Piracy and Armed Robbery Against Ships in East Africa 2016
- In 2016, no hijackings were recorded, but the capability and intent of pirate groups remain, and the opportunity to commit acts of piracy continues to increase as vigilance by the shipping community decreases. This trend has been underlined by recent events and attacks in early 2017.
- Independent deployers now represent the majority of naval assets involved in counter-piracy operations as coalition forces end or decrease their commitments.
- Despite lower piracy numbers over the past year, pirate gangs and kingpins have continued their involvement in other illicit maritime activities, such as arms smuggling and human trafficking.
East Africa Overview
Since their peak in 2011, piracy and armed robbery around the Horn of Africa have decreased considerably; this reduction is thanks in large part to the presence of international and regional forces, the successful prosecution and imprisonment of perpetrators, ship self-protection measures being taken (including Best Management Practices Version 4 guidelines, or “BMP4”), and the use of private maritime security onboard vessels transiting the region. However, while at-sea efforts have mitigated the threat of piracy, it has not been entirely eliminated.
Mapping of Attacks in East Africa
Pirate networks in Somalia still possess the intent and capability to commit acts of piracy, as demonstrated by the attack on CPO Korea in October 2016 and the hijackings of MT Aris 13 and Asayr 2 in early 2017. The tumultuous socio-political environment in Somalia that initially allowed piracy to flourish remains largely unchanged, particularly in the original pirate safe havens. Among a number of other factors, deficiencies in governance, lack of economic opportunity, and an unstable security situation persist and continue to provide the impetus for piracy and potentially other maritime crimes.
According to the United Nations Office on Drugs and Crime (UNODC), central Somalia does not possess maritime law enforcement capacity, providing would-be pirates with a coastline to hold ships on with relatively little risk of interference from law enforcement. Secure maritime spaces have developed in pockets along the coast. In one instance in the former piracy hotbed of Puntland, the Puntland Maritime Police Force successfully demonstrated their capability to interdict illegal fishing vessels, resolve piracy incidents, and combat human and weapons trafficking. In Hobyo, another former piracy hotspot, the Galmudug Coast Guard, despite limited capabilities, intercepted Iranian fishing dhows in late September 2016, exhibiting the capacity to counter illegal fishing. Their effectiveness in combating piracy in their area of responsibility remains untested.
For the time being, the need for continued vigilance against piracy and other forms of maritime crime in the region remains essential.
Dataset and Methodology
Oceans Beyond Piracy (OBP) collected incident reports from multiple sources, including the International Maritime Organization (IMO), the International Maritime Bureau (IMB), the Office of Naval Intelligence (ONI), and others, to create the most comprehensive outlook possible. This dataset excludes incidents where vessels were berthed in port and incidents where the perpetrators did not use a boat to approach the victim vessel.
In the 2016 analysis, OBP opted to include incidents that took place off India’s west coast in the section about the Western Indian Ocean region (WIOR). While this section historically focused on incidents of Somali piracy, for the purposes of geographic clarity, OBP now includes instances of anchorage crime off the western coast of India as well as piracy and armed robbery at sea in the Arabian/Persian Gulf. The rationale for this is rooted in the history of piracy in the region: at the peak of Somali piracy, it was not uncommon to observe attacks as far east as the Indian exclusive economic zone, which was reflected in the parameters of the High Risk Area at the time.
It is important to note, however, that the nature of attacks off India’s coast in the present day varies considerably from that of the attacks in 2010–2012. OBP data shows that all incidents off the west Indian coast in 2016 were anchorage crime—not piracy—and can be attributed to entirely different actors. However, OBP has noted that pirate groups originating in Somalia continue to possess capability and intent to carry out attacks against merchant vessels, and resources to counter piracy in the region continue to dwindle; therefore, OBP believes that a resurgence of piracy remains a possibility.
Incidents of suspicious activity include cases where a vessel reports a close encounter or direct approach from another vessel which feels threatening in nature. The perceived threat is determined by the vessel master based upon the actions of the approaching vessel or from observation of weapons or ladders; this can include incidents where approaches were deterred by armed guards onboard. However, the approaching vessel may not have actually taken any overtly hostile action.
