The pirates of Somalia should not be confused with the sword wielding pirates of old. So write risk consultants Inkerman in a recent briefing for clients, which ties in with the article in the January print issue of Professional Security Magazine.
Inkerman regularly brief clients with their ‘Monitor’ reports, covering risk and business intelligence topics – for instance the February topic is rising Russian influence in Latin America. In December 2008, the destroyer Admiral Chabanenko became the first Russian or Soviet military ship to traverse the Panama Canal since World War II – a highly symbolic move by Moscow.
The consultants write:
Far from the romantic visions espoused by contemporary cinema, modern piracy is a ruthless and increasingly sophisticated business. With the large amount of money received from ransom payments, pirates are able to equip themselves with the latest in modern technology and weaponry, including handheld Global Positioning System (GPS) units, MANPADS (Man Portable Air Defence Systems), satellite phones and rocket propelled grenade (RPG) launchers.
… thus far companies and countries have preferred to negotiate ransom demands rather than risk an unpredictable armed exchange against the increasingly assertive pirates.
… prudent shipping companies are being forced to consider practical solutions to mitigate the risk of hijackings. The argument in favour of posting armed guards on ships is typically met with caution by mariners, who are generally wary of having armed military types onboard for extended voyages in cramped quarters. There is also the concern that should pirates be met with deadly force, they will respond in kind, leading to unacceptable casualties. Shipping companies are increasingly resorting to taking out insurance policies that cover potential ransom payouts on crew members, with some offering cover for individual ships or an entire fleet providing maximum cover of US$3 million per insured event, with between 12.5 per cent and 25pc of the premium returnable to the customer if no claim is made. Insurance costs for shipping in volatile areas have skyrocketed due to Somali piracy, with premiums covering cargo increasing tenfold from January 2008 to December 2008. It can cost over US$1.5 million to insure a fleet of ships against hull damage on a journey through the Gulf of Aden, added to this is loss or harm to cargos, terror attacks and kidnap and ransom costs, which include the cost of insuring the boat and crew of any ship tasked with delivering the ransom to the pirates, which in itself can cost upwards of US$1 million. Other, non lethal solutions, involve the installation of antipiracy equipment such as a “Long Range Acoustic Device” which directs a noise of up to 151 decibels up to 300 metres away. Others take a low tech approach to the problem, with the crew of a Chinese boat fighting off pirates with bottles and crockery on January 2, 2009. However the situation remains haphazard …
There are no obvious solutions to the quagmire of Somalia. The risk of pirate hijacking, terrorist attack and militia raids originating in the country can only be mitigated by increased internal and border security on the part of its neighbours and the increased policing of its coastal waters by international warships, they cannot currently be managed and eliminated without significant external intervention in the country,
intervention which is unlikely to happen.
