Tag Archives: private military contractors

Whither the Private Maritime Security Companies of South and Southeast Asia? (Part 2)

April 21, 2014 Guest Author 8 Comments

This feature is special to our Private Military Contractor (PMC)s Week – a look at PMCs’ utility and future, especially in the maritime domain.

In the first part of this article we briefly explored the long history of private maritime security companies (PMSCs) in South and Southeast Asia, as well as the conditions most conducive to their sustainment and growth. In part two we look at regional factors that have or could lessen the threats to which PMSCs provide services in response – including government action, capacity building, and legal regimes – and will conclude with final thoughts on the outlook for PMSCs in the region.

Lessening the Prospects for PMSCs

Perhaps the largest mitigating factor for PMSCs’ prospects is the whether governments will themselves tackle the underlying issues, including economic development, instability, and corruption, and/or their outgrowths that PMSCs attempt to address, such as piracy and maritime crime. This factor consists of and can be measured by both the desire and ability of governments to take on these challenges.

As discussed in part one, levels of piracy and armed robbery (PAR) and kidnapping and ransom (K&R) against ships have been two of the main determinants of the market for PMSCs in the region and the frequency, severity, and locations of these attacks have varied over the recent decades. This dynamic owes in part to several measures undertaken by regional governments beyond those development efforts aimed at removing the economic basis for crimes. What follows is not intended as an exhaustive catalogue, but an attempt to highlight some of the most illustrative examples.

Demonstrating Desire

In coming to terms in the post-Tsunami peace agreement, Indonesia’s government and its Aceh foes removed a major source of instability that opportunistic actors from both sides of the conflict reportedly used for kidnapping and ransom operations at the mouth of the Malacca Strait. Whether attackers’ motives were to provide a revenue stream to further the insurgency, or as a manifestation of corruption, the removal of the combatants – along with the tsunami’s decimation of the local population and maritime assets used in attacks – helps explain the documented drop in numbers by the International Maritime Bureau (IMB).¹⁸¹⁹

Alternately, governments can take direct action against criminals based in their territory as well as demonstrate their willingness to crack down on internal corruption feeding such crime. PMSC expert James Bridger remarks that the Chinese government launched a campaign in the 1990s against “criminal syndicates and ‘rogue’ police and coast guard units that had been engaging in hijackings and phantom ship fraud out of Hong Kong and southern China.” While there are dangers in relying on self-reporting, an area once known as a favorite destination of hijacked vessels re-named for resale,²⁰ Hong Kong, is now known far more for piracy of a digital kind.²¹

Governments can also work together, and with non-governmental organizations such as the IMB, in the fight against maritime crime. These efforts can be particularly important in preventing criminals from exploiting the seams between territorial waters and exclusive economic zones (EEZs). In 2004 Malaysia, Singapore, and Indonesia initiated an agreement known as the Trilateral Coordinated Patrol, or MALSINDO, nominally providing smarter coverage by coordinating patrol areas. Illustrating the importance of closing the maritime seams, the agreement was criticized for failing to provide cross-border pursuit permissions due to sovereignty sensitivities.²² As Lino Miani notes in The Sulu Arms Market, “territorial disputes and historical mistrust…undergirds the hesitation to enter into multilateral agreements.”²³

In 2005 the three nations of the MALSINDO agreement were joined by Thailand in an attempt to bolster the initiative’s effectiveness by dedicating air assets for maritime air patrol missions with hosted liaison officers in what is known as the Eyes in the Sky (EiS) plan.²⁴ In addition to the capability boost, EiS also marked the first time the nations allowed each other to briefly cross a short ways into their territorial airspace while executing the coordinated mission.²⁵ In 2006 the participating countries combined the two efforts in the new Malacca Straits Patrol Network.²⁶

Another recent example of inter-governmental cooperation helping close maritime seams is the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP). The initiative, which entered into force in 2006, establishes information-sharing and attack reporting procedures among 19 countries and an Information Sharing Centre (ISC).²⁷

Yet Malaysia and Indonesia are notably absent from ReCAAP. In another move seen as indicative of the nations’ territorial sensitivities the pair passed on the U.S.-proposed Regional Maritime Security Initiative in 2004, which would have involved Americans in joint patrols including “special forces on high-speed boats.”²⁸ A key difference between these efforts and the Malacca Straits Patrol Network is the involvement of nations external to Southeast Asia. While it doesn’t include Malaysia or Indonesia, ReCAAP involves nations such as Japan, China, Denmark, and the United Kingdom.

Singapore stands in contrast with the two former nations in its openness to long-term partnerships involving a foreign presence. In addition to hosting the ReCAAP’s ISC, it has invited the United States to rotate through a squadron of forward-deployed littoral combat ships, temporarily stationing them at Changi Naval Base, along with the maintenance facility the United States has long maintained in the port.²⁹ An important indicator of the outlook for PMSCs in the coming years will therefore be the receptiveness of these straits nations to maintain or pursue regional approaches to combating maritime crime – as well as their tolerance for joint patrols or a foreign presence.³⁰

Investing in Capacity

Whatever the merits of these regional initiatives in concept, they and individual nations’ efforts require assets to be effective. These assets in turn require investments in procurement, training, and maintenance.³¹ It’s what separates ReCAAP’s ISC from ASEAN’s Center for Combating Transnational Crime – first proposed in 1997 and stuck on the drawing board ever since.³² Even with the EiS add-on, MALSINDO has been criticized as a public-relations salve lacking the resources to provide comprehensive coverage and hindered by corruption.³³

Tracking defense expenditures therefore serves as a similar measure of governments’ seriousness in tackling PAR. While the specifics vary, South and Southeast Asian nations have a large appetite and long-term plans for expanding their coast guards and naval forces – with submarines, patrol craft, and naval aircraft high-priority items.³⁴ Yet the ability to field these maritime forces, and do so effectively, is constrained by limited, though rising, budgets.³⁵ Many of these investments are aimed at protective capabilities in the event of inter-state conflict against the backdrop of China’s own spending increases, but several can also boost maritime enforcement efforts. Key nations including India, Indonesia, Malaysia, Singapore, Vietnam, Thailand, Bangladesh, and the Philippines are pursuing corvette or frigate programs, as well as various fast attack and patrol boat procurement.

