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Counting the cost of piracy

21 February 2022

Piracy takes a physical and psychological toll on seafarers in high-risk areas, and causes economic difficulties for coastal states and shipping companies. Saffiyah Khalique reports on the latest industry figures

In the last year, there has been a robust effort on a global scale to tackle the effects of piracy on the maritime industry, particularly in the Gulf of Guinea and governments in piracy hotspots have amped up their anti-piracy initiatives. For example, Nigeria launched its Deep Blue Project to physically crackdown on piracy, as well as tackling the issue from a legal perspective through the Suppression of Piracy and other Maritime Offences (SPOMO) Act.

Shipping organisations such as BIMCO and Danish Shipping have taken an international lead on calling for the industry to do more to address piracy, with their Gulf of Guinea Declaration signed by organisations from across the industry including maritime charities, shipping companies and trade unions.

Nautilus International has not been idle either. The Netherlands branch of the Union has been lobbying the Dutch government to allow protection onboard for seafarers for over a decade. In 2016, Nautilus joined with the Royal Association of Dutch Shipowners (KVNR) and 24 other maritime organisations in an open letter to the Dutch Parliament warning about the potential consequences of not allowing private security. This included putting seafarers at an increased risk of attacks by pirates and undermining the Dutch Flag.

As of January 2022, the Dutch Parliament has approved a law that allows them onboard. Now shipowners can legally hire armed security details, and seafarers will no longer have to rely only on distant naval vessels for protection. Nautilus, KVNR and the Dutch Organisation for Captains (NVKK) were involved in this legislative process beginning in 2018.

Progress should not be met with complacency 

Thanks to these efforts, there is a cause for cautious celebration with reported piracy and armed robbery incidents hitting the lowest figures since 1994, according the to the ICC International Maritime Bureau (ICC IMB). The organisation's annual report for 2021 shows an overall decline in monthly incidents from a high of 16 in January to 11 in December.

The IMB notes the progress made off the coast of Somalia and in the Gulf of Aden, with only one incident reported in 2021. International navies patrolling the area have coordinated and liaised with merchant and fishing fleets in the region to help identify and apprehend pirate groups.

However, the IMB warns that Somali pirates still retain the capability and capacity to carry out attacks, stating that vessels should not be complacent. They also recommend vessels be cautious to not mistake fishermen for pirates in some heavy fishing areas.

Further progress has been noted in the Gulf of Guinea with an overall reduction in reported incidents from 81 in 2020 to 34 in 2021. The IMB attributes these changes to the increased presence of international naval vessels and cooperation with regional authorities, including the robust actions of the Royal Danish Navy in neutralising a suspected pirate group in late November.

However, the IMB warns that despite the decrease in reports and kidnappings, the Gulf of Guinea still remains a high risk area for seafarers, as the region continues to account for all kidnapping incidents globally, with 57 crew being taken in seven separate cases. The organisation describes the pirates operating in the Gulf of Guinea states, Nigeria in particular, as well-armed, violent, and with a history of attacking crews far from the coast. Vessels are advised to take extra precautions when operating these waters.

Seafarers still at risk

The maritime community must remain vigilant despite these positive signs.  The IMB reports that Southeast Asia now has the highest rates of piracy and armed robbery, with 56 incidents across the year. There were 35 reported attacks in the Singapore Straits, compared with 23 in 2020.

A general warning was issued in December 2019 regarding the Straits, and this remains valid today. The IMB notes that many of the attacks in this area occur during the night. They are are also on the increase, with the attacks apparently carried out by one or more groups targeting passing ships, including tugs or barges, to rob them. The IMB advises vessels operating in this area to remain vigilant and to maintain adequate anti-piracy/robbery watches and measures; from reported incidents it appears that the pirates will abort an attempted attack once they are spotted, the alarm raised, and the  authorities notified.

Overall incidents of piracy and armed robbery still remained steady towards the end of 2021 with 11 in October, 10 in November and 11 in December, however they are lower than the January figures.

