Feral Jundi

Friday, April 16, 2010

Legal News: ‘To Deny Hostage Takers The Benefits Of Ransom’–W.H. Somali Piracy Policy

    U.S. government policy is “to deny hostage takers the benefits of ransom, prisoner releases, policy changes, or other acts of concession,” the White House said in a statement today.

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   This is the only article I could find that listed the administration’s follow up statement on the matter.  This quote was also added as an update to this article. I have not seen a lot of stuff written on this, primarily because it is still kind of new and vague.  A reporter needs to nail down the White House on this, because I am sure there are shipping companies out there just scratching their head.  Does this new order expressly prohibit paying ransoms to pirates or not?

   If a lawyer (in the article below) states that this is vague and could be interpreted one way or the other, I tend to think that the American shipping industry is pretty confused right now.

   It could also mean that this is a hint that the administration is dropping on the US shipping industry.  A hint that says ‘you guys should probably think about doing something other than paying the salaries of Somali pirates with 3 to 5 million dollar ransoms’. Who knows, and we will see how this turns out. –Matt

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Obama Order May Block Ransoms Paid to Somali Pirates

April 15, 2010 (updated)

More From Businessweek

(Adds White House comment in fifth paragraph.)

By Gregory Viscusi

President Barack Obama signed an executive order freezing the assets of Somali militias that could also make it illegal for U.S. ship owners to pay ransoms to pirates.

The executive order signed late yesterday bars any U.S. citizens and companies, as well as their overseas branches, from having financial dealings with a list of 11 militia leaders and the Islamic guerrilla group al-Shabaab, as well anyone that has “engaged in acts that directly or indirectly threaten the peace, security, or stability of Somalia.”

While never using the word “ransom,” the order includes “acts of piracy and armed robbery at sea” among those acts.

“The wording could definitely be construed to make payments of ransoms illegal,” Bruce Paulsen, a partner at Seward & Kissel in New York, who negotiated a ransom payment with Somali pirates for a U.S. owned ship hijacked in 2008, said in a telephone interview.

(more…)

Thursday, April 15, 2010

Maritime Security: Obama’s Piracy Executive Order Prohibits ‘Donations’ And Maybe Ransoms?

   Wow, if this is interpreted this way, this would be very significant.  If in fact ransoms were considered ‘donations’, well then private security is now the only option that shipping companies would have.  Stand by for more on this one, and already the companies are jumping on this.  Check out the Marque Star’s press release in support of this new order. –Matt

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Obama’s Pirate Executive Order Sparks Concerns With Shipping Lines

15 April 2010

USA / SOMALIA – Late last night President Barak Obama signed an executive order that forbids American corporations and their overseas subsidiaries from having financial dealings with groups that “…directly or indirectly threaten the peace, security, or stability of Somalia.”

President Obama’s order specifically highlights the problems of piracy in the Indian Ocean, stating that: “I hereby determine…acts of piracy or armed robbery at sea off the coast of Somalia threaten the peace, security, or stability of Somalia. I…determine that…the making of donations…would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations…”

Though specifically aimed at certain individuals and groups, principally the Islamists and warlords fighting against the Somali government and African Union peacekeeping forces, the order has sparked concern amongst shipping lines that it could be construed as applicable to companies that pay ransoms’ to pirates who hijack their vessels, making them culpable.

Though there is some confusion, companies with US interests who are the victims of Somali piracy are now advised to consult with the Office of Foreign Assets Control (OFAC) of the US Treasury Department before making any payments to hijackers.

You can see the full Presidential Order here.

Link to story here.

 

Wednesday, April 14, 2010

Maritime Security: India’s Government Suggests Shipowners Use ‘Private Armed Guards’ For GOA

Filed under: India,Maritime Security — Matt @ 2:07 AM

In 2009, pirates attacked 214 vessels and held 58 Indians hostage. India’s government is suggesting that Indian shipowners adopt an “anti-piracy drill” and use private armed guards and decoy vessels to boost sailors’ security in deep waters.

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“They hunt like lions, seeking weak and vulnerable prey,” says Mainstone.

