Piracy and Robbery Against Ships in the Gulf of Guinea: 2015

Main Messages:

 

GoG: The Gulf of Guinea is the most dangerous region for seafarers with a rise in violence across the year and an increase in kidnap-for-ransom in the fourth quarter of 2015.

  • States in the Gulf of Guinea region continue to increase maritime security and cooperation, but capacity is still lacking.
  • The duration of kidnap and ransom incidents is consistent with 2014 (2 and 3 weeks of captivity) however, there has been a significant increase in violence including physical abuse and mock executions in 2015.
  • Increased Nigerian law enforcement patrols have forced pirates to change their business model, and pirates have had to expand their range beyond Nigerian waters in search of targets.

Overview

Piracy in the Gulf of Guinea started 2015 with a series of violent, high profile incidents. By the first week of February, 6 people had already been killed in pirate attacks, 58 held hostage during hijackings, and 3 kidnapped.

Gulf of Guinea Piracy 2015All reported attacks in the Gulf of Guinea in 2015

These events set the stage for a year in which fewer incidents were reported—54 attacks as opposed to 67 in 2014—but with significant human costs.

The year began with significant uncertainty related to Nigeria's March 2015 presidential elections. The Niger Delta states, where many pirate gangs base their operations, were an important base of support for then-President Goodluck Jonathan. Key figures, such as Government Ekpemupolo—known more commonly as Tompolo—had indicated that trouble might be on the horizon should Jonathan lose the election. 1

Tompolo, a former Movement for the Emancipation of the Niger Delta warlord, had secured a significant maritime security deal to provide patrol vessels for the Nigerian Maritime Administration and Safety Agency (NIMASA) through his company Global West Vessel Specialists Limited. This deal was procured with the support of the NIMASA Director General, Patrick Akpobolokemi, whose tenure was in jeopardy without Goodluck Jonathan’s support. 2

The uncertainty of this arrangement, and the potential effects of regime change on maritime security provision, led some to forecast an increase in piracy events leading up to and following the election. 3

 

 

Gulf of Guinea Piracy 2015

Incidents By Location

OBP aggregated incident reports to create as comprehensive an outlook as possible. The dataset excludes reports of incidents occurring while vessels were berthed and incidents not requiring the perpetrators to utilize a boat to approach the victim vessel. Of the 54 incidents recorded in OBP’s dataset, 29 occurred within territorial waters, and are therefore not categorized as piracy under the UN Convention on the Law of the Sea.

The remaining 25 incidents occurred in international waters, but all fell within the Exclusive Economic Zones (EEZs) of Gulf of Guinea states. While the nature of incidents within and without territorial waters may frequently be indistinguishable, the key element is jurisdictional. Incidents which occur outside of the territorial waters of a given state fall under universal jurisdiction, regardless of whether they happen within a specific state’s EEZ.

 

Models of Piracy and Armed Robbery in the Gulf of Guinea

 

Robbery

This report defines robbery as any incident in which the intent is to board the vessel and steal ship stores, equipment, and/or the crew’s personal effects. The robbers are usually armed with guns, knives, or other light weapons. However, in some occurrences, particularly those within port or anchorage areas, the robbers may be unarmed. In these instances, they attempt to avoid the crew, steal items of interest, and then slip away undetected.

 

Incident Breakdown

Piracy Incidents

Kidnappings made up the majority of successful incidents in 2015, followed by robberies. Only one successful incident of hijacking for cargo theft was recorded during the year. Gulf of Guinea pirates and robbers also significantly expanded the types of vessels targeted. While tankers were targeted in more than 50% of attacks in 2014, this percentage dropped to 18% in 2015.

Robberies at sea West AfricaAttacks involving robbery

Robbery

In 2015, OBP recorded 18 instances of robbery and attempted robbery in the area of interest.

