these pressures can lead to a drop in standards. For this reason some national registers do not delegate work related to safety and security to Classification Societies.

Directed Learning:

On the web, search for the classification society that best represents your industry section or country and see if you can find what its policies are in respect of ship security.


4. MARITIME ECONOMICS OVERVIEW

It is very difficult to get a meaningful picture of world trade without going into 1-029 considerable detail. The facts and figures here are only to give a very brief overview of world trade patterns, with the aim of providing a context for maritime security issues.

4.1 SHIPPING AND THE GLOBAL ECONOMY

More than 90% of global trade is carried by sea. Throughout the last century the 1-030 shipping industry has seen a general trend of increases in total trade volume. Industrialisation, globalisation and liberalisation have fuelled trade and a growing demand for consumer products. Technological improvements have also made shipping an increasingly efficient method of transport. But shipping is not immune to economic downturn. Until the latest recession, global trade was booming, fuelled by growth in several countries including Brazil, Russia, India and China. Shipping had gained from an upsurge in demand for the transport of all kinds of raw materials, components, finished goods, fuel and foodstuffs.

4.2 SHIPS

Todays world fleet of propelled sea-going merchant ships of no less than 100 1-031 GT7 comprises 99,741 ships of 830.7 million GT with an average age of 22 years.8 They are registered in over 150 nations and manned by over a million seafarers of virtually every nationality. The worlds cargo carrying fleet is 52,944 ships of 1,156.7 million dwt9 (791.1 million GT) and the average age is 20 years.

4.3 TOP 20 MERCHANT FLEETS

Flag State GT of Shipping (Millions) 1 Panama 183,503 2 Liberia 82,389 3 Bahamas 46,542 4 Marshall Islands 42,636 5 Singapore 39,885 6 Hong Kong, China 39,100 7 Greece 36,822

7 GT: Gross ton: internal measurement of the ships open spaces. Now calculated from a formula set out in the IMO

Tonnage Convention.8 LRF/Fairplay World Fleet Statistics 2008.

9 Dwt: Deadweight: the weight a ship can carry when loaded to its marks, including cargo, fuel, fresh water, stores

and crew.

Module 1 Maritime Economics Overview


8 Malta 31,633 9 The Peoples Republic of China 26,81110 Cyprus 20,10911 Germany 15,28212 United Kingdom 15,24613 Norway 15,03914 The Republic of Korea 14,14415 Italy 13,59916 Japan 13,53617 United States 11,26718 Denmark 10,09419 Bermuda 9,59220 Antigua and Barbuda 9,536

4.4 SHIP TYPES

Ships come in many shapes and sizes but can be generally classified as the 1-032 types set out below. In terms of maritime security the ship type is important because it often defines the level of vulnerability to attack and which security measures are practicable. For example a cable ship with low freeboard is an easy target for boarding whereas a car carrier with high freeboard presents a much more difficult target. Equally ships carrying inert bulk cargoes present very different issues from ships carrying volatile or explosive cargo.

General Cargo Ships

General cargo ships are the largest single category. The trend among new ships is more and more in favour of specialisation. It could be argued that handy-sized, geared bulk carriers and versatile medium-sized containerships, of which some have the ability to accommodate several different box sizes as well as palletised cargo, are the natural successors of the old general cargo vessels.

Figure 2General Purpose Carrier

(Photo: Dirk Steffen 2007)

Maritime Economics Overview Module 1


Tankers

Tankers make up the second largest category. There are many different types of tanker, ranging from those carrying crude oil, through those built to transport various refined hydrocarbon products, to highly specialised ships that carry liquefied petroleum gas and natural gas. There are even tankers designed to carry cargoes such as fresh water, wine or orange juice. Most large modern tankers are in the 200,000300,000 tonnage range. These are massive vessels and enormously expensive to build.

Figure 3Chemical Oil Tanker


Bulk Carriers

Bulk carriers are the workhorses of the international shipping fleet. They can be thought of as simple, relatively unsophisticated but nevertheless highly efficient vessels that typically transport commodities such as grain, coal and mineral ores. Bulk carriers are responsible for moving the raw materials that are the lifeblood of the modern economy. The bulk carrier fleet has three categories.

Ships of up to 50,000 dwt are known as Handy-Sized.

Ships of 50,000 to 80,000 dwt are known as Panamax (being the largest ships able to transit the Panama Canal) andShips of more than 80,000 dwt are known as Capesize



Figure 4Bulk Carrier


Bulk carriers come in a number of variations, single or double hull, with or without their own cargo-handling equipment. All are characterised by the huge hatch covers that can be rolled or lifted away to reveal to cavernous holds beneath.

Passenger Ships

Passenger ships come next in the world fleet league table. There are two basic categories, which can be summed up as fun or function.

Function: those which are designed to move people and, often, vehicles on regular itineraries from one place to another as quickly and cheaply as possible (i.e. ferries).

Figure 5Caribbean Cruise Liner

(Authors private collection)



Fun: those which the passengers see as a leisure destination in their own right (i.e. cruise ships).In both categories, the size, sophistication and the sheer number of passengers that can be carried have reached mind-boggling proportions. Because of their individuality, as well as their resonance with the great ocean liners of a bygone era, these ships tend to be the best known and most recognised among the general public at large.

Container Ships

The container is now ubiquitous and is the standard unit of cargo for just about every form of manufactured item on the planet there are exceptions: cars, for example, are transported in special ships designed solely for the purpose. Todays giant containerships typically operate between purpose-built ports served by massive cranes that can load and unload containers at astonishing rates. Containership operators can offer fixed sailing schedules with tight delivery margins and these ships are now an integral part of the modern, multimodal transport and logistics industry.

