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Expert article 867 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 Piracy is a menace to international sea traffic By Bo Österlund The world slumbered for a long time in the belief that piracy was a matter of history. The first hints of the emergence of this menace and retarder of peaceful sea traffic reappeared, however, in the 1980s. News of merchant ships en route assaulted by pirates trickled from Asia, the Strait of Malacca and the waters of Indonesia. In the years 2003 – 2008 these observations were concretized revealing a global activity off the coast of western Africa, South America, India, and Bangladesh. Actually there is nothing new in piracy, i.e in an assault upon a vessel at sea by outsiders. What is new is the intensity of the action, and the manner of operation as well as the considerable and rather farreaching economic impacts of these highjackings. One assault every day Within the five-year period given above, 622 verified hijacking attacks were registered; 387 i.e. more than 50 per cent in the waters of Indonesia. This equals, on an average, to at least one assault or attempt of piracy per day. When it comes to the frequency of the cases, the situation had remained on the same level ever since the latter half of the 1990s. On the initiative of the United Nations, the countries in southeastern Asia on the coast of the Strait of Malacca, i.e. Indonesia, Malaysia, and Singapore were called to the same assembly hall to solve their common problem. One of the arguments in calling this convention was the announcement of the United States concerning the curtailment of its own marine presence, and, thus, its diminishing protective activity in the area. The gaze of the United States was already turning in the direction of the China Sea to acquire a foothold for its marine forces. The cooperation and joint efforts of the three countries to put an end to piracy have given successful results. In 2003 there were more than 120 registered assaults in the Indonesian territory, which was the highest frequency of such events in the world. In 2008, no more than 21 piracies were verified in the area, i.e. a fall of almost 80 per cent. This was partly due to the fact that 80 patrol ships were stationed in this archipelago of 17 000 islands to prevent piracy. In the statistical year 2007 almost 50 per cent of the pirate attacks in the world occurred off the coasts of Somalia and Nigeria. In 2008, pirates made as many as 293 assaults upon merchant vessels, and in October 2009 the total number of the whole previous year had already been surpassed. According to the piracy report on last year (2010) published by IMB (International Maritime Bureau), piracy seems to be growing again on all the seas of the world, both when it comes to the number of cases and to their geographical extent. Last year the pirates succeeded in hijacking 53 vessels and kidnapping 1 180 sailors. The European Union joined the defensive manoeuvres with its own operation called Atalanta. The NAVFOR (Naval Force) Atalanta, launched in December 2008, is the first marine operation aiming at crisis management carried out by the European Union. This operation is a part of the large-scale measures to stabilize the situation of Somalia. A sustainable solution demands a progress of stability and development of constitutionalism in Somalia. The present mandate of the manoeuvre will be valid until December 12, 2012. The assignment of Atalanta is, in the first place, to protect the vessels of the WFP (World Food Program) transporting food aid to Somalia. Its second obligation is to protect other vessels sailing in the coastal waters of Somalia, and to prevent piracy and armed hijackings. In addition, the vessels participating in the operation are to shelter the AMISOM (African Union Mission in Somalia) transportations when requested by the General Secretary of the United Nations. So far, the operation Atalanta has been successful in its principal task, viz. protecting humanitarian transportations. The operation has, where possible, protected and convoyed also other sea traffic. Capturing pirates is not the principal obligation of the operation. Last year as many as 35 of the attempted hijacking assaults were registered as being performed by Somali pirates. The activity has, however, diminished in comparison with the 102 cases of the 16 preceding year. This might be due to the presence of the marine forces of the international community. During the first quarter of last year pirates made armed boardings on 26 vessels, 18 vessels were objects of gunfire, 12 suffered damage on account of attempted boardings, and 11 fell victims to successful pirate hijackings. The hijacking of a Danish sailing-boat and its prolonged ”catand-mouse”-game is bound to corroborate this trend of change, and the introduction of more severe methods of violence. The Danish family is now free after several months of being captives Piracy makes you rich Profiting lies, of course, as stated above, in the background of piracy, and plain money is the decisive factor in their undertakings. The pirates insist on gaining ransom money of up to one million US