Robbery in Ports and Anchorages

Of the 18 robberies, 12 occurred in or near port and anchorage areas. Robbers were only reported to be armed in four of the dozen, and armed with a firearm in just one. Only two robberies in ports and anchorages occurred within Nigerian waters. In all, 226 seafarers were aboard the vessels targeted, 5 of whom were reportedly threatened.

Robbery at Sea

The remaining six robberies occurred at sea, outside of major ports and anchorages. Five of these six occurred within Nigerian territorial waters, mainly along the coast near small communities or river inlets, and only one in international waters. The latter incident, which involved MV Ocean Splendor, occurred more than 100nm off the coast of Ghana and was likely perpetrated by pirates seeking to hijack a tanker for cargo theft. The presence of firearms was reported in all but one of the robberies at sea, and incidents targeting local traffic were especially violent. OBP estimates that 160 seafarers were involved in these attacks in which many were assaulted and 13 died.

West Africa HijackingAttacks involving hijacking for cargo theft

Hijacking for Cargo Theft

Only one vessel, MT Mariam, was successfully hijacked and had its cargo stolen, though there are several other instances in which pirates were likely attempting this type of attack.

There are a few possible reasons why the rate of hijacking for cargo theft dropped so dramatically from years past. The first is improved patrolling of Nigerian waters, which over the past few years has forced pirates to conduct attacks farther and farther from the coast. The second is the drop in oil prices, which has reduced the profitability of cargo theft.

While MT Mariam was hijacked within roughly 70nm of the Nigerian coast, it was later rescued by the Ghanaian navy. The pirates had hijacked the vessel and then siphoned the cargo somewhere in between the Nigerian and Ghanaian EEZs. 

In total, attacks in the category of Hijacking for Cargo Theft and related incidents affected 42 seafarers and left 4 dead.

 

The Case of FV Lu Rong Yuan Yu 917

FV Lu Rong Yuan Yu 917 was flagged in Ghana and had a primarily Ghanaian crew, but was operated by a Chinese company and had Chinese officers. The pirates robbed the crew of their cash and valuables, and at one point made arrangements with another vessel to siphon off most of the diesel in the fuel tank. Before this could be carried out, the Togolese Navy intervened. The pirates forced all but four of the crew to jump overboard, forcing the Togolese vessel to stop and save the crew and affording the pirates a chance to escape. One seafarer was stabbed to death as he prepared to jump overboard, and three others drowned. With four Chinese crew left on board, the pirates steamed to the coast of Nigeria, off of Bayelsa state, where they released the vessel. The ordeal lasted 5 days in total. 

Kidnapping for Ransom

Kidnapping for RansomAttacks involving kidnapping for ransom

The most concerning trend in 2015 was a significant rise in the percentage of incidents involving kidnapping, and a change in the types of vessels targeted. In 2014, 16% of the 67 total attacks had involved kidnapping for ransom. The majority of those incidents targeted small offshore supply vessels and tugs, though three incidents did involve small coastal tankers. By contrast, 15 of 54 incidents (28%) involved kidnappings in 2015. 13 of these attacks were successful. The kidnappers' targets and range expanded significantly as well.

In addition to attacking offshore supply vessels, pirates successfully kidnapped seafarers off of two small general cargo vessels, the supertanker MT Kalamos, and several floating production storage and offloading vessels (FPSOs). The targeting of merchant vessels, as opposed to small offshore supply vessels, has continued and accelerated in the first quarter of 2016.

Kidnapping for ransom incidents are heavily concentrated off of the Niger Delta region, particularly in areas with significant levels of offshore oil production. In most kidnapping incidents the pirates board the vessel after firing at the bridge to suppress any opposition and intimidate the crew, and then proceed to isolate the ranking officers and engineers, who net the highest ransoms. Time permitting, the pirates loot the vessel as well, sometimes spending a few hours aboard. They then escape with the three or four crewmembers who will be held onshore during negotiations.

This model provides a high return on investment for the pirates, yielding ransom payments as high as $400,000, as in the case of MT Kalamos, after holding the kidnapping victims for only a few weeks. On top of the monetary settlement, discussions with industry experts have indicated that the pirates often ask for other items, such as electronics, once a ransom amount is agreed upon. 

