The new developments included the introduction of modern warships, advanced mining systems, submarines and, most importantly, naval aviation. Simultaneously, advances in law led to increased regulation of ocean spaces, both for merchant and military activities.

Back to the Future?

Today, however, we are at another turning point in maritime security affairs. As state budgets are declining and demands on world navies are placing them in increasingly precarious positions, the maritime community is once again employing private means to enhance protection against asymmetric threats, thus liberating our naval forces to defend our freedoms on the high seas.

Accordingly, the industry’s self-help measures can be considered a resurgence, or even renaissance, of private maritime security. This time, however, not ungoverned as in the unruly pre-industrialization period but full of legal and industry compliance regimes in the post-United Nations Convention on the Law of the Sea (UNCLOS) paradigm.

Non-state actors entered the maritime scene with a bang. Literally. The western world re-targeted maritime threats in the year 2000 with the USS Cole bombing in Yemen. This was followed by increased maritime counter-terrorism and naval force protection operations, mimicked in the commercial world with the adoption of the International Ship and Port Facility Security (ISPS) Code, which came into effect in 2004.

On the heels of maritime terrorism came the biggest threat to the physical security of maritime trade: piracy/armed robbery at sea.

The Threat

Between 2002 and 2005 terrorist attacks and armed robbery spiked in the Malacca Straits. This caused the first private maritime security boom. Just after, in 2008, East African piracy surged, notably around Somalia (Gulf of Aden region). This area, extending well into the Red Sea and Indian Ocean, is much larger than the Malacca Straits.

The shipping industry continued to suffer losses from hijackings, stolen cargo, and ransom demands despite the redirection of world naval powers to combat the pirate infestation in the region. The United Nations Security Council passed five separate directives aimed at authorizing member navies to patrol the waters off the Somali coast and apprehend pirates, whether on the high seas or in Somali territorial waters (including on Somali beaches.)

Now, additional piracy and armed robbery hotspots have emerged in the Gulf of Guinea as well as Southeast Asia, leaving regional coastal states, global players, and non-state actors scrambling to implement security responses and the necessary legal framework.

The spike in Somali attacks since 2008 and West African attacks in since 2013 forced shipowners and charterers to find alternate ways to mitigate risk and avoid, if possible, increasing “exception” insurance premiums for routes like the Gulf of Aden and West African coast. The ‘threat :: response’ ratio of sending multimillion-dollar warships to stop a few pirates in outboard skiffs simply did not add up. The response was not congruent to the threat and world naval powers are finding it difficult to maintain these costs and efforts.

The Response

On-board security emerged as the best, most cost-effective mitigation strategy. Thus the private maritime security industry received a steroid treatment following the boom in post-2008 Somali piracy, being called in to supplement, if not virtually replace, a reliance on naval protection.

Security at sea revolves around the protection of infrastructure that is mainly owned and operated by commercial entities. Securing these globally dispersed and heavily interconnected supply chains, such as ships and offshore oil-and-gas infrastructure that rely on the maritime domain for transport and extraction, can best be done by utilizing private sector assets – specifically, private security.

To demonstrate the vitality of private maritime security to the shipping sector, here are some statistics.

In 2009, 10% of vessels transiting the Horn of Africa/Indian Ocean had private armed guards on board. In 2010 that number jumped to 27%, and today it is suspected to be around 40% worldwide. Regarding cost, Chinese shipping giant COSCO says it pays $12 million per year for British private maritime security services aboard its 80-vessel fleet.

Further financial analysis from numbers released by the Independent Maritime Security Association puts the cost of hiring a private armed security team at about $50,000 per transit. If only 25% of vessels in the Gulf of Aden region employed guards, the math would work out to 10,612 transits per year. That equates to $530.6 million per year for private maritime security in the Gulf of Aden region alone. At 50% it would be a billion-dollar-per-year business. Current calculations actually appear to surpass this estimate.

Although largely populated by former military, law enforcement and other trained professionals who must meet the stringent vetting criteria of shipping companies and are aware of the Rules for the Use of Force, the possibility of accidents with grave legal consequences remains. Major concerns for shipowners, masters, and insurers include accidental misfires, wrongful murder of fishermen, ship arrest due to unlicensed weapons carriage, and inability to adjudicate or gather evidence in the occasion that a security response incident has gone awry.

Legal Gray Area?