Figure 6Container Ship

(Photo Credit: Author Juergen Lehle. Wikimedia Commons: GNU Free Documentation License)



High-speed craft (HSC)

Figure 7Greek Fast Ferry

(Authors private collection)

High-speed craft (HSC) are high-speed water vessels for civilian use, also called fastcraft or fast ferries. The first high-speed craft were often hydrofoils or hovercraft, but in the 1990s catamaran and even monohull designs have become popular. Most high-speed craft serve as passenger ferries, but the largest catamarans and monohulls also carry cars and even buses and freight.

Fishing vessels

The world totals for fish-catching vessels amounts to 22,358 ships with a GT of 9,760,738 and an average age of 27 years. Other fishing vessels (fish carriers, support vessels etc.) amount to 1,258 with a GT of 1,557,802 and an average age of 24 years.10

Further subdivisions

The table below shows further subdivisions of ship types based on the classifications used by David Hornsby in his book Ocean Vessels11 and which demonstrates the variety of ship types that can be seen.

Abbreviation Type of Vessel

B Bulk CarrierBC Bulk/Container CarrierBO Bulk/Oil CarrierBu Bulk Carrier Self UnloadingBv Bulk/Vehicle CarrierBw Bulk woodchip carrierC General Cargo

10 Lloyds Register/Fairplay. World Fleet Statistics 2008, Table 2K p 54

11 Hornsby, David, Ocean Ships, Plymouth Press, 14th edn.



Ca Cable LayerCC Cellular ContainerCO Cargo/Part ContainerCT Cargo TrainingHL Heavy Lift vesselHLS Heavy Lift/semi-submersibleHLC Heavy Lift/cellular containerHLR Heavy Lift Ro-RoL Livestock CarrierLC Lighter/ContainersLGC Liquefied Gas CarrierLNG Liquefied Natural Gas CarrierLPG Liquefied Petroleum Gas CarrierO Ore CarrierOBO Ore/bulk/oil CarrierOO Ore/oil carrierR Refrigerated CargoRO Roll on-Roll OffROI Roll on-Roll off/icebreakerRR Refrigerated with Ro-RoT TankerTfj Tanker Fruit JuiceTs Storage TankerV Vehicle Carrier

Directed Learning:

On the web, search for shipping companies who often publish details of their fl eets, including photographs or search http://www.shipspotting.com/ for photographs of all types of ships.

4.5 CARGO CARRIED

In the last 40 years the total amount of cargo carried by sea has quadrupled. In 1-033 2008 international seaborne trade totalled 8.17 billion tons of cargo between some 160 countries, of which roughly a third was crude oil and oil products (11,292 of a world total of 32,746).12

A similar amount of dry bulk cargoes (iron ore, coal, grain, bauxite/alumina and 1-034 phosphate and other dry bulk) are carried, closely followed by mainly containerised manufactured cargoes. The remainder is made up of grain (wheat, maize, barley, oats, rye, sorghum and soya beans) and other cargoes.13

12 Measured in billions of ton-miles.

13 United Nations Conference on Trade and Development (UNCTAD) Review of Maritime Transport 2009, Geneva, p. 14,

Table 5, 2009.



4.6 THE GLOBAL PATTERN OF MARITIME TRADE

The size of many ships is one factor that restricts their ability to trade. As a result 1-035 hub ports capable of berthing and unloading large ships have developed. It is from these that most cargo is carried. These hubs are fed by smaller vessels from other ports, creating a two-tier system.

The top ten container hubs (2009) are:1-036 14

Port TEU15 millions per annumSingapore 30Shanghai 28Hong Kong 24Shenzen 22Busan 14Dubai 12Ningbo 11Guangzhou 11Rotterdam 11Qingdao 10

Besides Rotterdam, Europe has three other ports in the top twenty:1-037

HamburgBremen/BremerhavenAntwerp

The US has three:1-038

Los Angeles,Long Beach,New York/New Jersey.

Taking exports and imports together, Western Europe has the most overall trade 1-039 (25%), followed by:

Location %

The US and South East Asia (each) 13Japan 10Middle East 8Mediterranean excluding Western Europe and South America (each) 7West Africa and Oceania (each) 5Caribbean and Central America 3The remainder



Directed Learning:

On the UNCTAD website (http://www.unctad.org/en/docs/rmt2010_en.pdf) find the United Nations Conference on Trade and Development (UNCTAD) Review of Maritime Transport 2010, and familiarise yourself with the latest developments in international seaborne trade

4.7 SHIPPING CHOKE POINTS

Figure 8The complex network of global cargo ship movements Pablo Kaluza, Andrea Klzsch,

Michael T. Gastner and Bernd Blasius, J. Royal Society: Interface

While training several hundred classification society surveyors tasked with the 1-040 job of approving and verifying ship security plans on a series of maritime security training courses worldwide, the author posed the question if you were a terrorist planning to attack shipping where would you choose to attack? On every course virtually the same scenario was repeated. The Suez or Panama Canals would be the place. Why? Well to sink or damage a ship in either of those places would affect not just the ship itself but the whole industry, so critical are those choke points. The above map shows clearly those places where shipping routes and ships are most concentrated around the world.

Today of course the spotlight is on the Red Sea and the Horn of Africa where 1-041 shipping is channelled on route to the Suez Canal. But choke points can be local as well as international and should always be taken into account when completing risk assessments for ships. Not all choke points are as dramatic or



strategic in nature as the Suez and Panama Canals or the Red Sea. Any areas where shipping is concentrated provide opportunity of target, one of the preconditions for a successful piracy or terrorist operation. The English Channel, Gibraltar Strait and Malacca Strait are all examples of places where high volumes of shipping are concentrated and of course the approaches to any major port provide opportunities of target. It should also not be forgotten that modern technology can create virtual choke points with readily available technology (such as AIS) providing information as to the location of ships enabling them to be targeted.

The total value of goods stolen in transit worldwide is estimated to be in the 1-042 order of $3050 bn, about 8% of which are in maritime transit.16 Of these over 90% of maritime cargo theft occurs in ports.

