While the consensus seems to be that Somali piracy is in a terminal decline, over the weekend the Washington Post’sWonkblog highlighted an interesting academic study from last year that attempted to determine the costs of Somali piracy since 2008. The bottom line, from economists Timothy Besley, Thiemo Fetzer and Hannes Mueller, was that piracy increased the cost for shipping bulk cargo through the region 8%, with a 14% seasonal discount between December-February and June-September when the monsoon causes sea states to be less hospitable to pirates.
Of particular interest is the economist’s attempt to measure how efficient piracy has been as a method of transferring wealth from the rest of the world to Somalia. According to their analysis, pirates generating a total in $120M in annual ransoms would possibly drive industry to spend up to ten times that amount on insurance and onboard security. Theoretically, Somalia could get the same amount of money from an .8% tax on charters than the 8% increased costs faced by shippers.
Piracy has driven some economic growth in Somalia, with one study arguing that ransoms received in 2009 were five times greater than the budget of Puntland. Such development has been uneven however and did not benefit all Somalis. Intriguingly, economic growth and development measured in terms such as construction, urbanization, and light emissions measured through overhead imagery showed significant growth in major Puntland cities like Bossasso, rather than main Puntland pirate bases like Eyl and Hobyo.
Although ransoms as a wealth transfer are a “thought experiment” which the authors don’t necessarily advocate as policy, there is a clear subtext that aid for effective security forces would be a cheaper method to achieve the security needed to eliminate piracy than paying ransoms or funding afloat counter-piracy task forces. They cite Stig Hansen’s compelling argument that the triggering event for the explosion of piracy in recent years was the Puntland economic crisis in 2008, during which the government of the semi-autonomous region suspended pay to the police and militia responsible for border security.
Of course while a tax on trade to fund a wealth transfer to Somalia may have been a much more efficient way of combating piracy than the current combined approach of naval forces afloat, industry best practices, a Kenyan invasion of Somalia, and the funding of AMISOM troops (in a previous article in Proceedings I vainly attempted to compare the relative costs and benefits of counter-piracy task forces afloat and security forces in Somalia), it does not square with any accepted notion of freedom of navigation in international waters. While an effective Somali government would certainly have the right to regulate economic activity in its Exclusive Economic Zone (commonly listed narratives for the start of piracy in the region include grassroots local efforts to regulate illegal fishing and toxic waste disposal by foreigners in Somali waters), impeding or taxing commercial shipping traversing international waters adjacent to Somalia would be unacceptable to the international community.
Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS Essex (LHD 2). The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the US Government.
The hijacked Luxembourg-flagged tanker MT Gascogne.
Along with the release of the International Maritime Bureau (IMB)’s 2012 piracy report come the onslaught of analysts seeking to explain 1) why the crime is decreasing in certain theaters, 2) why it is expanding in others, and 3) where it will spread next.
The top story is that global pirate attacks have hit a five-year low, thanks to a sharp decline in the activities of Somalia’s notorious marauders. When this trend is reported it is almost always followed by the caveat that a “new” piracy epicenter has “emerged” in Nigeria and that the criminal enterprise is now increasing and expanding across the Gulf of Guinea. These types of statements are an oversimplification, however, and mask the complexities of maritime crime in West Africa.
Playing with Numbers
A multitude of criminal actors have parasitically operated in the Nigerian littoral since the country’s oil boom in the 1970s—piracy, kidnapping, and oil theft are by no means “new” to the region. To say that the country has “reemerged” as an epicenter of maritime crime is more accurate, as it wasonly in 2007that Somali waters became more pirate prone than those of Nigeria. The 27 pirate attacks reported for Nigeria in 2012 represents an increase over the past two years, but fall well short of the 42 attacks the IMB recorded in 2007.
One must also be careful (a mistake this author is willing to admit) about reporting an absolute “increase” in the total number of pirate attacks that have taken place in West Africa over the past year. The IMB’s figures display a clear trend: attacks off Nigeria increased from 10 to 27, while those for the region as a whole rose from 44 to 51. These numbers are incomplete, however, as they only include incidents that were directly reported to the IMB; whereas an estimated 50-80% of pirateattacks go unreported.
The larger data set of the Danish consultancy firm Risk Intelligence reveals a decrease in Nigerian and West African piracy. The company recorded 48 attacks in Nigerian waters in 2012, a higher number than the IMB reported, but lower than Risk Intelligence’s 2011 and 2010 figures, recorded as 52 and 73 attacks respectively. The expansion of pirate gangs into the waters ofneighboring statesexplains why attacks may have decreased in Nigeria, but it is also noted that the total figure for West African waters has fallen from 116 in 2011 to 89 in 2012.
