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."
dblack@thenational.ae
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Scores
Day 2
New Zealand 153 & 56-1
Pakistan 227
New Zealand trail by 18 runs with nine wickets remaining
The specs
Engine: Four electric motors, one at each wheel
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Torque: 859Nm
Transmission: Single-speed automatic
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Engine: 77.4kW all-wheel-drive dual motor
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Engine: 3.9-litre twin-turbo V8
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
APPLE IPAD MINI (A17 PRO)
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Biometrics: Touch ID, Face ID
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In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
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RESULT
West Brom 2 Liverpool 2
West Brom: Livermore (79'), Rondón (88' )
Liverpool: Ings (4'), Salah (72')
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Specs
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Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
Men’s singles
Group A: Son Wan-ho (Kor), Lee Chong Wei (Mas), Ng Long Angus (HK), Chen Long (Chn)
Group B: Kidambi Srikanth (Ind), Shi Yugi (Chn), Chou Tien Chen (Tpe), Viktor Axelsen (Den)
Women’s Singles
Group A: Akane Yamaguchi (Jpn), Pusarla Sindhu (Ind), Sayaka Sato (Jpn), He Bingjiao (Chn)
Group B: Tai Tzu Ying (Tpe), Sung Hi-hyun (Kor), Ratchanok Intanon (Tha), Chen Yufei (Chn)
The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
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Price: Dh554,000
On sale: now
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SPEC%20SHEET%3A%20APPLE%20IPHONE%2015%20PRO%20MAX
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