Four Americans Murderd By Somali Pirates-Time to Get Serious?

Great Debates
101

However, governmental and corporate policy decisions generally have to take thought for the short run. In an individual case, paying a ransom is almost always going to be cheaper and/or less damaging in the short term than abandoning an entire ship, cargo and crew to be destroyed by pirates.

Which is why, AFAIK, a policy such as the one you suggest has never in the history of maritime trade been successfully implemented. Faced with an individual ransom demand, most people and companies are always going to be more concerned with comparing the short-term costs of their choices than with their long-term effects.

Historically, the approach that has worked in eliminating piracy has been destroying the pirates’ bases on land. Back in the day when Julius Caesar was captured by the pirates of Cilicia, he cheerfully paid the ransom demanded, regained his freedom, and then returned with backup and took the pirates out.

The only realistic way to eliminate Somalian piracy is for the Somalian government to be able to control its own territory. That’s not going to happen in the near future, so the realistic approach for the near future is to contain the piracy attempts as far as possible with the protected shipping corridor, and deal with individual rescue/ransom situations on a case-by-case basis.

I think you’re being a bit naively over-optimistic in predicting that pirates would just voluntarily stop preying on vessels of specific countries and companies that have a never-pay-ransom policy.

After all, if slaughtering the crew of a hijacked Company A ship will help persuade the owners of a hijacked Company B ship to pay the ransom you demand, then it can still be a good business decision to hijack the Company A ship, even if you know that Company A will “never never never pay a dime” in ransom. Plus, then you’ve got the Company A ship and cargo at your disposal, and there might be some money in that too.

So Company A’s tough-guy stance of “never negotiate, never pay” may sound impressive in theory, but in practice I doubt it would really accomplish that much in protecting Company A’s ships and crews. And in the short term, Company A would probably find it much more expensive than the alternative.

Remember, company executives have a fiduciary duty to their companies to maximize profits in the near term. Putting up with the burden of being called “weak-minded” and “feeble of purpose” and “naive” and “soft” and “timid” by anonymous strangers on messageboards who don’t like their corporate policy decisions is just part of what they get paid for. It’s not rational to expect that such criticisms would actually outweigh the mandate of the bottom line when it comes to setting policy.

102

Sorry, just paraphrasing:

Sounded like kimstu said something like: “Blah, blah, blah, stupid over-anlaysis about some contrived feeble-minded corporate financial hypothesis…”

So then you’re all for paying the pirates? Quicker the better? Maybe set up an international ransom fund or something like that? :confused:

You fail to recognize the obvious in that getting tough with the pirates only works if everyone does it. Make more sense now? :wink:

103

Duly noted. Thanks for clearing that up for us.

104

Nadir, you either need to respond with a better quality of post (meaning more facts and arguments, less sarcasm and dismissiveness) or you need to stop posting in this thread. Your responses are crossing over into threadshitting.

105

Well, if we decide not to pay “protection” money to the pirates, that leaves two options:
(1) continue to pay ransoms for seized ships
(2) engage the pirates in battle and kill them
If we choose option (2), would it not make sense to drop leaflets in the ports where the pirates are based, and warn the non-participants? Then we could destroy the boats without inflicting unnecessary casualties.
Personally, I think that if ransoms keep being paid, we will see more of this.

106

Yeah, uh, got it. Sorry. :o

107

I don’t think killing two of your own crew in an internal squabble, killing your hostages before collecting any ransom, another of your crew get stabbed by a Navy SEAL and the rest captured is indicative of the mistake-free execution of a plan.

108

Nope, it’s got nothing to do with what I’m for personally. What I said is that realistically, individual ransom/rescue decisions are going to be, and should be, evaluated on an individual basis: no theoretically absolute “never pay ransom” policy is ever going to be implemented across the board.

It’s exactly that obvious fact that I was pointing out to Chief Pedant, along with the equally obvious fact that such a “getting tough” policy never is going to be universally adopted.

What I think people often lose sight of is the fact that Somali pirates have little incentive to be risk-averse, so slightly increasing the risk-to-reward ratio of their activities isn’t likely to have much effect.

Only about one-quarter of hijacking attempts by Somali pirates are successful, and pirates are often arrested or killed. Their equipment costs are pretty minimal and their recruitment pool of desperate and impoverished young men effectively inexhaustible. There’s no way that getting rid of them is going to be simple.

109

Two points. First of all, you simply are wrong about AMISOM. It is an African Union mission operating under a UN mandate; that means that the UN is giving its moral support, and if anything indicates that the UN isn’t interested in having a mission to Somalia. (In fact, you’ll notice that the AU asked the UN to take over… in 2007. Didn’t happen. Won’t.) Secondly, UN agencies operate everywhere, but that’s not the same as a UN presence in any meaningful sense. As it applies to this thread, a UN mission deploying police against pirates and a UNICEF office giving shots to children are completely incomparable. Thirdly, your guess of hypothetical costs is no better than their estimate of actual costs (especially since you rely on citations, too.) Fourth, you’ll notice that the estimate of total costs includes all preventative measures (which in fact are the bulk of the cost); so increasing preventative measures would actually raise the costs of piracy by the method you cite. This underlines the point we’ve been making; there’s clearly a limit to how much anti-piracy measures are worth. Finally, coast guard operations aren’t really the same as anti-piracy operations of the coast of an independent nation. If you’ll pardon a bit of sheer speculation, I don’t think the actual hijacking of ships is the hard part —you could probably just as easily hijack a ship in Puget Sound as off the coast of Somalia. It’s more about having the weapons in the first place, organizing without getting caught, and getting away with the loot. IOW, you need functional, developed states —and, ideally, mariners who have solid economic opportunities.

