Thursday, May 7, 2009

Pentagon: Insurance Costs Prevent Shipper's From Fighting Pirates

Developing incentives such as tax credits and reduced insurance may be useful to cause shippers to defend themselves, Michele Flournoy, undersecretary of defense for policy told the Senate Armed Services Committee on Tuesday:

As part of this effort, it may be useful to develop incentives that will help encourage merchant ships to invest in security measures. These could range from tax credits to reduced insurance rates for ships with enhanced security. Ultimately, it may be appropriate to mandate some of these actions, beginning with passive self-defense

Apparently, the risk of having one's ship hijacked and one's crew kidnapped is not already incentive enough.

Her testimony buttresses our previous argument
that the reason shippers refrain from defending themselves appears to be that currently the liability insurance costs of defending themselves probably outweighs the casualty insurance costs of being pirated.

According to Flournoy, the following self-help measures would be effective:

Effective merchant ship security includes both passive and active defense measures, and we are committed to working with commercial carriers who operate in the region to undertake vulnerability assessments and disseminate best practices. Effective passive security measures can include developing a comprehensive security plan; including risk assessment; the removal of external ladders; posting lookouts at all times; limiting lighting; rigging barriers (such as barbed wire and fencing) in low freeboard areas; varying routes taken and avoiding high-risk areas when possible; securing hatches to limit access to crew and control spaces; creating “safe rooms” and maintaining good communications with maritime security authorities.

Active defense measures can range from rigging fire hoses to repel boarders to maintaining professional civilian armed security teams on board. While there is some concern within the shipping industry about armed security teams, we are working with industry representatives in conjunction with other agencies to explore how contracted security teams can be a useful and viable option for highly vulnerable ships, such as low freeboard and slow vessels.

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