The Case of MT Kalamos

One of the most high-profile incidents to occur in West Africa in 2015 was the attack on MT Kalamos. The Malta-flagged vessel was waiting at an oil terminal just off Bonny, Nigeria, with 23 crew on board when it was attacked by pirates. According to reports, pirates approached the ship by speedboat and the alarm was quickly sounded by the Kalamos captain, alerting the crew to retreat to the citadel.

Despite the presence of two armed guards on the ship, a pair of pirates boarded the vessel and were able to take two seafarers hostage. In the ensuing commotion, the Nigerian guards engaged in a shootout with the pirates, and one of the hostages was tragically shot and killed in the crossfire. The pirates were then able to escape with three members of the crew (two Greeks and a Pakistani).

During the escape, one crewmember was pushed overboard by the pirates, hitting the anchor chain and breaking both of his legs.4 While the kidnapped seafarers were eventually released, no one was ever arrested or prosecuted following this incident.5 

We had hoped that they would plunder the ship and leave us, sail. However, that did not happen. In the end they decided to kidnap us. It was horrible because they had total control. There was nothing we could do.

Captain Krzystof Kozlowski, MV Szafir

From kidnap to rescue, victims are held for roughly three weeks, on average. They are frequently held on small islands in the Niger Delta in camps with other hostages, many of whom are local victims of kidnapping. 

Though rarely communicated by international reporting institutions, violence and maritime crime in the riverine against local trawlers, ferries, and others are linked to events offshore.

Anecdotal evidence suggests that many of the gangs carrying out attacks against offshore support vessels and tankers at sea are the same as or are linked to the groups that kidnap local Nigerians. This indicates that incidents in the riverine are inextricably linked to incidents at sea, and therefore warrant greater attention by international actors.

Torture, Injury, and Death

Though there are few publicly available reports on the treatment the hostages receive, what little has been relayed indicates that kidnapped seafarers are beaten, tortured, made victims of mock executions, denied medical treatment, and fed limited rations.6 In the 13 successful kidnapping attacks that occurred in 2015, 25 regional seafarers and 19 international crewmembers were held hostage for ransoms. In the course of the attacks, four seafarers received minor injuries, four sustained major injuries, and six people, including one Nigerian maritime policeman, were killed; 329 seafarers were aboard vessels where their colleagues were kidnapped and some were killed. 

Trends

While the anticipated spike in kidnappings prior to the March presidential election did not materialize, the elections dramatically impacted maritime security and will reverberate well into 2016. Most important will be the fallout from the sacking and indictment of former NIMASA head Akpobolokemi, the cancellation of Global West Vessel Specialists Ltd.’s contract, and the warrant for Tompolo’s arrest.7 Despite an initial spike following President Muhammadu Buhari’s election, the number of attacks steadily diminished through September of 2014. However, once it became clear that Tompolo’s contract would not be continued, and that Global West was the target of an Economic and Financial Crimes Commission corruption investigation, the number of attacks slowly climbed through the end of the year.8 
With 6 kidnapping incidents in the first quarter of 2016 alone, and a steady rate of attacks and kidnappings through the writing of this report, it is clear that efforts to combat piracy in the region have successfully reduced incidents of hijacking for oil theft, however, much more remains to secure seafarers from the threat of kidnapping. 

Incidents of Piracy in the Riverine Areas of the Niger Delta

Niger Delta Piracy

Though often overlooked in discussions of piracy in the Gulf of Guinea, incidents of piracy in the riverine areas of the Niger Delta seem to be closely linked to piracy against commercial ships operating off the coast. This is particularly true of kidnapping incidents, as anecdotal reporting indicates that many of the local kidnapping victims are held on tiny islands in the Delta alongside kidnapped seafarers. OBP catalogued a total of 17 incidents in 2015 while researching piracy events in region.

