Time to Join the Fight Against Maritime Piracy

Later this morning I'll be off to the International Maritime Organization (IMO) headquarters here in London to participate in the launch of a new initiative called Seafarers' Rights International. In essence, it's a response by various stakeholder groups to the plight of seafarers travelling through the volatile Gulf of Aden where still-rampant piracy endangers not only crewmen but also world trade. While I'm not much of an activist, I'll make an exception here since my country sends somewhere between a fifth to a quarter of all seafarers worldwide. Not coincidentally, today (23 September) is also the UN-designated World Maritime Day. Here is a brief description of what we're up against from the press blurb:

Piracy and crime at sea have been problems throughout history. But, in recent years, there has been a dramatic upsurge in the threat to shipping and crews, particularly with attacks originating from the lawless coastal regions of Somalia. 2008 saw an increase in attacks on shipping in the Gulf of Aden from pirates operating out of certain coastal regions of Somalia. In that year 111 ships were attacked. By 2009, the number of ships attacked had increased to 217, with 47 vessels and 867 crew taken hostage.

Currently there are 354 people being held hostage (including Paul and Lynn Chandler). Their nationalities are Indian, Sri Lankan, Greek, Pakistani, Filipino, Sudanese, Ghanaian, Bangladeshi, Ukrainian, Yemeni, Burmese, Turkish, Vietnamese, Kenyan, Indonesian, Chinese, Korean and British. Sixteen vessels are also being held to ransom.

Twenty to twenty five thousand vessels pass through the affected area each year – that’s over 400 vessels and 6,000 seafarers at risk every week. In 2007, a piracy attack was reported approximately every 31 hours. There were 15 piracy related deaths in 2006, 11 in 2008 and nine in 2009. In 2008 the amount paid to pirates in ransoms was estimated at US$150 million. There are an estimated 600 to 1,000 pirates operating out of Somali waters.

And here are more details of the petition which you can of course sign on to online:

The petition (www.endpiracypetition.org) was launched just four months ago as the centrepiece of a campaign to persuade all governments to commit the resources necessary to end the increasing problem of Somalia-based piracy. Originally intended to achieve half a million signatures, it has far exceeded that figure and definitively proves that immediate action is needed.

At a time when 354 seafarers and 16 ships are being held hostage in Somalia, pirates are being released unprosecuted to kidnap, loot and maybe kill again, when it is impossible to use routes via the Suez Canal between Asia/the Middle East and Europe/North America without passing through a high risk area, the campaign calls on governments to:

• Dedicate significant resources and work to find real solutions to the growing piracy problem
• Take immediate steps to secure the release and safe return of kidnapped seafarers to their families
• Work within the international community to secure a stable and peaceful future for Somalia and its people

Since this is the IPE Zone, we must also consider the negative effects of piracy on world trade if ships choose to go around the Cape of Good Hope instead of passing through the Suez Canal or purchase increasingly costly insurance:

As well as the human cost in fear and trauma caused to victims, seafarers and their families, piracy creates additional economic costs which are ultimately passed on to taxpayers and consumers. Apart from military patrols, paid for by a handful of governments, ship operators have to pay to re-route ships, meet higher insurance premiums, hire security guards and install shipboard deterrent/protection equipment.

6.8 billion tons of goods are moved by sea each year, in a global trade cycle worth $7.4 trillion. European economies are those most affected in relation to trade through the Gulf of Aden. In August 2009 the Suez Canal reported a 20% drop in revenues, partly as a result of piracy.

Examples:

Re-routing a tanker from Saudi Arabia to the USA via the Cape of Good Hope means 2,700 extra miles on the voyage. Over a year this reduces the number of voyages the ship can do from six to five round trips (a 26% drop). Additional fuel costs over the year would be $3.5 million.

In 2002 maritime insurers tripled the premiums for tankers passing through Yemeni waters. The cost to insure the ship, not the cargo, for a typical supertanker that carries 2 million barrels of oil jumped from $150,000 to $450,000 for a single trip. That increase translated into an additional 15 cents a barrel on the delivered cost of the oil.

Re-routing on a liner trade would mean adding another ship to the service to maintain the schedule. On a Europe - Far East route, re-routing around the Cape of Good Hope would increase the costs by $89 million per year ($74.4 million in fuel and $14.6 million in charter expenses).

War risk binders for ships transiting the Gulf of Aden cost $20,000 per ship per voyage, excluding injury, liability and ransom coverage. Crew costs while the vessel is in the high risk area can double. The cost of hiring a security escort through the Suez Canal can be as much as $100,000. Yemen’s navy is charging commercial vessels up to $55,000 each for escorted transit through the Gulf of Aden.

Maersk Line is reportedly increasing the amount it charges for cargo in and out of East African ports by $50 to $100 per container. The company’s ‘war risk charges’ for containers transported through the Gulf of Aden are $25 for a 20 foot container and $50 for a 40 foot container.

The breakdown of what a typical ransom costs (Source: Miller Insurance Services Limited) is as follows:
Average ransom $2 to $5 million
Managing the pirates: approx $550,000
Managing the people: approx $600,000
Managing the business: approx $1 million
TOTAL = ransom + $2.15 million

Attacks on energy vessels account for a large proportion of piracy attacks (12% in 2006, 24% in 2007). Over 60% of all oil used worldwide is transported by sea.

It's not fun stuff, I hope you'll agree.