dollars for the crew, the vessel, and the cargo. In comparison with other ways of earning money it may be mentioned that the turnover of fishing off the Somali coast is under 2 million US dollars annually. Piracy might thus be regarded as extraordinarily profitable ”business”. As a consequence of piracy the prices of brides have risen considerably at the pirate bases. Today, the bride must be dressed in gold and diamonds, their shoes must be made in Italy, and the wedding dress must be bought in Dubai. Japanese cars, mobile telephones, plasma televisions, and DVD players change owners in the form of dowry. In the days prior to the rise of piracy the bridal dowry consisted of a few goats and some twenty hens.According to the estimates made by the Foundation ”One Earth Future” piracy causes annually an extra cost of 4 – 8 thousand million €. This figure comprises the ransom money, insurance premiums, military protection operations, the extra expenses caused by compulsory route alterations, and the costs caused by anti-piracy operations of various organizations. The operational area off the Somali coast and in the Gulf of Aden embraces slightly less than three million square kilometres. In comparison with our own lifeblood artery the Baltic Sea whose total area comprises slightly more than 400 000 square kilometers, the operational area of the Gulf of Aden is thus approximately seven times larger. More than 22 000 vessels sail through the Suez Canal every year. These vessels transport more than eight per cent of the total world trade volume. Additionally, more than 10 000 merchant ships, fishing vessels, and fishing boats traffic in the Gulf of Aden. There are considerable oil deposits in the area, and about 20 per cent of the world's gas deposits have been discovered in this region. More than 40 per cent of the oil transportations of the world trade travel through the Strait of Hormuz, and 11 per cent through the Suez Canal. Energy transportation means ”big money” to pirates, and such transportations are thus very profitable targets in the form of enormous ransom sums.Pirates have been capable of increasing their capacity of open-sea operations by adopting a new method of manoeuvres in the form of so-called mother ships; some vessels have been already captured by the pirates who have transformed them into mother ships. Sophisticated intelligence and leadership systems and a developed and enlarged land and base network create the basis of making rapidly reacting choices of procedure. The Commander of the Naval Forces of the United States established in his speech in May 2009 that the resources of the coalition were rather limited. About 30 warships are operating in anti-piracy activities off the coasts of Somalia. In theory a war ship is supposed to be capable of intervening within no more than ten minutes when needed anywhere in its operational area but this would actually require more than 1 200 war vessels off the Somali coast. Consequently, the rational procedure is to focus on the most actively trafficked waterways. In that way it will be possible to reach the above-mentioned necessary temporal preparedness when it comes to intervention, but even then in restricted areas only. To create a similar density of vessels say in the Baltic Sea would mean concentrating more than 250 war ships in this area � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei �
Expert article 867 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 (depending on the velocity of such vessels). The large regional archipelago areas will complicate such theoretical calculations because of their own specific traits and particular needs; the shortest way to reach the victim vessel is not always feasible for navigational reasons. The marine forces of the countries around the Baltic Sea have actually no resources to exercise such activity, and to bring together a necessary fleet. Unarmed Merchant Vessel – Easy Booty The most vulnerable object in all anti-piracy operations is the merchant vessel itself and its crew. The 400 000 crew members on the 20 000 vessels sailing in the Gulf of Aden annually jeopardize their lives to protect the freedom of the seas and to maintain international sea traffic. For decades, unarmed merchant ships have been easy booties in wars and conflicts. Although the situation off Aden does not yet meet the descripton of open war, violence already holds the reins. The area has obtained the status of a war zone in the classification of international insurance business. The amount of insurance for a merchant vessel sailing through the Gulf of Aden was in 2008 only 0,015 per cent of the value of the ship; today the charge is 0,15 per cent, i.e. the expense is now tenfold. In the Strait of Malacca in the Far East the amount may rise up to 0,8 per cent, which is 50 times higher than in 2008. The freight charges have risen correspondingly, and the consumer is obliged to pay these soaring charges in the form of higher prices of commodities. On the initiative of the marine authorities of the United States the security system of the IMO (the International Maritime Organization), the ISPS ( the International Ship and Port Facility Security