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Overview of @BIMCONews GUARDCON standard contract for employment of security guards on vessels. Podcast with @incelaw

By • May 14th, 2012 • Category: Ince & Co Podcasts by Coracle, Marine Insurance and P&I, Piracy, Shipping Law

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In this podcast we give an overview of BIMCO’s GUARDCON standard contract for employment of security guards on vessels.

Armed guards are now estimated to be a feature of some 35-40% of all transits in the High Risk Area. It is hoped that the Guardcon standard contract will be welcomed by all, not least those in the P & I Clubs responsible for vetting the myriad of individual contracts which cross their desk and which are produced by the estimated 200 plus Maritime Private Security Companies (“MPSCs” – as opposed to Private Military Security Companies which the international security world refers to as PMSCs).

While BIMCO would not like to see the use of armed security guards on ships becoming institutionalised, the new standard contract will give certainty to ship-owners and the early signs are that the insurance markets will develop products which meet the needs of the MPSCs and cover the liabilities that could possibly arise under the Guardcon regime. This article looks at some of the key clauses and the rationale behind them.

Guardcon was drafted with input from the International Group of P & I Clubs, insurers and ship-owners. It survived scrutiny from the MPSCs and the BIMCO Documentary Committee as each clause was pulled apart, debated and put back together. Unsurprisingly for a contract which contemplates and recognises the possible use of lethal force, it prompted some strong reactions, particularly over the emotive issue of the master’s authority. The issue was how to reconcile the master’s overall command of a vessel at all times with the need to distance him from the consequences of the unlawful use of lethal force. This is something that the recent events involving the Enrica Lexie brought into stark relief.

Guardcon, which can be used for multiple or single transits, resisted the temptation to impose on the owner an obligation to follow Best Management Practice (“BMP”), not least because the contract is designed to be applicable in other areas of the world.
In two areas, Guardcon gives a lead:

1. Guardcon provides that a security team should consist of four men. Some ship-owners (possibly for costs reasons) agree on three-men or even two-men teams and this still remains an option and a matter for negotiation. However, the view taken was that four-men teams were preferable. To agree a number below that would require a conscious amendment of the standard terms.

2. Guardcon comes with guidance for the Rules for the Use of Force (“RUF”) which set out a desired template for providing a layered defence with lethal force being a last resort to be used in exceptional circumstances. The industry still needs an internationally approved RUF and it is hoped that the Guardcon guidelines will find their way to one of the working groups responsible for formulating policy and direction in this area.
Certain clauses of the contract will be regarded by the Clubs as untouchable and attempts to amend these will no doubt be discouraged if not prevented. These form the central part of the contract, as follows.

Clause 6 – contractors’ obligations
This includes a set of criteria and skill sets for the individual security team members including the need for military or similar experience and the need for training in Standards of Training, Certification and Watchkeeping (“STCW”) and BMP (if applicable). At a time when there is no settled accreditation system (although international standards may yet be in place before the end of 2012), it provides another layer of checks and should provide some comfort to the owners. Some in the security world will no doubt hope that the standards required will act as another hurdle to entry by the lower end of the market but that is not its aim. Whilst the security company will be making representations on the qualifications of its operators, it will still be up to the owners to conduct their own due diligence on the contractors. The fact that they sign the contract does not mean they are meeting the demands made on them.

Clause 8 – master’s authority

There were strong feelings in some quarters that the RUF should be in play from the time of the embarkation of the armed teams, relying on the Fairchem Bogey (hijacked three miles from Salalah and in Omani territorial waters) as the basis for this. The view that prevailed was that the invocation of the RUF should arise at a time when a threat was perceived or had manifested itself. The concern was to distance the master from the decision to open fire and the balance struck is that it is for the team leader to decide when the threat is such as to allow him to invoke the RUF. This gives him the ability to follow the RUF and defend the vessel without needing approval for each step taken. This is sensible, particularly as it is likely that if a threat is real then the master and crew are likely to be in a citadel or secure muster point. In order to emphasise that the master does have overall authority, the clause provides a reminder that he has the right to order a cease fire. The individual’s right of self-defence is maintained and the security personnel must take responsibility for their own actions.

During the drafting process, some voiced concerns about the duty of a master in this situation and whether he is under an obligation to intervene if a fire fight was, in his view, threatening the safety of the crew or environment. An analogy was drawn to the duty a master has to intervene in a loading situation where a cargo’s stow compromises the safety of the vessel. The concern here is that if a master did not step in, he could somehow face legal liability afterwards. This has never been tested and one would hope that even at a time when some authorities can be quick to criminalise crew, they would hesitate to criticise a master in these circumstances.

Clause 10 – permits and licences

With the increased use of MSPCs, there is now a greater understanding of the licensing and certification required. This has been made easier in the UK by the issuing of the new anti– piracy Open General Trade Control Licence (OGTCL) which governs and allows the transfer of weapons between third party countries by UK nationals or companies. Guardcon seeks a declaration of the licences and certificates held by the security company and their personnel.

Clause 12 – insurance and Clause 15 – liabilities and indemnities

Guardcon has a robust knock-for-knock regime which includes third party claims, unless those third party claims are caused by negligence. The minimum insurance required to meet these potential liabilities is US$5 million. The MPSC gives no guarantees about protecting the vessel from attack or hijack, and it was not the intention to shift the traditional marine insurances that a ship has onto the liability underwriters who may be ill-equipped to meet those liabilities. One area of concern was over the costs of deviating to disembark a sick or injured armed guard. Guardcon provides that the costs of the deviation will be for the ship-owner (which is usually a P & I risk). However, the MPSC takes responsibility for the disembarkation and subsequent repatriation, either under an employers’ liability cover or under the individual’s personal accident cover, both of which are required under Guardcon. Generally, the parties will bear responsibility for the injury to their own personnel and for the damage and loss to their own equipment, the exception being where loss arises from the negligent or accidental discharge of a weapon by the armed guard.

Clause 18 – delay

The contract recognises that moving weapons in and out of ports or from floating armouries (which have become more common) is not an exact science and that delays can happen through no real fault of the operators. There is a no fault period of 24 hours to reflect this but, at that point, the owner has a right to cancel the contract. This he would normally no doubt do if there was an alternative to hand.

Comment

There is now general acceptance of the use of armed guards across the industry although for some flagged states they are still not permitted. There is widespread agreement that armed guards are not a substitute for the hardening required under BMP and, certainly in the UK, they remain allowed on UK ships only in the High Risk Areas off Somalia in the Indian Ocean. As the situation deteriorates in the Gulf of Guinea, it would no doubt be a real concern if there was a call for armed guards there as well. Guardcon is an important and real step forward in terms of regulation and ensuring that the use of guards, whether armed or not, takes place within a regime based on clear principles and obligations.

There is still much to do. Floating armouries are being provided on an ad hoc basis with no formal system of approval. At the moment, the OGTCLs being issued do not allow for their use and it remains to be seen how they will be regulated.

Further, there is still a degree of uncertainty as to the regulation and formalities required for bringing weapons into ports in High Risk Areas. There are significant differences in what is required with the risk of delays and even arrests if owners inadvertently fall foul of local law.
Overall, it will be interesting to see the uptake of Guardcon. It is believed that the contract is fair and balanced and it is intended that it should become the contract of choice in the coming months.