Somali piracy begets new security industry

Feb. 14, 2012 at 4:53 PM
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MOGADISHU, Somalia, Feb. 14 (UPI) -- The plague of Somali pirates marauding across the Indian Ocean has spawned a lucrative security industry that boasts 120 companies providing protection and which the Financial Times says "make more money than the pirates."

This growing business earns revenue of some $55.2 million a month for security firms such as Hart Security of Britain and Templar Titan of the United States, which provide armed guards for around 1,500 voyages a month, the business daily says.

The pirate gangs that prowl 1,500 nautical miles eastward into the Indian Ocean shipping lanes, including the heavy oil tanker traffic coming out of the Persian Gulf, amassed $160 million in ransom money from shipping lines in 2011.

"Piracy is a lucrative business not only for Somali pirates but to many profiteers who make more money than the pirates themselves," said Peter Cook, director of U.K. Security Association for the Maritime Industry.

"Some of them are cowboys -- they have no proper security training, they're inefficient, incompetent and they want money."

The Security Association, known as Sami, was established in 2011 to accredit companies offering armed and unarmed guards for ships. Cook estimated that by the end of 2012 some 20 percent of the shipping companies operating in the Indian Ocean and the Gulf of Aden will be carrying armed guards.

The security situation regarding merchant ships was confused for some time after the pirates became a problem three years ago, although that's becoming more organized.

The navies of some 30 countries patrol the piracy zones with destroyers and frigates as part of NATO's Operation Ocean Shield and the European Union's Operation Atalanta.

They've prevented some hijackings and rescued captured crews but generally they've not proved effective in combating the piracy scourge in the vast waters of the Indian Ocean.

Shipping companies spent $1.1 billion on security equipment and armed guards in 2011, with another $635 million going on insurance, a Feb. 8 report by Colorado's One Earth Future Foundation stated. Shipping firms pay around $5,000 a day for a four-man armed team serving for up to 20 days.

With maritime trade expected to grow, "there are rich pickings to be had" for the expanding security outfits," Cook observed.

"Some of the big maritime security companies have improved their turnover by 350 percent in the last year."

Some countries allow armed guards on their merchant ships; others don't largely because of the complex legal and financial consequences of engaging pirates in combat and the fears that armed guards would escalate the violence.

But as pirate attacks mounted, Britain's coalition government ruled in October that ships sailing off Somalia can carry armed guards with rocket-propelled grenades, automatic rifles and handguns.

Greece, Japan and the Netherlands don't permit weapons aboard their vessels. But the vast majority of ships that sail pirate-infested waters eastward from the Gulf of Aden fly the flags of Liberia, Panama and the Bahamas, which permit armed guards.

"The evidence is that ships with armed guards don't get attacked," British Prime Minister David Cameron said in October.

"The fact that a bunch of pirates in Somalia is managing to hold to ransom the rest of the world and our trading system is, I think, a complete insult."

Over the last couple of years, pirate gangs operating out of Somalia have become highly organized.

By using captured mid-size vessels as mother ships for the high-speed attack boats, the pirate groups can operate for longer periods over greater distances than they managed before.

The International Maritime Bureau, a U.N. agency, says attempted pirate attacks worldwide reached record levels in the first nine months of 2011. Of the 352 listed, 199 took place in the Gulf of Aden and the Indian Ocean, compared to 126 in the equivalent period the year before.

However, the number of successful hijackings fell from 35 to 24, the IMB reported.

Even so, armed guards or no, Somalia piracy cost the global economy $6.6 billion-$6.9 billion in 2011 and the $160 million paid out in ransom by shipping companies "was outstripped by the far bigger sums they spent on preventing attacks," the Financial Times reported.

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