Sea piracy threatens future of global shipping industry

As the world's shipping industry grapples with the challenges of declining global trade, lack of finance, and shortage of ship crew, the industry's future is under threat due to the escalating levels of piracy along major sea trade routes, believe senior industry players.

Piracy has long been a problem in the Gulf of Aden, where one of the world's busiest shipping lanes connecting the Indian Ocean to the Red Sea, passes by lawless Somalia, which has been without an effective central government since 1991.

Piracy off the coast of Somalia reached new heights last week when four ships – German, Japanese, Iranian and Malaysian – were seized within 48 hours.

An Omani ship, which was hijacked by Somali pirates for almost eight months, was released last week along with its 22 crew members after an unspecified sum of money was paid in ransom.

Several ships and their crew members remain under the control of the pirates as they demand huge amounts of money as ransom in what has come to pass as a lucrative business for the pirates.

Over the past three years, more than five ships flying the UAE flag have been hijacked by the pirates, scaring many local ships from venturing into the waters again. "It is very risky for the regional shipping industry. The Gulf of Aden is one of the most lucrative routes connecting to Africa and other places, but the acts of the pirates continue to threaten shipping activities along the route," said Sharafuddin Sharaf, President of UAE Ship Owners' Association. He said the association plays a key role in informing ship owners about the risky routes to avoid, but added some of the riskiest happen to be the most lucrative.

Hussein Bullaleh, the Somali Ambassador to the UAE said in the absence of a national army and a strong marine force to guard Somalia's territorial waters against pirates, no safety can be guaranteed for UAE ships sailing through the waters.

"The current Somali Government is militarily weak to successfully keep the coast clear of deadly pirate gangs. There is no national army nor do we have a marine force to stamp out the pirates and guard the Somali coastline," said Bullaleh.

During the brief reign of the Union of Islamic Courts (UIC) in 2006, acts of piracy came down tremendously, with a death sentence placed on any one found to be a pirate. The UIC rule gave confidence to UAE ship owners who soon returned to the Somali waters for business without any incidents. But piracy resumed soon after the UIC was overthrown by the Ethiopian forces at the end of 2006.

Piracy in Somalia was born out of a state of lawlessness created by 18 years of factional fighting which has devastated the social, economic and military structures. Several Somalis, including factional leaders, resorted to piracy as a lucrative source of earnings.

Their favoured tactic is to board and capture an entire ship, cargo and crew. The vessel and its occupants are then taken to a safe-haven port controlled by warlords and held until a ransom is paid. Analysts believe that ship owners' acceptance to pay ransom rather than exploring other means of securing their ships is the main driver for increasing acts of piracy in Somalia.

"For many years, piracy was simply robbery but now it has changed," Andrew Mwangura, head of the Kenya-based East African Seafarers' Assistance Programme, said. "We told people not to pay ransoms but they started paying. Other gunmen realised they can earn money this way and started taking ships hostage instead of robbing them."

Authorities in Somalia have also called on shipping companies and governments to refrain from paying ransoms but the sums of money changing hands have only gone up.

Mwangura said the pirates were now largely ignoring African ships and going for the big money jobs – cargo ships and tankers owned by global shipping lines or tourists in their luxury yachts.

The going rate now appears to be around $1 million (Dh3.67m) – the figure paid last month to secure the release of two German tourists who were seized from their yacht in June.

With such big money on offer, the number of pirates operating off the Somali coast has soared in the past three years, from 100 to over 1,200 operating in 160 groups. The pirates, armed with rocket-propelled grenades and automatic weapons, launch speedboats from "motherships" to pursue their targets.

The United Nations Security Council in June approved incursions into Somali waters to combat the pirates. But despite the resolution, and recent interventions by a coalition of warships, piracy has continued to climb.

The International Maritime Bureau believes the situation is on the verge of spiralling out of control and wants nations with warships in the area to take the UN resolution to heart.

The US Naval Central Command said last week it had ordered the setting up of Maritime Security Patrol Area – a coalition of warships backed by aircraft – to patrol the Gulf of Aden.

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