MOGADISHU, Somalia, April 26 (UPI) -- International naval forces are expected to step up operations against Somali pirates but private security companies are seeking to provide armed escorts for merchant ships to counter the pirates' expansion into the Indian Ocean.
The leading British insurer Jardine Lloyd Thompson is organizing a fleet of 18 gunboats to shepherd convoys of vessels across the Gulf of Aden, which runs into Arabian Sea and Indian Ocean, vital trading and oil routes now under increasing threat.
The project is known as the Convoy Escort Program, was conceived several months ago by Jardine Lloyd Thompson, which insures around 15 percent of the world's maritime cargo ships.
It is working with the London security firm BTG Global Risk Partners. Its founder, Liam Morrissey, a former major in the Canadian army, is the principal consultant.
Although business sources say much of the funds to finance the program have been secured, the CEP has not yet been approved by the European Union.
Jardine Lloyd Thompson has been seeking to get other maritime insurance companies, as well as major shipping lines, to support the project.
If the project comes together, CEP could be operational this year, say insurance sources in London.
The EU operates a counter-piracy naval flotilla in the Gulf of Aden, one of several international naval task forces deployed in the waters used by some 30,000 merchant ships every year.
Nor have any of the states along the littoral signed on to allowing the CEP gunboats to fly their flag and thus provide a legal framework under which the ships can operate.
The plan calls for the escort boats to be armed with heavy .50 caliber/12.7mm machine guns and crewed by armed former military personnel, mainly Britons, South Africans, Australians and New Zealanders.
These would coordinate with naval forces and allow the warships to hunt pirates who in recent months have been attacking ships up to 1,000 miles from their longtime coastal hunting grounds deep into the Indian Ocean.
Piracy is costing the global economy $7 billion-$12 billion a year, the shipping industry says.
A report by One Earth Future, a governance foundation in Colorado, estimated piracy costs the industry up to $3.2 billion annually in extra insurance and another $2.95 billion to reroute vessels around the Cape of Good Hope.
The average ransom rose from $3.4 million per ship in 2009 to $5.4 million in 2010.
A record $9.5 million was paid out Nov. 6 for the Samho Dream, a 300,000-ton South Korean supertanker and its 24-man crew. It was hijacked in the Indian Ocean April 4, 2010, carrying 2 million barrels of Iraqi crude to the United States.
The Somali pirates are increasingly threatening global oil supplies from the Persian Gulf as they extend their attacks ever deeper into the Arabian Sea and Indian Ocean.
They have achieved this all-weather, deep-water capability by using captured trawlers and small cargo vessels as motherships for the pirates' speedboats.
Three supertankers have been seized this year, the first time that such a number have been captured in a three-month period.
The International Maritime Bureau in London reports that piracy hit an all-time high in the first quarter of 2011 with 142 attacks worldwide, mostly by Somali sea bandits. Of the 97 attacks pinned on Somali pirates, up from 35 in the equivalent period in 2010, 37 were on tankers, IMB said.
The piracy problem "is spinning out of control into the entire Indian Ocean," Joe Angelo, managing director of the International Association of Independent Tanker Owners, declared in February.
"If piracy in the Indian Ocean is left unabated, it will strangle these crucial shipping lanes with the potential to severely disrupt oil flows to the United States and the rest of the world," he said.
"We want to see a significant increase in government will to eradicate piracy in this area, and not just contain it."
Some shipping lines employ "guns for hire" from private security contractors on their vessels.
But the IMB has voiced concerns about this. "Ships are not an ideal place for a gun battle," declared IMB Director Capt. Pottengal Mukundan.
"While we understand that owners want to protect their ships, we don't agree in principle with putting armed security on ships."