110

In retrospect, that was more than two points.

111

Gee, thanks for the link to wiki page for the organization I already posted a direct link too. And the UN provides a bit more than moral support. 15 major agencies from FAO to WHO operate programs and missions in Somalia but I guess none of them are meaningful.

As far as not taking direct control from AMISOM, contrary to the belief of some, the UN has no desire to be a world government, but believes in the principle of subsidiarity and aims to increase regional and local capabilities to address issues. They were quite right to not takeover, but to rely on the African Union and help them develop their institutional capacities - which can also be used to address other regions such as the Congo.

UN actions should be reserved for those areas that lack local resources - such as the Indian Ocean. India does a decent job for its territorial waters, but not much beyond it. Yemen spends most of its time hiring out its coast guard for escort duty, than anti-piracy operations. Oman focuses on the Persian Gulf.

Until I see any substantial critique of my assumptions and its results, rather than weak handwaving, I’ll continue to stand by them.

How would instigating a blockade and then building a coast guard raise costs?

From previous cite:

*The cost

  • Ransoms: Over the past five years, Somali pirates’ ransom demands have increased from an average of $150,000 in 2005 to $5.4 million in 2010. The largest known ransom payment was for the South Korean oil tanker, Samho Dream, for which a record $9.5 million was paid in November 2010. Somali pirates’ income for the whole year 2010 was around $238 million.*

How would this cost increase if pirates could no longer operate with impunity?

** Insurance: Insurance cover includes war risk, kidnap and ransom (K&R), cargo, and hull. The most significant increase in premiums has been in war risk and K&R. With the Gulf of Aden classified as a war risk area by Lloyds Market Association (LMA) Joint War Committee in May 2008, it is therefore subject to these specific insurance premiums. OBP estimates that the total excess costs of insurance due to Somali piracy are between $460 million and $3.2 billion per year.*

Once this area is no longer classified as a war risk area, those surcharges would disappear. So how would a blockade increase these costs?

** Naval forces: The cost of naval operations off the coast of Somalia is around $2 billion a year.*

The cost for sporadic, uncoordinated naval operations - costs that would decrease with effective coordination to reduce unnecessary proliferation of forces. And far greater than the cost of operating a full-time coast guard.

** Prosecutions: More than 750 Somali piracy suspects have either been tried or await trial in more than eleven countries. Working on an average cost of prosecution, OBP estimates that the cost of piracy trials and imprisonment in 2010 was around $31 million.*

This number may or may not increase depending on arrests. It may increase significantly as the blockade goes into effect, but should decrease equally significantly once a functional coast guard is established.

** Anti-piracy organisations: A number of intergovernmental organisations dedicated to working towards a solution for maritime piracy have a total budget of around $24.5 million.*

I would consider this a normal cost of business. There will always be some level of piracy and continuing organizations will be needed to monitor it. So okay, no savings there. But neither do I see why those costs would rise that much.

** Re-routing ships: “Low and slow” vessels, which are prime targets for pirates, are often re-routed to avoid risk zones. The excess cost of re-routing these ships is estimated to be between $2.4 billion and $3 billion per year.*

Here again, how would increasing preventive measures such as a blockade increase these costs? The primary purpose is to restore shipping to normal transit lanes, so these costs should disappear.

** Protection: Deterrent and security equipment costs ship owners between $363 million and $2.5 billion per year.*

Again, a strong police presence lessens the need for individual ships to arm themselves, though I think that number may include recommended upgrades to take advantage of the regional information sharing centers, so that is partly the cost of doing business.

*Total direct costs of piracy in 2010 is thus estimated to be between $7 billion and $12 billion. *

So eliminating the costs from ransoms, higher insurance and rerouting alone would save $3 to 6B. I do not see how those costs would increase under a blockade.

How are they not? Pirates can’t function without safe harbors. One of the primary jobs of a coast guard to monitor the coast and deny those safe harbors. While I am sure the various naval bases in Puget Sound deter piracy, the first responders will the Coast Guard, not subs out of Bangor or frigates out of Everett.

112

I think what straight man means is that a nation’s own coast guard service is operating from the nation’s own territory with authority to enforce the nation’s own laws. A foreign anti-piracy fleet isn’t in that position.

So you’re suggesting that the costs of substantially increased anti-piracy naval operations would actually be less than the current costs?

I’m not convinced that the cost savings resulting from vaguely described “effective coordination” would in fact outweigh the increased expenses of a larger fleet.

