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Thursday, March 29, 2012

Somali Pirates: Piracy Leads to Standard Contract for Private Armed Counter-Pirate Guards

Unknown to much of the general public, the ships that travel the great sea lanes usually operate under contracts to carry goods and oil and other things from point A to Poiint B.
After years and years, these contracts (known as "charter parties") have become standardized in format - so that they are often a matter of "fill in the blank." In many instances, a contract for engaging a ship to carry something may consist of an email which reads, in part, something like "standard BIMCO terms," BIMCO (Baltic and International Maritime Council) being a trade organization the members of which have agreed on the terms of certain charter parties that form the standard contracts. The variations in the terms are covered in the emails by writing out the exceptions rather than the entire agreement. So, the terms may read, "standard BIMCO terms, except . . ." and the exception is set out. Using standard contracts saves a great deal of time and keeps lawyer fees down, a very important thing indeed.

Well, now, it is reported, as expected, that BIMCO publishes much anticipated GUARDCON Contract:
Soon to be under contract?
BIMCO is pleased to announce the publication of the GUARDCON standard contract for the employment of security guards on vessels. This brand new contract has been developed to provide ship owners and private maritime security companies (PMSC) with a clearly worded and comprehensive standard contract to govern the employment and use of security guards, with or without firearms, on board merchant vessels. While BIMCO would not like to see the use of armed security guards on ships becoming institutionalised, it recognises that while the industry awaits a more permanent long term solution, armed guards currently provide an effective deterrent to piracy attacks.

BIMCO’s Chief Officer Legal and Contractual Affairs, Grant Hunter said “In response to ship owners’ increasing demand for security services, an ever growing number of private maritime security companies have entered the market to meet that demand. In the absence of a standard contract for these services, ship owners and their P&I Clubs are currently faced with the difficult and time consuming task of assessing large numbers of contracts from these security companies, all with varying terms and conditions. GUARDCON’s objective is to create a contractual benchmark for the employment of security services so that minimum levels of insurance cover for PMSCs are established and that adequate safeguards are put in place to ensure that liabilities and responsibilities are properly addressed and that all necessary permits and licenses are obtained.”
So, using GUARDCON should help answer questions relating to the duties of an embarked security team and of the master of the vessel with respect to that team. You can view GUARDCON at the BIMCO site, along with an explanation and "Guidance on Rules for the Use of Force (RUF) by Privately Contracted Armed Security Personnel (PCASP) in Defence of a Merchant Vessel (MV)."

Thus, the "wild west" aspect of private security teams is tempered by lawyers and liability is accounted for. The cats have been herded.

 Well, except for the inevitable things that aren't clear in the contract . . . UPDATE: The security firm Sea Marshals, LTD announces it's one of the first to qualify for insurance under the BIMCO rules:
SeaMarshals Ltd is one of the first security companies to fully comply with the new BIMCO Guardcon contract released on 28th March 2012.

Among the many things we fulfill to comply you will find;
General liability insurance, 3rd party - USD 5 million
Professional indemnity insurance, USD 5 Million
Maritime employers insurance, USD 5 Million
Personal accident and illness, USD 250 000 per person
Valid licences for embarking and disembarking armed teams
Legal weapons, European origin, government EUC's
All men with STCW95, ENG1, SSO, CRB check, Weapons training, Military/Navy background and more..
100s of references from satisfied ship owners and masters from past transits.

1 comment:

  1. mandb4:59 AM

    I must admit the GUARDCON paperwork looks like a good start that no doubt will be modified in the coming years as experience and events unfold. The use of Rule of Force (not ROE) section is particularly of note. Although BIMCO worked hard to get this out it really should have been completed a year or so ago.