The Changing Face of Piracy

The release of tense new Hollywood thriller Captain Phillips has brought piracy back into the headlines – at least on the entertainment pages.

Piracy is no laughing matter. After witnessing Johnny Depp ham it up as captain Jack Sparrow in the Pirates of the Caribbean franchise for the last decade, Captain Phillips reminds us of this fact, providing an altogether more frightening and contemporary view of this often-romanticized trade.

The film tells what is alleged to be the story of captain Richard Phillips (played by Tom Hanks) and his crew aboard the Maersk Alabama cargo ship. Alleged, because some of the crew are now disputing the portrayal of Phillips and certain events in the film, claiming he is not quite the hero he has been made out to be.

The Alabama was boarded by four Somali pirates in 2009, 240 miles from the country’s coastline. The ship was carrying 17,000 tons of cargo, including food from aid organizations, but it wasn’t the cargo that interested the young pirates, it was the ransom money they hoped to receive after taking off with Phillips in one of the ships lifeboats. Instead of making it safely to shore, the group was intercepted by the US Navy destroyer USS Bainbridge. After a standoff lasting several days, three pirates were killed by a Navy SEAL team, while their leader, Abduwali Muse, was captured. Phillips was rescued and hailed a national hero for putting his crew before his own life.

This particular effort may have ended unsuccessfully for the pirates, but it is just one of hundreds of attempts in the area in a wave during the last decade. A recent joint study by the International Criminal Police Organization, United Nations Office on Drugs and Crime and the World Bank says that from 2005 until the of 2012, 179 ships were successfully hijacked off the Horn of Africa, primarily off the coast of Somalia. Pirate Trails, which looks at the finances behind the piracy, claims that over $339 million was paid in ransom money during the period.

Causes of piracy in the area center on political instability, a somewhat lawless society and extreme poverty. It has been suggested that the West, too, has played its part. When Hanks’ Phillips points out to Muse that he is carrying 200 tons of food for starving Africans, the Somali, a struggling fisherman, retorts that if foreigners had not over-fished local waters, then they would not need their charity.

Hired guns

While the crew of the Maersk Alabama had to face their machine gun-toting captors unarmed, things have changed somewhat in the last two years. An increased international naval presence has helped, but the key is that many ships now carry private armed security teams onboard. Previously a legal and cultural difficulty, a number of countries have altered their policies to allow the practice in dangerous waters.

As former US Assistant Secretary of State Andrew Shapiro has stated, “The ultimate security measure a commercial ship can adopt is the use of privately contracted armed security teams. The reason for this is simple: to date, no ship with an armed security team onboard has been successfully pirated.”

The result has been a significant decrease in hijackings off Somalia, falling 50% to 14 in 2012, with attacks dropping from 237 to 75, according to the ICC International Maritime Bureau. In 2013, there have been just 11 reported incidents and two hijackings. As Sven Gerhard, Global Product Leader Hull & Marine Liabilities at Allianz Global Corporate & Specialty puts it, the targets have become harder, and that has affected the Somali piracy business model.

“Like any business, piracy is reliant on funding, from buying a boat to weapons sourcing and operation planning. As the risk has increased and the chances of success fallen, investors have begun to look elsewhere for their profits.”

The changing face of piracy

International attention is now shifting to the opposite side of Africa, particularly Nigeria, where there have been 30 reported incidents so far in 2013, with two successful hijackings. In October, two American sailors were kidnapped in Nigerian waters.

Despite this incident, the business model there has a broadly different focus, explains Gerhard: “While Somali pirates focus on kidnap and ransom, off the West African coast we are seeing more violent theft. Usually it’s cargo such as oil, but ships are also being ransacked for valuables. This changes the risk profile for ship operators, insurers and the crew members themselves.”

Legal challenges prevent the use of armed security that has been so successful in the international waters off Somalia, as West African states don’t allow foreign armed guards to enter their territorial waters. With US Navy ships accompanying the EU Naval Force off Somalia, several West African leaders are calling for a similar floating police force in the Gulf of Guinea, which is home to heavy oil transport traffic.

But as Gerhard emphasizes, solving the issue goes beyond improved security. One of the driving forces behind piracy in Nigerian waters has been the failure to address a rampant black market for oil, making theft a lucrative business. “The long-term solutions to the problem lie on land. You have to address the causes, not just the symptoms.”

Captain Phillips has already been released in the United States and United Kingdom. It will be released on 14 November in Germany and 20 November in France.

Written by Geoff Poulton, Allianz


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