UK “Pingdemic” Causes Labor Shortages

Businesses across the country are complaining of serious staff shortages that are affecting services. The government produced the National Health Service (NHS) Covid app to alert those who have come in contact with someone who has since tested positive for coronavirus and advises them to self-isolate for 10 days. However, this backfired when 618,903 alerts were sent between 8 and 15 of July, a 17% rise from the week before.

If you spend enough time close to another person, who also has the app, and who later tested positive for coronavirus you will receive a “ping” alert. The app uses the Bluetooth signal to determine whether your phone had been within 2 meters of theirs for at least 15 minutes. If you are pinged you are strongly advised, but not legally obligated, to self-isolate for 10 days. The number of COVID-19 cases reported in the UK has been rising in recent weeks. As a result, so has the number of people being pinged.

Although this advisement is not law and individuals are able to decide whether or not to self-isolate, many are following the suggestion. The “pingdemic” as it’s been called, has produced huge disruptions for businesses and critical services that threaten to undermine the efforts to revive an economy that is struggling because the pandemic. Supermarkets have warned that they may have product shortages due to staff self-isolating. Meanwhile, dozens of councils have suspended bin collections due to staff shortages, the fuel provider BP have needed to temporarily close a handful of sites over staff absences, and Royal Mail has announced delays to deliveries in 10 parts of England. Many businesses are worried that the situation could become even worse now that social distancing rules have been scrapped. The suspected boom to the hospitality sector is under threat as businesses are having to close or adjust hours based on how many workers are available. The transport network is also at risk of the consequences of staff absences. The Rail, Maritime, and Transport union said the closure of the popular Metropolitan Line on the London Underground network was closed due to key staff self-isolating on July 17.

People are questioning why those who have received both vaccination jabs or recovered from the virus need to self-isolate. Many flaws are being spot lighted over current self-isolating requirements. Over the course of the month contact alerts sent to NHS app users continually increased. This has caused many workers to delete the app because they cannot afford to miss work. As stated before, people can ignore the messages without any legal reciprocations and those in favor of the app believe that even if someone ignores the suggestion to self-isolate, knowing they came in contact with the virus is likely to affect their behavior. In response, the government has allowed key workers to opt-out of self-isolating and instead take daily coronavirus tests. Although an improvement, industries feel the definition for which workers are key workers are too narrow given the complexities of the supply line.

For businesses struggling to deal with the impact of the past year it is evident that a different approach is needed. The government still insists the app is doing the job for which it was designed, put pressure will continue to rise from business owners and workers to allow people to work, particularly when such individuals are fully vaccinated. The rules around self-isolation are set to change on August 16. From this date, those who have been fully vaccinated for at least 14 days or are under 18 will not have to self-isolate if the come into contact with someone who has tested positive for coronavirus. Instead, they will be advised to take a PCR test. Although there is an end in sight, businesses are beginning to consider the admin burden of figuring out, on a case-by-case basis, who has been vaccinated and who must isolate if they have been pinged.

Maritime Update – Implications of MV ASPHALT PRINCESS Hijacking

The recent events surrounding an illegal boarding and temporary hijacking of the MV ASPHALT PRINCESS in international sea lanes near Oman and the killing of UK and Romanian personnel on the MV MERCER STREET by a suspected drone attack a week earlier in the same vicinity have been focusing the maritime industry.  These episodes are the latest in a series of tensions watched closely by observers over recent years.  Despite the tragic loss of life and uncertain security conditions that these events highlight, they are nowhere near the scale of the tanker wars of 1984-1988.  In that era nearly 200 merchant vessels were deliberately targeted by military combatants.  Vessels were strafed by aircraft, impacted with missiles, fired on by warships and gunboats and struck by sea mines.  Both Iraqi and Iranian military forces engaged in these attacks and their ongoing war (1980-1988) was widened as a result, drawing in regional and international forces to attempt to protect unrelated and innocent merchant traffic and contain the crisis.  Losses were significant.