4.8 MARINE INSURANCE

Marine insurance is coverage for goods in transit, and for the commercial 1-043 vehicles that transport them, on water and on land.

There are four basic types of marine insurance:1-044

hull insurance that covers physical risk to the ship, like grounding or 1. damage from heavy seas, collision, sinking, capsizing, being stranded, fire, piracy, and jettisoning cargo to save other property;cargo insurance that covers the goods transported in the ship;2.

war risk insurance; and3.

protection and indemnity (P&I).4. In addition, shipowners can purchase separate kidnap and ransom (K&R) 1-045 insurance for crew members.

Hull insurance primarily covers physical damage to vessels (hull) and the 1-046 machinery and equipment. The insurance also covers collision liability associated with damage to other vessels and their cargoes resulting from collision with the insured vessel.

Cargo insurance policies are written as separate coverage from hull insurance 1-047 because merchants typically ship cargo via vessels owned by others. Cargo policies may be classified by whether they are designed to cover a particular voyage; a specific time period; or a commodity such as grain, cotton, and iron ore; or whether they are adapted to cover cargo general in its nature. Cargo is insured by the owners of the cargo which can be a large number of parties with a variety of different insurers. The principle of general average is incurred for emergency situations when part of the ship or part of the cargo

16 The Detection and Prevention of Cargo Theft in: Trends and Issues in Crime and Criminology No. 214 (September

2001), published by the Australian Institute of Criminology.



has to be sacrificed to save the whole. All parties share in the common loss incurred.

War risk insurance is special coverage on cargo in ships that protects against 1-048 the risk of confiscation by a government in wartime. War risk insurance coverage protects, at an additional premium, against the danger of loss in a war zone. The war risk zones are established by the London-based Lloyds Market Associations Joint War Committee (JWC), which has recently included the Gulf of Aden as a war risk area due to piracy. About a decade ago, the Malacca Strait was similarly designated a war risk area due to piracy. The JWC represents the interests of underwriters writing war and related risks within the London ocean marine insurance market.

4.9 P&I CLUBS

Hull insurance does not protect the vessel owner against liability for damage 1-049 to:

Cargo in the custody of the insured;

Injury to passengers, crew members, or labourers handling cargo; and Damage to docks, piers, and other fixed objects.

Ship-owners typically purchase a Protection and Indemnity (P&I) marine 1-050 insurance policy to cover these risks from ship owners clubs that form to mutually insure these risks. In the 19th century, shipowners banded together in mutual underwriting clubs to insure liability risk amongst them. These clubs are still in existence today. Members of the clubs are generally levied an initial sum that is used to purchase reinsurance to cover their mutual liability risks. If a club experiences unfavourable losses, the members are assessed a supplementary premium. The club attempts to build up loss reserves.

4.10 PIRACY AND INSURANCE PREMIUMS

The Cost of Piracy Model1-051 17 calculates the additional cost of insurance to the shipping industry using a lower bound estimate (10% of ships purchasing these insurance premiums) and an upper bound estimate (70% of ships). From these calculations, it is estimated that total excess costs of insurance due to Somali piracy are between $460 million and $3.2 billion per year.

According to the Cost of Piracy Project the total cost of piracy in 2010 is estimated to be 1-052 between $7 and $12 billion.

17 http://oceansbeyondpiracy.org/.



Directed Learning:

Read the latest Cost of Piracy Report in full at: http://www.saveourseafarers.com/assets/files/The_Economic_Cost_of_Piracy_Summary.pdf


5. INTRODUCTION TO THE MAIN THREATS TO SHIPPING

The main security threats to shipping are commonly considered to be piracy, 1-053 terrorism and other crime, including cargo theft, fraud, drug smuggling, contraband and arms smuggling. But it is often difficult to establish exactly the scale of any of these crimes because of the fragmented nature of the industry and the absence of any centralised maritime crime reporting agency. It is true that ships are encouraged to report piracy and robbery at sea to the International Maritime Organization (IMO) and the Piracy Reporting Centre but even this is uneven and often inaccurate. Attempted piracy attacks reported may be innocent approaches to ships by tradesmen or small fishing vessels or simply navigational misunderstandings. Other genuine piracy attacks may not be reported at all as some shipping companies are reluctant to report incidents of piracy for fear of raising their insurance premiums and prompting protracted, time-consuming investigations.

Similarly, crime reported to port state authorities may or may not be recorded or 1-054 even acknowledged, particularly where a particular port state does not wish to discourage trade by building a reputation as being high risk. Even if it is recorded this information is often not readily available. Local police records do not generally define a theft on board a ship as a maritime crime, but simply as a crime within that forces jurisdiction. Crime internally on board ships is often not reported to flag states and where registered with an open registry, that registry may not have the capability or interest to deal effectively with the incident.

Mark Twain popularised the saying Lies, damned lies, and statistics and while 1-055 this might be a little coloured, security professionals should always view maritime crime statistics with a healthy caution, particularly where terrorism and piracy are concerned, because politics and vested interests will follow not far behind and as in war, the truth, or at least the whole truth, is often the first casualty.

5.1 PIRACY

In the City of London not far from where today bankers sip their skinny lattes 1-056 and gaze out over the Thames, dreaming up ways to separate people from their money once swung on gibbets the bodies of executed pirates, men who had been guilty of similar thoughts, but in the violent fashion of their time. There is much debate as to exactly what constitutes piracy but sea robbery probably describes best (if not fully) what most pirates did and do. Robbery of course is theft involving violence or the threat of violence. The intent to rob, animus furandi, has been an important part of the development of law of piracy. Piracy has never been a harmless crime. Piracy went hand in hand with slavery for many centuries. With no international law to protect seafarers, states often used pirates for their own ends. Roman Catholic pirates preyed on heretical Protestant nations ships, Christians on Moors, and Turks on everyone. Navies, pirates and their legal brethren, privateers, were often one and the same, or were able to switch instantly to suit the circumstances.