Table 1: Incidents of Piracy off Nigeria and West Africa: 2008-2012 (Risk Intelligence)
2008
2009
2010
2011
2012
Nigeria
114
91
73
52
48
West Africa Total
138
120
110
116
89
Nigerian Incidents as Percentage of Regional Total
82.6%
75.8%
66.3%
44.8%
53.9%
Not More, but Different
An overall decline in the total number of pirate attacks in the Gulf of Guinea does not mean that the problem is being a solved. TheJanuary 16 hijacking of the Panamanian-flagged product tanker Itri andFebruary 4th hijackingof the Luxembourg-flagged tanker MT Gascogne, both off Côte d’Ivoire, attest that the threat remains high, but has shifted in terms of its targets and scope.
The rampant maritime crime and insurgency that plagued Nigeria in the mid-to-late 2000s displayed a mixture of communal, political and economic motives and was frequently directed towards supply vessels and fixed assets operating in oil and gas fields off the Niger Delta. A 2009 amnesty offered by the federal government essentially served to buy off thousands of Delta militants,rewarding some of themwith huge security contracts to protect the waters they had previously hunted in. It is this change in the security environment that is credited with the sharp decline in pirate attacks in Nigerian waters seen in Table 1.
Heightened security in the Nigerian littoral appears to have had a Darwinian effect on maritime criminals, as more sophisticated and politically connected syndicates have thrived at the relative expense of opportunistic “smash-and-grab” pirates.
One manner in which this is evident is target selection. Attacks against support vessels operating close to shore have declined over the last five years (and with them, the total number of incidents), but this has coincided, since 2010, with a surge in tanker hijackings. According to the records of one corporate security manager operating in Nigeria, there were 42 attacks against supply vessels in 2008 (one of the worst years of the Niger Delta insurgency), but only 15 in 2012. Conversely, there were just 8 attacks against tankers and cargo ships in 2008, but 42 in 2012. In total,Risk Intelligence has recorded78 attempted attacks on product tankers and 27short-duration hijackingssince December 2010.
This shift in targets might explain why commenters incorrectly refer to rising levels of piracy in the region, as the hijacking and short-term disappearance of tankers owned by international companies garners far greater media attention than the robbing of supply ships, despite the fact that these types of attacks were more frequent.
Latest piracy incidents in the Gulf of Guinea (Courtesy OCEANUSlive.org)
Bigger and Better
While boarding a supply vessel and robbing it of valuables is a relatively low-tech affair, hijacking a product tanker and pilfering vast quantities of fuel over several days requires a high degree of organization and sophistication. Theconfessions of four captured pirates, believed to be behind the hijacking of the Energy Centurion off the coast of Togo on August 28, 2012, reveals the intricacies of such an operation.
According to one testimony, criminal syndicates are “sponsored by powerful people,” including Nigerian government officials and oil industry executives, who provide advanced payment and information about the cargo, route, and security details of ships that have been targeted. Theseintelligence-led operationshave become increasingly multinational with gangs based in Nigeria planning attacks off the coasts of Benin, Togo, and Côte d’Ivoire, often with theassistance of nationalsfrom these countries.
Once a vessel has been hijacked, pirates have been known to go to great lengths to make sure that the ship ‘disappears’ while preparations are made to offload the cargo. For example, the gang that hijacked the product tanker MT Anuket Emerald made sure to damage all the ship’s communication equipment and loading computer, repaint its funnel, change the tanker’s name, and remove its IMO number. The offloading and black market sale of stolen product is equally complex, requiring a network of“oil mafia” insiderswho facilitate fuel storage at numerous depots across Nigeria and then organize for onward distribution.
Money over Everything
Though fewer ships are being attacked, the current crop of West African pirates (and their financial backers) are seeing greater returns. The group that recently hijacked the Itri was able to siphon off the ship’s entire cargo of fuel,valued at $5 million. Captured pirates involved in tanker hijackings (dubiously) claim thatpayoffs rangefrom $17,000 for new recruits to over $60,000 for ‘commanders.’ The value of large-scale oil theft exceeds many of the ransom sums made by Somali pirates and is acquired without months of hostage negotiations. Piracy in the Gulf of Guinea, notes piracy expert Martin Murphy, is now“the most lucrative in the world.”