Indonesia bears closer scrutiny as it faces perhaps the largest PAR threat and is expected to double defense expenditures from 2013 to 2018, after increases of 34 percent in 2011, 16 percent in 2012, and 7 percent in 2013.³⁶ In addition to frigates, the country is also building three classes of fast attack craft that can aid maritime enforcement efforts.³⁷ Further, Indonesia’s military (TNI) announced in March that it would increase its presence around Natuna Island, a former mainstay of piracy to the east of the current hotspots near the Riau Archipelago. While this move is publicly aimed at preventing “infiltration” and “instability” in the South China Sea – primarily to safeguard nearby oil and gas fields – the additional air force and naval assets could act in a secondary capacity to deter PAR to the west when not otherwise engaged.³⁸

Meanwhile at the western approaches to Malacca Strait, India’s Andaman and Nicobar Islands could act as the first line of defense against a return to epidemic maritime crime in the strait. India’s Andaman and Nicobar Command (ANC) is charged with “maritime surveillance, humanitarian assistance and disaster relief, as well as suppressing gun running, narcotics smuggling, piracy, and poaching in India’s EEZ.” Since establishing the ANC in 2001, the India has continued to develop the command’s capacities, albeit at a slow pace, commissioning a new naval air station in 2012 and a new offshore patrol vessel in 2013.³⁹

Yet in the short run, foreign partners or PMSCs may be the easiest capacity-bolstering ways for states to preserve the gains against maritime crime or reduce it further. Help from the former is forthcoming from several corners, potentially limiting the need to turn to PMSCs. India agreed to build four Offshore Patrol Vehicles (OPVs) for Myanmar’s navy, along with a “$100-million credit line to Vietnam to purchase” four patrol boats.⁴⁰ The United States has recently sold former U.S. Coast Guard cutters to Bangladesh and the Philippines on favorable terms. Japan is likewise “donating” 10 patrol boats to the Philippines, reportedly by extending a $110-million line of credit,⁴¹ and Vietnam has asked to procure them as well.⁴² While there has been no public confirmation of a deal between Japan and Vietnam, including during last month’s bilateral agreement on enhanced maritime security ties, it’s possible that this will be announced during President Obama visit this week to Asia. On Friday the Yomiuri Shimbun cited sources stating that Japan and the U.S. will on Thursday announce moves to jointly help ASEAN countries “strengthen their maritime surveillance capabilities,” “counter piracy,” and “help member states better respond to natural disasters such as typhoons and earthquakes.”⁴³

A final way for governments to boost their capacity directly mimics PMSCs’ at-sea protection services through what are known as vessel protection detachments (VPDs). These detachments are typically comprised of active duty service members of a nation’s military and hired out to individual shipping companies for protective duties in high risk transit areas or aboard World Food Program vessels.⁴⁴ While VPDs have faced criticism on legal and efficacy grounds – for blurring the lines between sovereign services and mercenaries and for narrowing protection to individual ships – the list of countries offering VPDs has grown markedly in the past five years, albeit primarily for use along the East African coast.⁴⁵

The effect of this competition on PMSCs is debatable. On one hand some shipping companies have “voiced a strong preference for VPDs” over PMSCs due to their perceived legal protections and ease of moving weapons.⁴⁶ As will be discussed below, however, these legal protections have been challenged. Further, according to a 2013 study, only 35% of Dutch ships traversing high risk areas off Somalia applied for a VPD due to the “high costs, lack of flexibility of deployment, and long application schedule.”⁴⁷ (Figures for Southeast Asia were not available but the business case rationale is likely analogous when available) While those Dutch companies who looked to PMSCs as an alternative did so illegally due the nation’s laws, it’s clear that VPDs will remain attractive to some who would otherwise higher PMSCs.

Legal and Policy Issues

Governments’ legal regimes and policies serve as additional factors directly impacting the prospects of PMSCs in the region on several fronts. When operating in territorial waters, the U.N. Convention on the Law of the Sea (UNCLOS) provides little clarity on the legal status or protections for PMSCs performing embarked duties or vessel-protection escorts. The innocent passage regime protects the rights of states in territorial waters, including their transiting warships, but sees armed non-state escort vessels, or private armed on-board detachments as violating the “standard practices” of the international community. No definitive case law has put the matter to rest and the increasing acceptance of armed guards on ships combating Somali-based piracy could lead to a change of acceptance elsewhere, but for the time being the waters remain murky.⁴⁸

In setting national policies, Indonesia and Malaysia both publicly prohibit the use of armed shipboard PMSC detachments, with Singapore the exception – provided stringent weapons control requirements are followed.⁴⁹ Carolin Liss notes, however, that despite these pronouncements PMSCs are routinely able to obtain back-channel notifications and permissions, smoothed over with “fees.”⁵⁰

