Addressing piracy threats in African waters

During the webinar, panellists discussed the differences between piracy areas, specifically the Gulf of Aden, which is situated in East Africa, and the Gulf of Guinea, which is located to the west. One key difference between the two regions is the goal of the hijackings: in the west of Africa, the focal point of the hijacking is usually around the theft of products, which often results in a hostage situation taking place.

When boarding a vessel to steal product, pirates are often concerned about lingering on deck – where they would be an easy target for security forces coming to the aid of the hijacked vessels – which leads to pirates taking crew hostage and using them as human shields. This means the hijacking transitions to a kidnapping case, although the goal of the pirates was product theft with kidnapping being the secondary motive.

Another difference that was discussed regarding the regions was the ability to secure and steal the vessel. Unlike locations in Somalia, where the availability of ungoverned space allows pirates to retain hijacked vessels, in the west these locations are not as plentiful, making it more difficult for pirates to keep stolen vessels hidden.

When discussing which product onboard vessels was the most attractive to pirates, oil was a front runner; however, this changed once the impact of the pandemic reduced global oil prices. Jeff Green, director of kidnap insurance company Griffin Underwriting, explained this shift: “In the Gulf of Guinea, cargo was the initial targeted, particularly when oil was over $100 a barrel. Once the oil price dropped, suddenly the crew were more valuable than the oil.”

Many cases of piracy hijacking involve a crew or individuals being held at ransom, which puts both ship owners and managing authorities in difficult situations. In certain locations, paying a ransom to ensure crew safety is seen as a breach of sanctions or an illegal act, which the panel acknowledged was a hugely concerning situation.

Sean Woollerson, a partner at the marine, oil and gas division at insurance broker Jardine Lloyd Thompson, discussed this issue: “In certain locations, a ransom payment could be considered an illegal act, and that’s where we were heading in the Gulf of Aden. 

“The US was looking to identify these pirates as terrorists, and if they were deemed to be terrorists, that was the legal element that we were fearful of because we wouldn’t be able to get the ships back by paying a ransom.

“I think that’s a huge area of concern for the crews around the world and crew management. I’d like to think that perhaps the United Nations might be able to help out with that in terms of steering us down a path where [we] will always have the ability to get vessels back where we have the safety of life at risk – that’s the main concern.”

With the concern surrounding the legality of paying the ransom, what can ship owners do to ensure that negotiations are dealt with in the best way possible? In piracy situations where a ransom is being demanded, companies such as MS Risk prepare reports for ship owners and insurers in order to highlight the circumstances of the hijacking.

Liam Morrissey, CEO of MS Risk Limited, explained: “We prepare a report for the insurers and for the legal teams involved and ultimately this report can go to the office of foreign asset control or other government agencies. 

“The report sets out the circumstances of the hijack or kidnapping, who the group claimed to be, why we think they are or are not that group, who we think they really are and what we think the case is going to play out under a couple of different scenarios.”

According to figures provided by the Office of Management and Budget (OMB), 68 pirate attacks were reported globally this year up until 1 July, including 60 cases of kidnappings of individuals out at sea with 50 happening in the regions of East and West Africa. However, many cases are unaccounted for, which means the real figures could be much higher.

When discussing why piracy attacks may go unreported, several points came up. The first centred around the reputational concern involved in reporting certain events. Morrissey touched on authorities’ reluctance to disclose these events.

“There’s a reluctance by officials to admit there are problems or to admit the scale of the problem, he said. “Junior police commanders in this part of the world think that by publicising the problem it undermines their reputation. 

“I’m exaggerating to make my point slightly, but the point is that the law enforcement and government don’t want to give bad signals. They want to promote a good news story, not a bad news story.”

Another issue that can hinder reporting of piracy incidents is that smaller vessels are often unaccounted for. Operators of smaller fishing vessels may not report each case of piracy that they encounter, which obviously impacts the overall numbers. 

However, if they do report incidents, this information is usually forgotten about as more attention is given to reports from larger, commercial vessels – particularly those with insurance.

This is due to the fact that, with larger vessels, there is an insurable interest that the operating company will want to recover, whereas smaller vessels tend to be operated by local or coastal traders with no insurance.

“There’s severe under-reporting, we just don’t appreciate how dangerous the problem is, or how pervasive the problem is,” Morrissey commented.

In its closing comments, the panel stressed the importance of the piracy issue and that the situation is far from going away, which begs the question of why isn’t more being done to ensure the safety of crew and vessels in areas such as East and West Africa.

Closing the discussion, Green commented: “It’s 2021; I started dealing with kidnap insurance in 1980, and I never dreamt in a million years that we would still be dealing with piracy at this time of our history. I don’t think it’s close to going away. I think West Africa is and continues to be a problem. I think it’s going to stay with us, and there’s a long way to go before it’s resolved.”

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