Concern over cyber liability and lack of regulation hindering implementation of unmanned ships

Books, IMarEST, Legal, Technical, Technology — By on November 21, 2017 at 1:23 PM
  • Concern over increased cyber security threat

  • Uncertainty surrounding insurance cover availability
  • Doubts raised over industry readiness for new technology

Almost two thirds (64%) of global marine industry executives believe there is uncertainty surrounding liability issues relating to unmanned ships should a vessel be involved in an incident as a result of a cyber-attack, according to a new report from global law firm Clyde & Co and the Institute of Marine Engineering, Science & Technology (IMarEST).

 A survey of 220 marine industry executives from across the world also found that there is a lack of clarity around collisions involving unmanned ships, with 59% of survey respondents agreeing there is confusion surrounding the regulations in this area.

David Loosley, Chief Executive, IMarEST says: “Technology is today advancing at an unprecedented rate and promises a host of new solutions for the maritime industry in terms of improved efficiency, safety and environmental performance. However, we should not be blinded by the benefits. We must also remain alert to the potential risks. This joint research report examines these vulnerabilities and how they might be addressed and is an important starting point for the industry to begin preparing for the future.”

 Clyde & Co explains that current international shipping law states that vessels must be properly crewed, which means that unmanned ships are not presently permitted to enter international waters.

However, the International Maritime Organisation (IMO), a UN agency that regulates shipping, announced in June of this year that it would begin to consider updating the International Convention for the Safety of Life at Sea (SOLAS) to allow cargo ships with no captain or crew to travel between countries.

The Comité Maritime International (CMI) has also this year established a Working Group on ‘Maritime law for unmanned craft’ to consider how international conventions and regulations can be adapted to provide for the operation of unmanned vessels on the high seas.

Joe Walsh, Partner at Clyde & Co, comments: “The present state of SOLAS and collision avoidance regulations are being over taken by and holding back potentially industry-changing technology from being developed and implemented.

“Fortunately, the IMO, CMI and other industry interests appear to have recognised that there is a real appetite to test the water with unmanned ships at a commercial level. Industry will quickly need some legal clarity around cyber liability and collision regulations before any ground-breaking progress can be made.”

 The Cyber threat

Over two thirds (68%) of survey respondents fear that unmanned ships present a greater cyber-security risk than traditional ships.

Clyde & Co and the IMarEST acknowledge that unmanned ships are likely to have a greater array of digital infrastructure than traditional ones, in order to ensure that ship owners and operators are able to control and track their ships remotely.

Walsh comments: “Marine executives are right to be concerned about the potentially increased threat of cyber attack as a result of the use of unmanned ships.  However, it is probably worth mentioning that the maritime industry as a whole has been criticised for being a bit slow in reacting to existing cyber threats, including fully crewed vessels, and that the biggest threat to any organisation’s cyber-security posture is still, in fact, human error.

“It is therefore possible that  a transition to unmanned ships might actually reduce an organisation’s profile and exposure to cyber risks. The cyber threat should certainly be taken seriously but it should not put the brakes on further exploration of the viability of unmanned ships.”

Uncertainty surrounding insurance

The report finds that another key issue is the availability of insurance cover for unmanned ships. Four of every five (80%) survey respondents think it is unclear how insurers will approach the new technology.

Patrick Murphy, Partner at Clyde & Co, says: “For a business to implement any new technology there is always a certain ‘leap of faith’ moment, especially when that technology could significantly change the way that organisation operates.  Suitable insurance cover can help make this a much more calculated jump into the unknown.”

Clyde & Co points out that the International Union of Marine Insurance (IUMI) has been discussing the implications of the new technology.  While there are not yet any concrete answers, IUMI expects unmanned vessels to change the landscape of the traditional maritime insurance industry.

Murphy continues: “The current concern for the marine industry is that few insurers are yet in a position where they can advise on how they are approaching insurance cover for unmanned ships. This is perhaps unsurprising given the lack of legal framework on which to assess and base liability.

 “Insurers are reacting to new cyber risks, so I would expect them to be able to underwrite risks relating to unmanned ships assuming the liability and regulatory framework can be sorted out.

 “Currently autonomous cars and drones look to be near the top of insurers’ agendas in terms of writing new technology risks.  But the marine industry can push unmanned ships up the agenda by speaking with their insurers and asking how they are approaching the issue. As soon as the insurance industry realises there is genuine interest and can see the legalities starting to take hold then it will soon start to consider writing that risk.”

Other key findings – industry unprepared for new technology

  • Half (48%) of survey respondents predict unmanned ships will be implemented in the next 10-15 years
  • Nearly two thirds (63%) believe that the industry is not at all prepared in terms of infrastructure requirements  for unmanned ships
  • Half (51%) think that crews do not currently have the skill sets needed to operate and maintain unmanned ships

Joe Walsh concludes: “It’s clear there is plenty of work to be done but currently it is very much a chicken and egg situation. The marine industry desperately needs more clarity on the legal framework if they’re going to invest in the infrastructure and skills needed to roll out unmanned shipping on a commercial level. Meanwhile, regulators are unlikely to invest much time in assessing technology that they don’t think the industry is considering for widespread use. “

“Of course something will move eventually, so the organisations that are taking a proactive approach towards this new technology are likely to have a competitive advantage once the regulatory landscape becomes clearer.”

Read the full report here.

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