The varying home laws of the shipping companies also impact the environment for PMSCs in South and Southeast Asia. As mentioned, some states such as the Netherlands currently prohibit PMSCs aboard their vessels. Nonetheless, the trend is clearly towards operating states allowing their use in a regulated process as the Netherlands is the sole E.U. nation without such legislation in place, and a Dutch law that would permit PMSC use in 2015 is in the process of approval.⁵¹

Whether PMSC or VPD, Italy’s experience in the Enrica Lexie case is illustrative of the legal dangers in the region facing embarked detachments. In February 2012, two Italian Marines – part of a VPD – shot and killed a pair of Indian fishermen they believed to be pirates. The case has tested the belief that sovereign actors provide greater legal protection for counter-piracy teams in international waters and is still working its way through India’s legal system with a trial date scheduled for July.⁵²

Regional weapons control laws also complicate the logistics of both VPDs and PMSCs. Kevin Doherty, President of Nexus Consulting, a PMSC that operates in Southeast Asia, states that in contrast with ports servicing embarked teams in the western Indian Ocean, “many Asian ports don’t allow weapons to be ‘introduced,’ and must therefore be loaded well in advance.” One outcome is the creation of so-called floating armories in international waters, which come with their own set of complications and regional baggage.

India in particular has expressed concern for these armories. Then-Indian Navy Chief of Staff DK Joshi argued at the 2013 Galle Dialogue they could fall prey to pirates and that they and PMSCs’ lack of international regulation made them susceptible to supporting criminals, traffickers, and terrorists.⁵³ Another on-going case illustrates the complexities and difficulties for PMSCs. After the Sierra Leone-flagged vessel Seaman Guard Ohio entered Indian waters in October 2013 it was escorted to port by an Indian Coast Guard vessel.⁵⁴ While the Indian government has labelled the vessel operated by U.S.-based PMSC AdvanFort, a floating armory, the company’s spokesman denies the categorization saying the ship serves as an escort vessel that was unable to dispose of its weapons prior to entering port due to the sudden nature of the detainment by the Indian Coast Guard.⁵⁵

During the same Galle speech, Joshi commended neighboring Sri Lanka for providing what he viewed as a model regulatory regime of both PMSCs and the nation’s government-supported armories. PMSCs can receive licenses from the Sri Lankan Ministry of Defense to store equipment and weapons on naval bases or on floating armories run in partnership with the government – although these primarily service western Indian Ocean transits.⁵⁶ Center for Naval Analyses’ Nilanthi Samarankaye says that this stringent effort to control armories through regulation is due in part to the “still fresh” memory of their use by the Liberation Tigers of Tamil Eelam (LTTE) during the Sri Lankan civil war, giving context to the regional fears that unregulated PMSCs and their support networks could have destabilizing side-effects.

Marine Resource Protection

A final area of possible mitigation for PMSCs’ prospects is in the realm of marine resource protection. As The Diplomat’s Zachary Keck notes, PMSCs “have sometimes been used by states to combat illegal fishing in their EEZs. Tensions over fishing rights in Southeast Asian waters have been high and are likely to persist so long as states continue to dispute their maritime borders in places like the South China Sea.”

Yet PMSCs are not alone in seeking to find solutions to these problems. Maritime activism expert Cdr. Chris Rawley, U.S. Navy, points out that “today, pirates, environmental activists, and more legitimate private security contractors compete for some of the same business, especially in the realm of marine wildlife protection.” For example, “Illegal shark finning remains a problem mostly driven by Asian markets that NGOs have expressed an interest in combating.”

The Sea Shepherd Conservation Society's Steve Irwin — The Sea Shepherd Conservation Society’s Steve Irwin

It’s a fascinating trilateral confluence of interests which, instead of seeing states hiring PMSCs, could see NGOs outsourcing to PMSCs to achieve their aims, or alternately NGOs becoming more like PMSCs by “selling” their services to nations. In one possible scenario, in exchange for the enforcement of a nation’s territorial claims, an NGO might extract concessions on marine wildlife preservation. As documented by Rawley, some of have already moved towards PMSCs in tactics and capacity if not in business models or motivation.⁵⁷ Says Keck, “Already, we have seen the Philippines use nominally civilian vessels to resupply their marines on the Second Thomas Shoal in the face of China’s blockade. Thus, there seems to be demand for more innovative solutions to the region’s growing maritime disputes.”

In providing training maritime law enforcement (MLE) to national agencies PMSCs might also run into difficulty. Heather Bacon-Shone, a U.S. Coast Guard officer with experience conducting MLE training in Southeast Asia says PMSCs would have trouble finding an adequate profit and could lack credibility if they don’t hire personnel specific to the mission. “MLE training is as much if not more about laws, legal process, case packages, and reasonable suspicion than it is about kicks, punches, and stuns,” said Bacon-Shone. “What we are really trying to teach them is about the rule of law, not about how to take each other down. It’s a real eye-opener for some that we accomplish so much compliance without having to beat people up.”

Assessing the Outlook

On the balance, the opportunities for PMSCs in South and Southeast Asia appear constrained. “The need for PMSCs is limited,” says Doherty. “The ‘high risk’ zones are only a day or two of transit, not like the 7-10 days in the [western] Indian Ocean or like a week at anchorage in West Africa.” Meanwhile geography might also help prevent a resurgence of piracy in the Strait of Malacca. As Bacon-Shone points out it’s “quite narrow and limited of a space, unlike the Gulf of Aden, which is much harder to patrol and control.” Additionally, “the prospects for PMCs in Southeast Asia may be dimming, remarks Keck, “as tensions over the South China Sea push Southeast Asian nations to develop stronger navies and coast guards, which should reduce demand from commercial entities for private security.”

