Piracy remains a threat to chemical tankers

Piracy scourge of the seas

30 July 2007 00:00 [Source: ICB]

Piracy may seem like the stuff of fairy tales, legend and the Hollywood blockbuster but the threat is real. Reported attacks have been falling for years, but is the tide about to turn?

ANDY BRICE/LONDON

A FEW centuries ago, pirates and privateers were the scourge of the South China Seas. Ransacking ships, stealing cargoes and holding crews for ransom were part and parcel of a life at sea.

Times may have changed but the threat remains. Even today, the danger of piracy in Southeast Asia instills fear among seafarers, especially chemical shippers, with parrots and peg legs replaced by speedboats and rocket-propelled grenade launchers.

According to statistics from the International Maritime Bureau (IMB), there were 12 piracy attacks from January to March 2007 in this region alone nine of these were in Indonesian waters.

Slow-moving chemical tankers are easy targets, and shipowners have every reason to be a little anxious about their multimillion-dollar cargos. Along with container ships, these were the most popular targets in the first quarter of this year, accounting for 22% of all attacks worldwide.

Nevertheless, this is still a marked improvement on the past few years. Overall, there were 35 piracy attacks against chemical tankers in 2006, a drop of 19% over 2005 figures.

"Piracy will never be eliminated," says Captain Pottengal Mukundan, director of the IMB. "It's one of the risks of maritime commerce it has always been there and always will be. The whole idea is to bring it down to such a level that people can live with it, and stop the violence."

Low-level attacks are most prevalent on chemical tankers, where thieves board the vessel and steal what they can. Increasingly, however, the more brazen pirates are seizing ships and holding the crew for ransom, which often proves extremely lucrative.

These more aggressive and adventurous attacks are becoming all too common, says Mukundan. On rare occasions, there have been reports of ships being hijacked, renamed and flown under a new flag, with the cargoes taken for resale. This, however, is often fraught with difficulty.

"Kidnap and petty theft is the main threat, but so is safety," says Toralf Sorenes, vice president risk management and company security officer of Odfjell Tankers. "These ships are carrying very flammable and dangerous cargoes, and having unqualified people on board poses a very serious threat to the ship."

Wouter Breel, round-voyage manager, Pacific Ocean Services at global transportation group Stolt-Nielson, agrees. "Practically, it wouldn't be difficult to board a slow-moving vessel, but I think pirates would tend to think twice before attacking a chemical tanker. With these cargoes, they know there could be some risk to their health if something goes wrong. They'd have to have extensive knowledge of how to handle and store what's in the hold."

Even if the pirates do have the expertise, he says, they would undoubtedly have difficulty finding a buyer capable of receiving the stolen goods. Indonesia has historically been a haven for piracy, particularly in the Malacca Strait - a 500 mile (800km) seaway linking the Indian and Pacific oceans, used by more than 50,000 ships a year.

However, with the route labeled a high-risk area, international pressure saw the three littoral states - Singapore, Indonesia and Malaysia - boost efforts to keep the pirates at bay.

Last year, 14 Asian nations also launched the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP).

This increased cooperation between local governments, and regular patrols by sea and air, have been key to the successful reduction of attacks.

Piracy just keeps popping up

"Wherever there is heightened attention and increased activity by way of patrols and legal action, the problem has been brought under control the Straits of Malacca are a case in point," says Tillmann Kratz, senior consultant at reinsurance firm Munich Re, "But when you suppress it on one side, the problem rises up somewhere else."

Globally, four successive years of decline saw a total of 240 incidents reported last year, almost half as many as in 2003.

This downtrend may now have bottomed out, warns Mukundan. Piracy is still endemic and soon-to-be-published figures are likely to show a significant increase, with other regions reporting higher than usual incident rates.

"Even though the figures have been coming down, attacks are increasing in audacity and violence," he says. "Somalia and Nigeria, for example, are the two biggest hot spots today, and both are areas of great concern."

Speaking at the 6th triennial Conference on Piracy and Security in Kuala Lumpur in June, Mukundan said that the Horn of Africa had officially taken the mantle held by Asia. Somalia, just south of the Suez Canal -one of the world's busiest waterways - is largely responsible for the latest spike.

So far this year, 15 incidents have been reported in or near Somali waters, compared with 10 in the whole of 2006. Since many of these attacks took place well offshore, the IMB now recommends that vessels not calling in to Somali ports stay at least 200 nautical miles (370km) from the coastline.

