Supplement to the Summer/Fall 2013 Issue: Terror on the Seas: Assessing the Threat of Modern Day Piracy

Brandon C. Prins, Ursula Daxecker, and Amanda Sanford*

Abstract: Maritime piracy is a major post-Cold War challenge to U.S. and international security. While the Greater Gulf of Aden represents the face of modern maritime piracy, the threat is larger than just the Puntland region of Somalia and the Bab el-Mandeb waterway. Nearly 60 percent of all littoral states have experienced piracy over the past decade. State weakness and economic dislocation both drive maritime piracy, and while increased naval strength in the Gulf of Aden may have finally reduced attacks off the coast of Somalia, it is likely that counter-piracy efforts need to focus more attention on institution-building and poverty reduction on land to eradicate this security threat.

Introduction

On 5 April 2010, two attack skiffs successfully boarded and hijacked a German-owned commercial vessel in the Indian Ocean. The MV Taipan, on its way from Haifa, Israel, to Mombasa, Kenya, had intentionally avoided sailing near Somali waters because of the increased frequency of such attacks since 2005. When captured, the Taipan was five hundred nautical miles off the Somali coast, and had sighted a seemingly innocuous dhow. The two skiffs, with ten Somali pirates on board, attacked the Taipan with machine gun fire upon approach, causing the ship’s master to order his crew into a secure location, while he and another officer remained on the bridge. The pirates disabled the ship’s GPS and redirected its route to Somalia. The sequestered crew was able to radio international naval forces in the area, bringing the Dutch warship HNLMS Tromp to the Taipan’s rescue. The approach of the Tromp led to the immediate retreat of the dhow Hud Hud—serving as the pirate mothership—but all attempts at negotiations between the Dutch Marines and the pirates aboard the Taipan were unsuccessful. The Tromp resorted to freeing the Taipan and its crew by force, opening fire against the pirates and boarding the ship by rappelling down from a military helicopter. Within only a matter of hours from the initial hijacking the Dutch Marines had successfully apprehended the Somali pirates, rescued the crew, and freed the ship with no casualties or loss of merchant supplies.[1]

The suspects involved in the pirate attack on the Taipan were immediately taken to Djibouti, flown to the Netherlands, and extradited to Germany, where they stood trial for their crimes in the first legitimate piracy trial in Germany in four hundred years. The trial itself was unexpectedly long given the apparent simplicity of the ordeal, lasting 105 days. Furthermore, it was marred by the inability of the German prosecutors to assess the age of the accused, the specific actions taken by each individual during the hijacking, and the consideration of the duress under which some of the suspects may have acted. Nevertheless, the meticulous and drawn-out proceedings resulted in the conviction of all ten Somali pirates on charges of kidnapping and attacks on maritime traffic. Prison sentences ranged from two to seven years, and the trial itself set a precedent for larger antipiracy counter-measures in the international community.[2] The importance of this incident—and the subsequent criminal proceedings—cannot be ignored, as incidents like the attack on the Taipan are not uncommon. In fact, there have been 168 piracy incidents reported by the International Maritime Bureau so far in 2013 (through 23 August). While this is fewer than the 221 incidents from the same time frame last year, attacks appear to have increased around Indonesia and the Gulf of Guinea. Somalia and the Greater Gulf of Aden may be safer, but piracy remains a threat to shipping (see Figure 1).

In this paper we argue that state weakness and economic under-development help to drive maritime piracy. Institutionally fragile or corrupt governments do not possess the ability to capture, punish, or deter would-be pirates. Poverty and joblessness further create incentives for local citizens to turn away from legal employment and perhaps risk their lives for the possibility of a large ship payoff. We begin by briefly reviewing extant research connecting government weakness and under-development to piracy. We then present evidence of these relationships using data from the International Maritime Bureau (IMB), the World Bank, and the Center for Systemic Peace. The paper concludes with several policy recommendations.

Government Weakness and Poor Economic Conditions Drive Piracy

Piracy flourishes in fragile and under-developed countries. Indeed, both institutional weakness and economic dislocation correlate strongly with pirate attacks.[3] Because of this, transit corridors and enhanced naval patrols in the greater Gulf of Aden will not by themselves eliminate this maritime threat. Institutionally weak states that confront extensive poverty, such as Bangladesh and Nigeria, continue to grapple with the problem of piracy in spite of their efforts. Nigeria, for example, saw twenty-seven incidents of maritime piracy in 2012, while Bangladesh witnessed eleven. These numbers may not seem high, but the incidents in the territorial waters of both countries were fairly serious. All eleven incidents in Bangladesh waters involved the successful boarding of ships, rather than attempts; seventeen of the twenty-seven incidents in Nigerian waters represented successful attacks, and four of the ships were hijacked.