Nonetheless, PMSCs will not disappear from the scene. Outside the universal need for port security, especially prevalent in the region, there are opportunities in high-value transit protection, training of VPDs and security forces, investigation services, and marine resource protection. And, as we discussed above, Keck says “it’s possible that some of the weaker maritime Southeast Asian nations could hire PMSCs to help patrol the waters they claim. This could be seen as a cheaper or at least quicker, temporary solution to their maritime woes, compared with building up their own naval and coast guard fleets.”

Furthermore, one should never discount the ability of organized crime syndicates to adjust and find new vulnerabilities to exploit. As von Hoesslin stresses, criminal organizations remain “dynamically fluid and capable of adjusting quickly to enforcement pressures.”⁵⁸ Counter-terrorism too could return as a greater priority and create an opening for PMSCs. “There are a lot of really bad guys reportedly getting out of jail this year in Indonesia,” remarks Doherty, “and the line between piracy and terrorism is not going to be as clear.”

In the “Asian Century,” PMSCs will continue to play a role when threats outpace state capacity. The breadth of that role has yet to be defined.

LT Scott Cheney-Peters is a surface warfare officer in the U.S. Navy Reserve and the former editor of Surface Warfare magazine. He is the founder and vice president of the Center for International Maritime Security (CIMSEC), a graduate of Georgetown University and the U.S. Naval War College, and a member of the Truman National Security Project’s Defense Council.

