While reading about the recent attempted pirate attack on a cruise ship that has drawn sudden attention to the long-standing but little-known issue of piracy in the modern shipping trade (It’s interesting reading, but only Part III is specifically about piracy), I found this chock-full-of-statistics but much shorter article.

It raises an interesting point:

…there is very little financial incentive for both governments and shippers to deal with this crime. Piracy is costing shippers $.32 for every $10,000 of goods shipped estimates David N. Kellerman of Maritime Security. Not only is the economic cost inconsequential to companies, so it is to some governments.

Sound familiar? If I’m the corporate owner, the cost is inconsequential. If I’m a sailor on one of these ships, though, the cost is a little more significant:

Merely one year before, in September of 1998, a smaller Japanese-owned freighter named the Tenyu had gone missing soon after departing from the same port of Kuala Tanjung with a similar load of aluminum, and a crew of fifteen. Three months later the Tenyu was discovered under a changed name and flag in a Chinese port, but the cargo was missing, as was the original crew, all of whom are presumed to have been killed.

Ship owners can transfer the risk of Piracy with insurance, but sailors only have two options. They can either avoid the risk by finding a new vocation (avoiding working on vessels which travel through pirate-prone regions is not really an option for crew members) or hope that the shipowners mitigate it by implementing anti-piracy safeguards such as anti-boarding defenses or armed guards, at least for passing through piracy-prone areas.

So what can be done? According to The Asia Research Center at Murdoch University, not much.

a number of companies offer armed escort vessels for shipping in high risk areas and piracy hotspots, such as the Malacca Straits. However, the publication of a handful of newspaper articles in the Straits Times, describing these services (Boey 2005: 3; Sua 2005: H4-5) sparked an outcry from Malaysian and Indonesian authorities. Both countries rejected the employment of private armed escorts, with the Malaysian Director of Internal Security and Public Order, Datuk Othman Talib, warning that any such vessel found in Malaysian waters would be detained, and the crew arrested and categorised as terrorists or mercenaries. They would then be charged under the Internal Security Act. He also pointed out that any PSC wishing to operate in Malaysian waters has to apply for a permit from the Ministry of Internal Security (Marinelog.com 2005; Bloomberg.com 2005).

…

PSCs [Private Security Companies] also have to compete with local authorities and institutions like the IMB´s Piracy Reporting Centre (PRC) for contracts. While a number of government offices, NGOs and other institutions offer political risk analysis, the IMB also regularly publishes reports on piracy and armed robbery at sea (Zou 1998: 13). Furthermore, it has a proven track record of successfully assisting victims in the recovery of hijacked vessels and stolen cargo.22 The IMB has also the advantage of providing these services most likely substantially cheaper than private companies.

For the shipowner, the dollar cost is acceptable…so long as the value of the crew is zero or close to zero.

The real irony, though, is that efforts by potential victims prevent seaborne lawlessness are hampered legally by many of the same governments who are failing to prevent seaborne lawlessness.

Finally, by reducing the expected cost of an incident, the IMB reduces the likelihood that shipowners will bring economic or political pressure to bear to create a climate where meaningful anti-piracy countermeasures can be implemented.

Update: This is not to imply that PSC’s don’t provide significant numbers of armed guards aboard ships. I realized that my excerpting implied a lack of self-defense efforts in my original post. Most shipowners accept/ignore the risk to their crews and focus solely on optimizing their financial risks unless the likelihood of an incident is extremely high or the boat is owner-operated (e.g. some Tuna boats fishing off the Philippines).

Read the Asia Research Center paper in its entirety for the best summary of the state of maritime security.

Nice to see - yet another one of my articles published , my ook on priracy is out in December 2006

The Maritime Terrorism Research Center http://www.maritimeterrorism.com is great starting point for all how want to go deeper into the subjects of maritime terrorism, maritime piracy and maritime security in general.