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impacts_of_maritime_piracy

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									               Overview of Somali piracy impacts on maritime industry
                             and international response

                                    Aly Elmaghawry
                              Maritime safety programs
                                        AASTMT
                               Alexandria October 2009
                           E mail elmaghawry2@hotmail.com
                                    Tel: +0101668115

Abstract

Pirates activities off the coast of Somalia are growing at an alarming rate, threaten the
safety and security of international shipping, international efforts had been work hand on
hand to control the act of piracy in Somalia. This paper discusses possible impacts not
only on Somalia but also on regional states and on international level.

Introduction

Somali pirates attack all types of ships; General cargo, Bulk carrier, all types of Tanker,
Ro-Ro, container, Fishing ships, Sailing yacht and Tugboat. Somali pirates‟ attacks ships
along the northern Somali coast in the Gulf of Aden, southern Red Sea and the Straits of
Bab El Mandeb, the current pirate activities in the Gulf of Aden have resulted in some
ship‟s owners having already, and considering rerouting their ships via the Cape of Good
Hope. It has reached unprecedented levels during the past year, threatening one of the
most important maritime routes in the world, the Gulf of Aden, which is the primary
trade route between Asia and Europe because it is the shortest and most economical trade
route. Moreover, in 2007, 2008, and early 2009 piracy in Somali waters became a growth
industry, driven by the prospect of millions of dollars in ransom money and facilitated by
the lack of effective government in Somalia, since President Siad Barre was overthrown
in 1991; Somalia is a case study in what happens when a failed state is left to its own
devices.


Factors facilitating Somali piracy

Lack of state authority and law enforcement, low risks for capture, high financial
rewards, geographical factors, and ongoing political and economic instability, allowing
pirates to become increasingly organized and operationally sophisticated, wherever these
factors persist, piracy is likely to grow. According to International Expert Group report
on Piracy off the Somali Coast, 2008, Poverty, lack of employment, environmental
hardship, pitifully low incomes, reduction of pastoralist and maritime resources due to
drought and illegal fishing and a volatile security and political situation all contribute to
the rise and continuance of piracy in Somalia. Nicole, S, and Marie, B, 2009, states three
factors have contributed to the rise in piracy activities along the Somali coast and the




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Gulf of Aden: the political environment, the geographical environment and the legal
environment.

Somali piracy statistics

From the IMB reports, all attacks and attempted attacks in 2008 were carried out against
steaming ships, and the data below shows that the main purpose of the attacks is to hijack
the ship and take the crew hostage with a view for obtaining a ransom for their release.

Table 1: Actual and attempted attacks in Somalia and Gulf of Aden from 2004 to 2008
              2004           2005           2006            2007          2008
GOA           8              10             10              13            92
Somalia       2              35             10              31            19
Total         10             45             20              44            111
Source IMB piracy reports 2008

Table 2: type of attacks in Somalia and Gulf of Aden 2008
                   Boarded           Hijacked         Fired Upon         Attempted
                                                                         Boarding
GOA             2                   32                 31                27
Somalia         0                   10                 8                 1
Total           2                   42                 39                28
Source IMB piracy reports 2008

Table 3: Type of violence to crew, 2008
               Taken           Crew           Crew           Crew           Crew
               Hostage         Injured        Killed         Missing        Kidnap

GOA           629            2                3              14             0
Somalia       186            0                1              0              3
Total         815            2                4              14             3
Source IMB piracy reports 2008

From table 1, 2, and 3 above, 111 incidents were reported for the east coast of Somalia
and the Gulf of Aden, which makes Somalia pirates responsible for 37% of the world
piracy, reported in 2008. This is an increase of nearly 200% compared to 2007. A total of
42 ships were hijacked by Somali pirates, and 815, crew taken hostage, makes Somali
piracy responsible for more than 80% of the world reported hostage taken. According to
IMB piracy report 2008, at 31 December 2008, Somali pirates were holding 13 ships for
ransom and 242 crew hostage.