Follow @scheneypeters

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18. Catherine Zara Raymond, “Piracy and Armed Robbery in the Malacca Strait: A Problem Solved?” Naval War College Review, (Summer 2009): Vol. 62, No. 3, 37: http://www.usnwc.edu/getattachment/7835607e-388c-4e70-baf1-b00e9fb443f1/Piracy-and-Armed-Robbery-in-the-Malacca-Strait–A-
19. Kate McGeown, “Aceh Rebels Blamed for Piracy,” BBC News Online, September 8, 2003: http://news.bbc.co.uk/2/hi/asia-pacific/3090136.stm
20. Abby Tan, “In Asian Waters, Sea Pirates Eschew Eye Patches, Steal Ships via Internet,” Christian Science Monitor, 13 June, 1996, http://www.csmonitor.com/1996/0613/061396.intl.intl.4.html/(page)/2
21. Interestingly it should be noted that several sources contacted for this article mentioned rumors of continued criminal syndicates operating out of Chinese , which if true, shows the danger in relying only on reported statistics.
22. Raymond, 36.
23. Lino Miani, The Sulu Arms Market (Institute of Southeast Asian Studies: Singapore, 2011): 122.
24. Zou Keyuan and Shicun Wu Maritime Security in the South China Sea (Ashgate: 2013): 61.
25. Raymond, 37. Admiral Bernard Sondakh, Indonesian Navy Chief of Staff, emphasized the patrols are “coordinated” vice “joint” as there is no singular command structure. Keyuan and Wu, 62.
26. Rajeev Sawhney, “Redefining the Limits of the Straits: A Composite Malacca Straits Security System,” IDSS Commentaries, 18 May, 2006: http://www.rsis.edu.sg/publications/Perspective/IDSS0372006.pdf
27. “About ReCAAP” (accessed 17 April, 2014): http://www.recaap.org/AboutReCAAPISC.aspx
28. Bill Tarrant, “Balancing Powers in the Malacca Strait,” Reuters Global News Journal, March 7, 2010: http://blogs.reuters.com/global/2010/03/07/balancing-powers-in-the-malacca-strait/
29. Christopher P. Cavas, “Next LCS Decployment to Last 16 Months,” Defense News, January 6, 2014: http://www.defensenews.com/article/20140106/DEFREG02/301060023/Next-LCS-Deployment-Last-16-Months
30. There is additionally a multitude of short-duration bilateral and multilateral exercises and coordinated patrols with counter-piracy or maritime enforcement components, including India’s Indo-Thai Joint Patrols and biannual Indo-Ind Corpat and the Southeast Asia Cooperation and Training (SEACAT) exercise hosted at Singapore’s Multinational Operations and Exercise Center at Changi Naval Base.
31. Miani, 126.
32. Fund for Peace, Transnational Security Threats in the Straits of Malacca, 17: http://library.fundforpeace.org/library/ttcvr1213-threatconvergence-malaccastraits-08e.pdf
33. Liss, 295.
34. For a recent survey of procurement programs in the region see Wendell Minnick, “Tighter Budgets Limit Southeast Asian Plans,” Defense News, 13 April, 2014. http://www.defensenews.com/article/20140413/DEFREG03/304130015/Tighter-Budgets-Limit-Southeast-Asian-Plans
35. For analysis of defense budgets in the region see “Military Spending Continues to Fall in the West but Rises Everywhere Else,” SIPRI, April 14, 2014: http://www.sipri.org/media/pressreleases/2014/Milex_April_2014; Global Defense Budgets Overall to Rise for First Time in Five Years,” IHS Pressroom, February 4, 2014: http://press.ihs.com/press-release/aerospace-defense-terrorism/global-defence-budgets-overall-rise-first-time-five-years; “Southeast Asia: The Next Growth Opportunity in Defense,” McKinsey and Company, February 2014.
36. “Forecast International Expects Defense Spending to Project Upward Across Asia-Pacific Region,” Forecast International, October 31, 2013: http://globenewswire.com/news-release/2013/10/31/585516/10055526/en/Forecast-International-Expects-Defense-Spending-to-Project-Upward-Across-Asia-Pacific-Region.html
37. Minnick, “Tighter Budgets Limit Southeast Asian Plans.”
38. Scott Cheney-Peters, “Indonesia’s Skin in the Game,” CIMSEC’s NextWar, Mar 19, 2014: https://cimsec.org/indonesias-skin-game/
39. Jeff M. Smith, “Andaman and Nicobar Islands: India’s Strategic Outpost,” The Diplomat, March 18, 2014: http://thediplomat.com/2014/03/andaman-and-nicobar-islands-indias-strategic-outpost/
40. Nitin A. Gokhale, “India’s Growing Military Diplomacy,” The Diplomat, August 16, 2013: http://thediplomat.com/2013/08/indias-growing-military-diplomacy/
41. “Philippines Asks Japan for $110M Loan for 10 Patrol Vessels,” manilastandardtoday.com, February 12, 2014: http://newsonjapan.com/html/newsdesk/article/100931.php
42. “Japan Coast Guard Vessels and Equipment in High Demand in S.E. Asia, Africa,” The Asahi Shimbun, September 30, 2013: http://ajw.asahi.com/article/asia/around_asia/AJ201309300001
43. “Japan, US to help ASEAN monitor Seas,” The Japan News, April 20, 2014:
http://the-japan-news.com/news/article/0001221995
44. James Brown, “Pirates and Privateers: Managing the Indian Ocean’s Private Security Boom,” Lowy Institute, 12 September, 2012: http://www.lowyinstitute.org/publications/pirates-and-privateers-managing-indian-oceans-private-security-boom
45. However several of these limit their use solely to World Food Program vessels, and many to own-nation flagged or controlled shipping lines. Ibid.
46. Ibid.
47. Bibi van Ginkel, Frans-Paul van der Putten, and Willem Molenaar, “State or Private Protection Against Maritime Piracy?” Netherlands Institute of International Relations Clingendael (February 2013), 10: http://www.clingendael.nl/sites/default/files/20130200_state_or_private_protection_web.pdf
48. Gerard Ong Graham “A Case for Armed Guards on Ships,” World Security Network, June 01, 2005: http://www.worldsecuritynetwork.com/Other/Gerard-Ong-Graham/A-case-for-armed-guards-on-ships. As an indication of changed attitudes towards armed guards on vessels, see the International Maritime Organization’s interim circulars: http://www.imo.org/OurWork/Security/PiracyArmedRobbery/Pages/Private-Armed-Security.aspx
49. Fund for Peace, Transnational Security Threats in the Straits of Malacca, 15
http://library.fundforpeace.org/library/ttcvr1213-threatconvergence-malaccastraits-08e.pdf
50. Liss, 336-338
51. “ESS&SA Pioneering Maritime Security Industry,” Maritime Executive, February 26, 2014: http://www.maritime-executive.com/article/ESSSA-Pioneering-Maritime-Security-Industry-2014-02-26/
52. “Italian Marines Case: Court to Hear Case on July 31,” The Times of India, March 31, 2014: http://timesofindia.indiatimes.com/india/Italian-marines-case-Court-to-hear-case-on-July-31/articleshow/33023539.cms. That the actions took place in international waters is a matter of contention, and the Italians’ legal team contends the shots fired were warning shots.
53. PK Balachandran, “Regulate Private Maritime Security Firms: SL Navy Chief,” The New Indian Express, November 26, 2013: http://www.newindianexpress.com/world/Regulate-private-maritime-security-firms-SL-Navy-Chief/2013/11/26/article1910994.ece
54. S. Vijay Kumar and Praveen Paul Joseph, “Ship with Armed Guards Detained in Indian Waters,” The Hindu, October 19, 2013, http://www.thehindu.com/news/national/tamil-nadu/ship-with-armed-guards-detained-in-indian-waters/article5229375.ece
55. Edward Lundquist, “M/V Seaman Guard Ohio Remains Detained in Indian Port,” Defense Media Network, October 21, 2013: http://www.defensemedianetwork.com/stories/mv-seaman-guard-ohio-remains-detained-in-indian-port/
56. Lowy and Oscar Rickett, “Piracy Fears over Ships Laden with Weapons in International Waters,” The Guardian, January 10, 2013: http://www.theguardian.com/world/2013/jan/10/pirate-weapons-floating-armouries
57. Chris Rawley, “The SOFification of Maritime Activism,” Information Dissemination, March 22, 2014: http://www.informationdissemination.net/2014/03/the-sofification-of-maritime-activism.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InformationDissemination+%28Information+Dissemination%29
58. von Hoesslin, 546.

Africa, Global Analysis

PMCs: The End or the Beginning?

April 17, 2014 Guest Author 2 Comments

This feature is special to our Private Military Contractor (PMC)’s Week – a look at PMCs’ utility and future, especially in the maritime domain.

The National Intelligence Council’s report Global Trends 2030: Alternative Worlds released in December 2012 revealed trends, game-changers, and potential worlds that have relevance to maritime security. Two of the four mega-trends identified were individual empowerment and diffusion of power. Two game-changers will be a governance gap (or previously suggested maritime security shadow zones) and the potential for increased conflict. It suggests one potential future of a “Non-state World” in which non-state actors take the lead in confronting global challenges. If this is the future, where the power of traditional states erodes or collapses and individuals and illicit organizations are super-empowered, private maritime security companies could be far more employed than they have been in the past decade.

