Joint War Committee
The Joint War Committee comprises underwriting representatives from both the Lloyd’s and IUA company markets, representing the interests of those who write marine hull war business in the London market. It usually meets quarterly; also see Committee Terms of Reference.
LMA Competition Law Guidance
From time to time, the JWC updates and disseminates the Listed Areas - these are areas where owners are required to notify underwriters of voyages. Rating is a matter for individual negotiation between underwriters and brokers and the JWC plays no role in that. The Committee last reviewed the areas in September 2020. As a result, an advisory was issued in respect of the Bay of Campeche, and the Gulf of Guinea Area was expanded south and east in recognition of the extended range of attacks. The current Listed Areas (areas of perceived enhanced risk) are detailed in:
Since the US withdrew from the JCPOA, tensions between the US and Iran have been raised as Iran's ability to trade its oil has been steadily eroded. The IMF have shown that restrictions on the use of the dollar or the involvement of any US person or entity has significantly impacted the Iranian economy since 2007, and the US "maximum pressure campaign" has magnified the effect.
Tensions remain elevated although it should be recalled that both sides have repeatedly stated they do not want full scale war. Nonetheless, careful diplomacy will be needed.
Underwriters are naturally aware of the situation and will be mindful of the many variables of risk when assessing voyages in the region.
Based on current information, JWC considers that there is no dramatic change to the strategic maritime picture. There are clearly increased tensions in the Gulf region, with American assets now referenced, but the underlying maritime threat remains heightened with an ongoing possibility of escalation.
Following the explosions at Fujairah anchorage in May last year, the JWC updated the Listed Areas to reflect the perceived heightened risk across the region. Vessels trading to the Gulf are now required to notify underwriters before entering the area. Whilst there are claims and counter-claims about specific points, the insurance market is faced with the potential for multiple million dollar losses and will be keenly aware of the issues including the high number of unknowns.
The direction of US foreign policy and Iranian domestic policy remain opposed and the logical consequence will be continued friction with varying levels of tension. Ship owners have reported a heightened level of harassment when transiting. A general threat exists to all vessels in the region and specifically to tankers transiting Hormuz. It was clear last year that Iranian capability extends beyond the particularly vulnerable Strait of Hormuz itself but Iranian actions indicate a wish to keep its actions proportionate, one for one. Despite the incremental escalation inherent in past seizures, the situation remains under comparative control.
Vessels picking up refugees may have to divert to a different port to that originally intended; voyages may be lengthened and there are likely to be logistical and operational consequences.
Status of Libyan Ports
Situation in Yemen
Iran and Saudi Arabia are effectively in a proxy conflict. There have been several cruise missile attacks on vessels in the Bab el Mandeb.
Foreign vessels are currently forbidden from entering Yemeni waters. Yemen does not have an effective navy of their own, so the Egyptian and Saudi navies have been mandated to enforce this. There are entry procedures for vessels to enter Hodeidah or Saleef port - a completed form must be sent to the Yemen Ministry of Transport, now based in Jeddah. The system works but needs much effort from concerned parties - there may be some vessels which the coalition will decline to authorise.
The JWC's advisers, Herminius (formerly Aegis DS), are happy to take calls from members on specific issues. Lloyd's Agents office in Aden is in insurgent hands and thus closed.
Since September 2017, CMF Bahrain has operated the implementation of a Maritime Security Transit Corridor including the Bab-el-Mandeb.
The area of the Indian Ocean where ships need to be on their guard remains extensive. The military assessment is that although the pirate infrastructure remains in place, their appetite to take ships is reduced. The JWC Listed Area is set for business reason and is not the same as the UKMTO or BMP areas but in part serves a similar purpose, to alert ships to the potential dangers. The applicable US Executive Order effectively requires insurers to contact OFAC should they be involved in a piracy case.
Pirate activity is intermittent of Eastern Malaysia and a number of oil cargo seizures have occurred there. Oil cargo seizures have also been a problem in the Gulf of Guinea, but the recent focus has been on abductions.
Below is some background on UKMTO Dubai:
Best Management Practice
The current version is BMP5. This version includes details of self-protection measures and a feedback request to masters on the effectiveness of the anti-piracy actions taken by the vessel. Maintaining vigilance, and reporting to UKMTO and MSCHOA are fundamental but only part of what prudent owners should do. It is clearly necessary for adequate training and regular practice to be given to crews to enable them to respond effectively when under attack or threat. Low speed and low freeboard remain factors which significantly increase the vulnerability of ships.