Woollerson would also like to see it involved in trying to remove the causes of Somali piracy through land-based initiatives.
“I see the CEP as a self-destructing company. Maybe in many years’ time we will no longer be needed and could donate the tonnage to a Somali coastguard,” he said.
This is a very interesting quote, and actually the entire article below is filled with some great stuff. Bravo to the author for getting the scoop and putting it out there for all to read. Here are my older posts with comments that first talked about this venture.
Now for my take on the whole thing. In order for this Convoy Escort Programme (CEP) to be a ‘self-destructing company’, it must take part in destroying their ‘Raison d’être’ –the pirates. Escorting ships does not alone create this kind of market mechanism. Especially if they only plan on capturing 27% of the merchant traffic going through the GoA, and allowing the pirates to feast on the other 73% of the merchant traffic. If anything the consequence, intended or unintended, will be a higher concentration of armed pirates attacking undefended vessels.
The other angle on this is that merchants and insurance companies will see how this works, and they too will fire up a similar business model. That other 73% of the merchant market might shrink pretty fast with a higher concentration of pirates coming down on them, and an increase of insurance backed protective services available to them at a decent price.
But this is where the quote up top really grabs me, and that is the land based initiatives of this CEP team. Could there be something going on here, like JLT taking a hint from what is going on with Saracen International and their proposed private militia? I bet JLT wouldn’t mind attracting some of that funding coming from this middle eastern mystery donor either.
Finally, there is the quote about a reputable flag state sponsoring these CEP vessels, and the concept of a government and military granting them ‘legitimacy’. That sounds like all the makings for a Letter of Marque or some kind of similar license to do what they are going to do. We will soon find out in the coming months exactly what kind of arrangement we have here. –Matt
‘Private Navy’ Is Close To Kick-Off
December 10, 2010
An insurance broker’s plan to create a “private navy” to combat Somali piracy is close to being launched.
Shipowners could be asked to back the project as early as late January or February with private military-escort vessels sailing alongside merchant ships by mid-2011.
A reputable flag state prepared to register the 18 patrol boats has been lined up, shipowner support is being canvassed and preparations made to secure funding for the vessels and crew.
Sean Woollerson of the Jardine Lloyd Thompson (JLT) insurance-broking group says there are still issues to overcome but the key task of securing government and military support to give the project “legitimacy” is almost there.
The venture, now branded as the Convoy Escort Programme (CEP), estimates it needs only £15m ($23.5m) to buy secondhand vessels suitable for use as patrol boats and the rest of the infrastructure.
Greek salvage entrepreneur George Tsavliris is already seeking support from fellow shipowners and Bimco has indicated a willingness to help facilitate the project.