Since January to June 2009, the IMB received a total of 44 incidents in Somalia, and 148
incidents (Gulf of Aden 86 attacks, Red Sea 14 attacks Arabian sea 1 attack, Indian ocean
1 attack, and Oman 2 attacks) carried out by suspected Somali pirates, that number,
present an increasing of more than 33% of attacks in Somalia, if it is compared with the
total number in 2008.


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A total of 495 crew members have been taken hostage. A further six have been injured,
four killed and one missing. A total of 30 ships have been reported hijacked in this
period.

Impacts of Somali piracy

The possible impacts related to piracy attacks in the Gulf of Aden and off the coast of
Somalia are divided into, national level, regional level, and international level

On the national level, increasing of piracy operations off the coast of Somalia, which is
negatively affecting both commercial and humanitarian assistant shipping, to Somalia, as
a result, commodities prices are increasing, income from commercial activities are being
undermined, and humanitarian aid deliveries are being delayed and their costs are
increasing. According to International Expert Group on Piracy off the Somali Coast 2008,
the economy of Somalia had been affected in particular by the acts of piracy, makes
Somalia a very danger area for international shipping. In turn of economic impact it
discourages potential overseas business partners and investors, reduces port revenues and
funds available for investment in port and related transport infrastructure, reduces
incomes of communities dependent on port revenues, and reduces customs revenues for
local and central governments. Congressional Research Service report 2009, estimated
3.2 million Somalians, approximately 43 percent of the population, required food aid. On
the other hand, international shipping plays an important role for the humanitarian aid as
it is one of the starting points of such assistance, unfortunately, continued sea piracy
along the Somalia threatens the delivery of vital humanitarian aid to the Horn of Africa,
much of which arrives by sea. MV Maersk Alabama (April 2009) is an example; the ship
is contracted by the World Food Programme (WFP) to deliver United States Agency for
International Development (USAID) food assistance off the southeast coast of Somalia.

The issue of Somalia piracy in the regional states of the Gulf of Aden, red sea, the Gulf of
Suez, and the Gulf of Aqaba, is one of the great threats to peace and security in Africa
and Middle East. Somalia piracy impacts are of great importance for countries around the
region, one of the most important being the economic and commercial effects that pirates
creates on one of the world‟s most important trade routes, the Suez Canal and petroleum
industry.

Attacks by Somali pirates are threat to petroleum industry in the region, such as, Bahrain,
Islamic Republic of Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab
Emirates, and Yemen, they are considered to be some of the most important countries
that oil flows to the world energy consumers. According to JAMES, C 2009, More than
3.3 million barrels of oil pass through the Gulf of Aden; this represents 4% of the world's
total daily production and 12% of all the oil transported by water daily around the world
by sea.

According to IMB reports, there are 91 tankers had been attacked in the year 2008 (39
chemical tankers, 30 tankers, 16 product tankers, and 6 LPG tankers) and 67 tankers



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attacked in the first six months in the year 2009 (26 chemical tankers, 24 tankers, 13
product tankers, 3 LPG tankers, 1 LNG tanker), example is, the attack on the Saudi
supertanker Sirius Star – 319,430 DWT built 2008 with a $100m oil cargo, has implied a
new magnitude of possible security impacts on the tanker shipping markets. From an
economic standpoint, the Sirius Star earned around US $47,000 / day in earnings at the
time of hijacking. Having been in captivity for ten days, the total vessel revenue loss so
far is around US $470,000.

Also attacks by Somali pirates are a threat to Suez Canal, it is well known that the canal
is one of the most important maritime routes in the world; also the canal is very important
for Egypt, in the form of direct income. The Suez Canal enables shipping companies to
avoid their ships traveling very long distances; because of sailing around the south of
Africa would possibly increased freight prices for shippers. According to Joseph, M,
2008, The Gulf of Aden/Suez Canal route for international transport trade is the leading
choice for European companies who want to get their products quickly to Middle Eastern
and Asian markets. Lars, S, 2009, stated that approximately 7 per cent of the world's
maritime transport passes through the Suez Canal. This means that between 1,700 and
2,000 ships pass through the Suez Canal every month, which corresponds to 60 ships
every 24 hours.