The recorded incidents demonstrated a high degree of violence, as 16 Nigerians were killed and 24 kidnapped in the attacks, However, the recorded attacks are likely only a fraction of the total incidents that occurred in the region as there is a general reluctance to report.

According to former president of the Nigerian Trawler Owners Association, Margaret Orakwusi:

“It’s just like the sea pirate attacks; most of the attacks are not being reported. Probably out of frustration by the owners of the vessels. You know when you continuously report and nothing is happening and the victims are not helped…”

 

 


Human Cost

Violence against Seafarers

While the total number of incidents in 2015 was less than in 2014, the human cost—both in terms of casualties and severity of incidents, as well as the aggregate number of seafarers affected—was higher. In all, 1,225 seafarers were aboard vessels involved in piracy or robbery incidents. Of these, 876 were aboard vessels fired upon or boarded by pirates. Just under half of the incidents recorded in 2015 involved the use of weapons. The criminals were armed with firearms in the majority (81%) of incidents involving weapons. Piracy attacks in the GoG are frequently characterized by heavily armed perpetrators who readily resort to violence. The danger is compounded when pirates are under the influence of drugs or alcohol during the attacks. This can make their behavior unpredictable, and has sometimes resulted in violent abuse.

They were aiming at us with machine guns. Right between the eyes. There was not any possibility to do anything. We had to adjust to them, it was the only chance to survive…

Captain Krzystof Kozlowski, MV Szafir

In total, 23 seafares were killed, 4 sustained major injuries, and 15 others received minor injuries. 44 were kidnapped, 11 threatened, and 58 were forcibly detained during hijackings for cargo theft, robbery, or use as a mothership. Robbery and kidnapping incidents caused the greatest number of casualties, particularly in incidents targetting local or regional traffic.

Seafareres Attacked on West Africa

Psychological Impact

The threat of attack by pirates in West Africa is constant, and the insecurity is both psychologically and emotionally taxing for those working in the region. Vessels operating in the Gulf of Guinea often loiter in the region for extended periods of time, increasing the risk of an attack and inflicting a psychological toll on even the seafarers who do not fall victim to an attack. There is increasing evidence that the stress and abuse suffered by seafarers may have serious long-term effects. Analysis of the long-term impact of piracy on seafarers indicates that of those seafarers who were held hostage, up to 26% experienced some form of post-traumatic stress disorder.9 

Friendly Fire

In addition to the threat posed by pirates, seafarers in the Gulf of Guinea may be concerned about the risks they face due to poor oversight of contracted security. Regulations regarding the use of armed guards vary throughout the region. There have been a number of instances in recent years where seafarers have been caught in the crossfire between pirates and embarked armed guards. When pirates attacked MT Kalamos on 3 February 2015, pirates boarded the vessel and grabbed two seafarers to use as human shields. Despite the captain’s pleas to not shoot, the contracted security team engaged in a firefight with the pirates and killed one of the crewmembers.10 Ultimately, weak and inconsistent regulation forces seafarers to rely on unqualified but heavily armed guards.

Impunity for Pirates

Very few suspects were arrested for piracy-related crimes in the region, and no prosecutions were conducted. Absent prosecutions, seafarers have little incentive to report the crimes, especially as many of the crewmembers continue to work in the region following a piracy incident and may have to face their attackers again. This contributes to chronic underreporting in the region, further exacerbating endemic maritime insecurity.

Cost to Families

Lieutenant Nikos Dagre, the seafarer killed aboard MT Kalamos, had previously expressed great concern over his trips through the Gulf of Guinea, at one point saying, “There are very dangerous things there. I will not travel there again.”11  Sadly his words proved prescient, and have continued to haunt his family. It is essential to remember that these seafarers have families and loved ones who shoulder their own burden of the human cost. Lieutenant Dagre’s family related:

“We have waited four days and the body has still not arrived. We cry and are tormented by his death, and we don’t know when his body will be here…..we cannot realize what happened from one moment to another. Our Nick was crazy about his child, a boy 2.5 years old, young, optimistic and full of dreams…”12

The impact of piracy on seafarers and their families demands adequate post-incident care and support for victims and their loved ones. While many international seafarer’s organizations have focused attention on victims of Somali piracy, it is unclear whether seafarers in West Africa have access to similar care.

