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Piracy syndicates are selling shares in planned attacks!

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  • Pacific Merchant Marine Council
    Ahoy All, How about this! Piracy syndicates are selling shares in planned attacks. Back-up information below plus some new links. See you at the luncheon on
    Message 1 of 1 , May 3, 2011
      Ahoy All,
      How about this! Piracy syndicates are selling shares in planned attacks.
      Back-up information below plus some new links.
      See you at the luncheon on the 24th!
      Heave Ho,
      Piracy syndicates are selling shares in planned attacks
      ItÂ’s a business. Pirates are extending the business model to how they pay their crew members based on skills or other assets, such as weapons, that they can bring to the mission.
      Piracy syndicates are selling shares in planned attacks, fueled by a surge of ransom payments that help attract investors, the U.S. Chief of Naval Operations Admiral Gary Roughead said.

      Piracy syndicates in villages, mainly in largely ungoverned Somalia, solicit investors who buy shares in the attack missions and gain a corresponding share of ransoms paid by the shipping industry, he said.

      "The ransoms fuel the business; the business invests in more capability -- either in a bigger boat, more weapons, better electronic-detection means to determine where the ships are," Roughead said yesterday during an interview in Bloomberg's Washington Bureau. "So it's a business."

      The average ransom payment rose 36-fold over five years to $5.4 million last year, compared with $150,000 in 2005, according to the Louisville, Colorado-based One Earth Future Foundation.

      The payments are fueling increased raids, adding at least $2.4 billion to transport costs because vessels are being diverted onto longer routes to avoid attacks off east Africa, the nonprofit group said earlier this year.

      A group of 60 nations is working to combat the threat, which is made worse by complex national and international laws and norms that restrict effective prosecution.

      The London-based International Maritime Bureau recorded 142 attacks worldwide in the first quarter of this year, the most for the period since monitoring began in 1991. Pirates took 344 sailors hostage and killed seven during the period.

      Worse in 2011

      Trends indicate that 2011 will be worse, U.S. Assistant Secretary of State for Political-Military Affairs Andrew Shapiro told an audience in Washington on March 30.

      The North Atlantic Treaty Organization said that on April 20 it fired in self-defense on a group of suspected pirates near the Somali coast. The Danish warship HDMS Esbern Snare came under attack while investigating a hijacked vessel headed toward a known pirate town, NATO said in a statement yesterday.

      "The government is not providing the industry with any other alternative" to ransoms, said Graham Westgarth, president of Teekay Marine Services, a unit of Hamilton, Bermuda-based Teekay Corp. (TK), the world's biggest oil-tanker owner. "This is a political issue that has to be solved by the government." About 600 mariners are being held hostage, some for as long as six months, he said.

      Result of Ransoms

      "The increase in attacks over the last year is a direct result of the enormous amounts of ransom now being paid to pirates," Shapiro said at a forum organized by the London-based International Institute for Strategic Studies.

      Pirates are extending the business model to how they pay their crew members based on skills or other assets, such as weapons, that they can bring to the mission, Roughead said.

      While shipping companies are increasingly adopting proven practices to reduce the risk of a pirate attack, they also may benefit from paying ransoms by avoiding higher insurance rates, the admiral said.

      Ransoms paid totaled $238 million in 2010 and total losses were as much as $12 billion when costs such as insurance premiums, re-routing of ships and security were taken into account, according to One Earth Future, which runs a project to work with industry and affected countries to curb piracy.

      "I think the shipping companies are aware of the fact the ransoms are not helpful," Roughead said. "My sense is that it is a business decision on their parts."

      Crew Welfare

      Shippers have to consider the welfare of their crews in confronting the challenges of piracy, said Joseph J. Angelo, the Arlington, Virginia-based managing director of Intertanko, a trade group for tanker owners. Westgarth is chairman of the group.

      "If our membership don't demonstrate a strong concern for the safety of the seafarer, why would any seafarer sail with our member?" Angelo said in a telephone interview yesterday. "There needs to be an increase in the will of governments to eradicate piracy."

