Houston Marine Insurance Seminar 2010

1. Houston Marine Insurance Seminar 2010 Somali Piracy Sparks Legal Controversy at Home and Abroad Risks and Responses Lawrence I. Kiern Winston & Strawn LLP 1700 K Street, NW Washington, DC 20006

2. The United States Government Must Protect Americans First • America should realize that piracy and in particular the threat of Somali piracy attacking U.S.-flag ships is a very real threat. • Last year the attacks on The Maersk Alabama and Liberty Sun signaled a wake-up call for America.

3. The United States Government Must Protect Americans First • The Obama Administration and the DOD need to work together to protect U.S.-flag vessels. • If the DOD doesn’t want to act, then the Administration should use the Coast Guard. The Coast Guard has the resources and experience to protect U.S.-flag vessels.

4. Congress Should Reaffirm the Right of Self-Defense Against Maritime Piracy • Legislation is needed to give U.S.-flag ship owners and merchant mariners the lawful capacity to protect themselves. • Statutes in place since 1819 to protect U.S.-flag vessels against piracy are no longer enough.

5. Congress Should Reaffirm the Right of Self-Defense Against Maritime Piracy • Initially, the DOS ITAR regulations prevented vessels from protecting themselves with firearms and most foreign ports prohibited vessels from bringing arms into port. • It was also very difficult for vessels to hire private security teams.

6. Congress Should Reaffirm the Right of Self-Defense Against Maritime Piracy CONSEQUENCES • Ship owner risk suits by their crews for putting them at risk. • U.S.-flag vessels carry much needed food aid to famine stricken Africa. If the food aid is stopped then a desperate and already unstable political region will only become worse.

7. Congress Should Reaffirm the Right of Self-Defense Against Maritime Piracy Maritime Industry Reaction • Maritime interests testified at hearings before Congress and asked for protection from the U.S. Government. • Ship owners proposed legislation to protect American merchant mariners by providing immunity for self-defense measures.

8. Congress Acts to Protect Americans First from Somali Pirates • One June 25, 2009, Rep. Elijah Cummings offered an amendment to the Department of Defense Authorization Act of 2009. • It required DOD to embark security teams on U.S.–flag vessels carrying government-impelled cargo on high risk voyages.

9. Congress Acts to Protect Americans First from Somali Pirates • It passed the House by a voice vote and then an overwhelming vote of 389-22. • However, DOD opposed the measure claiming insufficient "dwell time" for embarked security teams. • The Coast Guard stated it was capable and willing to protect American merchant seaman if tasked.

10. Congress Acts to Protect Americans First from Somali Pirates Senate Reaction • On July 26, 2009 the Senate Armed Services Committee reported its version of the Act and acknowledged the serious threat that Somali pirates present, but ignored the need for DOD embarked security teams.

11. Pending Legislation • Limitation of Liability remains pending before the Congress. • On October 23, 2009, the House of Representatives passed the so-called Lobiondo Amendment to the Coast Guard Authorization Act of 2010 which provided a limitation of liability for use of force in defense of a U.S. vessel.

12. The Lobiondo Amendment • Limitation of Liability – An owner, operator, time charterer, master, or mariner who uses force, or authorizes the use of force, to defend a vessel of the United States against an act of piracy shall not be liable for any injury or death caused by such force to any person participating in the act of piracy. • Proposed 46 U.S.C. Sec. 8107.

13. What Next? • Considering the strong bipartisan support for this provision, enactment is likely when the Congress agrees on the Coast Guard Authorization Act of 2010. • Progress on that legislation has been stalled by the deep partisan divide on other measures and the preoccupation with other priorities in Congress.

14. What Next? • The DOD can be expected to continue its opposition to the use of DOD embarked security teams. • Sadly, it will likely take another crisis like the kidnapping of Captain Phillips of the MAERSK ALABAMA with the loss of life of American seamen to expose the flaws in the Administration's position.

15. Questions?