Dangerous waters

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Is enough being done to tackle the threat of piracy to the maritime industry?

For modern-day pirates, the booming sea freight industry is an attractive lure. Using the latest tools, including guns, satellite navigation devices, mobile phones and speedboats, today's pirates have more in common with organised criminals than the opportunists of story tales.

Tight timetables and predictable shipping routes, coupled with steadily decreasing crew sizes due to the automation of ship tasks and the congestion currently slowing the flow of traffic, make sailing the seas a risky business for freight vessels.

Last year's piracy 'hotspots' were reported to include the Far East - in particular the South China Sea and the Malacca Strait - East Africa, West Africa, the Indian Ocean, South America and, for the first time, the Arabian Sea.

However, it is the inherently international nature of commercial shipping that leads to Middle Eastern controlled and operated ships becoming vulnerable to attacks. The waters off Somalia, for instance, have become a focus of concern for the region's industry following a spate of attacks in the past year.

According to the International Maritime Organization (IMO), the number of reported acts of piracy and armed robbery increased by 17% last year, with 282 attacks in total. Seven of those were reported in the Arabian Sea.

"Most of the attacks occurred or were attempted in the coastal states' concerned territorial waters while the ships were at anchor or berthed," explains Natasha Brown, external relations officer at the IMO. "In many of the reports received, the crews were violently attacked by groups of five to 10 people carrying knives or guns."

The IMO itself has responded by fostering regional agreements on counter-piracy measures, including the 2004 Regional Cooperation Agreement on Combating Piracy and Armed Robbery against ships in Asia (RECAAP), which Brown believes have contributed to the decline of piracy in certain locations like the Malacca Strait and the South China Sea.

Following a meeting in April this year, a draft memorandum of understanding on the repression of piracy and armed robbery against ships in the Western Indian Ocean, the Gulf of Aden and the Red Sea has been developed and is being considered by 20 countries from the region.

These long-term solutions have met with both positive and critical responses from the shipping industry, with the sector's own focus remaining on how to protect its vessels and cargo in the immediate future, particularly when charting through dangerous waters.

Ensuring adequate insurance against losses incurred due to piracy is one recommendation. "The whole purpose of such insurance coverage is to limit risk should a piracy attack occur," says Meenakshi Srinath, marine manager, Gulf region, AXA Insurance. In this case, Standard Hull clauses offer cover for loss or damage to the vessel's hull and machinery due to 'piracy', with separate cargo insurance needed to protect the ship's load.

"The coverage would be separate for the hull and the cargo carried, with each interest subject to the relevant clause," Srinath says. Considering that figures for worldwide losses due to piracy cases are estimated in the region of US$13-16 million each year, failing to take out adequate insurance could be a big mistake.

The issue of insurance can become a much more complex affair for vessels sailing through identified piracy 'hotspots'. For example, the latest edition of the Joint War Committee's Listed Areas warns against entering Somalian waters within 200 nautical miles off the country's eastern coast and advises vessels to stay at least 40 nautical miles to the north of Somalia whilst transiting through the Gulf of Aden.

"This area around the Horn of Africa and the Gulf of Aden particularly affects Middle Eastern trade and, unless the threat is identified and dealt with, piracy could affect commercial activity in the region," Srinath forewarns.

However, according to the International Maritime Bureau (IMB), a significant number of attacks remain unreported due to the reluctance of shipping companies to publicise the event in case it leads to a loss of trust from customers or insurance premiums being raised, which may well be the case.

"An increase in claims due to piracy will not only lead to an increase in hull premiums worldwide, it might also prompt underwriters to restrict the movements of the vessels insured by them to ‘safe' areas, with a resultant effect on the vessel's commercial activities," Srinath admits.

As well as adequate insurance, Srinath believes that shipowners would be wise to invest in technological solutions to reduce the risk of an attack. She points to some of the gadgets available on the market today such as Shiploc, where a vessel's position can be monitored 24 hours a day through a PC hidden on board the vessel.

The Shiploc system also involves stretching a fibre-optic network around the vessel's perimeter, which, if breached, is capable of sending an automatic signal to the ship's crew and authorities ashore.

"The key to foiling any potential attack is to have a ship security plan and increased vigilance whilst navigating pirate-infested waters. This coupled with the optimum use of fire hoses, flare guns, ship's horn, and lighting can deter pirate attacks to some extent," she adds.

Shipowners are presented with an increasingly diverse range of technological solutions to choose from. These range from the popular 'SecureShip', a 9000-volt electric fence surrounding the vessel to give a jolt to unwanted boarders, unmanned mobile surveillance systems such as SmarterSentry, and underwater sonar to detect opportunist intruders attempting to gain access from below the vessel.

However, such measures do come at a price and for some shipowners this may be an unwelcome additional cost. "The shipping industry has shown a general reluctance to increase fixed operating overhead costs by introducing more concerted security measures for safeguarding their vessels," agrees Peter Chalk, senior analyst at the non-profit RAND Corporation research organisation in Santa Monica, California.

He believes that monitoring and protecting initiatives such as ShipLoc and SecureShip should be sponsored through private-public sector partnerships instead.

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