A report by management consultancy AT Kearney and the Gulf Petrochemicals & Chemicals Association has warned that a renewed ‘wave of piracy’ could raise shipping costs by 150% over the coming years.
This potentially disastrous scenario could come to be if the current situation is allowed to continue. The report suggests that “piracy containment” could be achieved by a greater use of naval forces and an increase in the engagement of private security teams. This form of escalation would, however, cost the shipping industry up to twice what it is currently spending on private security.
The report also hints at a ‘permanent solution’, ergo the stabilisation of the Somali economy. Said solution envisages an end to overfishing off the coast of Somalia and alternatives to piracy. Neither of these goals would cost the shipping community.
The scenario in which piracy would be entirely eliminated from the Horn would require an international effort that drew on a number of players and would be dependent on the active involvement of countries belonging to the Gulf Cooperation Council (GCC). Indeed the report cautioned that the role of GCC states would be critical.
The report’s authors specified that the proposed solutions drew on ‘the widely acclaimed Strait of Malacca approach’, an effort that saw a co-ordinated multinational military effort implemented in parallel with improved economic opportunities for those involved in piracy. Indeed the report suggests that the effort led to the ‘ultimate demise of piracy in the region’.
As advice and a warning to supply chain managers, the report suggest that while awaiting a definitive solution they ‘should consider piracy as a part of their medium-term planning and maintain a budget for relevant counter-piracy measures’.
The report concludes by examining some of the current costs to shipping which include the payment of ransoms, ever increasing insurance premiums, serious delays and rising crew costs. Last but not least the report takes the costs of security equipment and protection into consideration.
So all told a report which appears to be very little other than the discovery of hot water or at best bordering on the naïve, however, the involvement of a Gulf States organisation should be seen as highly significant. Piracy off the Horn of Africa is not going to be resolved without a determined international effort thus this stating of position is most welcomed.
While the level of success achieved via the ‘Strait of Malacca approach’ is undeniable, many would contest that piracy in the region has been fully eliminated. In any case there are certainly lessons to be learned from the model in question and the author of this article has been advocating that they be studied and tailored to the realties of the Somali context for some time.
None of the proposals suggested or promoted by the numerous mainline and sideline actors or during any of the interminable conferences are of any use until such a time as the international community makes a firm and practical commitment to peace enforcing, peace keeping and nation building in Somalia. Despite their very best efforts, the African Union (AU) is not in a position to resolve the problem; while the contingents plying the Indian Ocean on the pretext of countering Somali piracy count dozens of navy vessels at a huge cost every single passing day, the AU contingent trying to support the Somali Government does not posses or have access to a single helicopter.
Necessary as they are, the maritime industry can hold conferences, write and publish reports, and discuss and decry the situation until Hell freezes over but, ultimately, it will make no difference whatsoever.
Hotels, travel agencies, taxi drivers and the pubs in front of event venues do appreciate the sector’s continued attempts to address the problems by holding conferences but in the long run energy would be better spent lobbying in a coordinated fashion for a proper and definitive solution to the problems on land.
Mark William Lowe
01 June 2012