Somali piracy may cripple global logistics

Rarely, if ever, in the annals of piracy have so few cost global logistics so much as the 1,000 or so Kalashnikov-toting Somali pirates. And rarely has the international response been so supine and dismissive that, in earlier times, would have appalled and shamed less spineless generations in dealing with an age-old crime.

At the IMO London offices' handover of a piracy petition on World Maritime Day, September 23, David Cockroft, general secretary of the ITF (International Transport Workers Federation), chastised the majority of those who make most from shipping for "doing little or nothing." But are the ship owners themselves contributing to the crisis, helped by the insurers, because they have adopted the 'calculated risk' approach which arguably is much cheaper than a final solution to the problem?

The anti-piracy petition, bearing nearly one million signatures, is the centrepiece of a campaign to persuade all governments to commit the resources necessary to end the increasing problem of Somalia-based piracy. It calls for:
1) Dedication of significant resources and work to find real solutions to the growing piracy problem,
2) Immediate steps to secure the release and safe return of kidnapped seafarers,
3) Work within the international community to secure a stable and peaceful future for Somalia.

The stakes are high and will simply get higher without effective action. In ransom monies alone an estimated $150 million have been paid to pirates and extra insurance premiums cost at least $400 million more annually. Then there are the increased crew costs while they are transiting the pirate zones plus the warships on patrol. All that, however, pales into insignificance against damage to the global supply chain, which may even cripple just-in-time (JIT) practices. On top of all this is the cost in human misery. Some 1,500 crew members have been taken hostage and kept in squalid conditions since 2008, at least 36 have been murdered, and currently 354 seafarers remain detained along with 16 ships.

Many ships, particularly oil tankers, are being re-routed via the Cape of Good Hope. An idea of just how costly re-routing a super tanker is on a liner trade for the Europe-Far East route can be gauged by the fact that it would raise costs by $89 million per year. Multiply that many times by the number of tankers bypassing the Suez Canal and the cost would soon reach billions for shippers. Yet this solution, if it could be called that, is apparently favoured by the International Federation of Shipmasters' Associations (IFSMA).

In an exclusive interview with Captain Bjorn Haave, vice-president of IFSMA, this writer was told that the whole area should be closed to shipping except to ships that have to go into ports in the area, escorted one by one. Such an approach, however, would have appalling cost implications, particularly for Europe, whose economies are geared to JIT deliveries. There would also be incalculable damage to Egypt's economy through the loss of billions of dollars in canal transit fees, which could destabilise the whole country. For a country which has so much at risk, Egypt has, to its shame, shown strikingly little action in deploying its 12 frigates to patrol the infested areas.

Captain Haave is only defending his patch when he says: "I represent the seafarers and masters and I don't think seafarers should be put at risk in the way they are today. They have to keep the area closed until the political situation in Somalia is solved."

Defeating the wisdom of Solomon

The political state of Somalia is the crux of the problem. A failed state torn by conflict for decades, desperately poor and governed by petty war lords in waters muddied by Islamist insurgent groups like Al-Shebab, a peaceful resolution to this problem would defeat even the wisdom of Solomon. Pouring in aid would simply not work without a prior desire by all Somalis to work for the common good. So what other proposed solutions does that leave?

There can be no doubt that shipping lines and their affiliated bodies have a genuine desire to see a prompt end to Somali piracy and the suffering of the 354 seafarers currently held in squalid conditions. Ship owners are also concerned that the impact of piracy will exacerbate the current shortage of skilled seafarers. But all of the proposals that the maritime industry have suggested seem doomed to failure. The piracy petition, for example, called for the the dedication of significant resources but Admiral Mark Fitzgerald, commander of NATO' Allied Joint Task Force Command, Naples, has said: "We could put a World War 2 fleet of ships out there and we still would not be able to cover the whole ocean." It is also questionable about how long the presence of a large naval force could be sustained, given the huge costs at a time when most states face increasing pressures to cut budgets, including the military kind. Instead, he advocates the arming of civilian ships in the Horn of Africa. Convoying has been suggested as a solution but this would be unattractive to shippers because it would be uneconomic and impractical.