      Pirates have changed their tactics to adapt to defensive measures taken by navies participating in the international anti-piracy coalition. They ranged as far south as Madagascar last year, and to within about 100 miles north of the Maldives in the east, reports from the International Maritime Bureau show.

      The Contact Group on Piracy off the Coast of Somalia has expanded to 60 countries this year from 28 countries when it was established in January 2009. A multinational task force conducts naval patrols in the Gulf of Aden and off the coast of Somalia, seeking to cover an area of more than 1 million square miles, Shapiro said in his March 30 speech.

      Aggressive Targeting

      Further steps being considered include determining better ways to prosecute pirates, expanding military approaches and "aggressively targeting those who organize, lead and profit from piracy operations," Shapiro said.

      "Over the years, 80 percent of the pirates have been captured at some point, and 90 percent of that 80 percent have been released," said Westgarth, the industry executive.

      The escalation in piracy has prompted the U.S. to back off its traditional reluctance to support an international forum for prosecuting such crimes after seeing that national courts in the region aren't sufficiently dealing with the problem, he said.

      "The United States is now willing to consider pursuing some creative and innovative ways to go beyond ordinary national prosecutions," Shapiro said.

      The industry also can do more, Shapiro said. About 20 percent of vessels off the Horn of Africa aren't using proven "best practices" to increase security, such as proceeding at full speed through high-risk areas or placing more lookouts on watch, he said. They account for "the overwhelming number of successfully pirated ships," he said.

      Source: Bloomberg

      Alarming Trends in Somalia Piracy Front
      Apostolos Belokas
      Principal Consultant & CEO, IBS Marine Consulting Group
      Unfortunately we have been witnessing escalating violence in the Somalia area lately. Furthermore we have seen significant milestones towards developing a robust anti-piracy culture, more specifically :

      1. On Mid March the Dutch parliament has agreed to deploy Dutch troops on board a number of Dutch merchant ships to protect them against piracy in the Indian Ocean and the Gulf of Aden. The only party to vote against the measure was the Socialist Party, which said too many things about the mission were unclear. (Full story at http://www.safety4sea.com/article.php?id=3210 )

      2. On April the 7th, the fully loaded VLCC MV Irene SL, transporting $200 million (of crude oil, was released by Somali pirates (after 57 days) who claimed that they received a record ransom on the area of $13 million. The vessel sailed to Durban where the South African authorities assisted by INTERPOL are scheduling to launch a thorough investigation of the incident. More than 30 officials are expected to attend the investigation process, that is expected to be one of a kind. (Full story at http://www.safety4sea.com/article.php?id=3593 )

      3. On April the 7th, Jama Idle Ibrahim, a Somali national, was sentenced in Washington to serve a 25-year sentence for his role in an attack on the CEC Future. Because the sentence will run concurrently with a 30-year sentence already imposed in the case of the Navy ship, however, Ibrahim won't spend any additional time in prison. The case in Washington is believed to be unique in that it's the first time a pirate known to have captured a ship and obtained a ransom was prosecuted in the United States. In 2008, Ibrahim and other pirates held the CEC Future captive for more than two months before being paid a $1.7 million ransom and departing. (Full story at http://www.safety4sea.com/article.php?id=3414 )

      4. On April the 15th in a move that could change the pirate-hostage equation, Somali pirates received a $5 million ransom for the release of Asphalt Venture, whose ownership is located in Mumbai, India, however they decided to release the ship and some of the crew but kept all the Indian crew members as hostages. A pirate told the Indian crew members' hostage ordeal is being prolonged in retaliation for the arrests of more than 100 Somali pirates by the Indian Navy. "We decided to keep the Indian because India is holding our colleagues," the pirate, Hassan Farah, said. "We released the other crew members who sailed away from our coast. We will keep these Indians until the Indians release our colleagues." . (Full story at http://www.safety4sea.com/article.php?id=3571 )

      5. On April the 18th, Mohammed Abdulahi Omar Asharq, Somali transitional government's foreign minister has told during a counter Piracy Conference in Dubai that shipping firms should not pay ransoms to pirates as it leads to more attacks. The world is losing the battle against piracy, he warned as he and other officials emphasised that the solution to piracy lies on land. He also slammed world leaders for being so slow to act over his country's problems, despite leaping into action for conflicts in Libya and Ivory Coast. (Full story at http://www.safety4sea.com/article.php?id=3585 )

      What is evident from the above : The International community is still trying to find an effective cure for the escalating Piracy Situation in the wider Somalia area.