Module 1 Introduction to the Main Threats to Shipping


5.2 PIRACY TODAY

The number of acts of piracy and armed robbery against ships reported to the 1-057 IMO to have been allegedly committed or attempted in 2010 was 489, against 406 during the previous year, an increase of 20.4% from the figure for 2009. The areas most affected (i.e. five incidents reported or more) in 2010 were East Africa and the Indian Ocean (249 Incidents in total) followed by the Far East and, in particular, the South China Sea (134 incidents), West Africa (47 incidents), South America (35 incidents).During 2010 it was reported to the IMO that 2 crew members were killed and 27 1-058 crew members were wounded, while 1,027 crew members were reportedly taken hostage. Fifty-seven vessels were reportedly hijacked, with one vessel reportedly still unaccounted for.18

In the first four months of 2011, 214 incidents were reported to the IMO.1-059

Modern piracy may be seen as a combination of many factors: opportunity, the 1-060 ability to profit from weak state and institutional structures, inadequate finance and supporting infrastructure, poverty and local traditions which create social acceptance for piracy.

The current piracy debate is centred on Somali-based piracy for a number of 1-061 reasons: the failure of the international community to prevent Somalias descent into chaos; the unprecedented success of Somali pirates; the commercial value of the targets attacked and subsequent publicity; the perceived danger to global trade; the proximity of Somalia to Yemen and its connection to extreme terrorism; and a linkage, actual or otherwise, between Somali pirates and Al Qaeda.

The economic impact of piracy in the Gulf of Aden on global trade.1-062

With over 80% of the maritime trade bound for Europe through the Gulf of Aden 1-063 and the Suez Canal, clearly Europe is most affected by piracy attacks there. Piracy poses significant burdens on governments and the maritime industry as they take steps to protect themselves from attack. Costs involved include a military presence in high-risk areas, rerouting of ships, higher insurance premiums, hiring private security guards, and the hardening of ships by installing physical barriers and counter measures. Since 2012 there has been an increase in the number of shipping lines employing armed security personnel from Private Maritime Security Companies (PMSC), and whilst this is not a comfortable strategic approach from all governments, shipping lines are facing a dangerous situation whereby military cover is diminishing. Ultimately, these costs are passed to the tax payer and the end user.

Ships have two choices: avoiding the area by rerouting vessels via the Cape of 1-064 Good Hope, or accepting and mitigating the risk by enhancing vessel security. Rerouting may be a viable option for lower value cargoes, such as some bulk commodities. However, for high value consumer goods or items needed for just-in-time manufacturing, the added delay may be unacceptable to the shipper.

18 MSC.4/Circ.169, 1 April 2011, Reports On Acts Of Piracy And Armed Robbery Against Ships, Annual Report 2010

/15_MSC_4.Circ.169%20-%202010.pdf

Introduction to the Main Threats to Shipping Module 1


For example, routing a tanker from Saudi Arabia to the United States via the 1-065 Cape of Good Hope adds approximately 2,700 miles to the voyage. This longer distance will increase the annual operating cost of the vessel by reducing the delivery capacity for the ship from about six round-trip voyages to five voyages, or a drop of about 26%. The additional fuel cost of travelling via the Cape of Good Hope is about $3.5 million annually.

The cost of avoiding risk becomes more complex in the liner1-066 19 trades. A long route change would result in the need for an additional vessel in order to maintain the scheduled service and capacity commitments of the liner operation. For example, a routing from Europe to the Far East via the Cape of Good Hope, rather than through the Suez Canal, would incur an estimated additional $89 million annually, which includes $74.4 million in fuel and $14.6 million in charter expenses. In addition, the rerouting would increase transit times by about 5.7 days per ship. This would result in the need for an additional vessel to maintain the service frequency. However, these costs do not consider the disruption in the logistics chains.

The cost of the war risk insurance for ships transiting the Gulf of Aden is 1-067 estimated at US$20,000 per ship, per voyage, excluding injury, liability, and ransom coverage.

It is estimated that the increased cost of war risk insurance premiums for the 1-068 20,000 ships passing through the Gulf of Aden could reach as much as $400 million.20

Clearly, this estimate represents an upper bound on the additional insurance 1-069 cost as not all vessels will seek the additional coverage, and the estimate excludes rebates given when no claim is exercised on the policy.

5.3 TERRORISM

The closest to an agreed international legal definition of terrorism is UN 1-070 Resolution 1566 (3) 8 October 200421 which refers to:

criminal acts, including against civilians, committed with the intent to cause death or serious bodily injury, or taking of hostages, with the purpose to provoke a state of terror in the general public or in a group of persons or particular persons, intimidate a population or compel a government or an international organization to do or to abstain from doing any act, which constitute offences within the scope of and as defined in the international conventions and protocols relating to terrorism.22

Terrorism then involves indiscriminate violence with the objective of influencing 1-071 governments or international organisations for political ends.

19 Ships sailing fi xed routes to fi xed schedules.

20 Piracy Could Add $400m to Owners Insurance Cover Costs, Lloyds List, 21 November 2008.

21 http://www.unrol.org/fi les/n0454282.pdf.

22 Resolution 1566 (2004) Adopted by the Security Council at its 5053rd meeting, on 8 October 2004.



5.4 MARITIME TERRORISM BEFORE 9/11

A RAND1-072 23 paper on maritime terror24 lists 13 Selected High-Profile Maritime Terrorist incidents between 1961 and 2004. An unpublished paper by the UKs Transport Security and Contingencies Directorate lists 19 between 1940 and 2004. However a (pre-9/11) RAND report25 lists no less than 111 incidents between 1960 and 1984 alone. Not all these attacks were terrorism one was a mutiny and two were clearly piracy but nonetheless the report says:

Although terrorist groups have not operated extensively in the maritime environment, they have carried out a variety of actions: They have attacked 47 ships. They hijacked 11 ships. They sank (or totally destroyed) 12 sea-going vessels. Since 1960, anti-Castro Cuban exile groups have been responsible for 25 attacks. Various Palestinian groups were responsible for 9 incidents. Other groups include the IRA, Moslem separatists in the Southern Philippines, right-wing Christian extremists in Lebanon, Polisario guerrillas,26 Portuguese dissidents, Angolan rebels, and members of the Maltese National Front.

