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Cybercrime – Is it a threat to Australia’s marine industry?

By Legal, News

pdf-screenshotThis article was published in Ausmarine Magazine, 2015.
Written by Maria Dwyer, of Oceanic Marine Risks.

In 2013, Australia established the Australian Cyber Security Centre and created a national cyber security strategy. Each year cyber crime costs Australian businesses $4.5 billion and yet many businesses still fail to recognise cyber crime as a threat to their operations.

It has become obvious that the consequences to a business as a result of security breaches can be dire. One only has to look at the consequences suffered by Target and Sony last year after their vast and complex computer systems were hacked into. Each year the frequency and severity of cyber attacks increases, and there is no reason to think that 2015 will be any different.

John Bruce, the chief executive of Co3 Systems, believes that cybercrime will continue to boom in 2015 and that we will see even more eager cyber criminals enter the profession. He argues that the reason for this is simple: cybercrime pays and the rewards heavily outweigh the risks.

This threat has two sides to it.

Businesses not only need to increase their computer system security levels and focus resources on prevention and detection, but businesses also need to consider what measures they must take to protect their customers from potential losses as a result of a system breach.

What has any of this got to do with the marine industry?

I recently came across a blog by Gilad Zahave, dated February 4, 2014. Gilad’s blog post was an excerpt from a report Cyber Threats to the Shipping Industry.

I realise that Australia’s shipping industry is very small and that the majority of commercial vessels in this country are either small passenger carrying vessels or brown water vessels. However, if the world’s shipping industry is under threat from cybercrime should we not take notice and start thinking about preventative measures at a domestic level?

We currently tend to think of cybercrime as resulting in identity theft, e-business interruption, copyright/trademark infringement, and lawsuits from customers but can cybercrime result in a casualty on a vessel at sea?

I do not have the identity of the author of the report Cyber Threats to the Shipping Industry itself. However, if you are interested in the full report please write to info@sensecy.com.

A section of the report deals with the vulnerability of the AIS system. Trend Micro, a security firm, had claimed it had uncovered major security breaches in the Automatic Identification System (AIS).

The AIS is an automatic tracking system for identifying and locating other vessels by transmitting electronic data with other nearby vessels, AIS base stations, and satellites. Information transmitted can include the position, the speed and the direction the vessel is heading in, among other things. The International Maritime Organisation (IMO) mandated AIS in all passenger and commercial vessels weighing in at over 300 tonnes.

In an experiment to test how secure the AIS was, Trend Micro researchers managed to break into the system and change the data being transmitted.

They did this by manipulating the Internet providers AIS was using to transmit information. They could modify vessel details like the position, the course, the cargo, the flag and the name of the vessel. It was also possible to create fake vessels that could show up in any location.

The researchers then used a basic transceiver to expose flaws in the AIS communication systems. They could send false distress signals, false weather information and even switch off the AIS entirely in a vessel.

These loopholes in the AIS could be used by hostile parties to alter data being transmitted in vessels, with the potential to cause dangerous safety risks, disrupt marine law enforcement, and sabotage rival economic activity. Terrorist organisations could even exploit this weakness as well, given little technical know-how is required.

In an article dated April 23, 2014, Jeremy Wagstaff states:

“In the maritime industry, the number of known cases is low as attacks often remain invisible to the company, or businesses don’t want to report them forfear of alarming investors, regulators or insurers, security experts say.

“There are few reports that hackers have compromised maritime cyber security. But researchers say they have discovered significant holes in the three key technologies sailors use to navigate: GPS, marine Automatic Identification System (AIS), and a system for viewing digital nautical charts called Electronic Chart Display and Information System (ECDIS).”

“While data on the extent of the maritime industry’s exposure to cyber crime is hard to come by, a study of the related energy sector by insurance brokers Willis this month found that the industry ‘may be sitting on an uninsured time bomb’.”

There are a number of discussion papers published on the global threat to the maritime industry – does this threat spill over to Australia’s domestic maritime industry?