Impact on Regional Seafarers

While international seafarers are profoundly impacted by maritime insecurity in West Africa, local seafarers and fishermen also suffer greatly from regional piracy. It is difficult to obtain comprehensive reports on the number of attacks on local traffic, as statistics and the international community are focused primarily on attacks against large commercial vessels.13 However, local newspaper reports indicate that the passenger and fishing vessels that frequent the waters around Nigeria endured numerous attacks in 2015.

Nigerian maritime expert Captain Thomas Kemewerigha has said of the situation: “Pirates are having a field day on these vessels as the areas are not patrolled by the Nigerian Navy or NIMASA, hence leaving the seafarers on board these vessels, defenseless, which has in some cases lead to loss of lives and valuable properties of seafarers…”14 

The incessant attacks have significantly impacted local industries that rely on the maritime space. In particular, the fishing industry has been devastated by piracy. According to the Nigerian Trawler Owners Association, industrial fishing companies lost nearly $596 million between 2003 and 2011 alone due to pirate attacks. The number of Nigerian fishing trawlers has fallen from 250 to fewer than 100.15 This has important implications for the country, as fishing is an important industry responsible for many jobs. According to the former head of the Nigerian Trawler Association, Margaret Onyema-Orakusi, "Piracy has decimated the fishing industry; 100,000 jobs have been lost and Nigeria now imports more than 80% of its fish."16   

The pirate activity throughout Nigeria is not only impacting international traffic, it is also profoundly affecting important local industries, demonstrating the urgency of the piracy problem.

 


 

Economic Costs of Piracy and Robbery

OBP estimates the total 2015 costs related to piracy and armed robbery in the Gulf of Guinea to be $719.6 million.
 

Total Cost of Piracy off Coast of Somalia

 

Costs Related to Deterring Piracy

The international community, regional states, and the shipping industry incurred significant costs dedicated to combatting or preventing piracy through capacity building, naval operations, contracted security, and ship protection measures. Those costs are estimated to have totaled $635 million dollars for 2015.

Costs Deterring Piracy

Security provision in the Gulf of Guinea is not cleanly separated into traditional public security provided by navies and law enforcement agencies and private security provided by private security teams and services. Instead, it is best understood as a spectrum, moving from traditional public security, such as international naval efforts, to public-private partnerships, which provide escort and patrol vessels, administer secure zones, and facilitate embarked public security teams.

International Naval Activities

Foreign naval activities in West African waters generally comprise capacity-building and training, rather than law enforcement action. France maintains a continuous naval presence through Operation Corymbe, the US and UK navies operate in the region regularly, and others conduct patrols and exercises as well. In addition to the force presence, each year sees a host of training and capacity-building events. Major multinational exercises include: NEMO, a quarterly event under the auspices of Corymbe; Obangame Express, an annual maritime safety and security exercise led by the US; and AMLEP, the operational component of international capacity-building program African Partnership Station. OBP estimates the cost of these counter-piracy activities to be $8.4 million. These international efforts are designed to support regional navies, whose efforts form the front lines in combatting piracy in the region.

Information Sharing/Maritime Situational Awareness

Cost of Piracy Information

17, 18 19 20 21

Regional Naval Activities

Nigerian Naval ActivitiesAIS tracks of Nigerian Naval activity in 2015

During 2015 at least 55 Nigerian naval vessels were actively deployed in Nigerian waters. These vessels were joined by naval assets from various regional states, including Ghana, Cameroon, Togo, Benin, and Côte d'Ivoire. On average, OBP estimates that 11 regional naval vessels were on station at any given time, incurring corresponding counter-piracy costs of roughly $37.6 million. The true cost may be considerably higher, as some states and vessels do not consistently use the Automatic Identification System (AIS), or engage mostly in irregular patrols or specific incident response.