*****

Hmmm. Private armed guards and decoy vessels? Is someone in India reading FJ and getting some ideas? (Q ships come to mind) Especially if pirates keep mistakingly firing on massive warships–what idiots. lol

The new conclusions I have been coming up with for today’s piracy issues, is that pirates have discovered a modern day business model of piracy that works and is profitable. Remember, these guys are operating in an entirely free market with no restrictions what’s so ever. No laws, no borders, nothing. All that matters is going after the weakest prey, and feeding their pride.

What I mean by that is that pirates do answer to one group, and that is their investors. That widowed Somali in the village that offered up one RPG round to the cause, is the share holder that the company has to answer too. Take it a step further, and if jihadists invested in their seaborne business venture, they really need be paid back. The only thing that will stop this free market based criminal venture and war, is organized and violent men that makes that venture too much of a risk.

As it stands now, just paying off ransoms to these guys only feeds this piracy machine. The pirate companies that are the best at taking down ships, will get the most investments and attract the most qualified pirates. Everyone loves a winner. Those successful pirate companies will also infuse innovation into the piracy game, and everyone will aspire to be like them. They will copy their operations, their tactics, their boats, and everyone will fight to out do the other guy and get rich. That is the allure of piracy to the Somali.

Until that venture becomes a zero sum game to the Somali pirate, or any pirate, things will only get worse. And because Somalia is a failed state, there is nothing of risk for the pirate back home. In essence, they only have to risk the violence of the assault at sea, but as soon as they get that boat, they can bring it back home and they know that their government can’t do a thing about it.

With that said, arm the boats. There is a talent pool of capable folks that the Indian shipping industry can draw upon throughout the world and I say arm the boats. If shipowners want professionals, there are a number of ways to find them and get them on their boats. Believe me, if a company put up an ad for what exactly the Indian’s wanted on their boats, they would get a massive reply from my industry. I am sure there are security specialists in India that would jump all over that stuff too. Like I said, there would be no problem at all in contracting this out and getting good people on your boats.

Shipowners can also draw up some excellent contracts, based on all the lessons learned from today’s conflicts. There is no excuse for writing a poor contract, or not moderating the contracts properly. There are plenty of mechanism that you could put into a contract these days in order to insure that you get a good service as well.

Most of all though, you have to decide how much you are willing to pay for such a thing? In my view, if you pay peanuts you will get monkeys. How important is your boat and the safety of your crew and what are you willing to pay to insure their safety? Or you can continue to pay ransoms or what I call ‘the pirate’s salary’. Not to mention that premiums will only go lower as less boats/hostages get taken and the insurance companies recognize the value of your security measures. –Matt

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India shipping firms seek new anti-pirate strategy

By Salil Panchal

April 11, 2010

MUMBAI — Alarmed by a big jump in pirate attacks, India’s shipping industry says it needs a new security strategy to safeguard vessels in the dangerous waters off Somalia’s lawless coast.

At least 95 Indian sailors are still being held by Somali pirates after they seized nine small ships in the Indian Ocean off the coast of Africa late last month, the Indian government says.

The attacks, targeting one of the world’s busiest maritime trade routes, were the latest in a string on Indian vessels in which dhows — slow-moving, mechanised boats — have been among the most vulnerable.

“(Dhow) piracy is becoming a major problem,” said Captain Harish Khatri, India’s deputy director general of shipping who attended an anti-piracy conference last week in Mumbai.

Wednesday, April 7, 2010

Kidnap And Ransom: Piracy Premiums Take A Breather But Menace Remains

   This is a first.  I want to thank the insurance company Maritime and Underwater Security Consultants who sent me this excellent article, and here is a link to their website.  Their intent was to promote that their company has the most extensive insurance plans for kidnap and ransom, and that other companies fall short in their coverage.  If you are a shipping company owner or yacht owner and you are reading this right now, feel free to check these guys out–but still, buyer beware. This is not an FJ endorsement, but I will definitely provide a link for your research.