The impact of Somali piracy on international level, can affect the maritime industry, such
as ports and terminals, cargo owners, seafarers, and environment, to list a few, also
shipping companies considered to face one of the grate impacts as it is responsible for
international trade between countries in the world. Ship owners with ships transiting the
Gulf of Aden are exposed to direct and indirect impacts, which add additional costs to
shipping companies, such as operational costs, and insurance costs. In effort to avoid the
pirate attacks, an increasing number of ship owners are altering their fleets from the
traditional trading routes, Gulf of Aden and Suez Canal to the Cape of Good Hope.
Therefore, as more vessels begin to avoid the area, an imminent impact on cargo delivery
times can be expected to take place, which have a direct impact to the cargo owners as
well as the consumers, may place the market out of balance and cause the freight rates to
be increased.

Direct impact on shipping companies, such as, delays due to escaping maneuvers,
damage to the ship and cargo, loss of safe and cash money, loss of cargo, loss of hire, loss
of operation during the attack, investigation procedures, loss of the whole ship as a cause
of hijacking, cost of ransom, negotiating and delivering the money for ship and seafarers
release, investigation costs, and contractual penalties due to delayed or damaged delivery.
Indirect impacts on shipping companies, such as, security costs incurred in the fight
against piracy, insurance costs due to the Gulf of Aden considered being a high risk area,
and change in Trade Routes

International response to deter Somali piracy

The growing number of reported attacks on ships off the coast of Somalia Since 2005
prompted the IMO to work with the United Nation Security Council (UNSC) and other



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international organizations together to ensure that acts of piracy and armed robbery
against ships sailing off the coast of Somalia are prevented and suppressed to the benefit
of the Somali people, first and foremost, the seafarers and passengers on ships sailing in
the region, the shipping industry and international seaborne trade, also the UNSC, which
has closely monitored the political and security situation in Somalia since 1991, has led
efforts to adapt the international legal framework to the specific challenges posed by the
increasing of piracy off the coast of Somalia, the UN Security Council issued five
resolutions in 2008 regarding piracy off the coast of Somalia, 1814, 1816, 1838, 1846,
and 1851. For example Resolution 1816, in paragraph 7, authorized countries to enter the
territorial waters of Somalia for the purpose of repressing acts of piracy and armed
robbery at sea.

In January 2009, representatives of 17 regional governments met at an IMO-sponsored
meeting in Djibouti and adopted a Code of Conduct concerning the Repression of Piracy
and Armed Robbery against Ships in the western Indian Ocean and the Gulf of Aden.
Also in an effort to counter piracy, 11 industry organizations developed the Best
management practices to Deter Piracy in the Gulf of Aden and off the Coast of Somalia.
IMO, the Maritime Safety Committee, at its eighty-sixth session (June 2009), considering
the distinctive nature of the incidents of piracy and armed robbery against ships in waters
off the coast of Somalia, and deciding that guidance specific to the area was warranted,
endorsed and agreed to promulgate the Best management practices to all interested
parties.

Military responses

The increase of piracy attacks in the Gulf of Aden and off coast of Somalia, has led to an
unprecedented multinational naval deployment, such as the European Union's military
operation, called EU NAVFOR, which began in December 2008; and United States
combined task force, CTF-151, in January 2009 under the overall authority of the UN
Security Council. By January 2009, an estimated thirty ships were patrolling an area of
about 2.5 million square miles. More than a dozen countries, including Russia, France,
the United Kingdom, India, China, and the United States, had sent warships to the Gulf of
Aden to deter pirates. Also eleven littoral states of the Persian Gulf and Red Sea have
agreed to create an all-Arab naval task force to prevent the spread of sea piracy in the
region. Delegates to a regional security conference in the Saudi capital, Riyadh, issued a
joint statement saying the proposed task force was necessary to counter "the danger posed
to their shipping, particularly vital oil and gas exports which pass via the Red Sea to the
Suez Canal and the Mediterranean." the task force would comprise warships from
Bahrain, Djibouti, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Sudan, the United
Arab Emirates and Yemen. The Saudi navy will coordinate joint efforts for a period of
one year.

