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Safe Haven

Hong Kong, with its geographical location and services infrastructure, makes an ideal risk-service c  

Hong Kong, with its geographical location and services infrastructure, makes an ideal risk-service centre (photo: EyePress)


Piracy on the high seas has become a modern-day problem for the global maritime industry. According to the International Maritime Bureau of the International Chamber of Commerce, some 15 vessels and more than 250 crew members of various nationalities, and another 49 crew on land, are being held by armed sea bandits. Hundreds more ships have been attacked, with untold millions paid out in ransom. As a major seafaring centre, Hong Kong had 27 ships attacked by pirates in 2011.

They can’t stop piracy in Somalia and West African countries, according to Timothy Lee, Marine Underwriter at Catlin Hong Kong, which offers property, construction, general liability, marine hull, cargo and terrorism insurance. The pirates, he says, “see it as a good business model that everybody is trying to replicate. It’s low cost, relatively low risk. I don’t see that it will stop haunting shipowners here.”  

Some 40 per cent of ships on the oceans now carry armed guards, compared with fewer than 20 percent just a year ago. “Right now, everyone is looking for armed guards. But it brings up a lot of questions: whether they’re licensed, whether they can carry weapons, whether they’re trained. We don’t want to start a war, we want to prevent piracy, scare the pirates away. There is footage on YouTube where American armed guards took over 200 shots at a skiff. That is not the proper way.”

Risk-Assessment Hub

Besides sea piracy, businesspeople face other security threats in the region, including terrorism and kidnapping. For many of Asia’s rich, Hong Kong is the preferred place to sign kidnap-and-ransom insurance because of the city’s standards for safeguarding personal security and secrecy.

As a result, industry experts believe Hong Kong is ideally positioned as a risk-service hub modeled on the city’s successful arbitration centre. Established in 1985 as a non-profit body for dispute resolution in Asia, the Hong Kong International Arbitration Centre is headed by a council of business and professional people. They offer diverse skills and experience to help contending parties resolve disputes.

The threat of piracy is a major concern for maritime industry companies, many of which have ties to  

The threat of piracy is a major concern for maritime industry companies, many of which have ties to Hong Kong (photo: EyePress)

Security expert Steve Vickers believes Hong Kong’s risk mitigation hub would extend beyond marine piracy. The former Hong Kong police officer set up risk consultancy Steve Vickers & Associates, which provides security advice and other business intelligence to corporations, financial institutions, insurance companies and high-net-worth individuals. Mr Vickers points out that security threats, including terrorism, remain a problem in many parts of Asia. But most risk services are still handled in London, which is thousands of kilometres and hours away from where a rapid, informed, intelligent response is needed, he says. 

Integrated Approach

Timothy Lee  

Timothy Lee, Marine Underwriter, Catlin Hong Kong Ltd

“Maritime kidnapping and unlawful detention, product extortion and product contamination are increasing menaces,” he says. “They also represent a clear opportunity for Hong Kong Inc.”

Mr Vickers envisions businesspeople, insurance companies, law firms, public relations companies and related fields coming up with an integrated approach to risk and crisis response.

“Between Hong Kong and China, we are the major shipowners in the world,” says Catlin’s Mr Lee. “Our combined tonnage is the biggest tonnage in the world and, of course, most of the crews are Chinese; officers and masters are Indians and Koreans. They are all Asians, and they are all looking for Asian armed guards,” he says. “They call to people in China to see if they can set up a security company, but I don’t think they are up to international standards. Most of the armed guard companies are originally from the UK, which knows about licensing and training.”

Aside from training for seamen and guards, shipowners have to be given the means to upgrade security aboard vessels, according to Mr Vickers. This includes building impenetrable “sanctuaries” to which crewmen can retreat until help arrives. And, in the event of a hostage situation, coordinated measures have to be taken – to assemble ransom payment and deal with legal means for delivery. 

Hong Kong Advantages

 Steve Vickers  

Steve Vickers, founder, Steve Vickers & Associates 

Hong Kong, Mr Vickers says, is ideally situated geographically: on the Chinese mainland’s doorstep and strategically positioned within a few hours’ flight of all major Asian capitals. Its attributes include a well-trained, extensive, international legal system, a freely convertible currency and excellent communications. Unlike many Asian cities, which suffer from corruption and even the involvement of government officials in kidnapping, extortion and piracy, Hong Kong is characterised by the rule of law and a strong law enforcement system.

Mr Vickers believes that stakeholders, including insurance companies, risk assessment and mitigation companies and law firms, should lobby the Hong Kong Government to develop the city as a risk-services hub similar to the status it now enjoys as a regional arbitration hub.

“We are a centre of excellence,” he says. “It is all being done out of London today; problems in the Philippines and other areas of Asia are still being handled out of London. Hong Kong is safe. We have the capability, and we should be positioning ourselves.”

Related Links
Catlin Hong Kong Ltd
ICC Commercial Crime Service (CCS)
Steve Vickers & Associates

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