It is frequently argued that the proliferation of maritime security providers has created an legal gray zone and privately contracted armed security personnel (PCASP) thus work in a regulation-free vacuum, both because regulations in this sector are thought to not always exist, and because they are on the high seas, an Area Beyond National Jurisdiction, which many believe lacks effective state control. Thus there is a mounting public, government, and industry-held belief that private maritime security providers are yet another armed group that needs to be further regulated.

Much of this perception has arisen from stories or even videos or fear, rather than direct evidence and scholarly assessment of the legal machinery which governs this sector. Nonetheless, it has fueled the belief that the provision and oversight of private security operations at sea is more complicated than on land. Complicated the legal regime may indeed be, but as evidenced by the numerous hard and soft law instruments which exist to govern this sector, a legal gray area this is not.

The legal regime of the Law of the Sea, specifically that codified in UNCLOS, provides the basis for ocean governance, stipulating state responsibility, obligations, and jurisdiction. This foundation, especially the jurisdictional trifecta of flag, port, and coastal states, as well as the zonal structure established by UNCLOS, is critical to ensuring uniform and universal oceans management in all industries, private maritime security being no exception. It provides the necessary checks and balances, coupled with the redundancy of concurrent jurisdiction in certain circumstances, to maintain order over activities at sea.

In addition, soft law industry guidelines have emerged to augment these measures, being fostered within the industry as a less costly and more immediate tool for the sector to regulate itself. This has led to a fast professionalization of the industry and its acceptance by the greater maritime community and especially the IMO. Such growth reflects global acceptance of the fact that private maritime security operations, which are now industry commonplace, are indeed regulated and checked via multiple channels.

Challenges

Challenges still remain in advocating for use of voluntary crisis-reporting measures and standardizing the interplay between the private security and insurance sectors to enhance transparency and business accountability. Yet there is no doubt that the efforts of private maritime security have made a substantial positive impact on the global shipping industry as no vessel employing armed guards has yet fallen victim to piracy or armed robbery.

The industry at large hopes to see this trend continue. Ensuring that the legal regime set down in hard law is respected, followed, and enforced, as well as encouraging industry leaders to adopt already existing soft law mechanisms, will guarantee that trends toward increased legal compliance, accountability, and oversight best practices will continue on a positive trajectory.

The lapses could waste taxpayer money and place U.S. personnel at risk, according to the audit by the Department’s Office of Inspector General (OIG).

Kabul embassy guards have warned of security weaknesses and management problems in a series of reports by the Project On Government Oversight.

The federal audit’s findings contrast with congressional testimony by Under Secretary of State for Management Patrick F. Kennedy, who last year told lawmakers: “Currently in Kabul we have a well-managed, effectively functioning contract that provides security to protect our people and facilities.”

The government has outsourced security for diplomatic posts in dangerous parts of the world to private contractors, and the State Department is responsible for making sure the contractors comply with requirements. The Department in 2010 selected a firm called Aegis Defense Services to protect the embassy compound in Kabul under a contract that began in 2012 and is potentially worth $723 million over five years.

However, the recently completed audit report by the OIG said the Department “did not ensure that Aegis maintained records documenting contract-required training and security screening for all employees” working on Kabul embassy security.

“[I]ncomplete documentation that guards are properly vetted places embassies and personnel at risk,” the OIG wrote.

The audit questioned millions of dollars of State Department payments to Aegis, saying certain labor charges for Aegis employees were not supported by the required time and attendance records, and that Department contracting officers approved certain Aegis invoices without adequately checking them.

The audit also said the Department had not done what it was supposed to do to uphold standards related to “Trafficking in Persons,” which are meant “to reduce the risk of abusive labor practices.”

Employees from Nepal make up much of Aegis’s security force in Kabul. Nepalese guards told auditors that their passports were being held by Aegis, in some instances for as long as four months for every six-month visa, the report said.

“Individuals who have their identity or travel documents forcibly removed from their person are rendered highly vulnerable,” the OIG report said. “Although OIG found no evidence that Aegis intended to prevent TCN [third-country national] workers from leaving Afghanistan by holding passports, holding them for such extended periods of time could negatively affect TCNs,” the report said.

The goal of the OIG audit was to determine how well the State Department was managing and overseeing Aegis’s contract. It focused mainly on administrative processes and paperwork—for example, how well certain matters were documented. As a result, it only indirectly addressed the actual security of the embassy. It did not get to the bottom of some basic questions such as whether Aegis personnel lacked security clearances, or whether the documentation of their clearances was merely missing from the files.