OBP recorded 27 incidents related to piracy and armed robbery in the Western Indian Ocean region during 2016. In total, there were five failed attacks/boardings, five instances of armed robbery, four instances of unarmed robbery, and 13 cases of suspicious activity. Of the 27 total incidents, eight occurred on the west coast of India, the majority of which took place at the Kandla anchorage.
Total Incidents by Type
The Case of CPO Korea
One of the most high-profile attacks in 2016 involved CPO Korea, a UK-flagged chemical tanker. On 22 October at roughly 9:55 local time, the vessel was approached by a skiff with five to seven armed pirates onboard. The armed security team on CPO Korea fired warning shots in an attempt to deter the attackers but the skiff continued its approach.
The armed security team engaged in a brief firefight with the pirates, after which the pirates aborted their attack. According to reports by EUNAVFOR, up to 20 rounds were fired at the security team. Luckily, no injuries or damage were reported.
2016 Incidents by Month
What The State Of Piracy Report Focuses On
Oceans Beyond Piracy has released the State of Piracy report annually beginning with the first Economic Cost of Piracy analysis of Somali piracy in 2010. Since that time, the report has expanded to include new regional areas of interest as well as other topical issues related to the central issue. Throughout this period, however, the State of Piracy report has always focused solely on the issue of piracy and armed robbery at sea.
However, it is important to note that the myriad of maritime security threats in the region are not happening in isolation; numerous reports indicate that former pirates are moving to other opportunistic maritime crimes such as human trafficking, for example. OBP has similarly noted with concern the spillover of the civil war in Yemen into the maritime domain, as demonstrated by the various incidents in the Bab-el-Mandeb and lower Red Sea in the last quarter of 2016.
OBP believes that the evolving threats in the Western Indian Ocean region, while clearly reflecting broader maritime security issues and of interest to stakeholders, are not directly related to piracy and will therefore not be included in this study.
For most of 2016, monthly incidents averaged between zero and four. No successful hijackings were recorded by OBP in 2016; the last known hijacking incident before 2016 was the attack on Muhammadi in November 2015.
Pirate groups continue to test the defensive capabilities of ships transiting the region, as evidenced by the 11 reported incidents deterred by armed security teams. While deterrence by armed teams can normally be accomplished by a show of force rather than actual engagement, in two of these cases, the attackers fired on the vessel before eventually aborting.
The 2016 incidents demonstrate that pirate groups still possess both capability and desire to carry out acts of piracy, as evidenced by the March 2017 hijacking of MT ARIS 13. The political and economic conditions onshore which allowed and encouraged piracy off the coast of Somalia to flourish less than a decade ago have seen negligible improvements.
Human Cost East Africa
In 2016, 27 incidents of piracy and armed robbery at sea occurred in the Indian Ocean region, affecting 545 seafarers. As in 2015, the majority of seafarers—approximately 266—were aboard vessels subject to suspicious activity—incidents where attackers approached vessels but did not board. Incidents of failed attack and failed boarding affected 117 seafarers, while robberies affected 79 and armed robberies affected 83 seafarers.
Seafarers Affected by Incident Type
Injuries and Deaths
In 2016, one seafarer was killed, 16 sustained injuries, and 17 were threatened during attacks. Representing an outlier for the Indian Ocean region, the incident involving a crew fatality occurred near the Arabian Gulf, where attackers beat crewmembers with wooden planks before stealing their fish catch and escaping.
|Violence Type||Number of Incidents|
Perpetrators were armed in 26% of incidents in 2016 (eight incidents). Of these, four were armed robberies, two were failed attacks, and two were classified as suspicious activity. Approximately 178 seafarers were onboard vessels with armed perpetrators; 17 seafarers were threatened. Perpetrators were armed with knives 50% of the time and guns 25% of the time.
Armed vs Unarmed Incidents
FV Siraj was hijacked by Somali pirates on 26 March 2015. Shortly after the escape of its sister vessel, FV Jaber, on 27 August 2015, the Siraj crew was brought onshore, where it has been held since. Of the 19 original crewmembers, eight Iranian crewmembers are still being held in Somalia.
Hostages Held (by duration)
*The number of days held shown in these graphics only represent days held in 2016.
