Impact of piracy on economy is a grave concern

The threat caused by piracy in the Gulf of Aden and the Somali basin continues to affect the economy and reputation of the Gulf Co-operation Council (GCC) states. The pirates are well organised, use modern technology and range ever further from shore in their search for targets. Measures are in place to combat the threat, but more needs to be done to deter the pirates and reduce the impact on the region and its shipping operations.

With such large amounts of the world's oil being transported in tankers using the Suez Canal and Indian Ocean as their transit route, the cost of insurance has increased considerably for travelling through what is now considered some of the most dangerous waters in the world. This cost is either borne by the ship operator or passed onto the customer, either of which has an economic impact.

The actions of the pirates have also caused a number of cruise line operators to reconsider their routes. This has resulted in a number of operators choosing to bypass traditional stopping points such as Oman and UAE, who will lose out on docking fees and passenger visits as cruises take the alternative route around the Horn of Africa and divert to West African ports.

Reputational impact may be of more concern. Energy security is a priority for many nations and the hijacking of the MV Sirius Star, a Saudi Arabia-operated tanker, carrying over two million barrels of oil, made headlines around the world. It highlighted the vulnerability of the transit system that is used to transport what is arguably the world's most valuable resource.

The pirates' operations are becoming increasingly sophisticated with satellite phones and GPS systems. There are suggestions that they are becoming more aggressive and using larger weaponry. In response to increased hijackings and threats of attack, many nations have participated in maritime task forces, contributing naval vessels or support infrastructure. Commercial ship operators have also been looking at methods to protect both their ships and crew with the use of armed guards and more sophisticated surveillance and non-lethal weapon technologies.

However, the nature of the threat and the vast areas of waters required to be monitored have only helped to expose the weakness in the current deterrents, which in most cases were designed to undertake anti-air warfare or relatively close range surveillance of large targets.

The introduction of additional advanced technologies, with the specific requirements of surveying, detecting and tracking small asymmetric threats across a very wide area, would help increase the ability of navies to protect a vessel at sea.

However, it is not practical for these types of technology to only be provided by the navy task forces. When dealing with such large areas to be monitored, the capabilities need to be distributed across a number of platforms, both commercial and naval, with a common view of the situation being provided to all.

Commercial vessels also need to consider self protection, although careful consideration needs to be given so that the crew are not put at any increased danger.

Suppliers of technologies need to take into account unique requirements and regulations when looking to increase the surveillance and protection systems on board a commercial vessel. Crews are low in number and not trained for these roles. Cost is also a major driver to ensure they remain competitive within the market.

At BAE Systems, we have taken stock of the capabilities we developed for the military domain to see how they could be applied to combat piracy. We have developed a layered solution to identify and deter pirates. Components of the solution can be tailored to a vessel, its needs and constraints.

Attacks are becoming bolder and ransoms are escalating. This trend is likely to continue thereby raising insurance premiums further, impacting the economy and the reputation of the GCC region. Further measures to address the issue and its cause are required and being introduced. We will continue to look at what we can do to support the navies and ship operators to deter and combat these pirates.


The writer is Business Development Manager of BAE Systems, Strategic Capability Solutions. He leads the team assessing the threat from piracy and evaluating BAE Systems' capabilities, either existing or in development, to cou-nter it. The views expressed are his own


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