Ransoms to Pirates Remain a Spiraling Illegal Tax on the 90% of World's Goods That Move by Sea

The revelation this week that the owner of an Algerian cargo ship whose crew was held by Somali pirates paid them $2.6 million in ransom is yet another indication that the rewards these denizens reap for their illegal, life- threatening work remain a serious stumbling block to ending maritime organized crime, AdvanFort Company President and COO William H. Watson said.

“Those ship owners and operators who have still not hired a highly-reputable private maritime security company (PMSC) continue to risk paying what amounts to an illegal tax in support of further organized maritime extortion,” Watson noted in a statement. “It is a cost that ends up being borne by all of us.”

Watson noted that the MV Blida [pictured above], carrying 17 Algerians, six Ukrainians, two Filipinos, one Jordanian and one Indonesian, was overtaken by a gang of heavily- armed pirates on its way from Oman to Tanzania, with almost all the hostages freed after a bag full of cash was dropped from a plane to the captors.

“The fact that Rear Admiral Bob Tarrant, the Operation Commander of the EU Naval Force, has just issued a warning that Somali pirates still remain determined to get out to sea and attack easy targets should be a wake-up call for those still asleep at the helm of security for their companies,” Watson added.

“Tarrant’s observation that piracy’s threat in the Gulf of Aden and elsewhere is not over, but is merely contained for now, means that the costs associated with world-wide shipping remain burdened by a transnational security threat that carries with it an unnecessary tax that unfairly buffets the maritime industry and those consumers whose life depends on the free flow of commerce.”

“The silver lining in all those clouds on the horizon is the fact that those vessels protected by first-rate PMSCs remain outside the pirates’ greedy reach,” Watson said.

Rear Admiral Tarrant’s warning was issued after the EU Naval Force warship ESPS Rayo located a skiff with six men on board that was 320 nautical miles off the Somali coast. That the small, open-top boat was so far out to sea caused the Rayo to send a team to investigate.

As a result Tarrant said that he was “very concerned that seafarers and nations will lower their guard and support for counter piracy operations in the belief that the piracy threat is over. It is not; it is merely contained. We should remember that at its height in January 2011, 32 ships were pirated by Somali pirates and 736 hostages were held. It is crucial that we remain vigilant or the number of attacks will once again rise.”

Although the Gulf of Aden and the Indian Ocean are now protected by a coalition of world navies, in 2011 pirates staged 439 violent attacks and held hostage 802 crewmembers. Although the ransom paid by the Saudi owner of the MV Blida was $2.6 million, the average paid to pirates that year was $4.97 million.

According to a recent report, the some $170 million in ransom payments to piracy made during 2011 was a more than 50 percent increase from the total of $110 million they received in 2010. During the period 2007-2011, it noted, the ransoms paid “have increased sevenfold,” with average ransoms increasing from about $600,000 in 2007 to some $5 million in 2011.

In February 2011, $13.5 million in ransom was paid to secure the release of a supertanker, the MV Irene, which carried 2 million barrels of Kuwaiti oil, estimated to be worth $200 million and destined for the United States.