Middle East Workboats conference to highlight need for adequate insurance cover

Operators of vessels off the East coast of Africa are being warned by a leading insurance expert to prepare for an increase in pirate attacks after the southwestern monsoon ends in coming weeks.

"There is a temporary lull in pirate activity at the moment off the East coast of Africa...but we expect this to be just that - a temporary lull," said William Tobin, of the not-for-profit mutual organisation Shipowners' Protection Ltd., and a leading speaker at an upcoming regional maritime conference in Abu Dhabi.

"When weather conditions improve we expect an increase in activity over and above what we have witnessed in the recent past," he added. "The lack of any law and order, particularly in Somalia, continues to deteriorate." The southwestern summer monsoons occur from June through September.

Tobin was speaking ahead of the 2009 Middle East Workboats exhibition and conference the region's premier event focused on workboats. Workboats include tugs, ferries, supply vessels; police, fire, patrol, pilot, rescue and oil spill boats; along with, dredgers, barges and floating cranes. More than 2,000 such vessels are estimated to be docked or repaired in the Middle East.

More than 30 naval vessels from 16 countries operate off the Somali coast to deter piracy. Nevertheless pirates have attacked vessels off the coast of Somalia more than 130 times this year, with 28 ships seized. As a result, the cost of kidnap and ransom insurance for the Gulf of Aden has reportedly risen tenfold since the start of 2008. The Gulf of Aden is a chokepoint for the 25,000 ships a year that carry 20% of global trade through the Suez Canal.

"The problem of piracy and armed robbery against seagoing vessels is an ancient one. The first recorded incidents date back to the 13th century," said Tobin, an underwriter with Shipowners' Protection Ltd. With almost a century and a half of expertise in providing cover for smaller, specialised craft, Shipowners' is one of the oldest protection and indemnity clubs in the world.

"The escalation and severity coupled with the sophistication of the technology and ready availability of arms to modern day pirates are a cause of great concern to the insurance industry, however," Tobin added.

"The increasing activity has raised the matter to a very high level of awareness as to the importance of shipowners having adequate marine insurance cover - particularly hull and machinery, war and protection and indemnity insurance. There is also the issue of whether weapons of war are involved in an attack, which is a contentious matter. There are various views as to what constitutes a weapon of war - modern day pirates use very sophisticated weapons.

"The use of private armed guards is also a contentious issue and we have seen the demand for private security increase significantly this year, particularly for vessels transiting the Gulf of Aden.

"Demand for kidnap and ransom cover has also risen dramatically. Cover is generally bought on a voyage basis with a single sum insured and a fixed in full premium. Insurers work with dedicated response consultants who in turn will work with the shipowner in negotiations with the pirates.

"The first priority of insurers is always the safety of the crew. The vessel and any cargo on board, whilst of economic importance, will take second priority but usually release negotiations combine both crew and the vessel and its cargo."

Tobin added that pirate activity off the West coast of Africa was also on the increase, particularly in the Gulf of Guinea. Traditional areas for piracy, such as the Straits of Malacca between Malaysia and Indonesia, remain active but not on the scale witnessed off East and West Africa.

Principal sponsors of Middle East Workboats 2009 are DNV, ESNAAD, Irshad. Other sponsors are ABS, DVB, Khalid Faraj Shipping, Lamnalco, Svitzer, Topaz Energy & Marine, Wartsila abd ZMI. Supporting organisations are the International Marine Contractors Association and the Royal Institution of Naval Architects.