   The real story here though, is that with all of this competition between insurance companies in providing K and R insurance driving down cost, as well as the increase in protective measures on the boats, premiums are dropping.  Now of course Reuters and the authors won’t say it, but I think armed security contractors on the boats are what really give them a better rating. That, and all these navies floating around and hunting pirates have got to help as well. But what happens when these navies burn out, and their governments call them back because of the cost?

   For one, if you read further down the report, there is already some buzz in the industry about starting up a private navy to help supplement today’s naval operations.  I personally think this is a move to provide a back up plan, if a navy or two decides to bow out. Piracy is not going away anytime soon, and I wonder how long countries can keep up their deployments–both politically, and economically.

   I also took interest in this Automated Voyage Risk Assessment system, designed to analyze a boat’s protective capabilities in dangerous waters.  AVRA I hope is a complete assessment system, that includes lethal and non-lethal factors in protecting a boat. If this is one of those mechanisms developed by the Juicebox Commandoes I keep talking about, who continue to promote non-lethal as the only suitable protection for ships, then I have no respect for AVRA. –Matt

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Piracy premiums take a breather but menace remains

Thu Apr 1, 2010

By Myles Neligan and Lorraine Turner

LONDON (Reuters) – Stiff competition and moves by owners to protect ships better has taken the edge out of insurance costs after pirate attacks off Africa’s east coast created a two-year boom for specialist cover.

But analysts say the menace of piracy is far from contained, and unchecked growth in the rest of Africa, possible attacks in other key shipping channels and higher ransom demands will keep insurers interested in the long term.

While official estimates are not available, brokers reckon sales of so-called marine kidnap and ransom (K&R) insurance have soared to about $100 million (66 million pounds) a year since 2008, when the product was first developed in response to an upsurge of vessel seizures and ransom demands by Somali gangs.

But the cover now costs less than it did two years ago, reflecting mounting competitive pressure as more insurers enter the fast-growing market.

The marine K&R market is currently dominated by six players, led by Bermuda-based Hiscox (HSX.L) and Travelers (TRV.N) of the U.S., up from just three when the product first became available, and more are expected to join.

“There’s an increase in supply and the price is going down,” said Sean Woollerson of insurance broker Jardine Lloyd Thompson (JLT.L).

(more…)

Tuesday, April 6, 2010

Maritime Security: Marque Star Signs On Former Dell V.P. Steve Belt As CTO, And Buys A Boat

     “We stand ready to meet any challenge. Marque Star is seeing tremendous industry response and is accepting deposits for any additional new contracts. We can meet the demand as we are rapidly growing our flotilla of capable ships to deliver customized value to our clients,” says Agbeli Ameko, SVP of International Business Development.

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   Interesting news with Marque Star, and they have definitely popped up onto the radar screen lately. At this pace, I will have to do a company spotlight on these guys. lol

   Now will all this activity transfer into an actual increase in market share and business for the companies involved? Who knows, but when I see folks making all of these types of high end business moves, someone is reading the ‘Tea Leaves’ and getting ready.

   They also bought a pretty beefy boat called the Archangel Michael, and for their sake I hope this doesn’t turn into a MacArthur venture for them. We will keep our eye on this one. –Matt

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Marque Star Signs on Steve Belt as CTO

April 05, 2010

WASHINGTON–(BUSINESS WIRE)–The Former Dell Inc. Vice President, Steve Belt, has joined the private maritime security company Marque Star as CTO. Belt brings advanced technologies which will better equip Marque Star in its Pursuit to Take on Piracy and Secure the World’s Oceans for its Clients. Steve Belt will be responsible for the worldwide deployment of Marque Star’s industry-leading Command and Control and Governance Systems.

As VP, Business Client Product Development he was responsible for 550 employees across four international sites, including Austin, Taipei, Shanghai, and Limerick Ireland, and worldwide Client Platform Hardware and Software development for Dell. He also was responsible for the Office of the CTO and Advanced Engineering organizations which develop and enable the technology used in Dell’s client products. “Marque Star’s vision of using advanced technology to protect their clients from all forms of maritime security threats, coupled with my background in the technology industry, was a perfect match. I am excited about the opportunity to join Marque Star and help bring the latest in high-tech to the challenges of maritime security,” says Steve Belt, CTO Marque Star.

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