"The problem in Somalia is that there is no central government, no police agency and no judiciary," says Mukundan. "These attacks are unique they capture a ship which is way out in the Arabian Sea and anchor it about two miles off the coast. Negotiations then begin for a ransom payment for the return of the crew. They know that the ship owners will give up the vessel but are unlikely to give up the crew."

Nigerian attacks meanwhile are politically motivated, taking place in the oil-producing Delta region, which is hit by corruption and poverty. Militant groups, including the Movement for the Emancipation of the Niger Delta and the Niger Delta People's Volunteer Force, continue to attack the country's oil infrastructure.

Unlike Somalia, where patrols constantly scout the coastline, a lack of government control means ships are often hijacked well outside territorial waters and ransacked before the crew is taken ashore for ransom.

"Piracy is not becoming less of a problem, but it is changing," says Sorenes. "It is a real concern in some areas. There could be costs, but they are not normally excessive unless something serious happens."

Generally, insurance claims arising from piracy are extremely rare, according to the world's largest protection and indemnity (P&I) firm, the UK P&I Club. While the attacks can be very serious, claims resulting from piracy tend to be relatively small. No major claims have been reported by UK Club members so far this year.

Far more common are costs incurred when masters divert their ships to avoid the most dangerous routes. An owner-broker from Jo Tankers says that evasive maneuvers are extremely common, particularly for ships leaving the Suez Canal and heading past the east coast of Somalia.

"We bypass Somalia by sailing around the outer island of Socotra," says the Jo Tankers source, adding that this is well beyond the IMB's recommendations, around 250km from the coastline. "You'd normally pass on the inside of these islands but we go outside them for safety. It's a deviation of around 0.7 days, so additional costs are involved."

Quite who bears the brunt of these charges is unclear the charterers sometimes hesitate to pay for the cost of the deviation, while the owners say it is at the master's discretion.

But shipowners agree that this is ultimately a small price to pay, especially with these attacks becoming more frequent and increasingly violent.

"Piracy is just like any other crime where there is weak law enforcement, crime will flourish," says Mukundan. "Governments must take responsibility for law enforcement in their waters. I don't think that it has yet reached the scale where ships aren't going to a place because of piracy, or that it is hampering world trade. If we continue to raise the profile of these crimes, hopefully it will not reach these levels."

SHIPS ATTACKED: FIRST QUARTER 1997 TO FIRST QUARTER 2007

Vessel type	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
chemical/product tanker	5	4	22	13	20	7	13	13	13	10	9
crude oil tanker	-	-	-	-	-	18	10	4	3	1	5
liquefied natural gas (LNG) tanker	-	1	-	-	-	-	-	-	-	-	-
liquefied petroleum gas (LPG) tanker	1	2	1	-	5	2	3	4	-	-	-
container	6	6	8	5	12	7	14	7	4	15	9
Q1 TOTAL (all vessel types)	52	47	66	56	68	87	103	79	56	61	41
ANNUAL TOTAL:	248	202	300	469	335	370	445	329	276	239

Source: IMB

WHAT IS PIRACY?

The IMB defines piracy as "an act of boarding or attempting to board any ship with the apparent intent or capability to use force in the furtherance of that act." This definition covers actual or attempted attacks whether the ship is berthed, at anchor or at sea.

REPORT: KUALA LUMPUR

Kuala Lumpur is home to the IMB's Piracy Reporting Centre, manned 24 hours a day to receive confidential reports of piracy attacks worldwide. A dedicated hotline (+60 3 2031 0014) also allows mariners to leave details of any suspicious or illegal activity.

Somalia has been identified as the area with the highest piracy risk in the world. Ineffectual law enforcement means pirates have free rein around the coast, picking off passing vessels as they exit the Suez Canal. Hijacking and ransoms are common, but there have been reports of murder this year. The IMB recommends that vessels not visiting Somali ports should stay at least 200 nautical miles from the coast.

HOTSPOT: SOMALIA

HOTSPOT: THE MALACCA STRAITS

The Malacca Straits are notorious for pirates but increased efforts by local governments and regular patrols have slashed the number of attacks in the past few years. Only two incidents were reported in the first quarter. Indonesia has also shown a marked improvement on the same period in 2006, falling from 19 reported incidents to nine.

HOTSPOT: NIGERIA

Militant groups are largely behind attacks in Nigeria. Pirates often board a vessel and take the crew ashore before making their ransom demands. From January to March, five vessels were boarded and one hijacked. First quarter statistics show that 23 crew members were taken hostage, 17 were kidnapped and two were injured.

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