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Lucrative Piracy Business Thrives Off Somali Coast

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Lucrative Piracy Business Thrives Off Somali Coast

World

Lucrative Piracy Business Thrives Off Somali Coast

Lucrative Piracy Business Thrives Off Somali Coast

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The seizure Monday of a supertanker carrying $100 million of crude oil off the coast of Somalia is one of many ship hijackings by pirates of late. A cargo ship flying a Hong Kong flag also was taken over in the Gulf of Aden on Tuesday — the seventh hijacking in the area in 12 days, according to The Associated Press.

The magnitude of recent piracy attacks is rising, and an interactive map maintained by the International Chamber of Commerce shows where these attacks are taking place. Many are focused around the eastern Horn of Africa, but piracy in the waters around Indonesia also has been frequent.

J. Peter Pham, director of the Nelson Institute for International and Public Affairs at James Madison University, says the recent spikes in piracy are "a crime of both opportunity and expediency."

"Somalia has lacked a government, effectively, since 1991 and the current interim government — the 14th of its kind in a decade and a half — is tottering on its last legs, so there is very little control to prevent lawlessness," he says. "There is also the fact that increasingly commerce is moving in this direction — the demand for oil and other resources. Roughly 11 percent of the world's petroleum flows through these waters."

For Somalis, Pham says, "this is really the best thing they have going for them economically. Piracy and ransom this year will exceed more than $50 million — it's Somalia's largest income-earner.

"The ship owners and insurers have found that it's more cost-effective to pay ransoms. They are currently averaging slightly over $1 million per vessel, and that's cheaper than buying a new ship," Pham says. "The Saudi tanker that was seized [Monday] was just launched six months ago and cost $150 million to build and the cargo on board is worth $100 million, so I suspect the ship owners will be willing to pay some fraction of that to get it back."

Pham says that most tankers of that size are not armed, or if they are, they have small side arms. The pirates come in fast speed boats, circle the vessel and threaten to blow it out of the water with rocket-propelled grenades or shoulder-launched missiles.

"Faced with that prospect, most captains — to save the life of their crew and save the vessels — will surrender control of the vessel to the pirates," Pham says.

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