Conclusion

Somali piracy had been facilitated by the lack of state authority and law enforcement
which considered being one of the main factors for the increasing piracy activities off the


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coasts of Somalia and the Gulf of Aden, even with the presents of naval forces, acts of
Somalia piracy have affected the country mainly on the economic and on the
humanitarian assistance also it has a direct threat into the region of Gulf of Aden, red sea,
the Gulf of Suez, and the Gulf of Aqaba, as well as a direct and indirect impacts on the
maritime industry especially on shipping companies.

There is no simple solution to the problem of pirates‟ attacks against ships off the coasts
of Somalia and the Gulf of Aden; it is a complex, and requires international efforts from
maritime organizations, maritime industry, and shore organization, to work hand on hand
to combat and control Somali piracy, those efforts must be on the national, regional, and
international level.

References

Bangert, L. (2009) For a Greater Horn of Africa Sea Patrol (Strategic Analysis of the
Somali Pirate Challenge) Danish Institute for Military Studies

Caponiti, J. (2009) statement of acting deputy administrator, “presentation”, senate
armed services committee May 5, 2009 department of transportation

International Expert Group on Piracy off the Somali Coast, (2008) Piracy off the Somali
Coast (Final report, Assessment and recommendations) Workshop commissioned by the
Special Representative of the Secretary General of the UN to Somalia
3 ICC (2008) „piracy and armed robbery against ships‟ (annual report 1 January -31
December 2008) London united kingdom International Maritime Bureau

ICC (2009) „piracy and armed robbery against ships‟ (annual report 1 January-31
December 2009) London united kingdom International Maritime Bureau

International Maritime Organization (2007) piracy and armed robbery against ships in
waters off the coast of Somalia, (Resolution A.1002 (25) Adopted on 29 November 2007
(Agenda item 19(a)), International Maritime Organization

International Maritime Organization (2009) Protection of vital shipping lanes (Sub-
regional meeting to conclude agreements on maritime security, piracy and armed robbery
against ships for States from the Western Indian Ocean, Gulf of Aden and Red Sea areas,
Note by the Secretary-General), International Maritime Organization

International Maritime Organization (2009) Piracy and armed robbery against ships in
waters off the coast of Somalia, (MSC.1/Circ.1302 16 April 2009) International Maritime
Organization

International Maritime Organization (2009) piracy and armed robbery against ships in
waters off the coast of Somalia, (MSC.1/Circ.1332 16 June 2009) International Maritime
Organization




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Nicole, S and Marie, B (2009) „Motivation and tactics the case of Somali piracy‟ Dubai,
United Arab Emirates Gulf research center

Lauren P, Christopher M. Blanchard, R O, R. Chuck Mason, and Rawle O, (2009) Piracy
off the Horn of Africa, (CRS Report for Congress) Congressional Research Service

Mayton, J. (2008) „Somali Piracy Shakes Confidence in Suez Canal Route‟, Middle East
Times,                                                                           25
http://www.metimes.com/International/2008/10/21/somali_piracy_shakes_confidence_i...
1/6/2009

Nicolas, G (2009) „Taking stock six months on’ EUROPOLITICS No 3761, Pages12-22
19 RIA Novosti (2009) Arab countries agree to set up own anti-piracy force,
GlobalSecurity.org, ACCESSED Tuesday, September 01, 2009, 12:57:16 AM

United Nation Security Council (2008) Resolution 1814 (Adopted by the Security
Council at its 5893rd meeting, on 15 May 2008), United Nation

United Nation Security Council (2008) Resolution 1816 (Adopted by the Security
Council at its 5902nd meeting on 2 June 2008), United Nation

United Nation Security Council (2008) Resolution 1838 (Adopted by the Security
Council at its 5987th meeting, on 7 October 2008), United Nation

United Nation Security Council (2008) Resolution 1851 (Adopted by the Security
Council at its 6046th meeting, on 16 December 2008), United Nation

Wikipedia, the free encyclopedia (2009) Combined Task Force 151, ACCESSED
Tuesday, September 01, 2009, 12:27:32 AM




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