As regulation slowly and painfully filters down the private maritime security industry, a “proliferation” of new firms from emerging countries is inevitable and British PMSCs will price themselves out of the market, according to Norton Rose partner Philip Roche.
The big question, Mr Roche said, is whether shipping companies and charterers will want to continue to pay British rates?
“There will be a proliferation of PMSCs from countries like the Philippines and China. Their standards won’t necessarily be worse but they will have a different approach. It is likely that, like so many other industries, UK PMSCs are going to price themselves out of the market,” he predicted.
Mr Roche said that the legal wrangling surrounding the Enrica Lexie incident — in which two Italian marines shot dead two Indian fishermen they thought were pirates — reflects the concern that large parts of the industry still have about putting guns on ships.
“We have opened a Pandora’s box in a way and it has happened due to shipping’s ability to self help. The legal and insurance world has reluctantly followed. It has always been a question of when rather than if something shocking happens such as a negligent discharge or an armed guard opening fire and injuring innocent people. People may have thought the Enrica Lexie was shocking but it could be a lot worse.”
BIMCO published a standard contract for shipowners to use when hiring PMSCs last month and on the whole, Guardcon has been welcomed by the industry. However, Mr Roche said that while the contract has tried to deal with the grey area concerning liability, it has left several issues open.
“The master has absolute authority but Guardcon gives the decision to open fire to the head of the security detachment. The master can decide to stop firing but by then the damage could already be done. It seems to me that what might work practically may not work legally as it dilutes the master’s authority,” Mr Roche said.
“In the case of the Enrica Lexie, it amazed me that the master hasn’t been put in jail too. A master can be liable for any mistake that is made on his ship. You could argue that the master can step in and stop the shooting but if bullets are flying around and he is in the citadel, the idea that he can control the situation seems a bit fanciful to me.”