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24 April 2013
While the problem of piracy is not new, it has increased dramatically in recent years. With the collapse of stable governance in Somalia, pirate attacks on merchant vessels and yachts travelling through the Gulf of Aden, round the Horn of Africa and along the east coast of Somalia are on the rise.
What started as attempts by fishermen to prevent fishing trawlers from entering their territory to fish illegally is now a highly organised industry with sophisticated equipment capable of identifying vessels, their flags, their ownership and their cargoes and crews. Modern-day pirates will approach merchant vessels and yachts, board them, hijack the crew and vessel and hold them to ransom.
There was initially much disagreement internationally as to whether vessels should carry arms or armed guards to ward off pirates. The International Maritime Organisation (IMO), with the support of the International Transport Federation, argued against this approach, as it felt that crew members lacked sufficient training for carrying weaponry and violence could escalate in case of an attack, leading to further injury and deaths. In contrast, the US lobby allowed crew members on board US-registered vessels to carry weapons from an early stage.
In recent years, there have been more and more successful attacks on vessels and crews. In some cases, crew have been kept in captivity for several months. The effects of this increase are immense, in terms of both the psychological impact on crews and their families and economic losses. For example, $550 million was spent on insurance cover in 2012, as well as an estimated $290.5 million on rerouting, $1.53 billion on navigating at an increased speed and $31.75 million on reported ransoms.
Unfortunately, although numerous states have dispatched their naval forces to patrol the area, the area affected now stretches from the east coast of Somalia to the west coast of India and is therefore too large to patrol. The IMO has therefore changed its standpoint and issued circulars guiding shipowners on the use of armed guards on board vessels.
Vessels registered under the Maltese flag have not escaped the impact of these developments and the administration has constantly been asked whether vessels flying the Maltese flag are permitted to carry weapons on board. Transport Malta's policy was always to follow the IMO's direction - which, until March 2011, meant a 'no arms on board' policy.
However, with the publication of the circulars, Transport Malta has begun to allow the carriage of arms on board Maltese-registered vessels on a case-by-case basis, provided that the proper protocol is applied. This situation has been further reinforced through the issuance of the General Authorisation (Protective Security Measures on Board Ships) Regulations (Subsidiary Legislation 480.04).
These regulations establish the general authorisation for the carriage and use of firearms and ammunitions on board Maltese vessels by armed guards who are authorised to carry firearms and ammunition and are licensed to private maritime security companies. This general authorisation applies only for "purposes considered necessary in the public interest or for the protection of life and security of persons". The regulations aim to ensure that Maltese-flagged vessels have satisfactory procedures in place for the placement of armed guards on board.
The advantages of having professional armed guards on board a vessel to assist in anti-piracy measures are clear (to date, no vessel carrying armed guards has been hijacked), and the demand for private maritime security companies that can provide such guards has grown. International organisations such as BIMCO have therefore introduced a standard contract that regulates the relationship between shipowners and private maritime security companies, known as GUARDCON.
Private maritime security companies are becoming established in a number of jurisdictions, with Malta a jurisdiction of choice. They are attracted to the country due to its geographic position in the centre of the Mediterranean, as well as its EU membership, stable regulatory regime and attractive corporate structures. Malta is located on the route from the Straits of Gibraltar to Suez and is therefore considered a convenient port of call for a vessel before it starts what could be a harrowing onward journey.
Malta has therefore taken steps to regulate the licensing of private maritime security companies. Despite such companies having been established for many years in the United Kingdom and other European countries, no proper regulatory licensing framework exists. Such a framework would ensure that these organisations meet appropriate standards and employ quality personnel of high integrity.
The Licensing of Private Maritime Security Companies Regulations (Subsidiary Legislation 480.05) was published on March 8 2013. This legislation clearly stipulates that no company may offer a private maritime security business without a licence. The regulations further outline the parameters under which a private maritime security company incorporated in Malta may obtain a licence, listing more than 20 obligations, and aim to ensure that those companies that obtain a licence are suitable for such sensitive and demanding activity. Among other things, companies must provide:
The regulations also provide for the establishment of a board through which to administer the system, comprising the registrar general of Maltese ships (who will act as chairman) and representatives from the police, the Department of Customs, the Ministry of Foreign Affairs, Trade Services Directorate and the Security Services.
The board's composition has been carefully designed such that all organs of government likely to have an involvement in the operation of such companies are represented, to ensure the smooth operation of the system and to avoid the unnecessary bureaucratic bottlenecks that can be caused when an activity is dependent on a number of government departments.
Through this licensing regime, Malta has recognised (ahead of other countries) the need to regulate this highly sensitive industry. The policy has been well received by private maritime security companies, which are determined to ensure that only the most serious service providers are allowed to operate.
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