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PIRACY IN GULF OF ADEN THREATENS SUEZ
BY GEOFFREY CRAIG
It is considered one of the world’s busiest shipping lanes. The Gulf of Aden, between the coasts of Somalia and Yemen, lies on the main shipping route from Asia to Europe. About 4 percent of the world’s oil passes through the gulf each year.
Apart from its commercial importance, the gulf has recently gained a reputation as the world’s most dangerous body of water. But this threat isn’t a force of nature. Rather, it is a growing posse of Somali pirates, plying the open sea in fiberglass skiffs, capturing ships and demanding ransoms often exceeding a million dollars. A total of $30 million has already been paid this year.
According to the International Maritime Bureau, between January and October this year there were 63 attacks off the coast of Somalia, compared to 31 in 2007 and only two in 2004. In early September, an Egyptian vessel was hijacked and held for over three weeks off the Somali coast, before being released following negotiations.
A dozen ships and more than 300 crew members are still being held captive, including the MV Faina, a Ukrainian ship laden with tanks and heavy weaponry, for which pirates initially demanded a $35 million ransom. That request was subsequently scaled down to $20 million and then $8 million.
“We could see over a hundred attempted hijacks this year, four times what we saw last year,” says Roger Middleton, a specialist on east Africa at Chatham House, a UK-based think tank, and the author of a study on piracy published in September. “It’s a big, big danger,” he asserts.
These attacks have also become more sophisticated. Pirates are using GPS systems to track down vessels and satellite phones to communicate with colleagues. They have also extended their physical reach by utilizing mother ships – typically captured fishing trawlers – in order to launch attacks as far as 200 miles out to sea.
With small arms and fast boats, a dozen or so pirates are capable of seizing even large ships. The tactics are simple, but effective, explains Middleton. “The idea is to scare the ships into stopping. Normally, ships will try to take some kind of evasive maneuvers, going as fast as possible, swerving from left to right, making it harder for pirates to come alongside,” he says.
“Presumably, the ship being attacked is not able to outrun the pirates, [who] will come up alongside in their metal dinghies – normally they come in twos, like a pincer movement – and jump onside, because the ships they attack tend to have low sides,” Middleton adds. “On a choppy sea, you might be able to just step across, and if not, you can pull yourself up.”
Once onboard, pirates seize the crew and force the captain to sail towards the Somali coast, where the ship is anchored, and a ransom negotiated.
Even among those who sail through the Gulf of Aden without any incident, which is the vast majority of the 20,000 ships per year, the repercussions of increased piracy are still noticeable. That is because shippers are now required to pay a war-risk insurance premium when passing through the body of water. Insurance premiums for cargo shipments have reportedly risen ten-fold over the last year.
This added expense, combined with the possibility of paying a hefty ransom, could mean that shipping companies will avoid the Gulf of Aden and sail instead around the Cape of Good Hope to reach Europe and North America, experts warn. Indeed, “this option is mentioned by shipping industry insiders as a very real possibility,” notes the Chatham House study.
The decision to circumnavigate Africa would impact prices of goods worldwide because the extra weeks of travel and fuel consumption would add to the cost of transporting goods. A trip from Hong Kong to Rotterdam, for example, is 9,700 nautical miles via the Suez Canal and takes about 20 days. Going around the Cape, instead, requires an extra week of travel because the distance stretches 13,000 nautical miles.
Egypt’s economy would suffer directly because any ship that transits the Suez Canal must also pass through the Gulf of Aden. The canal is one of the country’s leading sources of foreign revenue – earning 3.3 percent of gross domestic product in FY 2007-08.
Strong global trade, high fuel prices and Panama Canal delays owing to renovation led to a surge in Suez Canal transits. The extra traffic, plus higher fees effective since April 2008, boosted revenue to the central bank’s provisional figure of $5.16 billion for FY 2007-08, up 23.6 percent from $4.17 billion in FY 2006-07.
Still, in the long run, many shipping experts believe piracy in the Gulf of Aden could take business away from the Suez Canal if the security situation doesn’t improve. Giles Noakes, chief maritime security officer at BIMCO, the largest of the international shipping associations, says shipping companies will have to weigh paying higher insurance premiums and potentially a ransom versus the fuel costs of sailing around the coast of Africa.
“That risk analysis equation can only be worked out by each individual shipping line,” Noakes says. “There is obviously going to be scope for quite a few of the lines to be thinking, ‘This might be a better bet to go around the Cape,’ unless there is very clear evidence that the issue is being addressed.”
In September, Malaysia prohibited its commercial fleet from using the Gulf of Aden for two weeks until its navy was able to provide an escort.