Code) involving vessels and ports with foreign trade activities has been universally adopted from the beginning of 2008. This arrangement binds every port and merchant vessel to design an up-to-date security plan, and to carry out pertinent and regular practices in this matter. Finnish foreign-trade ports are today fenced accordingly, and the access to the port area is controlled and prohibited without permission. How then can the vessels protect themselves against pirates? The events off the Somali coast reveal that the attacks are mostly directed on vessels with low dry boards (the height of the main deck from the sea surface), sailing at low speed, with little preparedness against pirate attacks, and with slow response in repelling assaults. There is actually no chance to accelerate the low (below 15 knots) speeds or to elevate too low (below eight metres) dry boards but structural reforms might raise the threshold of being hijacked: obstacles of barbed wire on the gunwales, pressurized fire hoses on the decks etc. In addition to the safety measures taken by the vessels themselves, war ships offer, within their resources, shelter on predetermined and hazardous route legs in the Gulf of Aden. According to the statistics pirate attacks occur mostly in broad daylight, and sailing on the risky legs should therefore be done preferably in the dark. A pirate attack may be divided into three phases: in the first phase an unidentified object approaches the merchant vessel in a suspicious manner, in the second phase the approacher attacks, and in the third the pirates board the vessel and hijack it. If the defense measures work well, the attackers will at some point give up their intentions and disappear. If the pirates succeed in boarding their target vessel, the game is in most cases over. According to the instructions of the IMO the crew should, in such a case, stay calm, give up all resistance, and appear to be willing of cooperation with the attackers. The various organizations within sea trafficking recommend that the defender, i.e. the merchant vessel should not resort to 17 weapons in order to prevent further escalation and to save the lives of the crew. during this autumn the British have begun to use armed guards on their merchant vessels. Consumers pay for Criminal Actions Still, the criminal acts of pirates are a deep-going factor in global economy. Ransom money must be paid, and the vessels with their valuable cargo may be damaged. If this, in its turn, restricts the supply of the commodities concerned, the prices will go up, and, again, the consumer is the payer. Goods deliveries will be delayed or may not reach their destination at all. In world trade operations the ship owners have to increase the structural safety measures of their vessels; these, in turn, will incur expenses of maintenance, and the impacts will be recurred in freight charges and in consumer prices. One notable and appreciable solution might be to transfer the sea transportations to more secure routes, but this will lengthen the sea passages resulting in rising expenses to be paid lastly by the consumers. Sailing round the Cape of Good Hope in order to avoid the Gulf of Aden will lengthen the sea passage from the Persian Gulf to Rotterdam more than 3 500 sea miles; at the rate of 15 knots this would mean about ten extra days at sea. The extra cost of fuel would be paid again in higher consumer prices. The Core of the Problem Lies in the Soil of Somalia Preventing piracy and taking precautions against it is the obligation of the entire civilized world. The situation in the Strait of Malacca was stabilized through mutual understanding of the conference called by the United Nations, and the number of pirate attacks was reduced as a result of the tripartite treaty of the states in that area. The situation off the Somali coast is entirely different: even though the resources might be sufficient at sea, the core of the problem lies on the land. The support area of the pirates, i.e. the coastal regions in Somalia is void of the jurisdictional authority of a constitutional state. The bases of the pirates seem to function well as a part of their activity. The population seems to give them their silent approval close to the large-scale unemployment in the area. To them, piracy appears to be lucrative and relatively secure business. Apprehending persons suspected of piracy, and arrangements agreed in advance to surrender them into the hands of justice would be a step in enhancing the preliminary threshold of deterrence. Releasing pirates gives them, instead, an opportunity of renewing their attempts to attack appropriate targets; the effect of protection and its results come thus to nothing, they will flow into the sands of Somalia. We all will benefit by a successful solution which will eradicate piracy for good from this world. The result of such a solution will be seen, if not in our wallets but at least in the prices of commodities universally needed, in the price of fuel, and , in the end, in our own well-being. Bo Österlund Commodore (retired) Finland � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei �
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