While most regional navies serve a dual naval and coastguard function, the Nigerian Maritime Administration and Safety Agency (NIMASA) is tasked with working alongside the Nigerian Navy to combat piracy—in fact, NIMASA’s 2015 budget of $726 million was nearly double the Navy's $379 million.22 Given NIMASA’s mandate, OBP estimates that roughly 30% of those funds are dedicated to maritime safety and security, implying around $218 million spent on counter-piracy efforts.

Public-Private Partnerships

In addition to patrols by traditional state security forces, there are a number of hybrid models at work in the Gulf of Guinea, with multiple public-private partnerships in place to augment state capacity. Their mandates include conducting patrols, operating secure zones, escorting commercial traffic, and protecting offshore oil facilities.

Escort & Patrol Vessels

Policy statements from Nigeria specify that operating escort vessels is the only security service permitted in territorial waters, though this does not appear to be true in practice. Several small fleets of these vessels run by companies like Specialized Vessel Services and Strickland Services Limited help bolster the Navy and NIMASA. In addition to patrols, these vessels provide security to vessels in transit to and from Nigeria, between secure zones and ports, and to riverine ports such as Warri, Onne, and Port Harcourt. Other private companies administer the secure zones, such as Ocean Marine Security Limited in Nigeria. These services are used in lieu of embarked armed guards, and tend to cost more per vessel. The relationship between these vessels and the Nigerian Navy is unclear, as there is significant overlap between their activity and that of traditional “NNS” Nigerian naval vessels. OBP analysis indicates that on average, 32 vessels are actively providing escorts, conducting patrols, and protecting secure areas. 

OBP has broken the cost of these vessels into two categories: costs related to specific escort services and a more general operating cost for the constant security presence that these vessels apparently provide. This second category represents a minimum estimated operating cost, not the total contracted cost to the end user. 

Security Escorts

cost of security escorts

23

Security Patrols

Piracy VesselsAIS tracks of security providers Specialized Vessel Services (L) and Strickland Services Ltd. (R) patrol vessels

The operating cost of the roughly 32 privately-run patrol vessels identified as being operational at any given time is estimated to be between $128 and $146 million for 2015.

These vessels appear to provide a near- constant security presence, particularly around oil production infrastructure.

As such their services are assumed to be contracted annually, rather than per use like the OMS escorts listed above. 

 

 

Patrol Escort Costs

Secure Zones

Secure Zones Gulf of GuineaSecure Zones off the coasts of Ghana, Togo, Benin, and Nigeria

 

In addition to the security measures already discussed, Ghana, Togo, Benin, and Nigeria have each established “secure zones” near major ports.24 These are clearly demarcated areas where vessels can safely anchor to wait for a berth or conduct ship-to-ship cargo transfers. 

 

In Nigeria, a private company provides the physical ships, maintenance, and logistics, and performs all scheduling and billing of clients, while the armed forces supply the security personnel and weaponry. In Ghana, the Ports & Harbour Authority is responsible for providing security patrols. In Benin and Togo, however, patrols are only conducted in response to incidents, and security is provided through embarked teams of public security service personnel. OBP estimates that operating these zones cost $8.2 million in 2015. 

 

Secure Zones Gulf of Guinea West Africa

Embarked Contracted Maritime Security

Because Private Armed Security Teams (PAST) are prohibited by every littoral state in the Gulf of Guinea, embarked armed teams are drawn from a state's armed forces or law enforcement agencies, to protect the ship while it is in that country's waters. This arrangement—private contracting of public personnel—in theory enables commercial vessels to maintain security while allowing the coastal state to retain its sovereign monopoly on the use of force. However, only a limited number of private companies have obtained the MoUs authorizing them to contract such teams. Ship operators may also choose to hire unarmed advisors, usually to serve as liaisons between the crew and the embarked military team. OBP estimates that hiring these security teams and liaisons cost $196.8 million in 2015.