The Case of Naham 3
"We plunged into a world of black-and-white after [we were] pirated, losing connection with anything colorful outside in the world."
After nearly four and half years in dire conditions in the hands of Somali pirates, the crew of Naham 3 was finally released on 22 October 2016. Through the cooperative efforts of the Hostage Support Partnership, the Galmudug authorities, and the local community, the remaining 26 crewmembers were reunited with their families after 1,672 days in captivity. The fishing vessel was hijacked on 26 March 2012, 65 nautical miles south of the Seychelles. From the onset of the ordeal, the crew suffered immensely; the captain was killed during the hijacking and two more crewmembers succumbed to illness.
Initially, the vessel was tethered to MV Albedo, another hijacked vessel. Following the sinking of MV Albedo about a year after Naham 3’s capture, the crew was transferred to a remote area onshore in Somalia. The circumstances of their captivity grew more dire with each passing year. The crewmembers were given very little food by the pirates, forcing them to survive on rats and insects they caught on their own. 1 One Filipino crewmember recalls how he and his companions felt “like walking dead” during their captivity. 2 Others recount the pirates withholding adequate medical treatment: "I almost died during an outbreak of cholera; I have no idea what medicine the pirates gave me.” Even toward the final days of their captivity, the crew continued to suffer. Shortly before their release, crewmembers experienced a bout of malaria and ongoing hunger resulting from protest strikes, and one captive was shot in the foot after a quarrel with one of the pirates.
Hostages frequently experience significant challenges following their arrival back home due to PTSD, psychological trauma, and difficulties finding a job. The Taiwan, Province of China company that owned the Naham 3 has yet to pay the crew, either for their time in captivity or for their work prior to capture. 3 Despite all of this, the account of one former hostage suggests hope for the future: “I’ve learned what pirates can do, I’ve seen beyond what is shown in the videos. It’s so cruel, but I’m still hopeful for a bright future for my family.” 4
The known nationalities of 160 seafarers onboard vessels involved in incidents in 2016 in the WIOR have been reported to the IMB. Majority of seafarers came from the following five countries: India, Philippines, Ethiopia, Bangladesh, and Croatia. By calculating the average number of crewmembers per vessel-type for incidents where the exact number of crewmembers is unavailable, OBP calculated that in total 545 seafarers were affected by piracy and armed robbery in WIOR in 2016.
Nationality of Seafarers Exposed to Incidents
Note: This graphic represents 160 of the 209 known seafarers exposed to piracy and armed robbery at sea in 2016. The nationalities of the other 49 are unverified.
Economic Cost East Africa
OBP estimates the total 2016 costs related to Somali piracy in the Western Indian Ocean Region to be $1.7 billion.
Total Economic Cost of Piracy and Robbery in East Africa
Costs of Deterring Piracy
According to OBP estimates, the international community spent roughly $1.5 billion on measures aimed at deterring, denying, and delaying piracy. Such measures include the use of embarked guards, naval deployments, vessel hardening, increased speed and rerouting, and prosecution and imprisonment.
|Type of Deterrence||Cost|
|International Naval Activities||$228,361,072|
|Embarked Contracted Maritime Security||$726,112,524|
|Vessel Protection Measures||$6,585,930|
|Counter Piracy Organizations||$14,455,209|
|Prosecution and Imprisonment||$6,491,090|
International Naval Activities
When calculating the cost of International Naval Activities, OBP took into account the costs of Naval and Aerial Counter-piracy Operations, Administrative Budgets, SHADE Conferences, and Ship Protection Detachments, all totaling $228.361,072.
Naval & Aerial Counter-piracy Operations
OBP estimates that the total cost of naval and aerial counter-piracy–related operations in 2016 amounted to $204,519,569. The analysis conducted by OBP divides international naval forces into two categories: Coalition forces and independent deployers. Coalition forces include Combined Maritime Forces CTF-151, NATO Operation Ocean Shield, and EUNAVFOR Operation Atalanta, while independent deployers include China, Russia, India, etc. As coalition forces have started refocusing their efforts toward other areas of the world, such as the Mediterranean Sea, independent deployers have stepped in to fill the void. In 2016, coalition forces allocated 31 vessels toward counter-piracy in the Western Indian Ocean Region, totaling 2402 days on station. Independent deployers, however, only had 25 ships engaged in counter-piracy patrols but accounted for 2657 days on station.
