Insurance Post

International: The state of piracy


With the nature of the piracy threat constantly evolving, John Thompson looks at the role of private maritime security companies in mitigating the risk

Piracy's gone away, right? You'd be forgiven for thinking so. The predominant narrative for the Indian Ocean is that piracy has been suppressed, so much that shipowners are requesting fewer guards - even unarmed in some cases. Certainly private security team composition has adjusted beneath the "rule of four" and the nationality of guards has shifted significantly away from the UK-only model.

But given the recent attacks in South East Asia and the prevailing amount of maritime crime and piracy off the Gulf of Guinea, it is clear that piracy has not been eradicated at all - it has simply evolved, and will continue to do as it has done for hundreds of years, presenting a threat to global maritime trade.

Varied threats
The increased profile of South East Asia/Gulf of Guinea maritime crime presents a challenge for private military security companies in terms of offering effective risk management services that can meet their global client base's needs.

These threats can range from Somali-style kidnap of crew and vessel for ransom, to Nigerian-style extended duration robbery and kidnap, to violent robbery in the Malacca straits. They are all very different, and PMSCs must have a range of capabilities in order to advise shipowners properly. The challenge for the shipowner is to select their PMSC carefully and build a long-term relationship based on detailed mutual understanding and trust.

The recent extension of international naval commitment off Somalia to 2016 demonstrates international naval forces view the significant cost of their presence both worthwhile and necessary. PMSCs will continue to be required for shipowners to demonstrate they take the safety of their crew seriously - and to guarantee security in the many areas where the international naval forces cannot react swiftly.

It is clear that the structures onshore in Somalia that support piracy are still very much intact, with an estimated 40 seafarers still held captive. Piracy might easily return at short notice.

The role of PMSCs
The reality is that the shipowner will ultimately turn to the International Maritime Organisation for guidance, who in turn will rely on international naval forces to determine policy. Recent extensions suggest guidance will not change significantly over the next 12 to 24 months, even if attacks do not resurface.

Undoubtedly the onshore dynamic will continue to change, but the overall trajectory is some way from being decisively clear. In the interim, it is the role of PMSCs to provide a cost-effective, compliant service that provides the ultimate insurance to shipowners operating in uncertain environments.

The reduced frequency of attacks within the Somali Basin and wider Indian Ocean might appear ironic given the increase in self-regulation in the private maritime security sector. Increasingly ISO-accredited, security companies are now firmly part of the commercial shipping industry supply chain, while PMSCs are members of shipping associations. Both changes reflect an industry driven and governed by standards, quality and safety.

Established PMSCs have their own in-house training facilities, with courses ranging from First Person on Scene and first aid, through to City & Guild Accredited courses to prepare an individual for the private security sector.

A more sophisticated threat
Further afield, the threat has adapted to present fresh challenges to shipowners. The Gulf of Guinea is beset with many problems on and offshore, with criminals proving adept at moving between basic product theft through to the targeting of high-value internationals for kidnap and subsequent ransom.

Wider still are West Africa's challenges of overcoming transnational organised crime, including extortion, national embezzlement, human trafficking, drug and arms smuggling and, of course, piracy. The recent intervention by the Nigerian navy in policing territorial waters and making use of private suppliers illegal is indicative of a region struggling to create consistency in combating maritime crime.

In South East Asia, piracy attacks have apparently become more prevalent. They are mainly focused on robbery at sea and some product theft - but worryingly, are displaying a capability to move towards hijack. The surge of attacks is more likely to be down to better reporting than an actual increase in maritime crime, but this in itself is welcome, with the sharing of information being wider, more transparent and consistent.

In this region, the private armed deterrent is unlikely to be utilised - with so many states surrounding these crucial sea lanes - but as in West Africa, PMSCs might be able to respond in support to existing navies and coastguards.

Piracy and maritime crime has not changed a great deal. There will continue to be individuals seeking to profit illegally on the high seas, but the nature of the threat evolves. Increasingly viewed as a credible and effective option, the private maritime security sector continues to adapt its offering to mitigate the risk to its clients operating in a complex environment. Private maritime security might be an uncomfortable part of the supply chain, but it remains integral to the safe passage of cargo, vessel and crew.

John Thompson, co-founder, Ambrey Risk


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