Tag Archives: private security firms and piracy

Business Models of Piracy: the pirates of the Niger Delta

Armed_guard_escort_on_a_merchant_ship

The decline in Somali piracy (which, according to a recent World Bank report, may at its peak have cost the world up to $18 billion a year in extra shipping expenses and lost trade) is partly the result of increasingly sophisticated co-ordination by international naval task-forces. Shipping companies are also making their vessels harder to attack thanks to a range of defensive measures, such as razor wire around decks, high-pressure hoses and maintaining speeds that make boarding hazardous. Armed security guards on many of the ships transiting pirate-infested waters have helped too.But the pirates could still make a comeback. The cost of deterring them is high. Shipping companies may lower their guard if they think the threat has passed, and patrolling naval forces could be needed elsewhere. And although Somali piracy has faded, west Africa has seen a surge in attacks on ships passing through the Gulf of Guinea.

Tom Patterson, a maritime security expert at Control Risks, a consultancy, says these pirates, who largely come from militant groups in the Niger Delta, have a different business model to their Somali counterparts. They tend to hold ships for about two to five days, removing as much of their cargo as possible (usually gas oil) and then auctioning it to the highest bidder. Hostages are taken if potentially valuable. This week five Poles and Russians, held since April 25th when pirates attacked the German-operated City of Xiamen container ship off Nigeria’s coast, were released, doubtless after a ransom payment.

International naval forces are unlikely to intervene. Nigeria has a decent navy of its own which claims to be upping its efforts to contain piracy. But foreign diplomats believe that some military officials turn a blind eye to thefts in return for a share of the spoils

Hijackings on the high seas: Westward Ho!, Economist, May 18, 2013, at 67

The Wild West of the Oceans; pirates, private security firms and human rights

Private security teams patrol the decks of around 40% of large vessels in the “high-risk area” that stretches from the Persian Gulf to the Seychelles in the south and the Maldives in the east. When pirates attack, these armed guards respond with flares or warning shots. This usually scares off assailants (or sends them in search of easier prey). If it fails, they fire at an attacking boat’s engine, before finally turning their sights on the pirates. No ship carrying armed guards has so far been hijacked.

Most of the companies providing these guards are British, typically started by entrepreneurial former special-forces types. A four-man team can charge $45,000 for safe passage through the high-risk area. The cost to shipowners is partly offset by savings on insurance.

The idea may seem simple but its legal framework is not. Under the United Nations Convention on the Law of the Sea a ship’s crew, including guards, must abide by the home laws of a vessel’s flag state. But these vessels ply international waters, meaning that regulation is scant. An array of standards created since 2009 suggests good practice for private security teams, but none is legally binding.

Spurred on by the International Maritime Organization (which will debate the issue at a meeting next month), governments are now trying to write rules for armed guards at sea, such as how they buy and store the lethal tools of their trade. Britain wants a voluntary set of rules in place by the end of 2012, detailing the acceptable use of deadly force and systems for company auditing and accountability. It may suggest and define a “proportional” response to pirate attacks, along with approved weapon types and standards of training. Other countries are making moves too. American law now allows for the self defence of US-flagged ships within tight rules of engagement. India also allows armed guards; Greece is considering a similar step. The Japanese government is pondering a change to its strict laws, which prohibit civilian armed guards on ships.

The United Arab Emirates will this year start allowing armed international teams into its ports. At present most teams use Sri Lanka, Oman or Djibouti for weapons storage between jobs. They run the risk of prosecution if they carry arms in the territorial waters of Yemen and other states. John Bennett, of the Florida-based Maritime Protective Services says some firms play safe by throwing their guns overboard before heading home.

Pressure for new rules has come in part from human-rights organisations. Unknown numbers of Somali pirates have been killed at sea since 2005 as a result of clashes with naval and private protection forces. In at least one incident, security guards killed Somali fishermen, mistaking them for pirates. Such incidents evoke bad memories. The last thing that anyone wants, says Steven Jones, director of the Security Association for the Maritime Industry (SAMI), is a “Blackwater of the sea” (Blackwater, now renamed Academi, is a private security firm which was sued in Iraq after the shooting of 17 civilians. It denies any wrongdoing.)