Days on Station in 2016: Independent vs Coalition Deployers
It is worth noting that the mandates for coalition forces and independent deployers vary. Coalition forces have generally been responsible for deterring and disrupting pirate activity, as well as escorting humanitarian aid actors, whereas independent deployers have traditionally focused on protecting commercial traffic moving through the Internationally Recommended Transit Corridor (IRTC). As a result, independent deployments alone may well not be enough to provide adequate deterrence and interdiction with relation to piracy and armed robbery at sea.
The cost of maintaining coalition operational headquarters, theater headquarters aboard flagships, and personnel transportation—separate from national operational expenditures—amounted to $17,116,825.
Deconfliction between coalition forces and independent deployers has been achieved through the Shared Awareness and Deconfliction (SHADE) conferences that are hosted regularly in Bahrain. With an average of 110 delegates from at least 30 countries, travel and accommodations for the two SHADE conferences held in 2016 are estimated to have cost $332,186.
Ship Protection Detachments
EUNAVFOR provides Autonomous Vessel Protection Detachments (AVPDs) in addition to conducting aerial and naval patrols. AVPDs are teams of soldiers that protect certain merchant vessels while they transit the High Risk Area (HRA) defined in BMP4. Most AVPDs are contracted by the World Food Programme (WFP) to deliver aid to African ports in the BMP4 HRA. However, EUNAVFOR also provides AVPDs to the African Union Mission in Somalia (AMISOM). In 2016, AVPDs escorted 45 WFP vessels and 10 AMISOM vessels at a cost of roughly $6,392,492. By contrast, in 2015 WFP vessels were escorted a total of 36 times and an AMISOM vessel once. This represents a 23% increase over 2015, which can be attributed to the rise in the number of WFP and AMISOM vessels that employed AVPDs.
Ship Protection Measures
Since the release of the first version of the Best Management Practices (BMP) in 2009, the recommendations for vessel hardening have been refined and expanded upon in updated editions. Over the last seven years, these ship protection measures (SPMs) have become among the most basic and common procedures for transiting the WIOR. As such, OBP assumes that existing vessels operating in the region have already been outfitted with ship protection measures prior to this year. However, since passive defense measures such as sandbags and razor wire need to be replaced over time, OBP has attempted to calculate the necessary replacement cost. The estimated cost of refitting vessels and replacing corroded or damaged SPMs was approximately $6.5 million in 2016.
Due to the threat of piracy and armed robbery in the Western Indian Ocean, many shipping companies have taken up the use of privately contracted armed security personnel (PCASP) from private maritime security companies (PMSCs) to deter attacks. The decision to hire armed guards is up to individual shipowners and operators according to BMP4, but the document suggests that guards be used as part of a layered set of security measures and not as a replacement for BMP4 recommendations.
As was the case in 2015, PMSC teams were utilized less often as the year went on, and shipping companies and operators increasingly turned toward smaller and less expensive teams. In total, OBP estimates that the shipping industry spent around $726 million on guards for cargo and tanker vessels.
Rate of Employment
The percentage of vessels that reported embarked armed guards declined 12.5% during throughout 2016, falling from 36% in Janaury to 31.5% in December. In total, PCASP teams were onboard for about 34% of all transits through the HRA.
Decline in Rates of Armed Guard Employment in 2016
Team Size Throughout 2016
The trend toward three man teams which was noticeable in 2013, 2014, and 2015 continued in 2016. From the start of the year to the end of the year, the number of ships employing three man teams increased steadily—while the use of four man teams steadily declined. In a few instances, eight man teams were used. OBP has also received anecdotal evidence that some flag states have allowed the use of two-man teams—which is in direct conflict with BIMCO’s GUARDCON contract and others. Similarly, reports indicate that former Somali pirates are being hired to protect foreign fishing vessels. However, due to the lack of hard data, these factors were excluded from OBP’s calculations.