      The problem was initially attracted the international attention due to the piracy of Sirious Star, the VELA operated VLCC in the middle of the Indian ocean. Then it was the Atalanda Operation that evolved into a highly successful counter piracy operation in the Gulf of Aden. Unfortunately we have to fight a war here. As soon as the counter piracy operations prove to be effective the pirates are changing tactics to find an effective offensive cure for the defensive strategy employed.

      For many people in the International Community the solution lies in the Somali land. Things need to be sorted out and this has not been achieved without the international help, a help that has been provided without hesitation in other situations like Libya, Iraq etc.

      Despite all of the above and the emerging trend of arming the vessels, as this is the only effective piracy deterrent measure so far there is no light shaded to the key objective of counter piracy operations.

      What is the objective(s) of the counter piracy operation?

      1. Ensure safety of the crew, cargo and property in general from the pirates
      2. Ensure continuous flow of global trade

      To work within these objectives you will find out that the Atalanta Operation initiated with the following on focus :

      1. Destruction of the land bases the Somali pirates use to launch their many sea attacks from.

      2. Protect merchant vessels in the waterways between Somali and Yemen.

      3. Protect fishermen in the Indian Ocean.

      You need to be honest now in order to see what is going on :

      Are these objectives achieved : NO

      Has the international community including the naval forces made any improvements so far by improving the efficiency of the operation : Certainly YES.

      Is it sufficiently effective ? Certainly NO

      Have we learned anything from our mistakes over the last 4 years in the Somalia Area ? NOT CLEAR

      Several Failures of the International Community may be recorded in the Somali front, however someone has to stay on the two major failures here:

      1. IMB in its dedicated web page http://www.icc-ccs.org/piracy-reporting-centre/piracynewsafigures indicates that currently the Somali Pirates are holding 26 vessels and 532 seafarer hostages. This is certainly a failure of the International Community to stop such an annoying trend. The flow of global trade may not be the same after that.

      2. Still more than 500 seafarers are being held as hostages. How exactly are we going to attract fresh blood into the industry ? Many companies are providing some sort of compensation bonus to the released crew after a piracy Incident. Is this enough ? How about the next vessel, the next incident and so on. The industry has failed to protect its key asset : PEOPLE

      To see the truth as is at the moment the cost of combating piracy seems more than the cost of Piracy it shelf. The cost of ransoms and the associated counter piracy operations may be in the round of billions but it is LESS than the profits out of this equation. As long as the industry DOES NOT solving the equation properly the piracy will thrive. And sooner or later we will see such a trend to be transformed into epidemic. It is a simple law of nature.

      New piracy related links at http://groups.yahoo.com/group/PMMC-NLUS/links

      Best Management Practices to Deter Piracy off the Coast of Somalia... (BMP3)
      BMP3 Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area (Version 3 - June 2010) Suggested Planning and Operational Practices to deter attack.

      Oceans Beyond Piracy
      Oceans Beyond Piracy is the initial project of One Earth Future (OEF), a privately funded foundation that works towards a world beyond war within one hundred years. Source of current information on piracy.

      Make Safety easy to understand for everyone in the marine industry. Promote the concept of Safety in all marine operations. Improve the perception of people towards safety initiatives.

      Save our Seafarers (SoS)
      Over 800 seafarers are being held hostage by armed gangs of Somali pirates, in appalling conditions, subject to physical and psychological abuse, for up to 8 months. This organization along with the IMO is taking the lead to combat piracy.



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