Ship Protection Measures

Active security measures such as embarked contracted security teams and use of patrol vessels are only available within territorial waters or in designated areas, and are intended to supplement other vessel protection measures. These Ship Protection Measures (SPMs) are laid out in the “Guidelines for Owners, Operators, and Masters for Protection against Piracy in the Gulf of Guinea Region.” The Guidelines suggest that vessels utilize the Maritime Trade Information Sharing Center-GoG (MTISC-GOG), implement SPMs such as enhanced watch-keeping and vessel hardening, and limit the use of AIS and lighting at night. Each vessel operator is responsible for conducting a vessel-specific risk assessment to determine the appropriate SPMs. 

As with previous reports, OBP has compiled a list of some of the more frequently recommended and used SPMs to show the estimated average acquisition and implementation cost per vessel. Since piracy has been a recognized threat in the GoG for a number of years, OBP presumes that most ship owners who intend to do so have fitted their vessel with hardening measures already. As such, expenditures are primarily limited to refitting worn or damaged kit and equipping vessels new to the region. OBP estimates the cost of SPMs to be about $3.9 Million.25 

Ship Protection Measures from Piracy

26 27

Prosecution & Imprisonment

It continues to be difficult to calculate costs associated with prosecution and imprisonment of pirates in West Africa, as countries in the region do not release that data. OBP has thoroughly reviewed open-source documents and reports from counter-piracy institutions and has found no information about specific piracy prosecutions in 2015.

While there were high-profile arrests throughout the year, including the arrest of eight pirates from MT Miriam made by the Ghanaian Navy, there was no follow-up prosecution reported. West African nations generally do not have domestic legislation against piracy, which limits the ability of states in the region to prosecute incidents. Because of that, and in the absence of further information indicating prosecution of individuals for acts of piracy in 2015, OBP is unable to estimate a cost for this category.

Counter-Piracy Organizations

In recent years the international community has also developed a number of initiatives to support regional efforts to combat maritime crime.

Counter Piracy Costs

28 29 30 31

Other Costs Associated With Piracy

Secondary Costs of Piracy

In addition to costs dedicated to combatting or preventing piracy are those costs incurred as a result of piracy, such as ransoms paid to recover hostages, increased insurance rates, and higher labor costs. These costs are estimated to have been at least $84.9 million.

Ransoms Paid

Given the highly confidential nature of ransom negotiations, actual sums paid are rarely made public. Publicizing ransom payments can result in inflated ransom demands and expectations, further increasing costs and prolonging negotiations. Consequently, obtaining accurate information about sums paid, the amount of time victims were held, and even the total number of kidnappings is difficult. In order to estimate total ransoms paid in 2015, OBP used an average amount based on a range developed through discussions with experts involved in hostage recovery. In total, OBP estimates that $1.6 million in ransoms was paid to recover kidnap victims in the 12 incidents recorded below.

It is important to note that this $1.6 million is an estimate of only the monetary sums provided to secure the release of kidnapping victims. In addition to monetary compensation, pirate gangs may also ask for other items, ranging from alcohol to electronics, usually added in as the negotiations near a close. The monetary and non-monetary ransom sums are in turn only a fraction of the total costs associated with securing the release of kidnap victims. Not included here are the costs of a response team, ransom drop and security personnel, medical treatment, hotels, flights, and repatriation. In addition to these direct costs, there are other expenses related to the incident, including the opportunity cost for personnel involved in the negotiation and recovery work, damage to the vessel, lost charter fees, replacement crew wages, etc. All told a kidnapping incident incurs significant costs above and beyond the ransom itself.

Ransoms Paid to Pirates in 2015

Value of Stolen Goods

Robbery is the most basic and most ancient of piracy models. Often, robbery at sea is an opportunistic crime, and in many hijackings for cargo theft or kidnappings the perpetrators rob the vessel and crew of valuables as well. The value of stolen goods, whether ship stores, crewmembers’ belongings, or both, is rarely reported. In all, OBP estimates the value of stolen goods and cargo to be roughly $400,000.