Changes in Armed Guard Team Size in 2016 (by quarter)
UK personnel are involved in roughly 28% of teams—with UK only teams making up roughly 5% of all teams. While the number of non-UK multinational teams decreased, the number of Greek, Indian, and other single nationality teams grew in 2016—potentially a cost saving measure as UK personnel are grouped with less costly counterparts or bypassed completely.
Armed Guard Team Composition
The logistical footprint available for Private Maritime Security Companies (PMSCs) operating in the Red Sea and Indian Ocean has become constrained over the last few years. Several coastal and port states prohibited fly-in/fly-out of security guards with controlled equipment including firearms and ammunition. Other states require security teams to bond their weapons onboard or store them in land-based armories during port calls. As a result of these growing compliance obstacles, emerging concerns on regional instability, and increasing costs for shore-side operations, PMSCs have pursued an alternative option—keeping their equipment and personnel offshore. By utilizing the services of “floating armories”—vessels which have been repurposed for accommodating maritime security guards and storing their equipment in international waters—PMSCs can provide a more streamlined service to ship operators without subjecting their personnel or equipment to the jurisdiction of port states.
The number of commercially available vessels operating as static or mobile floating armories or providing similar offshore security support services in the region at the beginning of 2016 was at least eight in the Red Sea and at least seven around the Gulf of Oman. By the end of 2016, that number was reduced by at least one vessel in each region.
Based on approximate rates across the market of floating armory operators, the average fee charged to PMSCs for embarking or disembarking personnel and equipment from a floating armory vessel in 2016 was around $1,590 per movement on or off, on average. If security guards were housed on a floating armory, some operators charged roughly $55 per person per day, on average, after several days which may have been included in the embarkation movement charge.
Cost of Counter-Piracy Organizations
Counter-piracy organizations and programs work alongside military and other security operations to build capacity, support information-sharing and situational awareness, coordinate initiatives, and aid victims. OBP has attempted to capture all the organizations whose mission is to counter piracy in the WIOR, but the list is not meant to be exhaustive; rather, it provides another measurement of the cost of countering piracy.
|CGPCS Trust Fund||$492,980|
|OBP Western Indian Ocean||$280,121|
Djibouti Code of Conduct and the Jeddah Amendment
In early 2017, in response to the growing concern about illicit maritime crime other than piracy, the scope of the Code of Conduct Concerning the Repression of Piracy and Armed Robbery Against Ships in the Western Indian Ocean and the Gulf of Aden (also referred to as the Djibouti Code of Conduct) was expanded. In a meeting in Jeddah, Saudi Arabia, signatories of the Djibouti Code of Conduct agreed to broaden its remit to include arms trafficking, trafficking in narcotics and psychotropic substances, illegal trade in wildlife, crude oil theft, human trafficking and smuggling, and illegal dumping of toxic waste. 5
The expansion of the code’s mandate will allow for signatories to employ its original framework—cooperation in information-sharing; the interdiction and seizure of suspect ships and property onboard such ships; thorough investigation, apprehension, and prosecution of suspected perpetrators; and the rescue and care of vessels and their crews subject to such acts—in order to address this longer list of maritime crimes.
Steaming at increased speeds through the High Risk Area is a recommended procedure under BMP4. While this cuts transit times and makes vessels less vulnerable to pirate attacks, speeding also increases fuel consumption. In the past, speeding has represented a significant portion of counter-piracy –related costs. In 2016, OBP estimates that the costs of speeding in the HRA amounted to $533,348,039.
Contrary to expectations, OBP analysis showed a substantial increase in speeding costs during 2016 compared to 2015. In 2016, the average global speed of commercial vessels underway was approximately 0.5 knots lower than the 2015 calculated global average. Therefore, the “speeding threshold” used to categorize a vessel as speeding in the HRA (0.5–1.0 knot above the global average, depending on vessel classification) decreased accordingly. Thus, the calculations included a broader range of vessels underway. Furthermore, the average observed speed of vessels classified as “speeding” in the HRA increased by an average of 8%.
Combined with an observed increase in daily transits and the possibility that the conflict in Yemen encouraged ship operators to increase speeds while transiting the region, this explains the increase in total speeding costs. Additionally, OBP noticed that the number of vessels larger than 300 meters transiting the region increased. Given that vessels of this size use more fuel at higher speeds, this also contributed to an increase in overall speeding costs.
