Pirate Focus On Crews Will Force P&I Clubs To Pay Ransoms

The trend for pirates separating crews from vessels, taking them onshore and holding them to ransom is set to worsen and will force the P&I market to adopt a more significant role in the provision of piracy cover.

There has been a long and heated debate over whether the P&I clubs should contribute to the general average of ransom payments.

If pirates continue to hold crews separately clubs will need to step in as they cover the usual P&I liabilities arising out of piracy incidents, such as claims for loss of life, personal injury and stress and trauma following attacks and hijackings.

International Group of P&I Clubs executive officer Andrew Bardot confirmed that in situations where the crew was taken ashore and a separate ransom demand made for their release, P&I Clubs could become involved.

With the monsoon season coming to a close, it has been well documented that pirate attacks are set to become increasingly violent and frequent.

The International Maritime Bureau will publish its third-quarter piracy report next week and a spokesman said that separating seafarers from vessels and holding them to ransom was a matter that now features in the document.

The spokesman confirmed that there had been two high-profile cases this year where Somali pirates had kidnapped crew members and held them to ransom onshore.

One involved Asphalt Venture and seven Indian crew and the other saw six seafarers, two Danes and four Filipinos, taken from Leopard to inland Somalia where they still remain.

However, he also said that these were not the only cases recorded and that the issue was a “messy problem” as there had been cases of hostages being taken ashore due to vessels experiencing problems or running aground.

RFIB director Nigel Russell said the development was a serious matter that needed to be confronted by the industry.

“Pirates were originally quite supportive of seafarers and took reasonable care of them. Now they threaten them and guns have been put to crewmen’s heads. This has left them frightened and unsettled and it is going to ratchet up. It will be difficult for things to move backwards and P&I clubs will have to get more involved,” he said.

Ince & Co partner Stephen Askins said that crew members were taken ashore partly to increase the pressure on owners but also for security as vessels were less likely to be attacked by the military if key crew members were ashore.

He did note, however, that Asphalt Venture and Leopard were exceptions to this rule.

Mr Askins said that ransoms paid last year were around $90m and that the other losses such as loss of hire were possibly three or four times that, a figure that was only set to increase.

He argued that the escalation of pirate activity could force the whole industry to revise how it dealt with the problem.

“If this is to go on for another three to five years then the industry needs to decide whether the present approach, of putting things in general average with the ransom-paying underwriters bearing all the cost, can continue.

“Only after that debate could we see whether there was appetite to bring the clubs into the picture in terms of contributing to the ransoms. After all they are run by shipowners.”

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