Piracy has re-emerged, particularly in the Gulf of Aden off the coast of Somalia. Considered as a crime against the international community at large, piracy is prosecutable by any state. Maritime piracy brings with it tremendous human and financial costs at a time when the international economy is still recovering from an international economic recession.
The main direct costs of piracy include ransom demands, with the largest known payment being $9.5 million paid in November 2010; the costs of a ship being out of service as negotiations are lately lasting an average of 150 days; an increase in shipping rates and insurance premiums; deterrent and security equipment; excess cost of re-routing of vessels via safer but longer routes; deployment of naval operations off the coast of Somalia; and the institution of piracy prosecutions.
Somali pirates’ income for 2010 was around $238 million with the total direct cost of piracy in 2010 estimated to be between $7-$12 billion.
Piracy also negatively affects trade and fishing industries, the oil industry (with fears that global oil supplies could be distrupted), food prices and tourism. Secondary costs to regional economies is estimated to be $1.25 billion a year.
How should the global shipping industry react to this reality? Although a number of options exist for combating maritime piracy, most are defensive in nature. Individual ships have adopted different onboard deterrents which range from rudimentary measures, such as barbed wire to the employment of private security guards on board.
Over 27 countries currently contribute naval forces towards piracy deterrence. EU NAVFOR Atlanta (the primary goal of which is protecting World Food Programme vessels delivering aid to Somalia as well as other shipping in the region), Ocean Shield (a Nato initiative to protect shipping in the region) and Combined Task Force (CTF) 151 (a multinational task force) together make up over 43 vessels operating off the Horn of Africa and the Indian Ocean.
Yet, despite rigorous patrols by warships off the Somali coast, pirate attacks have far from declined and have moved further out to sea. Attacks are becoming increasingly more sophisticated as pirates use ransom money to organise themselves and obtain military equipment. Statistics show that gun use in attacks has increased resulting in more injuries and deaths. As a consequence, shipowners are resorting to self-defence measures and the use of arms and armed guards.
Questions of legality with respect to armed guards on board ships is problematic because many states are reluctant to get involved, leaving operators and personnel in a legal limbo and bereft of the required protection. Shipping lines have therefore intensified pressure on the International Maritime Organisation and Flag States over the deployment of armed guards.
While the IMO is actively engaged in discussing the issue of deploying armed guards on ships its official position remains against their use for fear that such a policy will lead to an escalation of violence and loss of life.
Notwithstanding the position taken by the IMO and Flag States, many shipowners are ignoring official advice and routinely employing armed guards on board ships sailing in high risk areas. These shipowners insist that this policy serves as a deterrent and is the safest way of protecting crew, ships and cargoes. Governments continue to frown on such practices, but in reality many are turning a blind eye, given the failure of naval forces to protect ships from the almost daily piracy attacks.
Interestingly, while the IMO still does not recommend the use of arms, the United States encourages its vessels to keep arms on board. Other jurisdictions such as the Bahamas, Panama and Liberia also seem to encourage the deployment of armed guards on board.
With the eighth largest maritime flag in the world and the second largest in Europe in terms of tonnage, Malta has a serious interest in the further development of anti-piracy measures at international levels and Maltese soldiers have participated in EU NAVFOR Atlanta.
As an EU member, Malta adopts a strict ‘No arms on board policy’ in line with the stand adopted by the IMO and almost all other Flag State Administrations. As long as the IMO and EU retain such a policy, Malta cannot afford to deviate from this stand.
Piracy is clearly a consequence of the general collapse of law and order, particularly in Somalia. Experts predict that such attacks will continue as long as there is no central government in Somalia capable of arresting and prosecuting pirates. The only hope of effectively reducing and possibly bringing an end to this crime is, undoubtedly, the establishment of a stable state.
Dr Saguna specialises in ship registration and ship finance at Fenech & Fenech Advocates.