IMIF Buffet Luncheon

Date: Thursday 4th April 2013

Venue: Stephenson Harwood LLP, 1 Finsbury Circus, London. EC2

Host: Julie Clegg, Partner, Stephenson Harwood LLP

Speakers: John Dalby, CEO, Marine Risk Mgmt

Alex Davis, Partner, Stephenson Harwood LLP

Subject: John Dalby: “Piracy – Where Are We Now?”

Alex Davis: presentation on a particular piracy event in Benin.

Report by James Brewer

buffet-luncheon-4th-april-2013Our chairman, Jim Davis, reminded us, if it were needed, that the question of piracy is far from solved. ”It is not a very happy future.  I have not the slightest belief that there is currently a will to solve anything.”

John Dalby, founder and chief executive of the company Marine Risk Management, and co-founder of the security industry regulatory association, the International Association of Maritime Security Professionals, started on a cautious note, in so far as the Indian Ocean piracy situation was diminishing; and now that governments were taking a more active interest in the Somali hinterland and its natural resources, the geopolitical scene was changing.  “How long that lasts, remains to be seen,” said Capt Dalby.

We were now seeing a resurgence of piracy in southeast Asia, a strategy of seizing ships and cargoes, with scant concern for human lives, those of the crews.

Various parties including governments and ship owners had spent billions of dollars on counter-piracy measures… to stop what: to stop a few hundred million dollars worth of ransom and hijacking claims.  “The numbers just do not stack up.”

In West Africa and notably the Niger Delta the longstanding (of at least 40 years!) petty theft had escalated to a more serious level. In the “good old days” these inappropriately labelled “pirates” would steal tins of paint, the odd mooring rope and wire, empty the ship’s safe and rarely harm crew members. Now there was a growing tendency to use violence, and whole cargoes were being targeted – following the southeast Asia model. “In west Africa, there is more going on than meets the eye,” declared Capt Dalby.

He said that his firm is currently working closely with major defence contractors from the UK and US in developing the trademarked Globalert MARS (Maritime Airborne Reconnaissance and Surveillance) programme using Hawker Beechcraft special mission equipped King Air 350 ER as extended range aircraft platforms.

Refering to a series of PowerPoint slides, Capt Dalby said: “Some of what you see has just been recently declassified.” He explained: “Surveillance radar, high definition electro-optical infrared imaging equipment and highly sophisticated communications systems are integrated into the platform. The aircraft has the ability to remain unseen and unheard, allowing Globalert to locate, positively identify and track a wide range of targets (ships, people and vehicles) regardless of weather and day or night conditions.” Primary uses for this programme were defined as counter-piracy, movement control team tasks, border control, human and drug trafficking, search and rescue, anti-pollution and tracing illegal weapons movements.

Capt Dalby said there had been a huge growth in maritime security operators, with many small companies springing up over the last few years. He claimed that most of these consisted of unqualified, inexperienced (and thus dangerous) and unsuitable personnel with little maritime or seagoing experience. “I know of security teams that have lasted three days on a ship before they became seasick. Owners are becoming more selective and we are getting a natural culling of the cowboy operators. I receive weekly two or three special offers – last week I even received an email with an ‘Easter offer – 50% off maritime security!’”

Alex Davis offered some grim insights into the case of tanker Anuket Emerald. The background was that hijacks of tankers for the purpose of stealing some of their cargo, mostly refined oil products, had become routine in the Gulf of Guinea. Unlike in the Gulf of Aden, owners in many cases cannot provide their vessels with armed guards. Actually, said Mr Davis, the Gulf of Guinea is much more dangerous than Gulf of Aden when one speaks about piracy, and the theft of cargoes was “highly organised and pretty terrifying.”

On August 18 2012, the AIS signal from the Anuket Emerald disappeared. The 5,500 gt, 2008-built product tanker was used as a bunker barge. The ship had loaded 3,400 tons of gasoil and proceeded to sea to sit off Lomé, the port city that is the capital of Togo, awaiting orders. After nine days at sea, the quiet was shattered when four men burst in wielding an AK47 and another man brandished a home-made shotgun. The crew had no time to press the ship security alert. The Ukrainian and Russian officers were beaten badly, but the Filipino crew were pretty much left alone.

The pirates had brought with them a cocktail of drugs and spirits, and things quickly turned nasty. Bullets were scattered everywhere.  The bosun tried to hide but the door was smashed open. While high on drugs, one of the pirates discharged a firearm making a hole in the deck.

The marauders demanded to know what cargo there was, and painted out most of the name of the vessel, leaving only the letters Rald. The crew were confined in a space with all the windows covered. The second officer was singled out to assist and the vessel sailed immediately south.  The following day the crew heard fenders of another vessel coming alongside for a ship to ship transfer of cargo. Of the criminals, Alex Davis said: “They knew how to pump a commercial vessel.” Within three days the cargo was gone, and the pirates left.

The arrival of the second vessel had marked a slight escalation in that the men on board had belt-fed machine guns, looking as if they wanted to defend their position, rather than just run if foreign naval forces appeared. Almost every pirate had a gun. They had equipment including metal ladders fabricated for boarding. “It was a well oiled machine for an operation with considerable levels of sophistication.

