Don't Give Up the Ship.

Earlier this year a cargo ship just off the coast of Riau Island, Indonesia, was boarded by thieves armed with knives and guns. The thieves succeeded in overpowering the crew and hijacking the vessel. They then tied and blindfolded the seamen and abandoned them on an uninhabited island. The crew was ultimately rescued, but the ship, along with her cargo worth $2.1 million, is still missing.

This incident exemplifies the dangers of theft in the maritime industry. And such incidents are on the rise. According to the International Maritime Bureau (IMB) the number of reported attacks, worldwide, rose 57 percent in 2000 in comparison to 1999 figures, and numbered more than four times the attacks reported in 1991. But almost as worrisome as the violence itself are the roiling legal waters into which an incident can plunge a carrier.

Is it piracy? One of the major issues confronting the industry concerns the way in which incidents are defined--are they truly piracy or merely thievery? The answer can affect a company's liability.

The IMB calls all the attacks on its list piracy, including the incident off Riau Island. Yet that incident and many others on the list do not meet the current legal definition of piracy because they occurred within twelve miles of shore. Piracy by definition occurs on the high seas, not in the territorial waters of any given country, according to international law. That definition could be changing, however, depending on the success of maritime industry efforts to make the term more inclusive.

One case that illustrates the changing outlook is New York Marine & General Insurance Company v. M/V Rauten, (U.S. District Court for the Southern District of New York, 1999). In that case, a company was moving cargo on a ship named the Rauten. The vessel was attacked and the cargo stolen. The company that owned the goods recouped its losses through its insurance policy. The insurance company, however, sued the ship owner for the loss.

The ship owner requested summary judgment--a ruling based on the facts of the case without a trial -- claiming that the loss was due to pirates and that the pirates were "public enemies" as defined in the U.S. Carriage of Goods by Sea Act of 1936. (The act makes it clear that carriers are not responsible for the acts of so-called public enemies.)

The court denied the request for summary judgment, ruling that the matter must be tried because the case presented questions of fact--such as how far from land the ship was when attacked--that could not be determined by summary judgment. Two of the questions to be decided, ruled the court, were whether the thieves were actually pirates (since it was unclear whether the incident occurred immediately offshore or on the high seas) and whether pirates and public enemies are one and the same.

The court also raised the issue of negligent security in reference to the attack. The three issues raised in the case are critical in determining a company's liability in any similar case of maritime theft.

Precedent. The definitions of piracy and the high seas are well established. The Supreme Court of the United States defined the high seas in a 1969 ruling as "the international waters not subject to the dominion of any single nation." But the definition of piracy has roots in the law of King James I of England, who defined piracy as "robbery on the high seas" committed by "certain lewd and ill-disposed persons." In this tradition, the United States criminal code says: "Whoever, on the high seas, commits the crime of piracy as defined by the law of nations, and is afterwards brought into or found in the United States, shall be imprisoned for life."

This same definition is reiterated in the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The United Kingdom specifically adopted the UNCLOS language in its Merchant Shipping and Maritime Security Act of 1997. The act clearly states that the high seas are defined as all waters beyond the territorial sea of the United Kingdom or of any other state.

New treatment. The Comite Maritime International (CMI)--an international organization consisting of participants such as Interpol, the International Maritime Organization, the International Maritime Bureau, and the Baltic and International Maritime Council--has drafted the Model National Law on Acts of Piracy and Maritime Violence. The law, which the group hopes will be adopted by individual countries, broadens the definition of piracy, malting it an act that can occur on the high seas or alternatively in the territorial waters of a given nation.

According to Samuel P. Menefee, a CMI board member who helped draft the law, one goal was to bring acts of piracy within the jurisdiction of nations by removing the high-seas requirement in the definition of piracy. The law also defines a pirate as anyone who engages in "an act constituting piracy." This definition, if adopted, would brand public enemies, assailing thieves, and other attackers as pirates.

Negligent security. In addition to questions of definition, the court raised another question in its deliberations in the Rauten case. "Even assuming the individuals were pirates, was the crew of the Rauten still negligent?" wrote the court. "If so, would the defendant still he liable? Were the actions of the alleged pirates foreseeable and, if so, did the crew of the Rauten take sufficient precautions?"