The West African modus operandi is also more secure, as Nigerian pirates are not subjected to the same risks as their Somali counterparts—namely extended voyages in treacherous open ocean, the combined pressure of the world’s greatest navies, and the widespread use of professional armed guards aboard merchant vessels. Endemic corruption in Nigeria assures that even if pirates are caught, they are unlikely to face serious consequences. The Nigerian Maritime Administration and Safety Agency and Joint Task Force have made dozens of arrests in recent months, butlack the authorityto detain or prosecute suspects as this is the responsibility of other security agencies. Bribes to these agencies, captured pirates note, are set aside as an operational expense, meaning most suspects arereleased without charge.
In terms of numbers, overall pirate attacks may be declining in the Gulf of Guinea, but the gangs responsible appear to have increased both their operational sophistication and target selectivity. Given the increased value of each operation and the small risk of punishment their crimes show no signs of disappearing.
James M. Bridger is a Maritime Security Consultant and piracy specialist with Delex Systems Inc. He can be reached at [email protected]
By LCDR Claude Berube, USNR; LT Chad Hutchins, USN; and N.R. Jenzen-Jones
The following is a guest post inspired by the questions in our Maritime Futures Project. For more information on the contributors, click here. Note: The opinions and views expressed in these posts are those of the authors alone and are presented in their personal capacity. They do not necessarily represent the views of their parent institution U.S. Department of Defense, the U.S. Navy, any other agency, or any other foreign government.
1. What manner of broad trends are emerging in pirate activities, and how will these develop in the future? Where will we see continued, increased, or emerging piracy over the next 5-10 years?
Piracy in the 21st Century: The Long Ladder Ahead
From a macro perspective, piracy will increase worldwide as western navies continue to contract in size and non-state actors become super-empowered. Piracy will remain and even flourish in regions of diminished state maritime security caused by land-based conditions. Half of the National Intelligence Council’s recent Global Trends 2030 top-ten countries of high-risk destabilized governments have significant coastlines – Niger, Nigeria, Kenya, Somalia, and Yemen. Destabilized nations will offer opportunities to pirate criminal networks as state navies – particularly Western navies – do not have sufficient assets or comparative interests to exert necessary influence. West Africa will pose a continuing challenge if steps are not taken to curb piracy in the region; significant national interests exist there for many nations, including the US, China, and many European nations. Energy security will be a key factor in the decision to support counter-piracy strategies in West Africa.
Since its origins, four things have had to be present for piracy to exist: (1) Non-existent or weak government on land, (2) Ungoverned territorial seas, (3) Access to shipping lanes, and (4) Access to boats, manpower, and arms. It’s important to continually watch any coastal nation which meets these criteria, no matter the size, for developing signs of pirate activity.
2. Which response strategies will best limit or curtail pirate activity over the next 5-10 years?
Specific to Somali piracy, current efforts – including coalition forces, independently operating platforms, industry employment of Best Management Practices, and the increased use of armed guards, have been sufficiently effective as evidenced by the decrease in attacks on commercial ships in the Gulf of Aden. Continued success will however hinge on the sustained availability of coalition forces, which is in turn based on the comparative threats faced by participating states and the impact of their economies and debts to future military operations, acquisitions, and maintenance. Because of the uncertainty of state naval presence, industry will either return to a pre-2008 level of ‘acceptance of risk’ in the region, turn increasingly to armed guards and other private sector capabilities, or rely more on alternative powers such as India and, especially, China. Broader, cooperative international engagement will be necessary. Land-based engagement strategies will also be increasingly important, but will be largely dependent on access, funding, and political will. The U.S. Department of State is beginning to move in this direction now.
3. Which vessels in Western navies should we be looking to for their utility in conducting counter-piracy operations?
Will the Coalition hold?
Policymakers may ask if the best use of a billion dollar warship is as a platform against modern pirates. While surface warships are a flexible asset, with helicopter detachments providing extended range and tactical small boats for boarding, they come at a price. Depending on future budgets, Western navies could turn to smaller ships with UAVs or inexpensively modified commercial platforms. The U.S. Navy, in concert with European navies, could explore building a piracy squadron of ships such as the Sea Fighter (FSF-1) to work in concert with a dedicated mothership. Modular design of mission-specific ‘packages’ may provide another opportunity to decrease operating costs and use next-generation vessels more effectively.
4. What advice would you give to a smaller nation on the counter-piracy specific maritime investments it should pursue, and why?
Smaller nations in destabilized regions rarely have the economic capacity to support a viable counter-piracy force, leaving them with two options. The first option is to work with larger nations interested in capacity building. Larger nations and their industries have a need for stability on the high seas for global commerce. There are a number of capability development programs offered by nations including the U.S. and China. In Africa, in particular, programs such as African Maritime Law Enforcement Partnership (AMLEP) and Africa Partnership Station (APS) have had some success, but need to be expanded and better integrated into the broader counter-piracy strategy.
