x Abu Dhabi, UAEWednesday 26 July 2017

Fighting multibillion-dollar piracy

Research finds that pirates are losing the war with global shipping owners as they boost security measures and add better armed vessels.

The 9,800 tonne container ship recently purchased by Typhon, will be the first of three planned escort ships. Once converted, she will have a flush deck to carry fast patrol boats, and be painted grey.

Photo courtesy of Typhon
The 9,800 tonne container ship recently purchased by Typhon, will be the first of three planned escort ships. Once converted, she will have a flush deck to carry fast patrol boats, and be painted grey. Photo courtesy of Typhon

There are approximately 25 naval vessels from the European Union and Nato countries, China, Russia, South Korea, India and Japan involved in anti-piracy operations patrolling about 8.3 million square kilometres of the Gulf of Aden and Indian Ocean, an area about the size of western Europe.

The extent of the problem they were dispatched to address was detailed in a report last year by United States-based One Earth Future Foundation. It found Somali piracy in the Indian Ocean costs the global economy about US$7 billion (Dh25.7bn) a year.

For the past five years, a few hundred pirates sailing from a handful of towns on the Somali coast have pushed ever deeper into the Indian Ocean, forcing governments to spend at least $1.3bn trying to control the problem, a figure dwarfed by shipping industry costs estimated at up to $5.5bn.

The biggest single item was the $2.7bn it costs for ships to transit the waters at higher, uneconomic, speeds.

Shippers also spent more than $1bn on private security guards, often armed, often earning much more than the pirates themselves.

The report estimated the total paid in ransoms at $160 million and the re-routing of ships to hug the Indian coast to avoid pirate waters costing $486 to $680m.

However, current protective measures are proving effective, the study said. Pirates have never seized a ship travelling faster than 18 knots. Armed private security guards also had a 100 per cent success rate in protecting ships.

Shippers have added barbed wire and an array of other measures to vessels, including "citadels" - armoured safe rooms in which crews can shelter from attack.

That has helped to bring down insurance premiums, although shippers are still paying $635m in extra premiums because of the piracy threat. "A major risk is that complacency sets in if we think piracy is now under control," said Jens Vestergaard Madsen, a senior researcher on the project. "The piracy problem is still not resolved. Ninety nine per cent of these costs are spent mitigating the problem, not resolving it."

A former commander of one of the naval forces to operate in the region, retired Rear Admiral Terence McKnight, the US commander of Task Force 151, agrees.

"Piracy is a moneymaking business and they are going to try their hardest to stay ahead of us," he is quoted as saying on the US Naval Institute website. "They are always looking for tactics to overcome those of ours."

Stepping into the security gap are private navies such as Typhon and the Convoy Escort Programme.

"To date the only effective commercially available countermeasure has been provided by ride-on guards," Typhon says in its mission statement. "This protection model provides a quantity of armed personnel to live aboard the client ship for the duration of the transit. However, the client vessels have to detour for their embarkation and disembarkation often at significant cost. The range of protection from pirates is narrow: 400 metres from the 'target' ship."

Typhon says its protection begins by "detecting any threats of piracy at long range. It enables Typhon to conduct their transit safely through the network of pirate action groups, advising [ships] of necessary course adjustments to avoid known trouble hot spots."

Typhon's concept involves each convoy being supported by the new Regional Anti-Piracy Prosecution & Intelligence Coordination Centre established in the Seychelles this year. Largely funded by the United Kingdom government, the centre targets the piracy groups. Its opening comes as concerns grow about potentially inadequate protection from maritime crime after the withdrawal of the European Union naval force from the region next year.

Convoys will be able to call on satellite surveillance and detection and early warning to identify and assess any suspected threats, and to avoid or deter a pirate threat before it becomes a danger.

"The convoys travel in a protected 'envelope' which make it extremely difficult for the pirates to enter the protection zone to launch an attack. Typhon's policy is always to seek to diffuse and de-escalate any violence," says the Typhon statement.

If there's a real threat, the escort ship's fast patrol boats will "intercept a potential target, engage direct fire weapons or mount a key defence of the client vessel. The use of force is a last resort and is always reasonable and proportionate using the minimum amount of force necessary", Typhon adds.

Typhon's chief executive, Anthony Sharp, believes concerns in the insurance industry over the use of on-board security guards will encourage ship owners to opt for the escort option.

International insurance brokers, Marsh, has amended its insurance cover for private maritime security companies to address fears that the use of floating armouries may invalidate current insurance policies.

The armouries are used by on-board guards to offload their weapons before entering port where the possession of firearms by civilians is illegal.

The Marsh global marine practice managing director, Nick Roscoe, recently told the shipping journal Lloyd's List that unlawful use of third-party armouries could impact insurance policies because a clause in them stipulates a client must carry out business lawfully and a common law principle states that companies cannot profit from their own illegalities.

"Any of these issues could have an impact on using floating armouries and could invalidate its insurance," Mr Roscoe said. However, not all agree that Typhon's escort model is viable.

John Cartner, a maritime lawyer and the author of The International Law of the Shipmaster, has blogged: "It seems that Typhon is doing nothing more than displacing armed guards away from the vessels that pay for the protection. The only economic rationale one can see in this kind of arrangement is the marginal ability to protect several vessels with a slightly larger armed guard detachment in a convoy system. To the extent that can be done, these are merely armed guards on waterborne pogo sticks hopping around to where the threat may be.

"Would you rather be on a crew boat [fast patrol boat] with armed guards being chased by an angry pirate or on a real ship with an armed guard detachment being chased by angry pirates? I'll take the large one, thank you.

"The vulnerability in the scheme is that without spot on intelligence, and a lot more surveillance power than Typhon is likely to have, [there is] no demonstrated betterment to the armed guard system."

A piracy expert and US navy reserve officer, Lt Cmdr Claude Berube, writing on the US Naval Institute website, observed: "It isn't clear if the current level of piracy will support [these escort] vessels."

He says the downwards trend in pirate attacks around the Gulf of Aden "can be attributed to the increased use of private embarked armed security, improved Best Management Practices by the shipping industry, and the creation of international maritime operations in the region."

He also questions the possible high costs potential clients face as they likely spend long hours waiting to join Typhon convoys, whose timetables might not be convenient to all shipping.

 

dblack@thenational.ae