The arming of merchant vessels has also been mooted and could be undertaken in different ways. One option would be to put armed security teams on board vessels. This has already been done, particularly on ships considered at high risk, but it has been said that, given the low risk of hijack, stationing security teams on all vessels would not be cost effective; all part of the 'calculated risk' scenario. A second and more controversial option is to arm the merchant crews but this has largely been rejected by shipping lines and port authorities because of the added security risks, costs and legal liabilities, all deemed to be too high.

There is, however, a third option, the secondment of weapons-trained naval personnel posing as civilians for use in the pirate zones. This would give some comfort to untrained civilian crews and would be like a return to Q-ships, which had significant success against U-boats in World War 1. At most, such naval guards would require no more than heavy machine guns and light firearms and they would have a huge advantage over pirates clambering over gunwales, where they would be extremely vulnerable.

However much ship owners may eschew the arming of their ships, more and more lines are seriously considering the option unless more is done to protect vessels. The world's second largest container ship line, MSC, is considering the option and working closely with Maersk Lines and CMA CGN. But what more can be done that has any chance of permanent success?

Insurance companies hold the key?

In this writer's view all the mooted suggestions so far can only be temporary at best. Shipping lines have clearly shown that their supine response is governed by the profit motive as enshrined in the 'calculated risk' approach. After all, it is insurance companies who ultimately pay the ransom money but they, too, are doing very nicely out of the piracy because their jacked-up premiums since 2002 far exceed the ransom monies paid. In any event, all these raised costs are ultimately passed on to hapless consumers. On account of this, when told that the insurance companies seemed under no pressure to bring their undoubted influence to bear, Captain Haave, of IFSMA, said: "I agree with you." His contention is that if insurance companies stopped insuring voyages through the pirate-infested waters most ship owners would re-route via the Cape of Good Hope, which would make voyages much safer. That said, however, they could then be attacked by Wast African pirates.

The current arming of merchant ships, preferably by trained naval personnel, deserves to gain ground. Shamefully, however, when pirates are caught they are often released without charge, sometimes within hours of capture, to resume their depredations. This clearly must stop. With a growing sense of immunity, Somali pirates will only be emboldened to raise the stakes, risking a human and environmental catastrophe at sea, not to mention staggering global economic damage. Alas, therefore, logic inescapably points to a military solution in the known pirate ports.

The current wave of piracy is primarily motivated by the desire for financial gains and exacerbated by lack of good governance and high poverty levels. Illegal fishing by foreign countries and dumping of toxins in Somali waters, for which Somalis themselves must share some of the blame through their own bad governance, may have played some role in turning to piracy during the early days but the current level of piracy cannot be explained by such activity. Rather, piracy has become a lucrative business, generating huge incomes, which Somalis are unlikely to give up unless military action no longer makes the game worth the candle.

There is, of course, a problem with such a response -- the safety of the 354 crew members still held hostage. These numbers will decline to zero provided that the ransoms are paid but it is essential that no further ships are hijacked and that is where the armed merchant vessels must play a role. An alternative might be well-planned Entebbe style rescues. When it comes, as is likely, any attacks on pirate ports should be aimed primarily at the fishing vessels large enough to act as mother ships. The tragedy of this, of course, is that innocent fishermen's vessels could suffer along with the guilty, as there are no more than an estimated 600 to 1,000 Somali pirates. But would it not be a far greater tragedy still if Egypt and other countries were destabilised by adopting an indefinite exclusion zone around the Horn of Africa?

The reason no military action has yet been undertaken on shore stems from political rather than legal constraints. The UN Security Council resolution 1851, in fact, authorises military action against piracy on Somali territory. If the piracy problem persists or, more likely, worsens, such escalatory steps would look increasingly more plausible and pressing. There are historical precedents which show that the application of superior force against piracy, the only language that all pirates respect, can work well. In 1816 and in 1824 the bombardment of Algiers by British and Dutch fleets forced the release of 1,000 Christian slaves unharmed and broke the hold of the Barbary pirates permanently.
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This story first appeared in Bob Couttie's Maritime Accident Casebook, for whom this writer is the UK correspondent, under the headline: Piracy: Is closing Africa the Answer?