The second option is to employ vetted, credible maritime security companies which may provide a less-expensive alternative in the long-term. Maritime security companies have had some success in Africa, providing specific training and personnel where capability gaps exist. Employing private companies allows countries to focus on nascent piracy, or threats such as illegal, unreported, and unregulated (IUU) fishing or oil bunkering, which may be considered less serious by major powers. The use of private security companies is generally compatible with working with larger nations, and opportunities for third-party funding may arise in the future.
Yet it would be too easy to write off piracy in the area as a dead issue. Despite some glaring examples to the contrary, pirates are not uniformly stupid, as demonstrated by the $160 million they made in ransom in a single year. They are capable of adapting to change in their maritime operating environment. For example, when the world’s navies began patrolling the area, pirates attempted to disguise themselves as innocent fishermen. International naval forces reacted by conducting more thorough searches and seizures of suspected pirates, who in turn adapted by using motherships to expand their area of operations beyond the patrol areas. Despite increasing the transaction costs for both the pirates and international naval forces involved in this conflict, this “tit-for-tat” process did not slow or halt the increase in piracy.
Several analysts believe that the increase in armed private security guards aboard commercial ships in the region played a key role in reducing piracy; at least 40% of commercial vessels in the region had armed guards aboard at the beginning of 2012. Although armed guards did in fact contribute to the drop in piracy, their dampening effect merely shifted the onus back to the pirates to continue measure/counter-measure evolution. There’s little to stop them from adapting to this tactical change as they adapted to those that came before, for instance by using more personnel to overwhelm ship defenses, or mounting a stabilized light machine gun to deliver greater and more accurate fire against ships. Rather, it’s two other factors that have been the main cause of the drop in piracy in Somalia: attacks on pirate safe havens from the offshore EU task force and more operations by a better trained PMPF.
In May 2012, EU forces attacked the pirate safe haven Haradhere, one of the largest pirate bases in one of Somalia’s notoriously ungovernable regions. This was the start of the EU’s counter-piracy targeting pirate safe havens with surgical and extremely precise strikes. It was also a key development in the region as the first strike ashore by any patrolling international naval forces (with the exception of a handful of hostage rescue missions). By targeting the pirates at their center of gravity, EU forces were able to damage their logistics and raise the cost of doing business, which in turn disrupted their operations.
However, these strikes have two main shortfalls. First, they are difficult to conduct at a high tempo because of the time it takes to locate the strongholds, plan the strikes, and carry them out while ensuring minimum collateral damage; being based afloat only lengthens the timeline. Second, the surgical requirements for the strikes allow pirates to react by surrounding themselves with even more civilians, making the strikes all the more difficult.
Unlike the EU’s strikes, the PMPF attacks pirate strongholds from land. Trained initially by Saracen International/Sterling Corporate Services (which was led by Australian Lafras Luitingh, an experienced intelligence officer with from South Africa), the PMPF are arguably one of the most well-trained paramilitary forces north of Mogadishu. Although they are still categorized as a backwater paramilitary force, Sterling Corporate Services created this simple force that outclasses its pirate adversaries (however due to behind-the-scenes political moves it is unclear who, if anyone, now trains them). Consequentially, the PMPF has been able to patrol the littorals in Puntland and attack pirate bases. Although the PMPF lacks the firepower of the EU task force, they are able to permanently station themselves in areas prone to piracy and use their knowledge of the area to recognize and pursue pirates. Nevertheless, the PMPF’s main weakness is whether they have the capacity to sustain themselves and their capabilities without foreign funding and guidance from their former trainers.
Applying These Lessons Elsewhere
The fight to stop piracy in Somalia is not over but lessons learned can be applied to other areas, such as the Gulf of Guinea, where piracy is on the rise. These lessons are that changing the pirate’s operating environment alone will not eliminate piracy, as the pirates can and will adapt accordingly. Instead, the problem must be solved on shore by going after the pirate center of gravity—their strongholds—to effectively disrupt their operations. Although offshore attacks against these strongholds can yield some results, developing a disciplined local paramilitary force with greater capabilities than the pirates will disrupt their operations even more. Creating such a force in a weak or failed state is difficult and is fraught with the danger of backfiring, but as demonstrated by the PMPF, it is not impossible. Will the U.S. Navy and other international maritime forces pursue these proactive options in future areas where piracy becomes a problem? Or will costly international task forces reactively patrolling offshore remain the norm?
Bret is a student at the Walsh School of Foreign Service at Georgetown University.The views expressed are solely those of the author.