The quick rise of PMSCs in the past decade was due primarily to the threat of non-state actors—in this case Somali pirates operating off the Horn of Africa. Before the shipping industry responded to changes in its Best Management Practices and states began devoting more air and surface naval platforms to the region, individuals identified an opportunity in maritime security and formed companies. Whether they are mercenaries or entrepreneurs can be left to a discussion in the classroom or comments, but the reality is that the immediate threat to shipping was real and growing by 2006.

The companies themselves were analogous to dining in a large city. In the first category are the four and five star restaurants with superior ingredients and preparation, excellent service, but very costly. The second category includes standard restaurants. The third might be diners— affordable food, quick turn-around on service, and a dependable location. The last category is the street vendors. Because they have no infrastructure other than a mobile cart and they may not carry the best ingredients, their costs are extremely low. But there is a market for each of these categories.

The same has been true of PMSCs. Some are highly rated among the industry for the quality of their security personnel (such as former SAS and Navy SEALs), high-performance gear, and company infrastructure. These are the higher priced five-star restaurants. But as the industry emerged, it seemed anyone would join in if they had a cell-phone and an email address. Even experienced, qualified operators made attempts to form their own companies. Peter Cook, founder and director of the Security Association of the Maritime Industry (SAMI) suggested that this is one reason why the number of PMSCs has dropped in recent years as the number of piracy incidents off Somalia have declined. “New businesses fail at a high rate,” he said in a recent interview. “You have operators who might not have the business background necessary to administer all the paperwork that’s involved in setting up and operating a maritime security company.”

According to Cook, the number of PMSCs peaked in 2011 when eleven new PMSCs were applying every month for membership in SAMI. While there were an estimated thirty-five to fifty companies in 2010, SAMI now has about 160 members. The industry became highly competitive and very litigious. With some twenty to twenty-five percent of overcapacity in the shipping industry, shippers are trying to find ways to reduce costs and prices. When threats by Somali pirates resulted in far higher insurance rates, shipping companies reluctantly turned to protection from armed guards. At their height in 2008 to 2009, some PMSCs could charge $5,000 per day for a four-man team; today that price is down to about $3,500. Since, to date, not ship with an armed team has been taken by pirates, that investment more than offset the potential of paying hundreds of thousands to millions of dollars in ransom.

Although some in the industry argue that incidents of piracy remain unreported or underreported in order for companies to avoid higher insurance rates, the fact is that Somali piracy has dropped precipitously. As a result, Cook notes, there has been a major consolidation of PMSCs. That is not to say they will disappear or their work will not expand. To the contrary, they will likely be more necessary in the coming decades for several reasons.

First, long-time state navies with global projection (such as European nations or even the United States) are likely to diminish in size and projection capability due to increased domestic funding demands. Second, increasing competition for scarce resources and changing demographics will lead to greater instability among underdeveloped nations, particularly those along coastlines. Third, greater need for energy will result in more off-shore oil and gas platforms (currently twenty-five percent of all oil and gas platforms are off-shore such as those in the Gulf of Guinea.) Fourth, as one presenter at a recent Naval War College symposium suggested, a greater need for food sources will result in aqua-farming areas. Simply put, less maritime security capabilities by states and increased needs for security will lead to a greater reliance on PMSCs.

What does this mean for the United State? Most importantly, the nation will have to work with the industry in ensuring it is regulated and accountable. With Somali piracy, the country – like many European countries – was opposed to the use of PMSCs or at least did not recognize them. Public officials and senior military now recognize the partial role they have played off the Horn of Africa. The industry has already begun to self-regulate internationally. Operators quickly share information with each other on the reputation of firms and which ones should be avoided. In addition, organizations like SAMI provide standards such as certifications as a vetting conduit between PMSCs and the shipping industry.

In the coming decades, maritime security will be far more complex. Absent sufficient state navies and coast guard forces, PMSCs may well be the only alternative to ensuring platforms and regions have some semblance of security.

Claude Berube teaches naval history at the United Stated Naval Academy and is the author or co-author of several books including “Maritime Private Security” and his debut novel “The Aden Effect.” In December 2013, CIMSEC published his article and interview regarding “Civilian Warriors”. He is the immediate past chair of the editorial board of U.S. Naval Institute Proceedings.

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Asia-Pacific, Global Analysis

Whither the Private Maritime Security Companies of South and Southeast Asia?

April 16, 2014 Guest Author 8 Comments

This feature is special to our Private Military Contractor (PMC)s Week – a look at PMCs’ utility and future, especially in the maritime domain.

In a week-long operation in June 2010, 6 vessels were attacked and robbed over a 130-mile span while in a nearby strait armed security contractors kept watch for the pirate threat.¹ The same waters have played host to a “sophisticated syndicate…deploying speedboats from motherships” with raiding parties able to “board, rob, and disembark a vessel with ﬁfteen minutes without the bridge knowing.”² The location was not the Somali coastline or the Bab el-Mandeb, but rather 4,000 miles to the east, among the Anambas Islands and the Singapore Strait.