The new British rules may help to shape those adopted by other countries in future. They emphasise transparency, with the aim of differentiating respectable companies from domestic or international “mavericks”. But complying with them will be voluntary and is likely to involve extra costs. Firms may simply move to territories with less demanding regimes. That could create two tiers in the security industry: one that is respectable and regulated, and one that lives by improvisation, not by the law. A bit like the pirates.

Piracy and private security:Laws and guns, Economist, Apr. 14,2012, at 69

Legally Blank: floating armouries targeting pirates

Private security firms are storing their guns aboard floating armouries in international waters so ships that want armed anti-piracy guards can cut costs and circumvent laws limiting the import and export of weapons, industry officials say.  Companies and legal experts described the operation of the armouries as a “legal gray area” because few, if any, governments have laws governing the practice. Some security companies have simply not informed the governments of the flag their ship is flying, industry officials said.

Storing guns on boats offshore really took off as a business last year. Britain — where many of the operators are from — is investigating the legality of the practice, which has received little publicity outside of shipping industry circles.  Floating armouries have become a viable business in the wake of increased security practices by the maritime industry, which has struggled for years to combat attacks by Somali pirates. But those in the industry say the standards vary widely.  Governments and industry leaders “need to urgently address standards for floating armouries and get flag state approval,” said Nick Davis of the Maritime Guard Group. “Everything has got to be secured correctly, recorded, bonded, the correct locks, and so on. It’s not just a case of find a room, put some weapons in it and everybody chill out.Some floating armouries did not have proper storage for weapons, enough watchmen, or enough space for guards to sleep indoors, forcing them to sleep on deck, he said.  In the absence of applicable laws, he said, “companies are just being economical with the truth.”….

There are between 10 and 12 ships operating as floating armouries at any one time. About half a dozen are located in the Red Sea, three off Fujairah in the United Arab Emirates and a couple off the island nation of Madagascar, said Thomas Jakobsson of Sea Marshals Ltd.  “Many companies are too small to be able to comply with regulations. It costs a lot of money,” he said. His company only used floating armouries licensed by the Djibouti government and flew the flag of landlocked Mongolia, he said. He believed most of the rest were not operating legally, he said.

The increase in the use of floating armouries comes amid a rise in the number of shoot-outs between suspected pirates and private security companies. In February, two Italian marines shot and killed two Indian fishermen the Italians had mistaken for pirates. The investigation may set legal precedents for future shootings by armed ship guards.

A ship that uses a floating armoury will pick up weapons from it at the beginning of its travels through dangerous waters, then drop them off to another floating armoury at the end of the dangerous part of the voyage.

Companies use floating armouries because it’s cheaper for clients than having to take their ship into port to pick up escorts and because there are so many restrictions on bringing weapons into the region around Somalia. Several companies said Middle Eastern nations like Saudi Arabia, Egypt and Yemen were particularly sensitive about foreigners bringing in weapons since the start of political uprisings in the Arab Spring.

Lawyer Alan Cole, the head of the anti-piracy programme at the UN Office on Drugs and Crime, also said taking arms into coastal nations can be a complex process.  Regulations vary from country to country. In the island nation of the Seychelles, police come onboard and lock the armoury, he said. In Mauritius, weapons must be taken off a ship as soon as it is docked and stored in the police lockup.  Regulations can change from day to day, becoming so fluid that ships may put out to sea with armed guards onboard only to find rules have changed once the ship has reached its destination. Egypt, Oman and Kenya all changed the rules regarding the transport of firearms within the past month, Davis said.

But in international waters, the only country with jurisdiction over a ship is the state whose flag the ship is flying. Many ships fly flags from countries like Liberia or Panama, where regulations can be relatively lax.  Even if companies are trying to comply with the law, part of the problem is that legislation has not kept pace with the rapid growth of the maritime private security industry, said Adjoa Anyimadu, a piracy expert at British think tank Chatham House.

“There’s lots of calls — particularly from the shipping industry — for there to be more regulation,” she said. Britain was working on it, she said.  Since February, all British companies and citizens working in maritime security — or providing services to British ships — have to abide by a new regulation governing firearms. The regulation does not contain any standards for floating armouries.

Piracy fighters use floating armouries, Associated Press, Mar. 22, 2012