 

Yangtze cruise ship disaster will cost insurers

By Insurance, Legal, News

The fatal Yangtze cruise ship that capsized and killed more than 400 people last week will cost its insurers about $19.2 million, or 92.5 million yuan, Chinese insurance regulatory authorities disclosed.

The four-deck cruiser, christened the Eastern Star, was hit by a freak tornado on the Yangtze River on June 1. The vessel overturned in about a minute only a few dozen meters from the riverbank, leaving an estimated 442 dead or missing, mostly between the ages of 50 and 80. Just 14 people – including the ship’s captain and first engineer – survived.

China has assembled a 60-member team to investigate the incident, which marks of one of the country’s worst shipping disasters in nearly 70 years.

For insurance companies covering the ship and cruise line, the tragedy will mean a sizable payout. According to a conference held by the China Insurance Regulatory Commission Thursday, insurance companies underwrote 340 contracts for parties involved in the incident that live up to requirements for claims. That includes shipowners, travel agencies, passengers and crew members.

The ship itself, which was owned by the Chongqing Eastern Shipping Corporation, was insured for about 15.7 million yuan by the People’s Insurance Company of China.

The CIRC also included estimates for 12 million yuan of liability insurance for travel agencies, 61.7 million yuan of personal insurance for 396 passengers and 3.12 million yuan of personal insurance for 18 crew members.

Already, the People’s Insurance Company of China has paid 10 million yuan to Chongqing Eastern Shipping Corp.

Despite the scale of the tragedy and timing – the news comes one year after the sinking of a ferry in South Korea that killed 304 people on board, including teenagers on a school trip – the incident is not expected to have much impact on the insurance market or the risk profile for cruise ships.

Affected Chinese insurance carriers rushed to the site of the disaster as divers searched for missing people.

“We have set up emergency leadership groups, rapidly implemented emergency response measures and set small teams who have already rushed to the site,” PICC told Reuters.

Ping An Insurance Group Co. of China and China Life Insurance Co. also sent in emergency response teams and had claims teams on-site to work with clients.  Ping An said it has already identified multiple life insurance customers on board the cruise ship and have contacted family members to cover travel and accommodation costs.

Published 15.06.2015 – www.insurancebusinessonline.com.au

Oceanic Marine Risks

Death Penalty Sought for Ship Captain

By Insurance, Legal, News

Korean prosecutors on Monday sought the death penalty for the captain of a ferry that capsized in April, leaving 304 people, most of them school children, dead or missing, in a trial of 15 crew who abandoned ship before it sank.

Lee Joon-seok, 68, charged with homicide, should be sentenced to death for failing to carry out his duty, which in effect amounted to homicide, the prosecution told the court before resting its case in a trial that has taken place amid intense public anger.

Sentiment turned sharply hostile after evidence surfaced that the mostly teenage passengers waited in their cabins, obediently following orders, as the crew escaped.

Lee was among 15 accused of abandoning the sharply listing ferry. Four, including the captain, face homicide charges.

The rest face lesser charges, including negligence. A three-judge panel is expected to announce its verdicts in November. No formal pleas have been made but Lee has denied intent to kill.

“Lee supplied the cause of the sinking of the Sewol … he has the heaviest responsibility for the accident,” the lead prosecutor in the case, Park Jae-eok, told the court in the south of the country.

“We ask that the court sentence him to death.”

The prosecutors sought life sentences for the other three charged with homicide and prison terms ranging from 15 to 30 years for the rest.

The Sewol capsized and sank on a routine voyage on April 16, triggering an outpouring of nationwide grief and sharp criticism of the government of President Park Geun-hye for its handling of the rescue operation.

The crew on trial have said they thought it was the coast guard’s job to evacuate passengers. Video footage of their escape triggered outrage, especially after survivors testified they repeatedly told passengers to stay put.

After the prosecution rested its case, Lee apologized to the families of the victims, saying he never intended to harm anyone.