2011 Crude Oil Flows through Southeast Asia. Source: U.S. Energy Information Administration.

For the past decade or so, when people thought of private military contractors (PMCs)³ they typically thought of land-force outfits like the Academi formerly known as Blackwater and its founder Erik Prince. During this same period, the word “piracy” generally brought to mind skiffs plying the waters of the Horn of Africa and Gulf of Guinea. Others have written elsewhere on this site that some of the more interesting uses of PMCs during this timeframe have in fact been in combating (or attempting to combat) the now-diminished pirate scourge off East Africa in the form of private maritime security companies (PMSCs). Yet historically one of the greatest epicenters of piracy has been in the waters of South and Southeast Asia. If the region, already home to PMSCs operating in a variety of capacities and more than one-third of the world’s seaborne-oil trade, faces a resurgence of piracy, it may see a similar growth in PMSCs.⁴ This article will touch briefly on the historic precedents, preconditions encouraging the presence of PMSCs, and regional factors affecting their utility.

Precedents and Prevalence

South and Southeast Asia have long been home to private and quasi-private security arrangements. Cdr. Chris Rawley, U.S. Navy Reserve, notes that “historically, the line between privateering and piracy has been a thin one. From the 15th to the 19th century, pirates were often employed as a political tool by the Malay states to resist colonization by disrupting trade of the British and Dutch. Conversely, in the mid-1800s, the British East India Company’s private armies protected shipping in Malacca from pirates.”

The history of Singapore’s founding and growth under British rule is itself closely tied to this blurred public-private partnership. When the British arrived at Malaysian Singapore and sought local allies to protect their trade and investment, the recently displaced Temenggong, sea lord of the orang laut sea people, who themselves were noted for their marauding maritime prowess, presented himself as an acceptable solution. The Temenggongs thus served as part local officials, pressured to resettle their power base to neighboring Johor, and part maritime security contractors for hire, serving British counter-piracy operations in the early 1800s and port security for Singapore.⁵

In recent years, PMSCs have provided a range of services in South and Southeast Asia. According to The Diplomat’s Zachary Keck, “PMCs operating in Southeast Asia have primarily been focused on providing maritime security to clients, particularly in combating piracy. This has been especially true in narrow chokepoints like the Malacca Straits” and has included companies such as Background Asia and Counter Terrorism International (CTI).

In addition to providing these escort vessels and transit/cargo security aboard merchant vessels, PMSCs have worked extensively on port security (Gray Page, Pilgrim Elite, and the Glenn Defense Marine Asia group now know for the ‘Fat Leonard’ scandal), training and maritime hardening efforts (Trident Group), crisis response, and fisheries protection in countries’ exclusive economic zones (EEZs) (Hart).⁶ PMSC experts James Bridger and Claude Berube remark that in contrast with Africa, the companies in South and Southeast Asia place a greater focus on port vs transit security, due in part to the prevalence of at-berth and in-port crime, as well as training, vessel hardening, and security planning.

Preconditions

What conditions have given rise to this most recent cast of companies? In Carolin Liss’s 2011 book Oceans of Crime, she attributes the rise of PMSCs in South and Southeast Asia to several factors including states divesting former functions and the changed security landscape. This includes relatively more powerful transnational actors, both those interested in stability such as multinational corporations and multilateral institutions and those, such as terrorist organizations, interested in the opposite. Another element of the changed landscape facilitating PMCs’ rise is to Liss the disappearance of the Cold War struggle between the United States and Soviet Union, and the attendant opportunities for training of regional security forces.⁷ Further, post-Cold War terrorism heightened the focus of governments and the shipping industry on maritime security, as the threat joined piracy as a perceived regional risk to maritime assets, although it has so far failed to be nearly as impactful.⁸

In general PMSCs may find a market whenever the threats to maritime assets – be they from criminals, separatists, or environmental, corporate, or territorial disputes – appear to outweigh states’ capacities to safeguard those assets. The perception of corruption or distrust of the competency and fairness of states’ protective functions will similarly further the reception for external services.

How do these threat measures stack up in South and Southeast Asia? The first thing to note is the wide variance among the nations and waters of the region – as can be expected from such an diverse expanse generalities are hard to come by, so the following is a survey rather than a summation of the area.

With regards to the historical scourge of piracy, a recent report by the insurance firm Allianz made headlines for describing a 700 percent rise in actual and attempted attacks occurring in Indonesian waters in a 5-year span, from 15 in 2009 to 106 in 2013,⁹ although most of these were robberies at berth or at anchor.¹⁰ The International Maritime Bureau (IMB)’s April 2014 update notes that Indonesian “Pirates / robbers are normally armed with guns, knives and, or machetes…attacking vessels during the night.”¹¹ Derived from IMB statistics, the Allianz report also notes that in 2013 South Asia’s 26 incidents and Southeast Asia’s 128 combined to far outstrip Africa’s total of 89 incidents, with only 7 of the latter considered acts of Somali piracy.¹²

Attacks and Attempts in 2013. Source: IMB.

While privation is often portrayed as a leading spur for illicit maritime activities, analyst Karsten von Hoesslin contends that groups operating in Southeast Asia exhibit “more sophistication and structural coordination, reflecting the existence of organizations that go well beyond opportunistic marauders seeking to merely compensate for economic hardship.”¹³ In 2012 von Hoesslin noted such syndicates active in the Philippines, conducting kidnapping and robbery (K&R) operations, with robbery and hijacking organizations plentiful in Indonesia’s Anambas Islands and Riau Islands Archipelago.¹⁴

On the other hand, IMB’s April 2014 update demonstrates the fluid nature of piracy, stating only three years later that “attacks have dropped significantly in the vicinity off Anambas / Natuna / Mangkai islands / Subi Besar / Merundung area” and “dropped substantially” in the Strait of Malacca since 2005, although no such improvement is noted for the Singapore Straits.¹⁵ The year 2005 is significant as the year that Gerakan Aceh Merdaka (GAM) separatists and previous perpetrators of maritime assaults at the entrance to the Malacca Strait signed a post-Tsunami peace accord with the Indonesian government.¹⁶

Attacks and Attempts in 2014 to April. Source: IMB.

