Below I have posted this report that One Earth Future Foundation put together, and have also posted an article that describes a lack of reporting from private security companies that stopped attacks, due to liability reasons. My simple question here is how can we truly tally the cost effectiveness of armed security on boats, if we do not have accurate data inputs?
In the report, I went to page 16 to catch anything that perked me up. One figure talked about the cost of security equipment investments made by all the ships mentioned. Razor wire was the most preferred out of all of the security equipment listed. They averaged the value of all of the razor wire purchased last year at about $434,552,160! Wow, razor wire is quite the business. Acoustic devices like the LRAD came in at second costliest at $133,717,500.
Here are two quotes that I combined for further analysis of the statistics.
Average ransoms increased 25% from approximately $4 million in 2010 to $5 million in 2011…… In 2011, Somali pirates attacked 237 ships and successfully hijacked 28.
So that is 1.158 Billion dollars that shipping companies could have lost potentially if those 237 ships had actually been taken. Not to mention the costs of ransoms, medical care, transport, rescue or lawsuits for every hostage taken, and the rising costs of insurance premiums because of all of those potential hijackings. In other words, these statistics are misleading and they do not show the cost if security measures were not taken.
The other part of the report was the percentages of armed security on boats. Here is the quote.
Varying sources estimate that the additional costs of armed guards are anywhere between $30,000 and $100,000 per transit through the HRA. According to the Independent Maritime Security Association, the use of a private armed security team generally costs around $50,000 per transit. We have estimated that approximately 25% of vessels transiting the HRA employ armed guards. It is important to note that this figure of 25% is an estimation of the entire year of 2011. From discussions with leading shipping industry representatives, we understand that the proportion of vessels employing armed guards increased rapidly throughout 2011, and by the end of the year this figure was closer to 50% of vessels.
If there are approximately 42,450 transits through the HRA each year, then around 10,612 transits employ armed security. At an average cost of $50,000 per transit, the total costs of private armed security are estimated to be in the region of $530.6 million per year.
So here is the question. How can anyone say that if only 25% of the ships last year were covered by armed security, that armed security is not successful? Get back to me when 100 percent of the ships have armed security, and then we can talk about effectiveness.
Also, how many armed guards on boats were the primary reason why any of those 237 ships attacked were not taken, and how many of these hijackings were prevented because of navies? Because if we want to get technical, only 25% of the boats had armed security, yet the navies of the world with all of their might were involved as well, then who here is truly effective at preventing attacks? Whose cost is more justified?
Which brings us to the other article in my little collection below about the lack of good reportage by private security companies on the attacks they prevent. In order to prove effectiveness, then accurate figures on attacks prevented by private armed security on boats is crucial. Who knows how many actual attacks were prevented by armed security over the last couple of years? Are all the companies from all over the world reporting their actions, or are they not reporting because of fear of liability issues?
“Security teams are shaping this on-board decision-making for reasons of liability, because of the action they may have taken to defend ships against attack,” said Church, who works at a counter-piracy base in Northwood, England……
As many as half of all ships sailing through the region now use armed guards, the foundation said at the forum. That’s up from 25 per cent earlier this year, and companies providing security earn $530.6 million annually, it estimated. A total of 42,450 vessels pass through the region annually, it says.
Church cited a “disconnect” between the number of attacks expected last year, based on military intelligence assessments of pirates’ strength, and levels in 2009 and 2010. A “plausible argument” can be made that the increase in armed guards was the cause, he said.
Somali pirate attacks rose to 237 in 2011 from 219 in the previous year, according to figures from the London-based International Maritime Bureau. No legal framework exists to establish how armed guards should interact with pirates and what happens if any attackers are killed or injured, Pottengal Mukundan, the bureau’s director, said at the forum.”
So those are just a few thoughts on security costs and where we are at. I also like to bring this up to bring some balance to the discussion about cost effectiveness. Most of all though, these statistics and estimations add to the overall picture. If only 25 % of the ships transiting through the HRA had armed security in 2011 and we are now just at 50%, then we have a market with room to grow. –Matt
Security Equipment and Guards: A notable trend in 2011 was the rapid escalation in the use of private armed security. The total cost of both security equipment and armed guards in 2011 was between $1.06 and $1.16 billion.
One Earth Future Foundation Page 16
3. The Cost of Security Equipment and Guards
An increasing number of ship owners are seeking to protect their vessels against pirate attack when transiting the HRA with security equipment and/or private armed (or unarmed) security guards.
a) Security Equipment
According to the latest (fourth) version of Best Management Practices for Protection against Somalia Based Piracy (BMP4), a number of security measures should be taken by vessels to prevent and defend against a pirate attack. BMP4 describes these ship protection measures as “the most basic that are likely to be effective,” and ship owners are encouraged to conduct a full risk assessment prior to entering the high risk area. Suggested measures include (but are not limited to): Enhanced watch keeping/lookout/ and vigilance, maneuvering practice, enhanced protection of/and controlling access to the bridge, closed circuit television , upper deck lighting, razor wire, alarms, water spray and foam monitors, citadels/safe muster points.