Film sheds new light on Somali piracy

New-style piracy

In fact, the type of piracy on the high seas of East Africa shown in Captain Phillips is on the decline.Its sheer volume and cost to date has been staggering – in 2011 the International Maritime Bureau (IMB), which monitors global piracy, recorded a average of one incident a week, and in the five years from 2008 to 2012, pirates operating off East Africa cost the global economy as much as $12bn a year. 

Huge sums have been paid in ransoms. The US-based organisation Oceans Beyond Piracy(OBP) estimates that in 2012, $32m was paid in ransoms to Somali pirates, though this was a decline of 80% from 2011’s $160m, reflecting the lower number of incidents. The World Bank recently estimated that between 2005 and 2012 $339m to $413m was taken in ransoms off the coast of Somalia and the Horn of Africa. Its study analysing investments made by 59 pirate ‘financiers’ reveals the range of sectors – both legitimate businesses and criminal ventures – that were funded by the ransom money and estimated that between 30% and 75% ends up with financiers.

The pirate ‘foot soldiers’ receive just a fraction, between 1% and 2.5%. A total of 179 ships were hijacked; the average ransom paid was $2.7m, with ordinary pirates receiving $30,000 to $75,000 each ­– 54 times the country’s average annual wage of about $550 – and bonuses paid to those who brought their own weapons or were first to board the ship.

Naval security protection, the use of private armed security personnel and other proactive measures have now dramatically reduced Somali piracy. Spending on counter-piracy measures almost tripled to $1.53bn in 2012 from $500m in 2011. Piracy has had a profound effect on insurance: ‘kidnap and ransom’ insurance is worth around $250m; shippers spent up to $1.7bn in 2012 on private armed guards; a ship owner looking to insure a single transit can now get $5m in coverage from premiums ranging from $3,000 to $5,000, if the ship has armed guards.

In 2012, in Somalia and the Gulf of Aden, there was a reported 75% drop in attempted attacks, from 237 in 2011 to only 75, though this was still 25% of the global total. In the first three months of this year, there were five Somali attacks, against 43 in the first three months of 2012, according to the IMB. However, as a result, the actual cost per incident rose from $29.5m in 2011 to $80m in 2012, OBP calculates. Meanwhile, actual successful hijackings off the Somali coast fell by half from 2011 to 2012, from 28 to 14. 

Now the centre of piracy has shifted from East to West Africa. The Gulf of Guinea region, including Nigeria, is an important source of commodities such as oil, cocoa and metals for world markets. Unlike the waters off Somalia and the Horn of Africa, where it’s possible for ships to transit at high speed with armed guards on board, vessels may have to anchor off Nigeria with little such protection. Also unlike Somalia, which has lacked a functioning government, West African states have been wary of allowing foreign navies to operate so close to their territorial waters.

Pirate attacks in West Africa have jumped by a third this year, with more than 40 attacks so far, and 132 crew members taken hostage. Pirates operating from Nigeria accounted for the majority, with others doing so from Benin and DR Congo. The IMB estimates the value of the stolen goods in the Gulf of Guinea in 2012 at between $33m and $100m.