Today’s threat conditions have different drivers but the tactics available to combatants remain unchanged and with added measures that did not exist 35 years ago.  Concurrently, naval power is arguably weaker today than in the mid 1980s when the cold war saw western forces at their zenith.  Should conditions continue at an elevated threat tempo with future escalations, Masters and their crews will need to be able to adapt to shifting threats to include:

• Awareness of the air threat. This could mean something as basic as having an air sentry to watch for unknown aircraft or drones.  Drilling the crew to muster into a citadel or some other action station may be required if hostile air attack is suspected to be imminent.  There will be very little to no warning.  Drones in particular are a challenge given their small size and reduced radar signature, and that they are unlikely to be detected by commercial 10cm or 3cm surface radars.  Furthermore, drones are more likely be used as a surveillance tool and not necessarily pose an attack risk – something watchkeepers will be unable to determine with accuracy or confidence, presuming they are even spotted.  As for missile attack, this is a significant issue as air-to-ship, shore-to-ship and ship-to-ship systems can be devastating and appear with no warning.
• Awareness of the surface threat.  Attack by hostile warship or gunboat is a risk factor that is obvious.  If in international waters and approached by combatant surface vessels Master’s will have to take actions in line with protecting their crews and safeguarding their vessels, including with complying to illegal interference if under threat of attack.  What is less obvious is the risk of illegal boarding and hijacking.  Attackers may be masking intentions by posing as fisherman or other benign local seafarer traffic to close distance and attempt to board.  Why would they do this?  If the vessel can be commandeered and brought into the waters of a country it would give complexion to a justified seizure.  We have seen this previously such as the MV STENA IMPERO incident in the summer of 2019.
• Sea mines can lurk just under the surface and present another sinister challenge to merchant traffic.  Submarine attack can be disguised as a sea mine strike but this is unlikely to occur.  For starters allied military forces will be making a concerted effort to track and shadow the submarine activity of potential adversaries.  Awareness of sub-surface threat hazards like these however, are another dimension for Masters to contemplate.
• Awareness of the outlying threat. It is a common perception that the marine industry has inconsistent and outdated technology lacking in universally comprehensive controls, that include penetration testing to prove resilience.  A cyber-attack will not necessarily be targeting the safe working of a vessel at sea, unless there is a deliberate attempt to manipulate platform management systems software.  Instead, it might well be targeting shipowners and ship management venues.  One aim of such action will be gleaning intelligence on fleet details, vessel plans, cargo and crew insights and intended operations.  This will aid aggressors in planning and positioning resources for future attack efforts.  Other actions may be more offensive in nature and simply corrupt information to disrupt commercial operations.  At one end of the spectrum, they may present as nuisance cyber-attacks and at the other may pose a more tangible interdiction to commerce.  Cyber-attacks may present as non-state criminal actors but in fact be a front for hostile state-related offensive action.  Cyber-attacks may also serve to create distraction to an organisation that inadvertently places vessels in a greater exposure to the more traditional threats discussed above.  A Master at sea has control over his vessel and crew but if onshore managers are not thinking with the same clarity of purpose their shortcomings in procedures and information control in the office will be impacting seafarers in a way not conceived previously.  Simply put, all players in the marine industry have a role to live up to and failure in the office can have blowback for those at sea.

Against the backdrop of modern threats, merchant shipping has a lot of positives going for it to build on and enhance preparatory controls and absorb, react and step change competently as the current crisis unfolds.  The Somali piracy crisis of 9-15 years ago compelled the shipping industry to address crew safety and readiness drills in a new fashion.  The industry came together to create Best Management Practices (BMP) and BMP5 is still in use with sound advice on vessel protection and security.  This provides a strong starting point to evolve and adapt drills for the new threats.  This can be woven in parallel with ISPS Code compliance.  The International Ship & Port Security Code was created after 9/11 as an amendment to the 1974 SOLAS Convention and came into effect in 2004.  To some, it is just tick box compliance tool setting a basic level of security universally but if embraced along with BMP5 it provides a useful and operational cultural cue.

