BGN Risk News

Piracy is an insurance risk with no foreseeable resolution

uat — Tue, 16 Mar 2010 11:55:15 GMT

Simon Fordham, a Partner and crisis management expert from BGN Risk, said this week that insurers were used to hard-nosed negotiation but that this did not work with pirates in Somalia, Nigeria and elsewhere. In a lecture from the Insurance Institute of London's podium at Lloyd's Old Library, Fordham said that pirate activity did not conform to set patterns and was mostly outside ship-owners' control.

"The pirates will show how much control they have, and the lives of the crew could be in danger."

Fordham said that piracy was indisputably a "crisis" and that there was no sign of resolution or impact reduction for some time. He spent the rest of the lecture explaining to the insurance industry delegates the desperate and culturally entrenched nature of this emerging risk.

"The pirates carry weapons as easily as we Europeans wear a watch. If the pirates come within 800 meters of a ship, they do their damnedest to get it."

The average age expectation of a man in Somalia was 40, which meant that at 16, 17 or 18-years-old...

BGN Risk hosts successful Maritime Security Seminar in Tokyo, Japan

Richard Tyrrell — Thu, 23 Jul 2009 18:29:24 GMT

Simon Fordham OBE, a crisis negotiator of London based security risk consultancy BGN Risk, conducted a Maritime Security Seminar in Tokyo as a direct result of successful operations carried out for Japanese clients in the African regions by BGN Risk.

The Seminar's, which have yielded a fantastic response included topics on how to safely and successfully conduct business in Africa, with particular reference to the Horn of Africa (Somali region) and Nigeria. The uniquely positioned expert in crisis negotiation provided guests with exclusive, up-to-date advice for all Japanese business interests.

BGN Risk is a leading security risk consultancy specialising in counter piracy and anti-kidnap services. Helping our corporate and private clients to identify and reduce their most significant security risks no matter how hostile the environment. Our clients include insurers, lawyers, mining, oil & gas operators, financial institutions, infastructure developers and the maritime industry.

BGN Risk appoints Simon Fordham OBE

Ric Traynor — Tue, 02 Jun 2009 11:06:00 GMT

BGN Risk appoints Maritime Security expert Simon Fordham OBE for Crisis Negotiation.

Simon Fordham OBE has joined BGN Risk, a leading London based security risk consultancy, to lead the businesses expanding crisis management offering.

Previously a highly decorated Colonel in the British Special Forces, Fordham is now a globally acclaimed crisis management practitioner renowned for resolving major commercial kidnappings, maritime hijackings, extortion and other serious business risks.

Simon joins Partner, Liam Morrissey, in the London headquarters of BGN Risk to manage their crisis response services and will augment the extensive project management capabilities of the team. This expansion is a clear recognition of the increasing impacts that security risks are having on commercial clients operating trans-nationally and the growing need for reliable and effective professional services in this field.

Ric Traynor, Chairman of parent company, Begbies Traynor Group, said “we are very pleased to have Simon join the BGN Risk team. His outstanding track record in resolving major business crises will enhance our already strong commercially oriented security risk services and will add great value to major clients, particularly in the specialist insurance and international shipping arenas.”

BGN Risk identifies, reduces and manages client security risks to protect their assets, employees, customers and goodwill. Based in London, with satellite offices throughout Africa, BGN Risk serves an international client base.

BGN Risk is a division of BTG Intelligence Limited and part of AIM Listed Begbies Traynor Group plc.

Contact Liam Morrissey (0207 398 3800) liam.morrissey@bgn-risk.com or James McEwen (0161 837 1700) james.mcewen@begbies-traynor.com for further details.

Confusion over 'catch and release'

uat — Thu, 30 Apr 2009 15:44:00 GMT

Despite the successful disruption of several recent attacks in the Gulf of Aden, confusion continues over the jurisdiction of those tasked with intercepting the pirates.

A number of operations in recent weeks have ended not with prosecution, but with pirates simply being released after having their weapons and equipment seized. The problem stems from the lack of a NATO detainment policy, with the crew of warships in the area forced to follow national law. The crew of a Dutch vessel, for example, is unable to arrest suspected pirates unless the attack is targeted at Dutch citizens or takes place in Dutch waters.

