February 23, 2012

Somali piracy: Whole lotta shakedown going on

graphic, source- Ocean's Beyond Piracy

We ain't fakin'
Whole lotta shakin' goin' on
                                              -Jerry Lee Lewis

Denuded statistics from the Ocean's Beyond Piracy published last week prove to me once again how Western nations have deluded everybody and conspired to make billions annually from Somali piracy- while the pirates have made peanuts in comparison. Indeed, these nations have gone one up on Somali pirates- they don't hijack one or two ships; they hijack the entire industry instead, and they do it legally. 

What is even more frightening to a sailor is that the same game will be played elsewhere in the world. It is already being played in Nigeria, where a Taiwanese Captain and a Chief Engineer were shot dead by pirates last week when their ship was attacked. It will be played again and again, as criminals are encouraged across the world after the realisation that the powerful in the international community are party to their plunder, torture and murder, not a deterrent against it. 

The OBP figures are stark and tell their own story.  The number of pirate attacks has decreased, as we all know, but the cost of piracy is still around 7 billion dollars annually- the same as in 2010. Last year, the shipping industry spent all of 2.7 billion US smackeroos because of increased fuel consumption as ships- mainly container ships- ran hell for leather across pirate zones. More than a billion was spent additionally on private guards. The total pirate ransoms for last year were just 160 million US dollars, which makes it clear that "private security companies, many based in Britain or elsewhere in northern Europe that combat the pirates, were earning much more than the pirates themselves". That quote is from Reuters, but anybody can do the math.  

And oh, governments are spending $1.3 billion annually on their navies that patrol the region, although I am unclear how much of this cost should be allocated to anti-piracy and how much should be chalked up against the sabre rattling and geopolitical ambitions of some of these nations. Other large chunks of costs: insurance ($635 million, much of it paid again to the West), re-routing vessels (up to $680 million) and “danger pay” for sailors ($195 million). 

The bottom line is that pirates are making just two percent of the total money being spent on piracy. The rest is due to higher insurance premiums, security and other anti-piracy costs that remain unchanged whether ships are hijacked or not, OBP says, its lead author Anna Bowden pointing out that, “the costs of preventing piracy are indeed disproportionately high. It is also a concern that 99% of these costs are recurring costs. There needs to be a reassessment of the long-term sustainability of these costs.” 

Rather politely, I thought, pirate expert Jan Stockbruegger later told The Media Line, “Pirates earn $160 million per year, while the cost for insurance is four or five times higher. You could argue that insurance companies make more money from piracy than the pirates themselves.”  The same argument, as said, applies to private security companies.

To get some other stats out of the way: The number of Somali attacks actually increased to 237 in 2011 against 219 in 2010, although the number of ships hijacked fell from 49 to 28, thanks to armed guards. These numbers have to be taken with a pinch of salt, because many attacks remain unreported. However, average ransoms have shot up by 25 percent. Worse, the average time hostage sailors spent under pirate control increased dramatically- to 178 days, more than half a year. Moreover, “a worrying development in the ransom business model,” OBP says, is that pirates have begun to focus their attention on people rather than ships. We know that already; we have all heard the reports of torture, killings and the transfer of crews off ships and onto land, as pirates get increasingly violent.

You know, while I have been writing for a very long time about this criminal behaviour of mainly Western companies, backed by their governments and lackey international organisations, I have erred in assuming that at least some of their impotence in the response to piracy was because of inefficiency or ineptitude. 

Look at the evidence.  Some of us were screaming for years that armed guards were the only solution; it was only when things escalated out of control, that guards were allowed or even promoted by the same countries, the IMO or insurance companies that are all based in the West. Meanwhile everybody made a fortune.

Some of us were screaming for years about the links between Al Qaeda, Al Shabaab and piracy- an accepted fact today, as drone attacks and the invasion of Somalia by half a dozen countries shows. These links were not acknowledged, because it would have meant that no ransoms could be paid in countries like the UK and other action would have to be taken, all of which would have derailed the gravy train in the West. It took the kidnapping of a couple of western tourists from a Kenyan resort into Somalia for these links to be publicly acknowledged, although quietly even today, to ensure that the gravy train chugs along.

As things stand, the struggling shipping industry will continue to pay billions of dollars annually through its nose to the same companies and countries in the West. Very little of this will be for ransom; 98 percent will go into Western pockets.  Our screaming will be conveniently ignored -although, hypocritically, the West will continue to express concern about piracy and the abuse or killing of mainly third world sailors. 

They will be faking, of course.  Because the truth is that they love piracy. The truth is- sorry, Jerry Lee Lewis- that there is a whole lotta shakedown going on. 

Infographics  http://www.backgroundcheck.org/cost-of-piracy/


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