UKMTO is a central reporting centre for merchant traffic to raise the alarm, seek and share advice and affords Master’s with naval interface when needed.  UKMTO is operated by the UK Royal Navy and it’s voluntary reporting and information sharing platforms are unreservedly recommended to create better confidence for maintaining situational awareness and vectoring assistance in any emerging crisis event.  Shipowners should be cognizant and interact with UKMTO. Good intelligence is paramount in all of the above scenarios, so that passages can be routed appropriately through threat areas.

Insurers have a host of marine product in the marketplace.  Policyholders should be flexing the products they hold – alongside their brokers – to ensure they know the limits, gaps, and exclusions to their existing coverages.  Stress testing cover with penetration tests on IT systems and short table top wargames to simulate predictable crises will give confidence and reliability to decision makers in advance of a real event.  These efforts will also expose gaps not readily recognised and permit a chance to improve preparations and mitigate future incidents. Even if an incident cannot be fully prevented the recovery process can be expedited and impact costs reduced.  Commercial operations in a high-risk area demand commensurate control measures out of duty of care to seafarers and managing operational efficiencies responsibly.

MS Risk Limited is a British crisis response consultancy serving the Lloyd’s of London speciality risk insurance marketplace and shipowners around the globe.  It has completed assignments for energy and maritime clients in high-risk areas including Libya, Gulf of Guinea, Gulf of Aden, the Sulu Sea and Arabian Gulf for 16 years.      

Hedging Between Great Powers & the VFA

Of all the Southeast Asian states the Philippines has traditionally been one of the closest to the United States. Since decolonisation in 1946 the country has remained on friendly terms with the US, acting as an outpost during the Vietnam War, and maintaining a US military presence ever since. While neighbours like Indonesia and Malaysia are happy to cooperate with the United States in private to combat issues like terrorism, the Philippines has been happy to play the role of close ally in public.

A symbol of this partnership is the Visiting Forces Agreement (VFA). The VFA was brought in in 1999, and it essentially gives all United States military personnel based in the country diplomatic immunity unless the US authorities decide that person should be subject to local laws. The law has resulted in a number of controversies, most notably the Subic rape case, where four US troops were acquitted of raping a Filipino woman in 2006.

The VFA made headlines again in early 2020 when President Duterte said that it would not be renewed. Since 2017 Duterte has been trying to rebalance a perceived over-reliance on the United States by building closer ties to China. These ties have at times included discussion, amongst other things, intelligence sharing. Duterte also prefers China’s policy of refusing to comment on their ally’s internal politics. A closer alliance with China therefore could provide him with political cover internally, as well as resources, trade, and weapons from their northern neighbour.

However, the Philippines ongoing dispute with China over the Spratly islands in the South China Sea has complicated this shift and appears to have forced Duterte to keep the VFA and try to find a balance between China and the United States. Back in March, 220 Chinese coast guard and fishing vessels were placed at the Whitsun Reef. This ignited a number of retaliatory measures, including overflights by the Philippine Air Force, a rebuke from the U.S. National Security Advisor, and both the Philippine and U.S. navies moving parts of their fleet into the region.

This shows the complicated path the Philippines, and other countries in the region, are winding between the China and the United States. On one hand, China will provide investment, resources, and no interference in local politics. But on the other, many ASEAN countries, the Philippines included fear China’s ambitions in the South China Sea and its expansive ambitions. The United States, however, presents a different challenge. Increased interaction with the US could lead to high-profile political criticism, especially on Duterte’s human rights record, and potentially even sanctions. But it is a lot less likely the US will stake a claim to any island chains in the region.

Duterte for now has agreed to extend the VFA. But it remains to be seen if he will change his mind again. It is highly likely China will continue to reinforce their various claims on the Paracel and Spratly islands, unless the ASEAN countries can form a unified response. So, if China do wish to build better relations with the Philippines and in turn reduce the US’s presence in the region, they will need to find another way to forge a stronger relationship with the Southeast Asian nation. In turn, if the US wishes to maintain their relationship with the Philippines while Duterte is in charge it is likely there will be a reduction in official criticism of his government coming from Washington.