“We were quite lucky,” the lawyer continued, “in that the second officer in between beatings caught a glimpse of the STS vessel through a curtain, and was able to establish she had an orange hull. We worked with Gray Page which was able to establish a likely candidate vessel.”  The cargo was discharged at a certain jetty at Lagos. Gray Page was able to obtain copies of documents submitted to the agent, including a bill of lading for 3,000 tons of gasoil.

The Nigerian authorities seized the cargo at the tank farm and the owner of the tank farm was arrested.  “Our cargo currently languishes in the tank farm while the political process takes its place.”

Alex Davis went on to consider some wider implications. What is known as ‘finger printing’ could prove from its chemical make-up that a particular stem of oil was the one that had been seized. “If we can get the oil back, I believe it would be the first time it has ever been done,” said Mr Davis.

On the question of risk management of operations like bunkering manoeuvres, he reminded the audience that the vessel had been blacked out for three whole days. There were available for sale GPS transmitters that were very small and have their own lithium power packs. These could be hidden anywhere in a vessel, and if one had been on board the Anuket Emerald, “we would have had a fix on the vessel the whole time.”

With such kit costing around £200, this was a cheap solution which would enable a vessel to be arrested before she discharged a stolen cargo.  The question is, was there a will to introduce such equipment?  Could the charterers oblige the owners to fit it? Who would be responsible for it?

It was clearly not viable for a small product tanker “bobbing around” off the coast of Togo to pay for an armed guard while it waited 10 to 20 days for orders. The solution was “to cut the problem off at source, prevent these guys from landing the cargo and making the money.” Nigerian pirates will fight – the evidence from the Anuket Emerald supported that contention –with a lot of the attacks at night, and armed security guards in many cases would not be prepared to repel attacks.

A further telling contribution came from David Wardrop, of Westminster branch of the United Nations Association. Mr Wardrop claimed that the UK Foreign Office and EU Naval Force (EU Navfor) were ‘dysfunctional’ in their approach to the problem of piracy. He said bluntly: “The British government, our ministries, have failed you, the shipping community.”

Mr Wardrop referred to the February 23 2012 summit on the piracy question, hosted in London by Prime Minister David Cameron, and involving  55 nations and international organisations. He questioned whether anything had moved forward since then. Mr Wardrop, who mentors a Somali diaspora group (known as World G18 Somalia, and which proposes ways for communities tolerating piirate groups to move towards a better quality of life) said he had sought to identify any cohesive strategy on piracy being pursued by the international community, especially on the part of the UK government.

He said that a 2012 survey of coastal villages hosting pirates showed that the international community had ignored the chance to engage with local leaders to understand how piracy might be stopped at source. Instead energies had been directed to large inland cities. Thus, without clear health, education or employment programmes, villagers turned to living off the pirates who take over their communities.

In October 2011, Henry Bellingham, then Parliamentary Under-Secretary of State at the Foreign & Commonwealth Office, said when speaking to the Chamber of Shipping that “the government has decided to commit £2m to community engagement and economic development projects in coastal regions.”  When Mr Wardrop and Somali colleagues tested this by seeking £10,000 for a project in six pirate villages to determine the priorities of the elders, they were rejected  and told that the £2m had been allocated to a programme which it turned out would benefit coastal communities only marginally.

Mr Wardrop told the meeting that, pursuing the principle of engagement, he had arranged a meeting in his house in London between a EUNavfor officer and a village elder visiting the UK. This has led to positive outcomes but confirmed his view that, without a cohesive strategy to tackle the cause of piracy, money was being wasted unnecessarily by both the shipping community and the naval forces deployed to the Indian Ocean.  Remissions from the Somali diaspora regularly exceeded official aid.

Among other strong views from the floor of the meeting, there was criticism of Nigerian maritime capability in regard to crime deterrence. One senior executive said that a review of services at Lagos had found that one of the pilot launches did not even have a compass.  “We are trying to deal with the situation commercially, because governments are not fulfilling that role,” he said.

John Faraclas of the online news service www.allaboutshipping.co.uksaid that the industry should support the International Maritime Bureau to embark on a programme to open bases with trained people at points around the world that were most vulnerable to piracy. It was a political issue.

In reply, Alex Davis contended that the problem in West Africa could be snuffed out with solutions that needed neither guns nor bases.

Mr Dalby feared that criminal operators “more organised and using more lethal weapons” were ready to enter the scene. “You have to think ahead, because they are ahead of us already,” he warned.

Jim Davis summed up what had been one of the most intensely followed IMIF meetings of recent times: “We could easily have gone on for hours debating this. We have a problem, we cannot sleep on it. It is one of the extreme problems that the world is facing… and some people are suffering appallingly. We have got to keep this in the forefront of our minds, and at IMO and other international organisations. Things are very serious and could be getting worse.” Perpetrators were becoming better armed and more brutal.

The chairman warmly thanked Ms Clegg and her colleagues at Stephenson Harwood for their generous welcome and fine hospitality.