Gavin Simmonds, head of international policy at the UK Chamber of Shipping, told Fairplay that the situation can be frustrating: “Ship-owners have always wanted to see a procedure which would be truly effective in discouraging piracy. However, it’s a very complex legal situation; there are numerous military operations in the area now, and each of the operations have different rules of engagement and different legal guidance for the treatment and combating of piracy – and for dealing with the pirates [if they are] captured.”

Conditions in Somalia can make it difficult to reach a satisfactory conclusion when pirates are captured in the area, Simmonds added. “It is challenging to prosecute a case of international policy, and it becomes even more confused when you take human rights legislation into account; some EU member states feel that they are notable to take Somali pirates back to their own jurisdictions for prosecution.”

A recent agreement between the EU and Kenya for the transfer of suspected pirates to Kenya for prosecution is a step in the right direction, said Simmonds. “The EU NAVFOR-Atalanta operation provides member states with recourse to the Kenyan courts. There’s a question of throughput, but the industry is generally very supportive of the agreement.”

Simon Fordham, maritime specialist and partner at BGN Risk, part of the Begbies Traynor Group, told Fairplay that more can be done to resolve jurisdictional problems:

“There’s certainly an ongoing political sensitivity – and that is the role for our international diplomats and politicians. This is where they can have an effect, by making an international law that covers the area effectively. However, there is a lot of work being done at the moment, spearheaded by UN and naval operations, to see how the situation can be improved, to create more stable conditions.”

Fordham agreed that the current proliferation of ‘catch and release’ cases can be seen to be sending out the wrong signal. “When people are caught they need to be seen to go through a normal legal framework – and I think it’s better if that’s done in the region rather than being sent to America, for example,” he said.

Fordham added that the old adage that prevention is better than cure is especially applicable in the current climate: “There’s a clear role here for commercial, industry-led security solutions – the important thing is to prevent the pirates getting near the ship in the first place.”

Piracy in the Gulf of Aden

Simon Fordham — Fri, 13 Mar 2009 11:05:00 GMT

This was the key question that was on everyone’s minds during the annual IPTA sponsored Chemical and Products Tanker Conference held in London this week. A major session centred on piracy that has affected over 90% of the attendees during 2008. The answer was provided by Simon Fordham of BGN Risk Maritime Security Services – the commercial security provider on the panel following a series of briefings by the IMO, US Coastguard and EU Naval Operations.

Fordham stated that the Naval Force operations in the region have made an impact. They were now creating the conditions for an Industry led solution. BGN Risk has extensive experience of sustaining high profile security operations against aggressive adversaries to secure high value assets, transits and supply chains in hostile environments. They have been working with major insurance brokers and government agencies to deliver a self-supporting and sustainable corporate maritime security framework for Ship Owners to benefit from.

BGN Risk also articulated some key advice and comments for Ship Owners and Management Companies:

• Invest in Prevention:
• Corporate Reaction
• Address the human dimension

Fordham emphasised that a better understanding of the adversary is required through continued development of information sharing protocols between governmental and commercial intelligence providers. This will give early indication of the pirates’ next intentions and their supporting organised criminal networks. Officers and crew need to be protected from the prospect of corruption and intimidation as well as continue to be prepared and drilled for ship attack and hijack situations. Likewise, Ship owners and Management Teams need suitable guidance, support and rehearsal so sensible and timely decision making is backed by strong resolve, stamina and determination not to compromise on optimum business opportunities and working practices.

For an effective Corporate Reaction, there needs to be confidence in the security advice being offered, and the security practices being exercised. Fordham encouraged Ship Owners to interrogate security providers for relevant experience, expertise and appropriate motivation. Now more than ever it is essential for the security provider to have an established relationship with their clients. Also confidence for bringing security as a central business function to take full advantage of corporate and commercial opportunities to get that essential competitive edge in these trying economic times.

BGN Risk’s focus is on investing in prevention. This reduces the pirates’ expectations of success at every stage. Sound proactive planning, access to good integrated intelligence, and tailored, proportionate security operations – if necessary providing ship escorts and ship security teams. In the unlikely event of a hijack then professional and experienced responders are in place to react immediately to secure a safe and timely release of the crew, the ship and its cargo. Companies that have attempted to self resolve the hijack have invariably made basic mistakes in the early stages which have played into the hands of the hijackers/pirates.

Preventative maritime security operations at the centre of business thinking allows Ship Owners and their Management staff to get the results they want in difficult economic and operational times: to be able to trade and transit where and when without compromise, in safety and confidence. Anything else would be “chasing the error” with exponential rises in additional costs and operational uncertainty.