113

Which is why I have mentioned a UN sanction for such fleet, along with an official Somali sanction - they have already given several nations the right to operate in their territorial waters and combat illegal activity.

We will have to agree to disagree then. Like I said, India patrols a coast - and outlying islands - over twice the size of Somalia’s coast for less than $2B. Until I can see a breakdown of what the $2B from the above cite actually represents, it is mostly guesswork. Do you dispute the proposed savings I outlined above? I still remain unconvinced that a naval blockade would cost more than the $7 -12 Billion that piracy is costing us now.

114

But India has effective control over its own territories. It doesn’t have nests of pirates on its coasts operating outside the rule of law.

Moreover, I think your claim of annual Indian Navy costs totaling less than $2B may be a bit outdated. As of March 2006, India’s naval defense budget was over US$3.3 billion, while in 2009-10 it exceeded Rs. 19576.34 Crores, equivalent to about US$4.3 billion. One of the reasons costs have been rising is precisely because of stepped-up anti-piracy activities.

I’m unconvinced by your claim that an effective naval blockade that successfully suppresses Somali piracy—absent a stable government in Somalia that maintains real control over its coastal regions—would actually save money overall compared to the current situation.

I agree that a truly effective piracy-suppressing blockade would end up saving the money currently spent for ransoms, ship re-routing, and piracy insurance. However, ISTM that it would cost a metric buttload for naval operations, so it’s not clear to me that we’d come out ahead on the deal overall, financially speaking.

If you’re arguing that the value of piracy-free seas is worth more than its mere financial cost, I can respect that viewpoint. However, as far as purely financial considerations are concerned, I don’t think you’ve got a very convincing argument here.

115

I love it when primary sources disagree with each other. I used the Union budget for 2008-09 for my figures. I ignored the latest figures since I just wanted a baseline, and they are starting to engage in major increase in their capacity, and wanted to focus on their budget for current force levels.

But even using your figure, and the metric of dollars/km of coastline, the costs for Somalia would jump up to $1.75 B, or still less than $1.50 per person in the OECD countries.

Again, if we cannot afford that, then we deserve whatever further violence occurs.

And again, I doubt an effective naval blockade would cost more than current costs of piracy. The majority, if not all of the assets needed have been built. We are going to pay for their operational costs no matter where they are used, but by not using them for this purpose, the costs of piracy will continue to increase.

Convoys, patrols, or armed merchant vessels are only band-aid solutions, and the bleeding will continue. We need surgery, not more bandages, nor do we need to kill the patient, i.e. invade Somalia or bomb their ports. I agree that some ‘cures’ would be worse than the disease.

And the greater issue is not the piracy, but establishing a stable functioning Somalia, but I do not see that occurring until the piracy and other illegal activities are addressed.

This does go to a larger public policy argument - is it better to create local capacity and then address illegal activities, or vice versa, and most international efforts attempts the latter policy - from growing illicit crops, battling corruption, smuggling, illegal arms sales, etc. After watching this approach over the last decade and more, I no longer believe it works.

We need to use international task forces which use both military and civil resources to crack down on these activities, and then create the local capacity to maintain long-term enforcement.

And I am starting to believe such an approach would be cheaper than the current method.

This is also the method the US used to tame the ‘Wild West’ - we did not wait until territories became states and were able to hire local sheriffs and state judges to enforce the law. We sent in federal marshals and prosecuted criminals in federal courts. Then we began the process of moving toward statehood.

116

Even if that’s accurate, it still doesn’t compare. There’s a huge logistical difference between guarding your own shores and guarding the shores of another region thousands of miles away. Somalia doesn’t have naval bases and fuel depots and so forth to support such an effort; everything has to be shipped in from far away. Nor is a fleet of cheaper-but-numerous coast guard vessels the equivalent of the more powerful (but fewer and more expensive) ships of a navy.

117

Moreover, there’s a huge logistical difference between guarding the shores of a stable nation under the rule of law, where land-based institutions like police and courts effectively suppress criminal activity, and guarding the shores of a war-torn lawless region where maritime criminal gangs can maintain bases on land with impunity.

So I’m not buying your “metric of dollars/km of coastline” based on figures from India, no matter whether we take the Indian naval budget to be $2B or $4B or whatever, as an appropriate metric for the costs of policing the coasts of Somalia.

Policing India’s coasts is simply not comparable to policing Somalia’s coasts, because India’s civil authority operates successfully on land to keep its coasts from spawning indigenous gangs of pirates, and Somalia’s doesn’t.

118

Convoys do create big logistical and expense problems. Shipping is running on slim margins and voyages are calculated very carefully to make runs as efficiently as possible.

I think maybe the most effective solution is for shipping to arm itself. This creates problems too though. As you can’t enter most ports under arms presently. There would have to be new treaties negotiated around the world.

I’ve read some shipping lines have hired mercenaries with light arms that they just dump into the sea prior to entering port.

119

Not to mention India has an infrastructure of ports, naval bases, coastal batteries and so on, and Somalia… doesn’t.

120

You mean like the ones you’ve been supporting/propping all over the ME? Swell.