In 2015 there were eight incidents in which ships stores and equipment were stolen, resulting in roughly $45,000 worth of losses. In at least two of these incidents the crew was robbed as well. Between those two incidents and a third involving the theft of the crew’s belongings in addition to the crude oil cargo, seafarers in the GoG were robbed of personal belongings worth an estimated $39,000.

The value of the 1,500mt of crude oil stolen in the MT Mariam incident is estimated to be $327,000.32  

Labor Costs:

Hazardous Duty Pay

Seafarers working on ships traversing the Gulf of Guinea are recognized as incurring an increased personal risk due to the threat of piracy and armed robbery. As a result, several collective bargaining agreements developed through the International Bargaining Forum (IBF), International Transport Workers’ Federation, and various national seafarers’ unions have identified specific areas within which seafarers are entitled to additional pay, in addition to the right to refuse passage without penalty.33 Seafarers transiting the Gulf of Guinea IBF High Risk Area (HRA) in 2015 were entitled to at least $40.5 million.34


Captivity Pay

In the event that they are taken and held hostage, seafarers are entitled to captivity pay for the duration. This pay is estimated as the base wage plus 35%. In keeping with past reports, OBP assumes that only 40% of captured seafarers received the remuneration to which they were entitled. By this reckoning, seafarers kidnapped in 2015 collected approximately $79,000 in captivity pay.

Piracy Watch Overtime

A cost that hasn’t been captured in previous years’ data is the overtime accrued by seafarers standing piracy watch while transiting the HRA. Additional piracy watches are not only mundane, stressful, and physically taxing due to the longer hours, they are an added expense for the shipping company. If two additional crewmembers are on piracy watch it could cost as much as $865-$2,358 for a transit through the GoG War Risk Insurance Listed Area, or between $173 and $472 per day.

Insurance Costs

Hull War Risk Insurance

OBP utilized the reported additional premiums paid in 2014 by members of Hellenic War Risks Club (HWR) to generate an estimate of the total cost of War Risk Added Premiums (WRAPS) for transiting the GoG Listed Area in 2015.35 Assuming that the Gulf of Guinea accounted for 15% of all WRAPs in 2015, and that the change in net premiums was −5%, the calculations indicate the total cost of additional premiums incurred by vessels transiting the GoG Listed Area in 2015 were around $23.2 million.36

Cost of K&R Insurance

In addition to the war risk insurance premiums, a number of vessel operators take out kidnap and ransom (K&R) insurance as additional protection for their vessel’s crew. OBP used data from interviews with maritime insurance experts to gauge the rate of use and cost per transit. The total cost was then measured against an assessment of the global K&R market to check for accuracy. 

OBP estimates that in 2015, approximately 35% of all vessels transiting the GoG Listed Area bought K&R insurance at an average cost of $2,400 per transit, totaling $16.5 million. An alternative method of estimating the GoG K&R insurance cost is to assume that it makes up between 6% and 8% of the global market. The global K&R market is estimated to be between $250 and $300 million in net premiums. This indicates that the shipping industry in the GoG paid between $15 and $23.8 million in K&R insurance premiums.37 Our estimate of $19.0 million falls along the conservative end of this spectrum. 

Cargo Risk Insurance

The threat of piracy in a given region may necessitate increased cargo insurance premiums. Cargo insurance, unlike Hull War Risk or K&R insurance, is not paid by the shipping company, but by the owners of the cargo. There is significant variation across the types of policies and what they cover, and the premium varies based on a number of factors. The nature of cargo insurance is such that a comprehensive estimate of the piracy-related costs is impossible. However, one can deduce whether or not the costs associated with this type of insurance were likely higher or lower than in the previous year based on the risk score assigned to the region by the Joint Cargo Committee in their Cargo Watchlists.38