A major dry bulk carrier that regularly steams from Australia to Europe recently opted to skip the Suez, according to Rob Lomas, secretary-general of the International Association of Dry Cargo Shipowners (Intercargo).
Lomas declined to identify the company, which is a member of his organization, but noted that the company was “concerned about the situation in the Gulf of Aden.” Other members are considering the same idea, Lomas said. About 10 ships hauling dry bulk cargo transit the Suez per day, according to the industry association’s statistics.
Some major shipping lines insist that they aren’t changing paths. “We have no plans at all of bypassing the Suez Canal,” Michael Storgaard, a press officer at Maersk, says.
In fact, over the first half of October, an average of 62 ships per day passed through the canal, compared to an average of 56 ships per day during same period last year, according to an official at the Suez Canal Authority (SCA). “Until now, we haven’t seen any impact from the piracy, but maybe in the future,” the SCA official told Business Monthly.
A typical vessel transiting the canal weighs between 20,000 and 100,000 tons, whereas most ships attacked in the Gulf are much smaller, the same official noted. Therefore, larger vessels might feel more secure, particularly as they have higher sides, making them less susceptible to pirate attacks.
Moreover, any decision to alter the Asia-Europe route from via the Suez Canal to the Cape of Good Hope poses a logistical challenge that shipping companies can’t solve overnight. “Because the Cape route is longer, if you are a container line you have to deploy more ships to maintain a weekly service. Also, longer transit times are less attractive to shippers. So if line A is using Suez, line B has to as well,” notes Neil Davidson, head of port research at London-based Drewry Shipping Consultants.
Once these schedules are worked out, more shipping lines could decide to skip the Suez. It is therefore important to solve the underlying problem of piracy. In this regard, the shipping industry has lobbied for a larger presence of naval warships to protect sea-lanes. There has been progress recently, though foreign governments balked at this request earlier in the year, recalls Noakes.
“The reaction from the navies of the world was that merchantmen should arm themselves and do more to help themselves,” he says. “We have been arguing for some considerable time that this is particularly dangerous because of the potential for escalation, particularly the collateral damage to seamen, who aren’t trained to be involved in these sorts of things.”
A violent conflict between a commercial ship and pirates also raises the odds of an injured vessel. In the case of an oil tanker, the result may be an environmental catastrophe.
As a compromise, and prompted by several high-profile attacks on commercial vessels, coalition naval forces in the Gulf of Aden announced in late August that they would establish a shipping lane patrolled by coalition warships and aircraft. In addition, NATO, the EU and India have recently sent warships to help patrol the region.
Boosting military presence in the Gulf of Aden is a necessary deterrent, but preventing an attack will ultimately prove difficult because the size of the area is so large, notes Middleton. Moreover, a naval ship or helicopter would have to be positioned nearby in order to respond within 15 minutes, which is the amount of time needed for pirates to board a ship from the moment they are spotted.
Ships are being advised by experts to take certain precautions, such as maintaining a minimum speed and staying a safe distance from shore. The International Maritime Bureau recommends at least 250 nautical miles.
In addition, there are more proactive steps available, like hiring guards from private security firms as well as equipping a boat with loud acoustic devices that cause deafening pain when directed at someone a short distance away, such as approaching pirates.
Despite these measures, most analysts recognize that it will be difficult to clamp down on piracy in the Gulf of Aden as long as the political situation inside Somalia doesn’t improve. Unlike the Straits of Malacca, once considered a hot spot for piracy before Malaysia, Singapore and Indonesia cooperated on anti-piracy measures, Somalia has no functioning government to effectively patrol the coastline and bring criminals to justice.
In a press statement in early October, Egypt’s foreign minister Ahmed Aboul Gheit commented on the situation in the Gulf of Aden, saying that there was “a strong correlation between the growth of the piracy phenomenon off the Somali coast and the developments in the political situation in Somalia in general.”
At the same time, widespread poverty in the country and weak economic prospects provide a large pool of would-be pirates. Many recruits are ex-fishermen from a semi-autonomous region called Puntland in northeast Somalia, unable to compete with the crews of international commercial fishing fleets that have over-fished Somali waters.
In order to crack down on over-fishing and other illicit activities, the Chatham House study recommends the creation of a coast guard run by the United Nations or the African Union. This would serve multiple interests, Middleton notes. “If you have a force that is able to suppress piracy, that’s good for the world. And if it’s able to stop illegal fishing in Somali waters, that’s good for Somalia. It gives Somali people a better chance of making a living,” he adds.
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