Members will also be pleased to hear that there has been a decrease in the use of guns and knives, dropping from 69 and 46 incidents in 2020 to 34 and 38 respectively. There has also been a decrease in the use of violence against seafarers with rates of assault, hostage-taking, injuries and kidnapping all falling. However, there has been a small increase in threats made against seafarers and one death, the first the IMB has reported since 2019.

The IMB warns seafarers to be aware of incidents in other parts of the world. Two containerships were approached and fired upon during their river passages in Ecuador in the last quarter.

The cost of piracy

In December 2021 Stable Seas, a transnational maritime security research organisation, released a report titled 'Pirates of the Gulf of Guinea: A Cost Analysis for Coastal States', which investigated the economic costs of piracy to the region.

The report looks at the direct and indirect costs of piracy and armed robbery. It found that direct monetary costs of piracy are low in comparison to the high cost of anti-piracy initiatives, increased security measures, indirect financial losses and the psychological toll suffered by seafarers.

Part of the report includes an original survey of more than 120 ship operators and security officers aimed at understanding how increased piracy threats are affecting the business decisions of dozens of companies working in the Gulf of Guinea.

The survey was sent to BIMCO and INTERTANKO, as well as security officials associated with the Marshall Islands Registry. Data was collected anonymously between 1 October and 15 November 2021, receiving 122 responses, mostly from representatives of the companies currently operating in the region. Stable Seas also sought the opinions of those not operating in the area to gain a better understanding of the extent to which piracy is deterring companies from entering or returning to the Gulf of Guinea.

53% of respondents active in the region reported that piracy and armed robbery have directly caused them to decrease the scale of their activities. Over a third of respondents who were not operating in the region indicated that they would do so if piracy was reduced. Stable Seas notes that whilst these findings cannot be monetised, they do indicate that a sustainable solution to piracy would bring increased shipping volume and the associated economic benefits to coastal states relying on imports.

The report refers to a Nautilus article from 2019, 'India bans seafarers from Gulf of Guinea' to illustrate the concerns governments outside the Gulf have for their seafarers.

The findings also indicate that seafarers themselves are aware of the risks posed by piracy, and are also aware that they are entitled to specific protections under international law. 51% of survey respondents indicating that they were paying increased labour costs for shipping in the region, while the High-Risk and Extended Risk Areas for the Gulf of Guinea that formalise seafarer rights in these areas are having an increasingly significant impact on shippers attempting to operate there. In particular, the conditions that allow the right of refusal to sail in the International Bargaining Forum (IBF) listed areas and to be repatriated at the companies expense are having an impact.

 

Know Your Rights

The most recent update to international employment rights for seafarers captured by pirates came into effect on 26 December 2020. The new rights – set out in the 2018 amendments to the ILO Maritime Labour Convention – ensure that a Seafarer Employment Agreement (SEA) will remain in place while a seafarer is held captive by pirates on or off the ship. This still holds even if the seafarer's contract expires or is terminated by the shipowner, ensuring that seafarers will still be paid their full wages whilst in captivity and receive any other entitlements due from the shipowner under the terms of their SEA, collective bargaining agreement or national law of the flag state. These entitlements could include holiday pay and pension contributions.

According to the International Transport Workers' Federation (ITF) seafarers working on vessels that are covered by the International Bargaining Forum (IBF) and Total Crew Cost (TCC) agreements are entitled to be informed at the time of assignment if the vessel is bound for or may enter any Warlike Operations or High-Risk areas, and an up-to-date list of IBF Warlike Operations areas should be kept onboard and made accessible to the crew. Seafarers are also entitled to know if they are entering a Warlike Operations area while at sea.

Entitlements depend on the area entered. If a vessel enters a Warlike Area you:

  • Have the right not to proceed to such an area and are entitled to repatriation at the employer's cost
  • Are entitled to double compensation for disability and death
  • Are entitled to be paid a bonus equal to 100% of the daily basic wage for the duration of the ship's stay – subject to a minimum of five days' pay
  • Have the right to accept or decline an assignment in a Warlike Area without risking losing employment or suffering any other detrimental effects

There is also employment protection in place if a seafarer becomes a captive because of piracy or hijacking inside or outside the IBF and ITF designated areas. For vessels covered by non-IBF (TCC) agreements, the areas are designated by the ITF.


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