In the 1950s Cuban groups were trained by the US Navy in navigation and 1-073 underwater demolitions. Earlier they had been armed and equipped by the CIA. Until 1968 the US government supported a guerrilla navy that operated against Cuban ports and Soviet shipping in the Caribbean. The fleet comprised small, fast boats armed with 57 mm recoilless rifles and machineguns. They were responsible for a number of attacks on Soviet shipping.27 Maritime terrorism is not then such a stranger as is sometimes suggested.

5.5 MARITIME TERRORISM AFTER 9/11

The September 11 (9/11), 2001 attacks by Al Qaeda on the United States have 1-074 provoked increasing concern that terrorists may attack targets in the maritime environment. Applying the model of the 9/11 attacks to the shipping industry, security experts have highlighted the danger of similar and potentially much more devastating attacks carried out by ships. With the increasing importance of offshore facilities to the worlds supply of energy, the vulnerability of marine facilities, and no shortage of inspiration provided by security experts and fiction writers alike, it seems the authors of the 1985 RAND report were correct: terrorists will turn their attention to harbours, offshore platforms, and ships at sea.28

23 http://www.rand.org/.

24 Chalk, Peter, The Maritime Dimension of International Security; Terrorism, Piracy, and Challenges for the United

States, Rand Corporation, http://www.rand.org/pubs/monographs/MG697/, 2008.25

Brian Michael Jenkins (with Bonnie Cordes, Karen Gardela and Geraldine Petty), Chronology of Terrorist and Other Criminal Actions Against Maritime Targets, 19601983, Published by the Rand Corporation 1984.

26 Frente Popular de Liberacin de Sagua el Hamra y Ro de Oro (Popular Front for the Liberation of Saguia el-Hamra

and Ro de Oro) is a Sahrawi rebel national liberation movement working for the independence of Western Sahara from Morocco.

27 Warren Hinkle and William W. Turner, The Fish is Red: The Story of the Secret War Against Castro, New York: Harper &

Row, 1981.28

Brian Michael Jenkins (with Bonnie Cordes, Karen Gardela & Geraldine Petty), Chronology of Terrorist and Other Criminal Actions Against Maritime Targets, 19601983, Published by the Rand Corporation 1984.



They have already done so. The attacks on the 1-075 Limburg and USS Cole demonstrate that. But not as much as might be expected. There are plenty of targets. About 53,000 ships ply their trade internationally29 and this does not include naval and other government vessels, fishing vessels, leisure craft, riverine trade and non-international ferries.

The UK alone has some 350 port facilities subject to the ISPS Code. Port 1-076 Facilities contain Liquid Nitrogen Gas (LNG) terminals, refineries, re-gasification plants, and petrochemical installations. Vital pipelines and cables criss-cross the seabed. Such attacks as have been carried out were usually the work of specific groups working in specific areas (for example the LTTE30 in Sri Lanka) and not connected with Al Qaedas broader aims. A few incidents do stand out as the work of Al Qaeda (AQ) or its franchises, the attacks on the USS Cole and the Limburg and an attempted attack on the USS Sullivan being the most frequently cited.

Although maritime targets may appear vulnerable, are they attractive to 1-077 terrorists? The seizure of a passenger ship, oil or gas tanker, or an offshore platform would certainly capture headlines. It could have a high political value for the terrorists with economic losses thrown in; and attacks could exploit environmentalist sentiments, attacking, for example, ships carrying nuclear waste or contaminated soil. However, there are constraints on maritime terrorist activity.

Port facilities, offshore platforms, and ships at sea may be theoretically 1-078 vulnerable, but the ease with which moving ships can be boarded, platforms taken over, or refineries set on fire should not be exaggerated. Terrorists are not, for the most part, highly trained commandos. Taking over ships or platforms may require more men than most terrorist groups generally have fielded, and the larger the operation the greater the chances it will be detected by security forces before it can be conducted. Moreover, although assaulting a large vessel that has been seized by terrorists poses tactical problems for security forces; holding a large vessel or oil platform against an assault by well armed, resourced and trained security forces poses major problems for terrorists. Authorities also can more easily cut off communications and isolate a ship or offshore platform from television cameras and modern mass media than they can a land-based scene. In short, increased terrorist attacks on maritime targets, while possible, are not inevitable.

5.6 MARITIME TERRORISM AND INTERNATIONAL LAW

The 1985 hijacking by the Palestine Liberation Front (PLF) of the 1-079 Achille Lauro, in which one person was killed, prompted the IMO to introduce the Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, 1988 (SUA).31

29 http://www.marisec.org/shippingfacts/worldtrade/number-of-ships.php?SID=b21fb8572c97ed3ba21218f0938dc507.

30 The Liberation Tigers of Tamil Eelam (commonly known as the LTTE, or the Tamil Tigers) was a separatist militant

organisation formerly based in northern Sri Lanka.31

http://www.imo.org/OurWork/Facilitation/SUAConvention/Pages/Default.aspx.



The SUA was adopted on 10 March 1988 and came into force on 1 March 1-080 1992. The main purpose of the Convention is to ensure that appropriate action is taken against persons committing unlawful acts against ships. These include:

the seizure of ships by force;

acts of violence against persons on board ships; and

the placing of devices on board a ship which are likely to destroy or damage it.

The Convention obliges Contracting Governments either to extradite or prosecute 1-081 alleged offenders. It was extended by the Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf, 1988 which extends the requirements of the Convention to fixed platforms, such as those engaged in the exploitation of offshore oil and gas.