Nord Storm 2 Pipeline Creates Divisions Within Europe

Finalising the construction of the Nord Stream 2 pipeline has become a hotly contested issue that has put all sides in a ‘lose-lose’ situation. The German government is acting as though the pipeline were a vital national interest and the US, Baltic States, Poland and Ukraine fear that it will make Europe overly dependent on Russia.

An objective security analysis suggests that the fears have a kernel of truth, nevertheless Ukraine is not necessarily in a detrimental position.

One might see that Ukraine’s fear over the project as a major security threat is justified. Following this perspective, indeed from a purely geostrategic sense, the Nord Stream 2 threatens Ukraine, and not just with the loss of billions of euros in fees for the transit of Russian gas to Europe. Once Russia stops the gas transit, it would not hold back on damaging Ukrainian gas pipelines, and this would mean that the threat of war for Kyiv would increase considerably. The situation could also impact on how quickly Ukraine integrated into NATO and the EU and that the country would need both military aid and financial assistance in the form of low-interest European loans and funds to compensate. Therefore some analyst concluded that if the physical flow of Russia gas through Ukraine stops, the risk of full-scale military aggression by Russia could go up substantially.

In Poland, too, the US-German deal prompted strong condemnation. Poland Government emphasized from the very beginning that Nord Stream 2 is a geopolitical project that destabilizes the political situation in central and eastern European. The Polish Government announced it was ‘surprised’ by the German-American agreement and that Germany was “unfortunately pursuing Russia’s interests,”. Moreover, there has been no adequate response from the EU. At the same time, Poland’s relations with the US and Germany are likely to cool further. The fear remains that the Kremlin will perceive the concessions from the US which could encourage them to pursue an even more aggressive policy with regard to Ukraine and the whole central and eastern European region.

Nevertheless, one needs to keep in mind that a pipeline creates a bilateral dependence: Russia depends on the EU remaining a reliable customer. The bilateral economic link is much more important for Russia since earnings from gas exports make up a significant portion of Russia’s overall export earnings (and the revenues of the Russian government) – but are only a tiny fraction of the European economy. Furthermore, Europe already has an alternative source of supply in the form of free capacity for LNG imports. This means that Russia depends much more on the EU as a customer than the other way round. To achieve its own ‘gas market independence’ from Europe, Russia would need to construct a costly capacity to export LNG from facilities closer to fields near the Arctic Circle. With Nord Stream 2 it has less of an incentive to do so.

This being considered the fact that a large part of its gas exports go through Ukraine did not deter Russia from annexing Crimea and creating a frozen conflict in Donbas. It is thus not clear why a further drop in gas transit should negatively affect Ukrainian national security. Despite their mutual hostility, the two countries still managed to reach an agreement whereby Gazprom will pay transit fees between of $1.5 and $5 billion per annum until 2024. Many US and European observers assume that the transit fees benefit ‘Ukraine’. In reality, these fees found their way into the pockets of oligarchs who siphoned off profits via shell companies and associated local companies. Some recent reforms, which began even before the election of President Zelensky, have improved the situation, as recognised in a report by the OECD. But the transit fees will remain a potential source of corruption, which remains engrained in the country’s energy sector, as noted by the Ukrainian anti-corruption agency. The country as a whole still ranks at the bottom of all indicators of good governance and corruption.

In terms of the goal of bringing Ukraine closer to Europe, and of reducing corruption, the loss of Gazprom transit revenues should be counted as a plus. Ukraine no longer imports gas directly from Russia. The energy security of Ukraine is ensured by reverse flows from Western Europe towards Ukraine. But most of this gas (delivered from Slovakia to Ukraine) is actually Russian gas. Today, this gas arrives first through the Ukrainian transit pipeline into the EU and then returns. With Nord Stream 2 completed the flow would be somewhat more complicated (first to Germany, then through intra-EU Central European interconnectors and then back to Ukraine), but the substance would not change.

Analysing this, the geostrategic point raised initially, loses its linchpin assumption, namely that Ukraine stands to be negatively affected by the new gas pipeline. The discussion in its essence should revolved on how Germany, as the main gas beneficiary, could use its leverage point against Russia and not the other way around.

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