Payment Rise
Piracy in the Gulf of Aden has cost shippers US$80 million (Dh293.8m) in ransom money over the past two years, and companies can expect to pay out significantly more than that this year and next as pirates demand higher sums, experts say.
The Gulf of Aden and the Indian Ocean are bottlenecks in the $5 trillion global shipping trade and the sea lanes have been exploited by organised gangs based along the lawless Somali coast. A number of UAE-owned vessels are among the ships that have been targeted in attacks.
Marie Bos, an analyst at Control Risks in Dubai, said payments reported totalled $80m in 2008 and last year but the real amount could be much higher as many ransom payouts went unreported. The average payment was $2m to $3m, Ms Bos said. About 2 per cent of all vessels traversing the Gulf of Aden are attacked, although many raids are unsuccessful.
Total ransoms could top $120m this year and next, she said. It looks like ransoms may increase, because pirates realise they have more room for manoeuvring, Ms Bos said at the three-day IQPC National Security Summit Middle East in Abu Dhabi, which ends today.
Theyve been pressing companies for more money and its been working.
Piracy evolved out of the Somali fishermens practice of policing their fishing grounds to protect against poachers, she noted. Now, piracy provides a lucrative illegal industry that supports a wide range of Somali entities.
The increased risks to shippers has caused insurance premiums to rise. Insurance companies often foot the bill after a ransom payment.
To date, most shipowners have not resorted to armed guards as many are wary of potentially increasing the risk of attacks turning violent and of the possible attendant legal and reputational consequences.
EU, UN and US authorities police a sea corridor in the Gulf of Aden, which has reduced the risk to shippers using it. However, that has prompted Somali pirates to hunt for victims further out into the Indian Ocean, using small attack craft often assisted by larger mother ships, Ms Bos said. There have been raids off the coast of Oman and as far as 1,850km off the Somali coast.
Two weeks ago, the QSM Dubai, a 15,220-tonne cargo ship, was hijacked by pirates and the captain killed before Somali government forces regained control of the vessel. The ship was carrying sugar from Brazil to Bossaso, in northern Somalia, when it was attacked.
Worldwide, attacks jumped more than 30 per cent from 2008 to 406 last year. Locally, in the first four months of this year pirates made 47 attacks off the coast of Somalia, up from 37 in the same period last year, according to US Navy data.
Source:shiptalk