5.7 2005 PROTOCOL TO THE SUA CONVENTION

Among the unlawful acts covered by the SUA Convention in Article 3 are:1-082

the seizure of ships by force;

acts of violence against persons on board ships; and

the placing of devices on board a ship which are likely to destroy or damage it.

A new 2005 Protocol to the SUA Convention adds Article 31-083 bis which creates a number of offences where a person intends to intimidate a population or to compel a Government or an international organisation to do or to abstain from any act by using any explosive, radioactive material or BCN (biological, chemical, nuclear) weapon in a manner that causes or is likely to cause death or serious injury or damage.Other shipboard offences include:1-084

discharging any oil, liquefied natural gas, or other hazardous or noxious substance that is likely to cause death or serious injury or damage;using a ship to cause death or serious injury or damage; transporting any explosive or radioactive material or BCN weapon;

transporting any source material, special fissionable material, or equipment or material for the processing of special fissionable material and;

transporting any equipment, materials or software or related technology that significantly contributes to the design, manufacture or delivery of a BCN weapon.



The new instrument also makes it an offence to:1-085 unlawfully and intentionally injure or kill any person in connection with the commission of any of the offences in the Convention;attempt to commit an offence; participate as an accomplice; organise or direct others to commit an offence; or to contribute to the commissioning of an offence.

And a new article requires Parties to take necessary measures to enable a legal 1-086 entity (this could be a company or organisation, for example) to be made liable and to face sanctions when a person responsible for management or control of that legal entity has, in that capacity, committed an offence under the Convention.

Under the new instrument, a person commits an offence within the meaning of 1-087 the Convention if that person unlawfully and intentionally transports another person on board a ship knowing that the person has committed an act that constitutes an offence under the SUA Convention or an offence set forth in any treaty listed in the Annex. The Annex lists nine such treaties.

Directed Learning:

Browse the IMOs web pages on maritime security at: http://www.imo.org/OurWork/Security/Pages/MaritimeSecurity.aspx

5.8 CRIME

5.8.1 Cargo Theft

Cargo is any commercial shipment. Cargo theft has been around for many years 1-088 and is often characterised by the presence of international organised crime. Economic crises always increase the demand for black market goods. The introduction of containers has done a great deal to reduce small scale thefts from ships cargoes but they still occur regularly.

Because cargo theft statistics are often not a separate reportable category of 1-089 crime and because many companies dont report cargo crimes (to avoid bad publicity, higher insurance rates, damage to reputation, embarrassment, etc.), the exact losses arent known. Some industry experts estimate all cargo thefts ring up as much as $30 billion in losses each year, but this includes that stolen not just from ships and wharves but also from trucks, planes, rail cars, etc.; anywhere from point of origin to final destination.

5.8.2 Smuggling Drugs, Contraband, and Arms

Only a small percentage (often less than 1%, particularly in developing 1-090 economies) of containers are screened or searched. This makes it relatively



easy for the smuggling of drugs and arms to take place. In the UK alone, the drug industry is said to account for 8% of all yearly international trade the same as oil or tourism. Its helped by the profit made from drugs like cocaine, worth some 24,000 per kilogram as compared to the cost at source in Pakistan of 850 per kilo. The UK heroin industry is said to be worth 2.3 billion with an estimated 270,000 users.

Figure 9Panamanian motor vessel Gatun during the largest cocaine seizure

in United States Coast Guard history (20 tons), off the coast of Panama

Figure 10Major cocaine and heroin routes

Source: Washingtonpost.com

For ships, the high drug smuggling risks are said to originate from:1-091

Container services from South America



Bulk from Brazil

Charters from/via Jamaica

Any ship from the Caribbean

Northwest Africa

Cambodia/North Korea flag

But this is a constantly moving target. As police and other agencies close down 1-092 one operation, others spring up operating differently or using different routes.

5.8.3 Stowaways and Human Trafficking

The trafficking of human beings is the recruitment, transportation, transfer, 1-093 harbouring or receipt of people for the purpose of exploitation.

People smuggling is a multi-billion dollar business fuelled by the increasingly 1-094 restrictive asylum practices of many of the worlds industrialised countries. What was once a relatively visible and quantifiable flow of people seeking asylum has become a covert, irregular movement that is ever more difficult to control. It is estimated that four million people are trafficked or smuggled across international borders each year. The value of this criminal trade has been estimated at approximately US$10 billion per year.

Human trafficking is, by its very nature, a covert crime. This means its difficult 1-095 to establish the scale of the problem, although the harm it causes is clear. The majority of people trafficked into the UK for sexual exploitation arrive overtly by air or rail; or as foot, car, lorry or coach passengers on the many sea routes that serve the UK and its international neighbours.

Research indicates the UK is primarily a destination country for trafficking 1-096 victims, with most originating from Eastern Europe, the Baltic States, Balkans or Far East, especially China, Malaysia and Thailand.

Figure 11Over a thousand men, smuggled into Oman, return to Pakistan by

boat after they were arrested and imprisoned (Picture by Ansar Burney Trust: http://www.ansarburney.org)



5.8.4 Fraud

Fraud is an intentional deception made for personal gain or to damage another 1-097 individual. Maritime fraud usually occurs when one of the parties involved in an international trade transaction (the buyer, seller, ship-owner, charterer, ships master or crew, insurer, banker, broker or agent) illegally secures money or goods from another party.

Frauds can be broadly classified into Documentary, Shipping and Charter Party 1-098 frauds:

Documentary: Some or all of the documents specified by the buyer for presentation by the seller to the bank to receive payments are forged.

Shipping Fraud includes scuttling, deviation, cargo theft, or arson in which vessel or cargo is disposed of with the connivance of her owners.

Charter Party Fraud occurs when one or two contracting parties default, leaving the others to bear the cost.