“I will repent until the day I die and ask for the victims’ families’ forgiveness,” he said. “I swear with my hand over my heart, I did not intend to kill anyone. I never even thought of such a thing.”

Most of the crew were represented by state-appointed lawyers, who argued that the defendants were mostly too badly trained to handle the disaster.

Some family members of victims who attended Monday’s hearing had called for the death penalty, but Amnesty International said death was not the answer.

The Justice Ministry said 58 people were currently on death row. The country last carried out executions in December 1997, when 23 were hanged.

“While the South Korean court system has a reputation for being fair, as do other legal systems around the world where the death penalty still exists, public opinion can still creep in,” Amnesty International’s director of research for East Asia, Roseann Rife, said.

“…The Sewol ferry accident was a great tragedy and if negligence or human error was involved, those responsible should be held to account. But the death penalty is not a solution.”

By Ju-min Park (Additional reporting by James Pearson in SEOUL; writing by Jack Kim; Editing by Nick Macfie)

Source: Reuters

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Oceanic Marine Risks

Foreign Insurers allowed into North Queensland

By News, Uncategorized

It was announced last week that the Federal Government would set-up an online aggregator to allow consumers to compare insurance policies and to allow brokers to sell insurance policies from foreign insurers.

Insurance Council of Australia (ICA) voiced concerns about the entrance of foreign insurers into the Australian market. Existing licensed insurers operate under some of the tightest regulations of any industry sector, yet Unauthorised Foreign Insurers (UFI) may not be held to the same legal, prudential and capital requirements, nor the same consumer laws and remedies.

The industry is concerned consumers who buy a product from a UFI under these new guidelines may not be able to rely on that company to deliver on its promise if the consumer needs to make a claim.

(ICA) isn’t the only one concerned by the Federal Government’s plans for the North Queensland market, brokers in Queensland are also worried by the changes set to come into force in March 2015.

The ICA believes all market participants selling retail insurance products must abide by the same set of laws and capital requirements, and exceptions should not be made that would diminish consumer rights and create further uncertainty.

As has been stressed by many regarding the government planned aggregator, the ICA was keen to point-out the dangers over a price-reliant system.

As ASIC and other agencies and organisations have pointed out, buying a product on price alone may result in the consumer not having cover for the risks they face. Buying a product should first focus on its features and benefits

“This is especially important in North Queensland, which is one of Australia’s most exposed regions to natural disasters.”

Oceanic Marine Risks

Maritime 2014: Ship to Shore

By News, Uncategorized

Australia’s inaugural national shipping and domestic commercial vessel conference.

The Australian Maritime Safety Authority will be hosting the first national shipping and domestic commercial vessel conference. Combining the knowledge and resources of Natship and the Marine Safety Conference, this event will bring together national & regional representatives across the maritime industry in Melbourne on 10 – 12 November 2014.

Maritime 2014: Ship to Shore will provide a unique opportunity for people involved in both the shipping and domestic commercial vessel industries throughout Australia to discuss the latest maritime developments in regulations, safety, environment, seafarer qualifications, navigation and search & rescue. With a concurrent exhibition, this event will provide a meeting place for industry representatives to exchange ideas and knowledge, as well as to establish personal and business connections.

This is the first time since the commencement of the Navigation Act 2012 and the National System for Domestic Commercial Vessels that representatives of government, business and industry will come together to discuss the issues, challenges and opportunities of Australia’s maritime industry.

Oceanic Marine Risks

New Policy for the Australian Maritime Industry

By News, Uncategorized

Oceanic Marine Risks is pleased to announce the launch of their latest policy, Marine Trades Public and Products Liability,  specifically created for the Australian Marine Industry.

The policy is aimed at businesses which perform or provide various services to watercraft owners and operators. This coverage is not limited to specific operations as traditionally done, it is flexible and tailored to suit  the individual needs of the marine tradesman.

With Oceanic and CGU our policy partner, our customers get the right insurance cover at the right price, tailored and delivered by insurance professionals and backed by the financial strength and security of a company that has been serving Australian communities for over 160 years.