During the height of piracy, many vessels transiting through the Gulf of Aden chose to reroute along the coastlines of the Arabian Sea in order to avoid moving close to Somalia. This detour uses extra time and fuel, and could add as much as 600nm to the route. However, as with the 2013–2015 State of Piracy reports, OBP did not find any statistically significant rerouting in 2016.
As in past reports, OBP found that most vessels are adhering to the IRTC as instructed in BMP4 instead of taking a shorter route, such as cutting the Socotra Gap. As was the trend in 2015, traffic appears to have returned to pre-piracy shipping patterns. The main shipping lane off the east coast of Africa through the Mozambique Channel has moved back to within 300nm of the coast. Consequently, more ships are traveling close to the Somali coast despite the fact that pirates retain the ability to attack vessels at sea.
Prosecution and Imprisonment
Unaffiliated with UNODC
A single piracy trial unaffiliated with UNODC began in 2016: the trial involved seven men accused of attacking the catamaran Tribal Kat more than four years ago. They were sentenced in April to six to 15 years in prison by a French court after 13 days and nine hours of deliberation by a jury. An appeal for Abduwali Abdukhadir Muse, convicted for his involvement in the hijacking of Maersk Alabama, was rejected by the 7th U.S Circuit Court of Appeals.
Additionally, the highly publicized trial of the pirate kingpin “Afweyne” Mohamed Abdi Hassan and his accomplice, “Tiiceey” Mohamed Moalin Aden, ended in 2016. The two were accused of involvement in over 24 hijacking and kidnapping cases, including MS Pompei in April 2009. A Belgian court sentenced Afweyne to 20 years in jail. He was also required to pay €20,000 to the Pompei’s captain and family. Tiiceey was sentenced to five years in jail by the same court for his involvement with Afweyne’s organization, but was acquitted of all charges related to the Pompei.
Last, the case involving 119 accused pirates captured by the Indian Coast Guard and Navy in 2011–2012 is coming to a close. All of the accused were convicted under the Unlawful Activities Prevention Act. In response to the verdict and sentencing, hundreds of Somalis in Galkayo and El Buur held a peaceful protest to demand Somali government intervention.
In total, OBP estimates that the 2016 cost of prosecutions and imprisonment unaffiliated with UNODC amounted to roughly $6,491,090. This represents a slight 7% decrease from last year, likely attributable to the decreased number of trials in 2016. In 2015, by contrast, four trials were conducted.
|Region||Trials||Cost per Trial||Total Trial Cost||Pirates Imprisoned||Cost per Year of Imprisonment||Total Imprisonment Cost||2016 Regional Cost|
|Africa (less Seychelles, Kenya, and Mauritius)||0||$228||$0||609||$730||$444,570||$444,570|
|Europe and Japan||1||$633,800||$633,800||96||$47,794||$4,588,224||$5,222,024|
Along with support from the EU Programme to Support Regional Maritime Security (EU-MASE), the UNODC’s Global Maritime Crime Programme oversaw a number of piracy and armed robbery trials in 2016. The 12 men accused of attacking MSC Jasmine on 5 January 2013 were convicted by a Mauritian Court on 18 July and sentenced to five years in prison. However, given their time on remand and a reduction in their sentences for good behavior, the men’s sentences were deemed completed and they were repatriated to Somalia. Additionally, the Seychellois court convicted seven men accused of attacking MV Nave Atropos in January 2014. Finally, in December 2016, the Appeals Court of Seychelles acquitted five Somalis suspected of piracy.
|Prosecution Center||Cases Heard||Individuals Tried|
* From: the UNODC Global Maritime Crime Programme Annual Report 2016
Seafarers working on ships that transit the WIOR undertake increased personal risk due to the threat of piracy. As a result, several collective bargaining agreements developed through the International Bargaining Forum (IBF), International Transport Workers’ Federation (ITF), and national seafarers' unions have identified specific areas within which seafarers are entitled to additional pay. They also enjoy the right to refuse passage without penalty. Between the IBF HRA, the Warlike Operations Area, and the Extended Risk Zone, OBP estimates that seafarers were entitled to $66 million in hazard pay in 2016. The 32% increase in labor hazard pay from 2015 is explained by a similar increase in eligible transits in 2016.