The assets most at risk in Southeast Asia are in general not the more than 60,000 tankers and container vessels that ply the waters but tugs and other small vessels with low freeboards. Nonetheless, Erek Sanchez, a maritime security contractor, notes that insurance companies now require nearly all merchant vessels to “have a security team aboard or have a proven static anti-boarding mechanism that satisfies the requirements set by the insurance company,” meaning there is plenty of business to be had.

Adding to PMSCs’ potential in the region is the lack of enthusiasm for joint patrols by multinational forces in and around Indonesian waters due to sensitivity of competing territorial claims. While understandable from a sovereignty perspective, vessels must as a result rely on the prospect of the strengthening of individual naval forces or seek additional protection.

Although the majority of attacks in the region – whether at sea, at anchor, or in port – are short-run robberies, when hijackings do occur they are often inside jobs. An interesting variant on hijackings occurs in the Sulu Sea between rival fishing companies who “attempt to deplete the maritime assets and platforms of their competitors.”¹⁷ This points to another factor that might increase the region’s potential for PMSCs – that of maritime resource competition.

According to Rawley, “Poorly managed fisheries and maritime crime in SE Asia are inextricably linked. In the 1990s, over-fishing partially caused the loss of livelihood of coastal communities that contributed to the surge in piracy near Malacca. Southeast Asian countries that cannot afford adequate coast guards might reach out to NGOs or PMCs for fisheries enforcement patrols in their territorial waters.”

Taken together, the sustained incidence of piracy and robbery, especially near Indonesian waters, along with resource competition between companies, states, and fishermen indicates that there will be a ready market for PMSCs in the region for some time to come. In Part 2 I will look at factors that might lessen the need for or hinder the operations of PMSCs in South and Southeast Asia, as well as provide a brief outlook on their future uses in the region.

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1. Risk Intelligence, “2010 Statistics Fact File.” Marisk.dk
2. Karsten von Hoesslin, “Piracy and Armed Robbery at Sea in Southeast Asia: Organized and Fluid,” Studies in Conflict & Terrorism (2012): 35:7-8, 542-552: http://dx.doi.org/10.1080/1057610X.2012.684652
3. I use this term interchangeably with private security contractors (PSCs).
4. U.S. Energy Information Administration estimate of 2011, updated April 4th, 2013: http://www.eia.gov/todayinenergy/detail.cfm?id=10671
5. Carl A. Trocki, Prince of Pirates: The Temenggongs and the Development of Johor and Singapore, 1784-1885 (Singapore: National University of Singapore Press, 2007), 24.
6. Carolin Liss, Oceans of Crime: Maritime Piracy and Transnational Security in Southeast Asia and Bangladesh (Singapore: Institute of Southeast Asian Studies, 2011), 331.
7. Ibid, 323.
8. Ibid, 327.
9. “Safety and Shipping Review 2014,” Allianz Global Corporate & Specialty, 27: http://www.agcs.allianz.com/assets/PDFs/Reports/Shipping-Review-2014.pdf
10. Attacks in territorial waters, whether against vessels underway, at anchor, or moored, by definition under the U.N. Convention of the Law of the Sea (UNCLOS) are not considered pirate attacks and when possible I will attempt to distinguish between sea robbery and piracy, although the terms are frequently conflated.
11. International Maritime Bureau: http://www.icc-ccs.org/piracy-reporting-centre/prone-areas-and-warnings
12. Allianz, 27
13. Von Hoesslin, 541-542.
14. Ibid, 544.
15. IMB.
16. Von Hoesslin, 545.
17. Ibid, 545.

New Initiatives

Welcome to Private Military Contractors Week

April 15, 2014 Guest Author 8 Comments

Military contractors are assisting militaries and civilian government agencies throughout the world and across the mission spectrum, including planning, training, logistics, and security. Their use in support of a range of security-related activities is growing. Employing private military contractors (PMCs) for any security purpose, has both distinct advantages and disadvantages. PMCs are seen as having inherent advantages over militaries with regard to cost, flexibility, and responsiveness. Relying on PMCs, though, does have its share of risks—including safety and liability issues, performance, force management, compliance with international and domestic laws, and lost resources because a capability is outsourced rather than retained.

With this increase in contractor use in general, and the rise of privatized firms that are specifically organized to provide security services, the question is now how to determine the right force mix to most effectively and efficiently complete a task or mission. In some cases, contractors may be the best choice; however, they are not the perfect fit for every mission or the right solution for all skill or manpower shortages.

Despite their recent pillorying, PMC’s have existed since before the condotierri and will continue to exist after America’s campaigns. This week (April 14-19th) we will discuss their utility and future, especially in the maritime domain.

Also be sure to check out Sea Control’s recent interview with Erik Prince, former CEO of Blackwater. He describes the challenges of African logistics and how his new public venture, Frontier Services Group, will attempt to tackle them.

Emil Maine is a National Security Research Assistant at the Heritage Foundation, where he conducts independent research on U.S. defense posture. The views and opinions expressed in this article are his own.

Fostering the Discussion on Securing the Seas.