Though no laws or regulations cover security procedures for preventing piracy, case law does establish that reasonable precautions should be taken. Legally, if a pirate attack ensues, the question is not whether the procedures were successful but whether they were reasonable under the circumstances. A ship owner cannot guarantee the security of a ship, but he or she can take precautions to guard against particular security threats. Reasonableness under the circumstances can include the cost of implementing the security measures, how the measures compare to the security standards within the industry, and the extent and nature of the security threat. Factors such as the ship's cargo, ports of call, and sailing routes can also affect whether security procedures will be judged reasonable.

Personal injury. Acts of piracy can also lead to personal injury lawsuits. U.S. ship owners are subject to the Jones Act of 1920, which created a new cause of action for injured seamen. The law allows a sailor to sue his employer for negligence. Before 1920, maritime law only allowed a seaman to sue the ship for unseaworthiness. The injured worker had to prove that the specific unseaworthiness caused his injury.

If a sailor is injured as a result of a pirate attack, the employer can be found negligent under U.S. law in the way it planned or failed to plan for such attacks. Though it is impossible to determine how many lawsuits are filed, such cases do occur. However, they are almost always settled before a trial verdict is rendered.

Seaworthiness. An unseaworthy vessel is one not fit for its intended use, or not properly outfitted or safe for a voyage at sea. Thus, a vessel not properly outfitted or equipped to repel pirates, for instance, may well be unseaworthy if the vessel's sailing route takes her into known pirate waters. Consequently, if she is later determined to have been unseaworthy at the inception of the voyage in question, issues of insurance coverage, cargo loss defenses, liability for personal injuries resulting from attacks, and even criminal liability arise. The U.S. criminal code mandates that anyone who knowingly sends or attempts to send a vessel of the United States to sea in an unseaworthy state that is likely to endanger the life of an individual shall be fined not more than $1,000, imprisoned for not more than 5 years, or both.

In a landmark case, United States of American v. Pedro Rivera (United States Court of Appeals for the First Circuit, 1997), the court considered the issue of seaworthiness when ruling on the criminal prosecution of a tugboat company's manager. The case arose out of an oil spill that occurred off the coast of San Juan, Puerto Rico, in 1994. Interestingly, the case did not involve injuries or loss of life.

The accident was caused after the tow wire connecting the tugboat Emily S. to the barge Morris J. Berman parted. The barge subsequently ran aground and spilled her oily cargo. Rivera was the general manager of the company that managed the tugboat. He was found guilty of violating the statute by failing to replace a deteriorated towing wire.

The court of appeals was then called on to decide whether such a conviction was legally allowed and whether the evidence supported the conviction. After examining the statute at length, including its legislative history as well as its statutory predecessor, the court held that the statute did allow a basis for criminal liability.

The court ruled that a person may be found culpable if he or she in fact sends a vessel to sea with the knowledge that the vessel is in an unseaworthy condition and that the worthiness is such that it will likely endanger life. Criminal prosecution, the court continued, "requires knowledge not only that the vessel is unseaworthy but also that it is afflicted with a defect that is 'likely to endanger' life."

Having determined that the statute did in fact allow prosecution under the conditions set forth, the court next turned to the evidentiary standard needed for conviction. It focused on the statutory language, "likely to endanger life," and held that the government may not simply demonstrate the possibility that life may be endangered, but it must prove that the actions will "probably" or "in all probability" endanger life.

In the written opinion of the case, the court further stated: "a slippery deck, a malfunctioning winch, or poor stowage all can Lend themselves to fatal scenarios. There is very little that can go wrong at sea without some risk to human life." The test, the court ruled, "is not 'possibility' or 'some risk.' It is a significantly higher order."

Based on this assessment, the appeals court reversed the conviction, holding that "the government's evidence, in sum, showed only that the parting of a tow wire could pose a serious risk to human life." The court ruled that evidence in this case was inadequate to prove that Rivera violated federal law by sending a vessel to sea with the knowledge that its unseaworthy condition was likely to endanger life.