“We are not in a position to state with certainty why documentation was missing as we did not explore that specific question,” OIG spokesman Douglas Welty said in a statement to POGO.

Nor did the audit report address a variety of problems that POGO has documented and that guards have described since Aegis took over security at the Kabul embassy.

Guards have complained of working long hours for days on end with inadequate training. Records obtained by POGO have shown staffing shortfalls on certain shifts. Guards have sued Aegis, alleging that the firm has at times edited their time sheets and directed them to underreport the number of hours they worked to avoid revealing that they were on the job up to 18 hours per day. In addition, a State Department document published by POGO last year described a “mutiny” within the guard force that “undermined the chain of command” and “put the security of the Embassy at risk.”

Aegis spokesman Michael Gulino declined to comment when contacted by POGO, and he referred questions to the State Department. A State Department spokesman provided this statement by email, complete with anonymous attribution:

“’The department is on track toward strengthening security abroad and the inspector general’s report offers useful guidance for continuing that work. This is a timely snapshot of the progress being made, and we welcome and agree with the IG’s further recommendations for diplomatic security,’ said a department spokesman on background.”

As of February 2014, the State Department had expended about $224 million under the Aegis contract, the audit report said. As of April, Aegis was required to have 933 workers providing security for the embassy and other U.S. diplomatic facilities in Kabul, including 880 on “static security” (in other words, guard duty), the OIG report said

The report raised questions about the qualifications of people Aegis has hired to provide security. According to the report, the State Department had issued a “deficiency notice” to Aegis in November 2012, requiring remedial action to address “issues with Aegis’s candidate screening and recordkeeping.”

Among the problems the OIG identified in the files it reviewed, seven U.S. citizens employed by Aegis in Kabul “had no documented security clearance investigations.” In addition, fourteen Aegis explosive detection dog handlers “did not have documents showing they had completed required training.” The OIG reported that nine of the fourteen dog handlers with missing documents were “still active.”

The report said a deputy regional security officer at the State Department told the OIG that he had conducted a qualification and training checklist review of all contractor personnel before they began work on the contract. In written response to the OIG, the State Department’s Bureau of Administration said that Aegis “states that they are prohibited from sending clearance data to post and that is why it is stored separately.”

The OIG also examined a random sample of time and attendance data for Aegis workers from June 15, 2012, to December 31, 2013. It found that 6.5 percent of billable hours and 7.9 percent of billable days “were not supported.” The OIG said the State Department’s Bureau of Diplomatic Security told it that a time and attendance tracking system was not always working during the first five months of the contract.

The OIG said documentation of those matters improved significantly after the first six months of Aegis’s contract. In its response, State’s Bureau of Administration said early personnel musters “did have issues,” and it said it had reached a financial settlement with Aegis over those.

Based on its review of Aegis invoices, the OIG said that $8.6 million, about 4 percent of costs, were “possibly unallowable or not supported.” The Department “approved the invoices without adequately verifying the contractor’s invoices against the supporting documentation,” the report said. The questionable invoices included charges for training and travel.

In its response, State’s Bureau of Administration said Aegis invoices reflected acceptable travel agent costs. “A comprehensive review is not required because invoices are scrutinized routinely and our review of those invoices did not yield any discrepancies,” the Bureau of Administration added.

Lost or incomplete contracting files are nothing new at State. There are repeated examples of poor contract file administration. The result could be "substantial financial losses," according to a March 20, 2014 “Management Alert” from the OIG. Over the past six years, the management alert said, the OIG has identified State Department contracts with a total value of more than $6 billion in which contract files were incomplete or could not be located at all, the OIG reported. According to the OIG report on the Kabul embassy security contract, the State Department’s Bureau of Administration disagreed with some of the audit’s findings. In some instances, the OIG said the Bureau of Administration “did not identify any corrective actions to address the intent of the recommendation.”

The audit serves as another argument for the government to focus on the concerns of people who have served on the Kabul embassy guard force. The questions the Department and its congressional overseers should investigate run deeper than the paperwork in the files. Is the embassy at undue risk? Are taxpayer dollars being wasted? Is the contractor fulfilling its obligations? And is the State Department holding the contractor accountable?

 As reported by Project on Government Oversight