Theft of cargo by crew.

Fraud may also involve:1-099

Deviation Fraud

Insurance Fraud.

Deviation Fraud is the theft or misappropriation of the cargo by the shipowner. 1-100 Instead of sailing to an agreed destination, the ship deviates to another port where the cargo is sold illegally. The ship is then either deliberately sunk or renamed.

Insurance Fraud is all too commonplace and covers everything from false claims 1-101 for damage and loss by recreational sailors, to the loss of whole vessels and their cargoes.

5.9 CYBER CRIME

Although the term cyber-crime is usually restricted to describing criminal activity 1-102 in which the computer or network is an essential part of the crime, this term is also used to include traditional crimes in which computers or networks are used to enable the illicit activity. Terrorists are increasingly aware of this method of attack.

Cyber-crime in the context of national security may involve hacktivism (online 1-103 activity intended to influence policy), traditional espionage or information warfare and related activities.

Additionally, certain other information crimes, including trade secret theft and 1-104 industrial or economic espionage are sometimes considered cyber-crimes when computers or networks are involved.


6. INTERNATIONAL AND REGIONAL ORGANISATIONS AND REGULATORY BODIES

The organisations described below are all major players in the maritime indus-1-105 try and individually or collectively are responsible for, or have considerable influence on, the laws and regulations that govern the maritime industry. Ships ignore these laws at their peril. The economic price of being found to be non-conformant with any of them is significant, resulting in delay and possible detention in port. Security on board a ship cannot be blistered on to the normal shipboard operation of a ship but must be fully integrated and integral to how the ship is run. The influence and role of these organisations must be understood when designing a security system whether it be writing a relatively simple security plan or procedures, or mounting an additional counter piracy onboard security team.

United Nations (UN)32

The United Nations is an international organisation founded in 1945 after the Second World War by 51 countries, committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights.

The UN has four main purposes:1-106

To keep peace throughout the world;

To develop friendly relations among nations;

To help nations work together to improve the lives of poor people, to conquer hunger, disease and illiteracy, and to encourage respect for each others rights and freedoms;

To be a centre for harmonising the actions of nations to achieve these goals.

Due to its unique international character, and the powers vested in its founding 1-107 Charter, the Organization can take action on a wide range of issues, and provide a forum for its 192 Member States to express their views, through the General Assembly, the Security Council, the Economic and Social Council and other bodies and committees.

32 http://www.un.org/en/aboutun/index.shtml.

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The work of the United Nations reaches every corner of the globe. Although best 1-108 known for peacekeeping, peacebuilding, conflict prevention and humanitarian assistance, there are many other ways the United Nations and its System (specialised agencies, funds and programmes) affect lives. The UN works on a broad range of fundamental issues, from sustainable development, environment and refugees protection, disaster relief, counter terrorism, disarmament and non-proliferation, to promoting democracy, human rights, gender equality and the advancement of women, governance, economic and social development and international health, clearing landmines, expanding food production, and more, in order to achieve its goals and coordinate efforts for a safer world for this and future generations.

International Maritime Organization (IMO)33

An agency of the United Nations with 169 member states, the IMOs task is to 1-109 provide a regulatory framework for shipping, including safety, environmental, legal matters, technical cooperation, maritime security and the efficiency of shipping.34

It has always been recognised that the best way of improving safety at sea is by 1-110 developing international regulations that are followed by all shipping nations, and from the mid-19th century onwards a number of such treaties were adopted. Several countries proposed that a permanent international body should be established to promote maritime safety more effectively, but it was not until the establishment of the United Nations itself that these hopes were realised. In 1948 an international conference in Geneva adopted a convention formally establishing IMO (the original name was the Inter-Governmental Maritime Consultative Organization, or IMCO, but the name was changed in 1982 to IMO).The IMO Convention entered into force in 1958 and the new Organization met 1-111 for the first time the following year.

The purposes of the Organization, as summarised by Article 1(a) of the 1-112 Convention, are:

to provide machinery for cooperation among Governments in the field of governmental regulation and practices relating to technical matters of all kinds affecting shipping engaged in international trade;

to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships.

33 http://www.imo.org/About/Pages/Default.aspx.

34 www.imo.org/about.

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The Organization is also empowered to deal with administrative and legal 1-113 matters related to these purposes. IMOs first task was to adopt a new version of the International Convention for the Safety of Life at Sea (SOLAS), the most important of all treaties dealing with maritime safety. This was achieved in 1960 and IMO then turned its attention to such matters as the facilitation of international maritime traffic, load lines and the carriage of dangerous goods, while the system of measuring the tonnage of ships was revised.

In the 1970s a global search and rescue system was initiated, with the 1-114 establishment of the International Mobile Satellite Organization (IMSO), which has greatly improved the provision of radio and other messages to ships. The Global Maritime Distress and Safety System (GMDSS) was adopted in 1988 and began to be phased in from 1992. In February 1999, the GMDSS became fully operational, so that now a ship that is in distress anywhere in the world can be virtually guaranteed assistance, even if the ships crew does not have time to radio for help, as the message will be transmitted automatically.

On 1 July 1998 the International Safety Management Code entered into force 1-115 and became applicable to passenger ships, oil and chemical tankers, bulk carriers, gas carriers and cargo high-speed craft of 500 gross tonnage and above. It became applicable to other cargo ships and mobile offshore drilling units of 500 gross tonnage and above from 1 July 2002.

On 1 February 1997, the 1995 amendments to the International Convention on 1-116 Standards of Training, Certification and Watchkeeping (STCW) for Seafarers, 1978 entered into force. They greatly improve seafarer standards and, for the first time, give IMO itself powers to check Government actions with Parties required to submit information to IMO regarding their compliance with the Convention. A major revision of the STCW Convention and Code was completed in 2010 with the adoption of the Manila amendments to the STCW Convention and Code.

