Piracy a major drain for world economy

For the pirates, their work is big business, earning them US$160 million last year. For the world economy, it is a major drain.

Security measures add to the cost of piracy. AP Photo
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Since 2008, gangs of Somali pirates have carried out more than 800 attacks on ships as diverse as private yachts to oil supertankers, from the Gulf of Aden to the Arabian Sea.

More than 170 of those vessels were hijacked, with some 3,400 seafarers taken hostage and 25 of them killed, according to Intercargo, a global merchant-ship owners' group.

For the pirates, it is big business, earning them US$160 million (Dh587.6m) last year in ransom for the return of ships, cargo and crew.

For the world economy, it is a major drain, with piracy off the Horn of Africa alone costing an estimated $7 billion a year.

This is made up of: paying ransoms and insurance premiums; the extra fuel for faster steaming or rerouting ships; security measures from armed guards to fabricating safe citadels for crews; and funding the presence of naval forces.

About 40 per cent of the 42,500 ships that criss-cross the region each year now use armed guards, compared to 15 per cent a year ago, according to Protection Vessels International, one of more than 150 marine security companies with clients operating in high-risk areas.

However, the cost of stationing armed guards on a ship can range between $18,000 and $60,000 to cross the danger zone. If your vessel is a large container ship, the cost of steaming through the area at maximum speed can add $200,000 in extra fuel to a voyage.

These are critical figures for an industry in sharp decline since 2008, suffering under the double blows of falling cargo rates and too many ships. The container ship industry lost $11.4bn last year, according to SeaIntel Maritime Analysis, a consultant based in Copenhagen.

It is into this gap that the Convoy Escort Programme (CEP) wants to sail.

Angus Campbell, the chief executive at CEP, points out that according to the International Maritime Bureau's Piracy Reporting Center, in the first quarter of this year, there were 43 reported incidents involving Somali pirates, resulting in nine hijackings, with 152 crew taken hostage and two killed. That is about half the 97 incidents, 16 hijackings and 299 seafarers seized in the first quarter of last year. The reason for the decline, he says, is increased naval activity. Also, no ship with armed guards aboard has been hijacked by Somali pirates.

But stationing more warships in the region is prohibitively expensive, and putting guns on ships is not without its own risks. The international community agrees.

Last week, Britain announced it could no longer sustain a permanent frigate for anti-piracy patrol. And although several countries, including the United States, United Kingdom and Norway have permitted private armed guards to operate on ships sailing under their flags, the legal position remains murky.

As yet, there are no international rules regulating how they operate. The United Nations' International Maritime Organisation issued guidelines for private armed guards last year but they merely advise, "Force [should not] exceed what is strictly necessary."

"This is about getting guns off merchant ships," said Mr Campbell. "The last thing shipping wants is a firefight aboard a merchant ship.

"With escorts, the pirates won't get as far as the ships. We will act as a deterrent screen," he added. "The pirates will have to get past us first, and so far they have shown no willingness to attack defended ships, especially if they are in convoy."

CEP ships will operate to strict operational guidelines and all actions will be recorded on video.

"Our crews will not be authorised to act other than in self-defence," said Mr Campbell. "On the approach of any suspect vessel to a convoy, it will first be faced with an array of non-lethal responses, including LRAD, a long-range acoustic device that can be used for hailing or as a sonic weapon to induce discomfort at considerable ranges, allowing the issue of warnings to 'stand away'.

"Only as a last resort, and if life is in danger, will we resort to force. We are not in the business of looking for trouble," he added.

CEP is working with the European Union Naval Force's Maritime Security Centre - Horn of Africa, which provides 24-hour manned monitoring of vessels sailing through the Gulf of Aden, to integrate its operations into the international naval communications net in the Indian Ocean. That would allow the CEP to alert the military to pirate activity and would free up the EU Naval Force's ships for other missions, Mr Campbell said.

This coordination could be critical under international law, according to Robert Phillips, an international lawyer who runs the piracy-watch legal website Communis Hostis Omnium. He cited the UN Convention on the Law of the Sea (UNCLOS) of December 1982.

"Although Article 107 of UNCLOS does not permit private security companies not on government service from engaging in pirate hunting, the general principle of self defence, and defence of others, would justify protecting vessels from an on-going attack," said Mr Phillips. "Such conduct must be carefully circumscribed. The risk here is that private security personnel would, in the heat of battle, step outside of the orbit of self-defence and into the breach of pirate hunting."

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