In its World Drug Report 2020 the UN Office on Drugs and Crime (UNODC) stated that illicit drug use had been on the increase in the five-year period to 2019. UNODC reported that Colombia remained the country where most coca leaf (used to produce cocaine) was grown, accounting for about 70% of the global area under coca cultivation. Other significant growers were Peru and Bolivia. Afghanistan accounts for the majority of global opium production.
Are Solum, Senior Claims Adviser, Beatriz Luaces Åsgård, Senior Claims Executive, and Kristin Urdahl, Senior Loss Prevention Executive, all based at Gard’s headquarters in Arendal, Norway, have written a piece for members advising them where drugs were likely to start their smuggling journeys, and where they were likely to end up.
2018 seizure data showed that cannabis topped the list for the amount of drugs seized, followed by cocaine and opium. Cannabis is produced in almost all countries worldwide, and most of the cannabis herb produced in a region continues to be consumed within that same region. Cannabis trafficking remained mainly intraregional and was mostly by road.
For shipowners and crew, the main drug presence on vessels were likely to be cocaine and the opium derivatives of heroin and morphine.
UNODC seizure data indicated that most of the cocaine available in European drug markets was smuggled to Europe by sea, primarily in maritime container shipments entering at major container ports such as Antwerp, Rotterdam, Hamburg and Valencia.
UNODC noted in its 2020 report that reduction in air traffic to Europe resulting from the Covid-19 measures would likely lead to an increase in direct cocaine shipments by sea from South America to Europe. Cocaine was primarily transported to North America via Mexico.
According to UNODC, the overall largest quantities of heroin and morphine seized in Western and Central Europe in 2018 were reported by Belgium, followed by France, Italy, the UK and the Netherlands.
Although smuggling routes for heroin and morphine to Central Europe are along the Balkans by land, trafficking to Belgium in 2018 to a large extent took the form of maritime shipments departing from the Islamic Republic of Iran or Turkey.
Similarly, trafficking to Italy in 2018 was characterized by maritime shipments, with the bulk of seizures in 2018 having departed from the Islamic Republic of Iran in containers. This was followed by shipments by air, often departing from Qatar or South Africa, while heroin shipments destined for France typically transited the Netherlands and Belgium.
UNODC has advised that, because of a massive reduction in air travel in the past 15 months, and a tightening of borders within the EU (both because of the Covid-19 pandemic), the proportion of drugs transported by ship was likely to have increased.
Concealment of drugs on commercial ships
Packages of narcotics can be concealed in a myriad of places – within cargo inside of a container, within the structure of the container itself, in refrigeration units on reefers, and within bulk cargoes. In 2019, Malaysian authorities seized twelve tons of cocaine concealed in a bulk shipment of coal. One of Gard’s Members unwittingly loaded bulk sugar that contained packets of cocaine that were found when they became entangled within the shore hopper at discharge.
Smugglers also used ships’ external structure by attaching a box to the hull or drugs can be concealed by a diver in the rudder trunk in water-tight bags.
Void spaces within the ship could be used.
Hot spots
In Gard’s recent experience, high risk areas for cocaine smuggling included Colombia, Ecuador, Peru, Mexico, Brazil (particularly the port of Santos) and Venezuela. Gard’s experience was in line with the reported seizures in the UNODC 2020 report, which also advised that drug smuggling activity from Venezuela had diminished, likely due to sanctions, while activity in Brazil has increased.
Turkey, Algeria, Egypt and Lebanon were hot spots for heroin and captagon, an increasingly trafficked stimulant.
Gard provided a long list of preventative measures that members could undertake.
The P&I cover
P&I cover ceases in the event “the Ship, with the consent or knowledge of the Member, is being used for the furtherance of illegal purposes” Therefore cover ceases if the Member, although aware of the fact that the crew is using the ship for drug smuggling purposes, fails to take any action to prevent them from doing so.
In the absence of such consent or knowledge, the P&I insurance as such will remain intact concerning liabilities, losses, costs and expenses other than fines and penalties for the smuggling itself, which arise as a consequence of the detection of drugs in or on the ship. An example would be a cargo claim arising from delay of the vessel during an investigation and deterioration of a perishable cargo.
As of 20 February 2021, all clubs in the International Group of P&I Clubs revised their Fines Rule. Gard’s Rule 47 now provides in pertinent part:
Cover for a fine arising out of ’smuggling of goods’ is unavailable as a matter of right. Illegal drugs are considered to be ’goods’ in this context. The P&I cover does, however, allow for applications to the Gard Board of Directors for discretionary cover. It is a requirement to the consideration of discretionary cover that the Member demonstrates that he took such steps as appear to the Association to be reasonable to avoid the placement of drugs aboard the vessel.
“This discretionary approach may be seen as more consistent with the principles of mutuality than is cover as of right. Discretion is more likely to be exercised in favour of shipowners who can demonstrate the exercise of diligence in adopting anti-drug smuggling measures”, said Gard.
This would include whether precautions had been taken which were appropriate to the level of risk at the particular ports at which the vessel was calling, and whether guidance available from governmental and intergovernmental agencies and from industry organisations had been followed.
https://www.gard.no/web/updates/content/31640962/ship-operators-at-increased-risk-of-drug-smuggling