By Urmila Venugopalan, Special to CNN
Editor’s note: Urmila Venugopalan is the South Asia manager at Oceans Beyond Piracy. You can follow her on Twitter @Urmila_V and @OBPiracySAsia. The views expressed are her own.
Maritime piracy has long been considered the scourge of commercial shipping in the Indian Ocean. Recently, however, a combination of government- and private sector-led action has seen the number of pirate attacks in the region plunge to their lowest levels in almost five years.
This year’s statistics are unusually encouraging: the International Maritime Bureau (IMB) reported in July that Somali piracy activity fell by almost 60 percent, down from 163 incidents in the first half of 2011 to just 69 in the same period of this year. Somali pirates also hijacked only 13 ships, down from 21, according to the IMB.
Robust cooperation among international navies has certainly played a key role in driving this trend. Regular naval patrols – led by NATO’s Operation Ocean Shield, the EU’s Operation Atlanta, and Combined Task Force 151 – have undoubtedly disrupted several pirate attacks. China, India and Japan have also independently contributed to this effort – in a significant move at the start of this year, the three countries agreed to set aside their rivalries and coordinate their escort convoys in the Gulf of Aden.
The concentration of naval forces in this region has created a “ballooning” effect, forcing pirates in recent years to spread their reach eastwards. International counter-piracy missions have followed closely behind them, deploying well beyond their original area of operation in the Gulf of Aden and into the Arabian Sea and the Indian Ocean. This expansion presents its own set of challenges; put simply, the seas are vast and the warships are few.
Oceans Beyond Piracy estimates that pirate activity covers an area four million square kilometers, roughly equivalent to one and a half times the size of mainland Europe. Maintaining regular patrols in an area of this size would require a significantly increased commitment of naval assets over an extended period of time. Against a backdrop of fiscal austerity and budget constraints, it has been – and will continue to be – all but impossible for governments to muster the resources to augment counter-piracy efforts.
So, just as nature abhors a vacuum, the private sector has moved quickly to fill the gap in a highly profitable market. Indeed, since 2011, the number of private armed guards on board commercial vessels has mushroomed. A new study by the Lowy Institute, for example, estimates that as many as 140 new companies, employing some 2,700 armed guards, have been established recently (the majority were set up last year) to meet surging market demand.
This stands in contrast to just two years ago, when both industry and government were wary of employing private security guards, viewing them as a liability, from a financial, legal and reputational perspective. Now, however, major commercial shipping associations, insurance companies, international bodies like the U.N.’s International Maritime Organization (IMO) as well as individual states, are legitimizing the practice of hiring private armed personnel on board vessels. Shipping companies, for example, are now spending about a billion dollars per year on these armed security guards, according to Oceans Beyond Piracy.
So what has prompted this shift in attitude? Cost is the key factor driving this change. Consider these figures: the average ransom at the end of 2011 was about $5 million and it took on average six months for this payment to be negotiated; a bulk carrier held hostage for this period of time lost about “$3.15 million in unrealized charter hire rates alone,” while the “excess costs of ships held hostage for months on end was potentially as large as $20 million,” according to Oceans Beyond Piracy.
Expenditure on private security therefore seems like a prudent investment. To date, not a single ship with privately armed contractors on board has been hijacked by pirates, a fact regularly touted by both industry executives and government officials, particularly U.S. Assistant Secretary of State for Political-Military Affairs Andrew J. Shapiro.
It’s no surprise then that the maritime security industry is booming. However, this rapid growth brings with it the need for regulation. Private contractors are not, obviously, serving military personnel, so there is no clear legal framework governing their rules of engagement. In many cases, on the high seas at least, they are the law. This is a reality that should worry every maritime stakeholder.
Greater oversight and transparency, especially from flag states, is critical. However, the stringency of their policies regarding the use of armed guards vary greatly. While there are ongoing efforts – by the shipping industry, governments, the IMO and even the private security sector itself – to create standards and rules, none of these are legally binding. Such a glaring absence of regulation also makes it very difficult for ship owners to discern between reputable companies offering private security and those unprofessional and less responsible outfits.
The hazy legal status of privately contracted armed guards is a particularly thorny dilemma for international lawyers. Part of the problem lies in the fact that shipping is by its very nature already one of the most globalized industries, a fact evident not only in the central role that it plays in facilitating international trade, but also by virtue of the dizzying array of actors involved.
A typical merchant vessel is, for example, registered in one country but owned, managed, operated and guarded by a series of disparate companies based in several other countries and which employ individuals of diverse nationalities. Who decides which jurisdiction’s laws should apply, when, and in what specific circumstances? And who should be held accountable for the actions of private armed guards operating in international waters? Often, the sheer number of national interests represented results in a reluctance for any one state to take a leading regulatory role.
As part of the growing militarization of the high seas, another alarming trend may be afoot: the potential rise of private navies. One publication, for example, reported a few months ago that a private navy, comprising a fleet of 18 ships, based in Djibouti, would offer to convoy merchant vessels along the shipping lane between the Red Sea and the Arabian Sea.
If current trends provide any indication, Somali pirate attacks may well continue to drop over the short to medium term. At the same time, however, the consequences of unregulated efforts by unaccountable private security enterprises may herald the emergence of another maritime security risk to those who make their livelihoods on the high seas.