February 03, 2011

Orchestrating while Rome burns.

The world continues to feed off piracy more than Somali pirates do. And so it is unsurprising that the maritime industry, in the year that the IMO’s annual theme is “Piracy-Orchestrating the Response’, continues to talk, not act. The theme is more cacophony than melody: the toothless global response to piracy has, in any case, as much to do with callousness as it has to do with impotence, insensibility or culpability. (About ten percent of the year is over. The orchestra should have been playing by now, what?)

Last year, more seafarers were taken hostage than ever before on record, says the International Maritime Bureau’s global piracy report. In 2006 there were 188 mariner hostages; 2010 saw 1181. That is a jump of more than six times in five years, during which time the coalition navies, according to another report by the US based foundation ‘One Earth Future’, ramped up naval operations off Somalia that today cost about $2 billion a year.

Of course, those hostage figures are suspect; many agree that actual numbers are higher.

Follow the money, they say. So, to understand the business of piracy a little better, consider these numbers from the same OEF’s ‘The Economic Cost of Piracy’ report:
Total cost of piracy = 7 to 12 billion dollars annually
Average ransom in 2005, $150,000; average ransom in 2010, $5.4 million.
Cost of counter piracy organisations: $20 million
Insurance premiums: $460 million to $3.2 billion
Cost of security equipment: $363 million o $2.5 billion
Cost of prosecuting pirates (One UN honcho says- not in the OEF report- that 9 out of 10 pirates caught are released): $ 31 million
Cost to regional economies because of piracy: $1.25 billion

And a contentious figure: Ransoms accounted by the OEF in 2010: $ 238 million. Contentious because some experts have said this is based on the number of ships hijacked in 2010, not those released. Many more ships were taken than ransomed, they say; the ransoms paid were actually totalled around $ 80 million. They also say that the OEF’s assumption of 30,000 transits a year through the Gulf of Aden are overstated, and should be a maximum of 22,000.

The total annual costs of piracy, the OEF says, acknowledging that these are “notoriously difficult to calculate”, are between 7 and 12 billion US dollars a year. Yes, that is billion with a B.

To me, regardless of the dispute (which seems to be more about a spat between two accountants with competing calculators rather than anything more substantial, like seafarer lives) the stark fact remains that the amount of ransoms paid to pirates are a very, very small percentage of the total profits of piracy, much of which go into the pockets of administrators and international organisations, besides insurance and security companies, equipment manufacturers, lawyers, assorted ‘experts’ and other riff-raff. Much of the crew may be on wages of less than $50 dollars a day; armed guards may cost $1500 a pop. Something seems terribly wrong. That aside, there is, given the money being made by non-criminal elements in these shenanigans, a clear conflict of interest in wanting to address the problem. This explains somewhat why we have not been able to make any headway at all. The world manages the problem of piracy because it makes more money doing so.

That aside, I am angry that the discussion on piracy has been reduced, in much of the global and industry media, to two things. One, money, as usual. Two, mildly sensationalist reporting of hijacks and other reports of lists of ships taken. The latter, in particular, are put out regularly by many organisations and newspapers across the world, almost as if record-keeping was the way to fight piracy.

Actually, I can usually manage to ignore even that. I find it more difficult to ignore the shipping industry’s lack of will in even framing the right questions at a time that piracy has widened and escalated almost beyond recognition. More and more crews of hijacked ships are being beaten and forced to sail the ocean on mother ships as pirates hunt for other prey. Many have been killed last year. Taking an ‘every ship owner for himself’ approach is clearly not working. Some questions that need to be answered are:

  • Do we limit the fight to foisted ‘Best Management Practices’ and hope for the best?
  • Do we continue to accept the fact that the colour of skin of the majority of seafarers at risk determines this international response?
  • Do Eastern States, whose crews and ships are increasing and more at risk, have clout commensurate with their fleets at these international bodies that are sometimes mainly western old boy clubs?
  • Have the ‘Leopard’ and the ‘Beluga Nomination’ incidents shown us the obvious limitations and dangers of the citadel approach, or should armed guards now be mandatory, citadel or not?
  • What will be the impact on hostages if navies- as in the Samho Jewelry case- engage in five hour rescue operations with hostage crews caught in the crossfire? The next seafarer may not get away with just a bullet in his stomach, as the Master of the Jewelry did. Was the incident fallout of the reported record $9.5 million ransom paid for another vessel by the same owners two months ago? Will more owners or insurers knowingly put crews at greater risk in future by arm-twisting States into similar military action?
  • How do we protect ships from an MStar like terrorist attack?
  • When do we acknowledge that piracy and terrorism are linked? Are we waiting for a public announcement by Al Shabaab or some such to say so? Or is the problem that linking the two will automatically make paying ransoms a criminal activity in many countries, almost all of whom have corporations, lawyers, mercenaries and the like profiting immensely from piracy?
  •  Do we need armed guards between Aden to Sri Lanka on all our ships? And between Aden and the Gulf?
  • Do we need a better ongoing intelligence operation in Somalia? Or do we trust Western governments (Blackwater, with a changed name and smelling just as sweet, scandals or not, is now in Somalia, by the way) to feed us relevant and timely information?
  • What will be the impact of the current unrest in Yemen on anti-piracy operations in the Gulf of Aden- with demonstrators calling for the government to step down?
And, the biggie, and one that requires concerted industry action : How do we put pressure on the international community to take quick and effective measures to change things on the ground within Somalia, a haven for both pirates and terror groups today? How do we get the world to stop its blind-men-and-the-elephant act and acknowledge the beast in its totality? When do we realise that this is the only long term solution to the problem of Somali piracy?


When do we realise that we can’t hope to orchestrate squat the way we are going?


No comments: