How can modern law combat the ancient practice of piracy?

(Published in Lloyds List) As cases of piracy continue to hit the headlines, what is the position for owners and crew in international and English law?

Forget images of swashbuckling pirates sailing the high seas, forcing their enemy to walk the plank in the hope of capturing treasure chests full of gold. The 21st century reality is far less glamorous.

Piracy remains a serious and increasing problem notably in the Malacca Straits, South America and West Africa (particularly Nigeria). The latest counts of piracy according to Lloyds of London currently stands at fifteen vessels and more than 295 seafarers being held.

In particular, Somalia has one of the worst record of piracy and it is a problem that is constantly monitored by the International Maritime Organisation and the shipping industry. So far the international response has been on a two fold basis, firstly, to assemble naval forces in the affected regions and secondly to encourage a political settlement in the fractured state of Somalia. The European Union has now also pledged to tackle piracy with the launch of Operation Atlanta which will add a further eight vessels to the international effort.

On 17 November 2008 the Liberian flagged oil tanker "Sirius Star" was captured by Somalian pirates and taken into the notorious pirate stronghold of Eyl. The vessel which is thought to be the biggest tanker ever taken, has over £67 million worth of oil on board representing a quarter of Saudi Arabia's daily output. It also has 25 crew on board including two British crew members.

Not only has the incident raised issues over crew safety and the impact of a super tanker being impervious to piratical acts, but it has also raised concerns that any damage to the "Sirius Star" could result in an oil pollution disaster on an even larger scale than the "Erika" or "Prestige". On 20 November the pirates issued a ransom demand for 25 million US Dollars, and there are concerns that non-compliance with the ransom could lead to catastrophic consequences sparking fears of an environmental based terror threat.

Overview of international law

Acts of piracy are a conflict with the usual principles of exclusive flag state jurisdiction. Usually a State will retain jurisdiction over its nationals on a vessel, although since the collision involving the vessel "Lotus" there is a general expectation that where there is a conflict of two separate jurisdictions, it will be the jurisdiction of the Vessels' Flag State that prevails. That said, it is still a legal minefield as to who can obtain jurisdiction over the pirates and bring them to legal account.

An act of piracy undermines the usual principals applying to flag state jurisdiction as Article 100 Law of the Sea Convention ("LOSC") provides that every State has a duty to act against piracy.

Piracy, itself, is defined in Article 101 LOSC as "any illegal acts of violence, detention or depredation committed for private ends by the crew or passengers of a private ship against another ship or persons or property on board it whilst on the high seas".

The requirement of needing two vessels (pirate and victim) to be involved distinguishes acts of piracy from that of hijacking and it explains why incidents such as the "Achille Lauro" and "Santa Maria", where passengers took control of the vessels, are not acts of piracy.

Pirate ships on the high seas may be seized by clearly marked warships (or aircraft) or any authorised vessel on government service. Those found on board a pirate vessel may be tried by any State before whose courts they are brought and the State may determine by its laws the penalties to be imposed (Article 105 LOSC). However, this course of action should not be taken lightly. LOSC provides that compensation maybe payable to a vessel that is incorrectly boarded.

Arguably, the most effective response by international actors would be a bombardment on the strong hold of Ely. However, such a movement could not be bought about without the resolution of the UN Security Council, an outcome which is highly unlikely.

English law

Pirates bought before a court in England and Wales can be prosecuted under the Piracy Act 1837. Whilst in theory there is nothing to prevent the prosecution of pirates under this Act there are additional problems. It is possible that pirates can be extradited, although, this may only be done within the considerations of the Human Rights Act. Taking the example, of the Somalian pirates caught by Plymouth based HMS Cumberland, it is unlikely that they would be extradited back to Somalia (by whatever authority can be found) as the risk of unfair and harsh treatment is extremely high. The pirates were, eventually, handed to Kenya, not Somalia.

Transit and insurance issues

On 20 November 2008 AP Moller-Maersk, the largest ship owner in Europe, announced that it is adopting a new policy in respect its tankers. Vessels will be routed past the Cape of Good Hope, although depending on the availability of escorts, some vessels may join naval convoy through the Gulf of Aden. Speculation suggests that this may not aid the problem, as pirates become increasing capable of extending their catchment area and weapons capabilities.

Whilst a decision to avoid the Suez Canal ultimately means higher overheads which will be passed on to consumers, there will also be other long term implications. Egypt depends on the Suez Canal as its second most important foreign currency earner after tourism.

As levels of piracy rise, ship owners can in turn expect insurance premiums to increase accordingly. The insurance industry is currently undecided over where piracy risks should lie. Currently, there is the power to move this risk between hull and war cover as proposed by using wording issued by the Joint War and Hull Committees. If piracy risks rest with hull and machinery cover it is likely that a member will pay specifically increased premiums for traversing a stretch of water such as the Gulf of Aden, in the same way increased premiums were fixed in, for example, the series of Iraq wars. Furthermore it is not clear whether ransoms are covered under the scope of a war and terrorism policy or P&I Club terms? Should ship owners be made to pay for a peril unless there is specific cover?

Lloyds List recently reported that Hiscox Insurance Group has highlighted a new scope of insurance "Traditional marine cover will meet the cost of the ransom but none of the costs involved in the process. Ransom can account for just 25 percent to 30 percent of the costs of the incident. Where Kidnap and Ransom cover goes above the traditional marine policies is that it will become involved from the moment a vessel is seized. We'll provide a crisis management team and meet the costs of the security team that'll be needed to take the ransom to the Somali pirates."

The legality of Ransom

There are two potential pitfalls under English law, with the provisions of anti-terror laws and the Proceeds of Crime Act. Money cannot be paid over to individuals if there is a reasonable belief that the organisation is a terrorist one or of there is a reasonable chance that the funds could end up in the hands of terrorists. Pirates have gone to long great lengths to issue statements that they are not affiliated with any terrorist groups.

It is generally anticipated that the payment of ransom equates to extortion and there is a clear belief that public policy dictates that those who pay ransom demands should be exempt from money laundering regulations.

To arm or not to arm?

There is much debate over the use of armed guards, or even arming members of crew. The general consensus with the shipping and indeed, the security industry , is that arming vessels is not a sensible route forward. Crews that open fire on pirates, could potentially escalate a situation to a lethal level. Furthermore, many supertankers are so long in length that it would be impossible to provide adequate levels of security on a cost effective basis.

The industry is divided on this point as clearly shipowners require adequate protection but they remain responsible for the acts and ommissions of their armed and specifically trained subcontractors.

Whatever, there must be a sound argument for providing thorough training on counter attack measures so that crew members will have the confidence to deal with incidents in as non-violent a manner as possible.

This article is written by Charles Hattersley and Polly Russell Stower of the Marine Department at Ashfords. Should you require any further information, please email c.hattersley@ashfords.co.uk or p.russell-stower@ashfords.co.uk

Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.