The 2000s also saw a focus on maritime security, with the entry into force in July 1-117 2004 of a new, comprehensive security regime for international shipping, including the International Ship and Port Facility Security (ISPS) Code, made mandatory under amendments to SOLAS adopted in 2002.

In 2005, IMO adopted amendments to the Convention for the Suppression of 1-118 Unlawful Acts (SUA) Against the Safety of Maritime Navigation, 1988 and its related Protocol (the 2005 SUA Protocols), which amongst other things, introduce the right of a State Party to board a ship flying the flag of another State Party when the requesting Party has reasonable grounds to suspect that the ship or a person on board the ship is, has been, or is about to be involved in, the commission of an offence under the Convention.

World Customs Organization (WCO)35

35 http://www.wcoomd.org/fi les/1.%20Public%20fi les/PDFandDocuments/About%20Us/DEPL%20OMD%20UK%20A4.pdf.

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The WCO is the only international intergovernmental organisation that deals 1-119 with Customs procedures governing trade between countries. Its work aims to improve the effectiveness and efficiency of Customs administrations across the globe, and to help them fulfil their dual role of facilitating trade whilst ensuring its security. Born after the Second World War out of a desire by countries to re-launch world trade, and to provide a platform for the discussion of Customs issues, the WCO officially established in 1952 as the Customs Co-operation Council held its first meeting on 26 January 1953. Since then the Organization has grown from its original 17 founding members to encompass a truly global membership now numbering 176.

The WCOs mission is to improve the effectiveness and the efficiency of its 1-120 Member Customs administrations across the globe. While three-quarters of its Members are developing countries, the WCOs combined membership is collectively responsible for managing and processing more than 98% of world trade.

The responsibilities linked to the international movement of goods, people and 1-121 means of transport have expanded and will continue to do so, ranging from traditional Customs activities such as the collection of revenue to activities as diverse as environmental protection, combating drug trafficking and money laundering, and ensuring food safety and revenue security. To facilitate the work of Customs at borders, over time the WCO has developed a number of instruments and tools, and introduced a number of programmes and initiatives, that significantly enhance Customs operations.

Security and enforcement

Strengthening the security of the international trade supply chain through the WCO SAFE Framework of Standards that lists the minimum standards that Customs and economic operators should apply in order to avert the risk of terrorist attacks and other criminal threats.

Bolstering efforts to combat fraudulent and criminal activities by improving enforcement methods and practices through training, managing a global network of regional intelligence liaison offices, developing secure communication tools for the exchange of information, preparing analyses of smuggling trends and modus operandi, and facilitating field and border enforcement operations.

International Labour Organisation (ILO)

The ILO is a specialised agency of the United Nations that deals with labour 1-122 issues pertaining to international labour standards. Its headquarters are in Geneva. The ILO has significant input into matters of maritime safety and security.

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European Union (EU)

The European Union is an economic and political partnership between 27 1-123 European countries.

It is progressively building a single Europe-wide market in which people, goods, 1-124 services, and capital move among Member States as freely as within one country. The EU was created in the aftermath of the Second World War. Since then, the Union has developed into a huge single market with the euro as its common currency. What began as a purely economic union has evolved into an organisation spanning all areas, from development aid to environmental policy. It is now possible for people to travel freely within most of the EU. It has also become much easier to live and work in another EU country.

The European Union is not a super-state. The EUs ability to influence the 1-125 international order depends on its ability to bring together the whole of the EU, most crucially the Member States, who while independent in foreign and security affairs, are parties to a strategy for EU international policy.

The European Union remains essentially a civilian power that confines the use 1-126 of force to the most exceptional circumstances and broad international legitimacy.

North Atlantic Treaty Organisation (NATO)

NATO was created in 1949. Its member countries are Albania, Belgium, Bulgaria, 1-127 Canada, Croatia, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Turkey, United Kingdom and the United States. Its fundamental role is to safeguard the freedom and security of its member countries by political and military means.

Ongoing military operations and missions include counter-piracy operations off 1-128 the Horn of Africa.

NATO has very few permanent military forces of its own. Once members agree, 1-129 by consensus, to engage in an operation, they contribute forces on a voluntary basis.


7. MARITIME TRADE BODIES

Maritime trade bodies represent various groupings throughout the maritime 1-130 industry and like the international and regional bodies described in the previous chapter are often influential in the forming of maritime laws and regulation. They also often provide excellent guidelines for the industry on every major issue including safety and security. These guidelines often become the de facto legal standard for the implementation of regulations.

International Chamber of Shipping (ICS) and the International Shipping Federation

The International Chamber of Shipping (ICS) is the principal international trade 1-131 association for the shipping industry, representing all sectors and trades. ICS membership comprises national shipowners associations whose member shipping companies operate two-thirds of the worlds merchant tonnage. Established in 1921, ICS is concerned with all technical, legal and policy issues that may have an impact on international shipping.36

Nautical Institute

The Nautical Institute is the international professional body for maritime 1-132 professionals. It has over 40 branches worldwide and more than 7,000 members in over 110 countries. Nautical Institute membership is open to all nationalities in grades appropriate to qualifications.

World Shipping Council

The World Shipping Councils goal is to provide a coordinated voice for the liner 1-133 shipping industry in its work with policymakers and other industry groups with an interest in international transportation. The WSC plays an active role in the development of programmes that improve maritime security without impeding the free flow of commerce.

36 http://www.marisec.org/index.html.

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Baltic and International Maritime Council (BIMCO)

BIMCO is an independent international shipping association, with a membership 1-134 composed of shipowners, managers, brokers agents and many other stakeholders with vested interests in the shipping industry. The association acts on behalf of its global membership to promote higher standards and greater harmony in regulatory matters. BIMCO is accredited as a Non-Governmental Organisation (NGO), and holds observer status with a number of United Nations organs. The association provides one of the most comprehensive sources of practical shipping information and a broad range

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