This case was the first time anyone had been criminally prosecuted for alleged unseaworthiness under the statute, It now has set a precedent that has serious implications for the maritime industry. It is possible that this reasoning could be applied to security. A court might rule, for example, that failure to provide adequate security when sending a vessel into an area where a pirate attack is deemed likely could be equated with sending that vessel out in an unseaworthy condition, thus subjecting the carrier to prosecution.

As these cases show, maritime companies face dangers not only on the high seas but also from the tidal wave of legal issues that can follow in the wake of a pirate attack or other incident. Maritime security professionals must learn how to help their companies navigate around these legal shoals.

Kenneth Gale Hawkes is an admiralty trial attorney and independent maritime security consultant, presently in private practice in Miami. He is a former captain in the United States Marine Corps, a proctor member of the Maritime Law Association of the United States, and a member of the Southeastern Admiralty Law Institute. Nawkes is the author of Maritime Security (Cornell Maritime Press, 1989) and editor of several government-sponsored publications. He is also an adjunct instructor in the Continuing Education Department at the US. Merchant Marine Academy, King's Point, New York. He is a member of ASIS.

Ship Security Plans

THERE ARE NO INTERNATIONALLY recognized or recommended security procedures for cargo vessels, and experts rarely agree on antipiracy procedures. Therefore, a company should let any potential legal liability in a given circumstance he a guide to establishing reasonable security procedures Security professionals can undertake this task or hire a maritime security consultant to do the job.

No matter who ultimately devises a security program, that person should have significant legal and operational experience in the maritime industry. When considering a consultant, this means that security managers should choose carefully and he wary of making the cost of the consultant's services the determining factor. Once this decision has been made, the security manager or consultant should conduct a survey, develop a plan, implement that plan, and establish follow-up procedures.

The security manager or consultant should conduct a shipboard security survey and write a detailed report for each vessel. A ship-by-ship approach is critical because few ships are built the same; thus, the security plan will vary from ship to ship. For example, a ship designed to carry cars has a high superstructure to fit the maximum number of cars in the hold. This design makes it difficult for pirates to climb onto the ship's deck. Other ships do not have this design protection.

The type of cargo and the sailing route are also critical factors. For example, a ship hauling logs from Seattle to Tokyo through the Pacific Ocean is unlikely to be attacked. But a ship carrying computer components through the Straits of Malacca--a channel between Sumatra and the Malay Peninsula that carries shipping between the Indian Ocean and the South China Sea--should take care to protect against pirates.

The survey report should reflect these considerations. It should also be thorough, containing all the security recommendations. Once completed, this document should be considered proprietary information and should be protected accordingly.

The next step is to prepare a comprehensive ship security plan based on the information in the survey. These plans must be prepared with cooperation from the highest level of the organization since the implementation of recommendations will require executive approval. The operations, legal, and risk management departments should all he involved in the plan.

Any survey report recommendations that are not implemented should be discussed in a separate document to be kept at headquarters for future use if the company's actions are ever called into question. If a particular recommendation is not followed, the company should document why. It is far better to have considered a particular security procedure and rejected it for good reason than never to have considered it at all. As with the survey, the security plan and discussion of nonimplemented recommendations should be considered proprietary information.

The security manager should then implement the security plan for each vessel, taking care to document physical modifications, establish operating procedures, and ensure adequate record keeping for all aspects of vessel management. The cost and extent of vessel modifications will depend on a number of factors including the age and design of the vessel and the extent of the security procedures to be implemented. The program should also involve training of the officers and crew as well as of shoreside management personnel.

As a follow-up procedure, security should conduct routine--quarterly, semi-annual, or annual--security readiness inspections. It is best if these inspections are conducted by the security professional who prepared and implemented the security plan. Additional surprise inspections or exercises should also be considered for high-risk ships. The results of all inspections or exercises should be carefully documented in reports, and any problems should be corrected. Security managers should also establish guidelines for supplemental ship security surveys conducted every two years or every time the vessel significantly changes sailing routes, cargo, or ports of call.