BGN Risk on Maritime Security and the modern day threat posed by pirates

Liam Morrissey — Thu, 20 Nov 2008 11:04:00 GMT

BGN Risk, as featured in the Financial Times, LA Times, MSNBC & Bloomberg, report a dramatic rise in piracy set to cost businesses millions.

• Added insurance costs to businesses worldwide estimated at USD 400 million
• Businesses are failing to properly protect themselves against the very real risk of piracy

An unprecedented rise in piracy off the coast of East Africa has left businesses around the world exposed to risk and facing higher-than-ever insurance and transport bills of up to USD 400m, according to corporate security risk experts BGN Risk, a division of Begbies Traynor Group.

Prior to this week’s Sirius Star hijacking, the largest tanker ever to be hijacked, more than 60 piracy incidents plagued vessels traversing the Gulf of Aden, off Somalia, so far this year, posing a serious threat to trade along this critical route between Europe and Asia. Only five such incidents were reported in 2004.

Due to increased danger, the special risks insurance levy for crossing the world’s most dangerous piracy hotspot has skyrocketed to an average of USD 20,000 per vessel per voyage, up from only about USD 500 last year. Should every ship using the route carry proper insurance, the added cost potential to business would total more than USD 400m annually, not accounting for ransom monies (more than USD 30m so far this year). As of 30th September 2008, 12 vessels remained captive and under negotiation with more than 250 crew held hostage.

“This dramatic rise in piracy impacts the entire global supply chain by interrupting deliveries and escalating costs,” said Liam Morrissey, partner, BGN Risk.

“Unfortunately, more than 90 per cent of shipping companies, already squeezed by high fuel costs and stiff competition, fail to take out adequate special risks insurance cover, and thus leave their vessels, crew and cargo exposed in the very real event of an attack or hijacking attempt.”

Almost a third of the world’s piracy occurs in the Gulf of Aden, a 550-mile long channel difficult to safeguard. The alternative option of travelling the long way around Africa in safer waters adds a minimum of 20 days transit time, bringing associated increased costs in fuel, payroll, and lost delivery time.

“Either way, businesses ultimately pay the price of piracy,” says Liam.

“Companies wishing to safeguard their cargo should ensure they have the appropriate additional insurance cover. To protect themselves, vessels should plan their routes carefully, consider employing private security personnel if necessary, liaise with the International Maritime Bureau’s piracy reporting centre and carry out regular risk assessments.”

He notes that pirate gangs have become increasingly violent, as evidenced by this week’s hijacking of the Saudi-owned Sirius Star, in which pirates took 25 hostages including two Britons, and in and last week’s engagement between Royal Marines from HMS Cumberland and pirates, which left three pirates dead. Both incidents occurred in East African waters. He cautions against being lulled into a false sense of security by bolstered naval presence in the Gulf of Aden: “ Five warships can’t guarantee complete safety. Logistics in the area are difficult, and the ongoing regional instability creates challenges for private security firms. Although sophisticated, cost-effective precautionary measures do exist, both the public and private sectors are still working towards a commercially viable solution.”

BGN Risk identifies, manages and reduces security risk in commercial environments around the world – to protect employees, assets and goodwill. Based in London but with field offices in East and West Africa, their anti-piracy operations include deploying security escort teams on vessels; advising crew on mitigating the risk of pirate attack; hijacking response training; and hijack and ransom negotiations.

Contact Liam Morrissey direct for further information.

Ocean of Opportunity for Pirates

Liam Morrissey — Thu, 20 Nov 2008 11:02:00 GMT

BGN Risk has been published in The Financial Times, LA Times, Bloomberg News and The Scotsman today stating that piracy in the Gulf of Aden could increase insurance and transport costs by $400 million (£260 million). It said the special risks insurance levy for crossing the gulf had rocketed from $500 (£330) per voyage last year to $20,000.

Liam Morrissey, a Partner at BGN Risk, said: "This dramatic rise in piracy impacts the entire global supply chain by interrupting deliveries and escalating costs.

"Five Navy warships can't guarantee complete safety. Logistics in the area are difficult, and the ongoing regional instability creates challenges for private security firms.

"The alternative option of travelling the long way around Africa in safer waters adds a minimum of 20 days transit time, bringing associated increased costs in fuel, payroll and lost delivery time."