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Thursday, November 15, 2018

UK-led piracy Ransom Task Force debates ransom ban

Members will recall that, at the London Conference on Somalia in February this year (See WN No. 8/2012), the UK Prime Minister, David Cameron, pledged:


"Let’s create an international taskforce on ransoms. And let’s set the ultimate ambition of stopping these payments because in the end they only ensure that crime pays."


Hilary Clinton also commented that:


"And we welcome the UK's initiative to create an international task force to discourage the payment of ransoms to pirates and other groups to eliminate the profit motive and prevent the illicit flow of money and its corrosive effects."


These comments caused widespread concern in industry circles. In the light of these comments, the Round Table (INTERTANKO, Intercargo, BIMCO and ICS), the SaveOurSeafarers campaign and other industry bodies wrote to the Prime Minister to express grave concern at this initiative and the far reaching consequences that any ransom ban would have. Fundamentally, any ransom ban ignores the plight of those being held hostage and those that risk their freedom and their life working day to day on ships in the region.


Click the links for the Round Table and SOS letters.


The Prime Minister’s response to industry, which came in mid-May, was that he had set up the task force to look at “how the international community can best approach this complex issue, to bring about an end to the culture of ransom payments”. He encouraged industry to “engage fully in this important initiative”, and to “offer constructive advice to the task force”.


This is a surprising initiative given that the recent UK Foreign Affairs Committee report on Piracy off the Coast of Somalia (January 2012) concluded that:

“the Government should not ... make it more difficult for companies to secure the safe release of their crew by criminalising the payment of ransoms.”


In addition to that, in the English High Court in the 2010 Masefield v Amlin judgment (subsequently upheld by the Court of Appeal), Mr Justice David Steel, Admiralty Judge, held that ransom payments are not only lawful but that they are not contrary to public policy:


“I am wholly unpersuaded that it would be right to categorise the payment as contrary to public policy:


i) As already noted the payment of ransom is not illegal as a matter of English law (nor I can assume as a matter of Somali, Swiss or Malaysian law).


ii) Circumstances have arisen where legislative action has intervened to make such payments illegal: see e.g. the Ransom Act 1782. The courts should refrain from entering into the same field.


iii) So far as harm is concerned it is true that payments of ransom encourage a repetition, the more so if there is insurance cover: the history of Somali piracy is an eloquent demonstration of that. But if the crews of the vessels are to be taken out of harm’s way, the only option is to pay the ransom. Diplomatic or military intervention cannot usually be relied upon and failure to pay may put in jeopardy other crews.”



INTERTANKO and the Ransom Task Force (RTF)
From INTERTANKO’s perspective, this Task Force is highly controversial, as is any initiative that seeks to put the lives of seafarers in jeopardy. INTERTANKO’s Council confirmed its policy on ransom payments at its May meeting, stressing the need to maintain Members’ ability to make the lawful payment of ransoms. Members depend on the continued ability to pay, both as part of their duty of care towards their seafarers and as the only certain and guaranteed exit strategy following a hijack. Other industry bodies share our view that governments should not ban, or otherwise seek to interfere with, our ability to pay ransoms to free our crews.

We believe that the very existence of the RTF sends an extremely poor message to our industry, and more importantly to our seafarers who currently ply their trade in pirate-infested waters. It tells them that they have been singled out as victims of crime who may end up themselves paying for that crime with their lives. It is quite inconceivable that the UK government should even suggest that seafarers taken hostage should be chosen to have their sole lifeline removed, while ransoms remain without scrutiny or interference in any other walk of life.

Pirates have recently released the Greek-owned tanker MT Liquid Velvet, following a seven-month ordeal for the 21 Filipino crew and the vessel’s owners (INTERTANKO Members). Any suggestion that owners might in future find themselves restricted from paying a ransom to save their crews is abhorrent, more so for the 223 seafarers, fishermen and civilians currently held hostage in Somalia. It is also inconsistent with the freedom that exists to pay ransoms in other industries, e.g. for Western businessmen.

In order to get our message across, INTERTANKO is fully participating in the RTF. The RTF has recently been formed and is comprised of a select group intended to represent a range of Flag States, seafarer nations, countries with large merchant navies and those active in the Contact Group on Piracy off the Coast of Somalia. There are 14 nations represented – Australia, Denmark, France, Italy, Liberia, Malaysia, Norway, Panama, the Philippines, Spain, Ukraine, the UAE, the USA, and the UK.

It met for the first time on 30 May 2012 to discuss issues relating to preventing ransoms. The next meetings will look at other options for avoiding the payment of ransoms/alternative strategies to paying ransoms; and options for reducing the size/frequency of ransom payments. After considering the range of views on these issues, it is understood that the RTF will ‘recommend a set of policy options that will be presented to the wider international community to take forward.’

For the full Foreign & Commonwealth Office press release on the RTF, click here.

It is not yet clear how any RTF conclusions will be presented, whether for example via the IMO or to one of the Working Groups of the UN Contact Group on Piracy off the Coast of Somalia.

RTF meeting on Prevention of Ransom Payments
Prior to the first RTF meeting, an ‘Industry Advisory Panel’ was convened. This comprised representatives from shipowner and seafarer organisations, as well as representatives from the legal and insurance industry. For the first meeting, the RTF invited three industry representatives, chosen by the Industry Advisory Panel to speak on behalf of all industry stakeholders. Michele White (INTERTANKO); Giles Noakes (BIMCO) and Gavin Simmonds (UK Chamber of Shipping) attended a brief panel session during the day-long deliberations. This panel also included a representative from the Somali diaspora and an expert on Somalia from Chatham House who had prepared an analysis of the various policy options for banning ransom payments.

INTERTANKO’s General Counsel, Michele White, presented the international industry position on prevention of ransom payments to the RTF. This was a forceful intervention which covered the reasons why the industry pays ransoms and the consequences of preventing the industry from paying ransoms. In brief, she explained why any ransom ban is totally unacceptable to the industry. It has a myriad serious consequences; not least that it puts at grave risk the lives of our seafarers. Other consequences include legal, insurance, commercial and environmental issues. Overall, she stated that a ban is ill-conceived, unachievable and in any event, would not stop piracy. The full text of Michele’s intervention can be found here.

This industry position will be considered alongside policy options to prevent the payment of ransoms e.g. by domestic laws or international sanctions. From INTERTANKO’s perspective, we find legislative proposals for a ‘unilateral’ ban unworkable. For example, UK legislation would simply put at risk UK shipping interests – UK flag vessels, seafarers and UK armed guards. A ‘universal’ ban is equally unlikely and unworkable – would all states buy into and apply such a ban? A ransom ban may also be open to challenge either on human rights, or in extreme on constitutional grounds. Pirates are not rational individuals; they are common criminals who will not think twice about government policies on whether a ‘ransom ban’ applies to the ship and hostages they have taken.

While the RTF appears to have noted the Industry’s concerns, this has not deterred it from continuing its work to look at ways to either avoid or reduce ransom payments. It is not yet clear what the scope of these further meetings will involve. Avoidance should, for example, include a consideration of alternative strategies that involve governments taking responsibility for the release of hostages, including military intervention. A policy to ‘reduce’ ransom payments would appear to be no different to a policy that seeks to (part) ‘prevent’ them.

While the UK government continues to reassure the industry that there is no ‘pre-determined outcome’ for the RTF, the subject matter for each meeting has a duplicative and very clear theme. Members may be assured that INTERTANKO will continue to oppose any initiative that seeks to tie the shipping industry’s hands in any way when it comes to the ability to pay ransoms.

Members may provide any comments on this initiative and/or on ransom payments in general to  

Contact: Michele White