In addition to the mental, physical, and emotional toll that hostages and their families experience, they also endure a significant financial burden. Most seafarers come from developing nations, where their entire household often subsists on their earnings at sea. Since seafarers do not receive payment for their time in captivity, this dependence can be crippling. Using the Maritime Labour Convention-mandated minimum wage of $23 a day, the 8 remaining crewmembers of Siraj lost $100,000 in expected income in 2016 alone, bringing their total loss to $243,225. The crew of Naham 3 was released in late October having accrued a total of $1 million in lost wages over the course of their captivity. If the lost wages of the three seafarers who died during their captivity are included, the total loss to the families of the Naham 3 crewmembers is well over $1 million. Over the course of 2016 alone, seafarers lost more than $500,000 in wages due to hostaging in the WIOR.
OBP used premiums paid in 2015 by the Hellenic War Risk Club (HWR) members to estimate the total War Risk Added Premiums (WRAPs) paid for transiting the WIOR Listed Area in 2016. Assuming that the Indian Ocean Listed Area accounted for 50% of all WRAPs in 2016, and that the change in net premiums was −20%, the additional premiums paid by vessels transiting the WIOR Listed Area totaled around $62 million. Importantly, this 4% decline in premiums from 2015 reflects market pressures rather than a reduced perception of risk.
Piracy may also result in higher cargo insurance premiums. Cargo insurance is not purchased by the shipping company, but rather by the cargo owners. There is significant variation across the types of policies and coverage, so a comprehensive estimate of piracy-related costs is impossible. However, the trajectory of costs can be determined based on a comparison of the risk scores assigned by the Joint Cargo Committee from year to year. Over the course of 2016 in the Gulf of Aden, the assigned risk score maintained 2015’s low of 2.4 until August, when it spiked to 2.6 as a result of a failed pirate attack against an Iranian vessel, the Sea Star. This is still lower than 2015’s high of 2.8, so the cost of cargo insurance has likely either slightly declined or remained steady. Furthermore, since Somalia’s addition as a risk area in July 2015, its risk score has significantly decreased from a high of 6.0 to a low of 3.9. While there was a slight uptick from 3.9 to 4.0 in June 2016, this was not related to the maritime situation. Cargo insurance costs can therefore be assumed to be the same or lower in 2016 than in previous years.
A significant number of vessel operators take out kidnap & ransom (K&R) insurance as additional protection for the vessel’s crew. OBP estimates that in 2016, approximately 12% of all vessels transiting the HRA bought K&R insurance at an average cost of $1,500 per transit, totaling $7.6 million.
Stolen Ship Stores and Crew Belongings
Ship stores and equipment were stolen on seven different occasions during 2016, amounting to between $52,500 and $183,750 in losses. Crew belongings, on the other hand, were taken only once.
|Item Stolen||Cost Estimate (Low)||Cost Estimate (High)|
|Ship Stores and Equipment||$52,500||$183,750|
- 1. Gus Lubin, “‘It Made Me Cry. I Don’t Cry Easily’: Inside the Mission to Free 26 hostages after 5 Years in Somalia,” Business Insider, 26 October 2016, http://www.businessinsider.com/26-hostages-freed-in-somalia-2016-10?r=UK...
- 2. “Pinoy Ex-Hostage in Somalia: 'We Felt Like the Walking Dead,’” GMA News Online, 27 October 2016, http://www.gmanetwork.com/news/story/586660/news/pinoyabroad/pinoy-ex-ho...
- 3. Author’s personal communication with Naham 3 crewmember
- 4. May Titthara, “Somali Hostage Living in Hope,” Khmer Times, 23 January 2017, http://www.khmertimeskh.com/news/34598/somali-hostage-living-in-hope/
- 5. “Regional Maritime Piracy Agreement Broadened to Cover Other Illicit Maritime Activity,” International Maritime Organization, 13 January 2017, http://www.imo.org/en/MediaCentre/PressBriefings/Pages/4-DCOC-widened.aspx