The problem for weak governments is not just that they are incapable of projecting sufficient power to prevent and deter piracy, but that these types of governments also tend to facilitate extensive criminal activity, due to corruption.[4] Government soldiers, bureaucrats, and police officers may overlook or ignore illicit movements at ports as well as fail to apprehend known pirates if promised a share of the spoils.[5]Further, weak states confront resource limitations that prevent the effective monitoring of territorial waters. Government revenue spent on coast guard cutters means less money available for reducing poverty and disease or improving a country’s educational facilities. In some instances, governments confront more immediate threats, such as violent anti-state insurgencies and terrorism, which preclude investments in counter-piracy efforts.[6]

Poverty and joblessness also present significant challenges to counter-piracy efforts.[7] The inability to find work in the legal economy increases the demand at the individual level for alternative sources of income. In countries with a seafaring tradition and long coastlines, piracy represents a viable, if dangerous, option. Successful attacks on transiting cargo ships can produce sizeable rewards (in the range of five to fifteen thousand U.S. dollars per attack), and such resources enable pirate groups to recruit new buccaneers.[8] Iyigun and Ratisukpimol,[9] for example, find that countries with higher per-capita incomes suffer less violence from piracy, while Menkhaus[10] insists illegal fishing in Somali waters drove many Somalis to pirate activity. Daxecker and Prins also conclude that decreases in both the price of fish and per-capita incomes increase piracy in a country’s territorial waters. The level of foreign aid distributed to piracy-prone countries provides some evidence of the dire economic situation on the ground that prompts certain individuals to turn to piracy. Nigeria, for example, received $519 million in bilateral aid from the United States in 2011 and approximately $2 billion in total development assistance.[11] This represents about seven percent of the total government budget of Nigeria, a country with 174 million people and a gross national income per capita of $2,400. As such, efforts by the international community to mitigate poverty and encourage foreign investment may make it more difficult for pirate leaders to attract new members.

Finally, both the geographic location and structure of states influence the incidence of piracy. Proximity to strategic straits, such as the Bab el-Mandeb passage from the Red Sea to the Gulf of Aden or the South China Sea, correlates with piracy. Further, long coastlines with innumerable shelters pose logistical problems for maritime security forces. With light and fast boats, pirates are able to elude security forces by concealing themselves in bays and coves that are present along the coasts of Somalia, Indonesia, Malaysia, and Nigeria (in the delta of the Niger River). Territorial conflict and disagreements over maritime boundaries also complicate counter-piracy measures, particularly in the South China Sea, where several claims remain unresolved and salient.

Describing Piracy

While piracy affects nearly every region of the world, Southeast Asia and Africa account for a sizable majority of the incidents (see Figure 2). Approximately 65 percent of all piracy occurs off the coasts of sub-Saharan Africa and Southeast Asia. Nigeria and Somalia tend to dominate the African incidents, while Malaysia, Thailand, the Philippines, and Indonesia account for most of the incidents in Southeast Asia. Still, nearly every littoral state in sub-Saharan Africa, Southeast Asia, and the Far East has experienced some piracy.[12] The Western Hemisphere also experiences piracy: more than seventy incidents were reported in the Americas in 2003, with Colombia and Venezuela witnessing the highest numbers of attacks. By 2011 and 2012, the number of incidents had dropped considerably, but the waters off Colombia and Venezuela remained prone to piracy. The littoral states of Europe and North America continue to be the safest, with only a handful of attacks occurring over the past twenty years.

While nearly 60 percent of all non-landlocked countries have experienced piracy in their territorial waters, a handful of states account for the vast majority of incidents that occur in any given year. Figure 3 shows the five most piracy-prone countries from 2003 to 2012. All five countries suffer from significant piracy, but Indonesia and Somalia consistently witness the most attacks in their territorial waters. This is partially a function of geography, but it also results from extensive illegal fishing and government corruption. Indonesia’s military is funded at least in part through non-government revenue sources, which only facilitates extortion and protection rackets.[13] In Somalia, the collapse of the Barre regime in the early 1990s and its replacement with warlordism and political chaos has allowed criminality to flourish. Somalia’s political fragility has also enabled widespread illegal fishing in its territorial waters, likely pushing many former fishers into piracy and other criminal activities. In fact, when the USS Gonzalez apprehended Somali pirates in 2006, they claimed to be challenging foreign fishing vessels in Somali waters.[14] Data from the U.N. Food and Agricultural Organization shows that the value of fish production in Somalia dropped by 50 percent from 2004 to 2005, and despite a small increase in 2006, by 2007 it was still less than a third of the 2004 price. The variance in the value of fish produced also increased over this time period, creating tremendous uncertainty for fishers and pushing many risk-averse Somali fishers out of the market.

States with long coastlines, archipelagic makeup, numerous islands, or proximity to strategic shipping lanes offer opportunities for piracy.[15] The concentration of piracy events along the Strait of Malacca and around the waters of Indonesia supports such arguments. Indeed, Indonesia has more than 54,000 kilometers of coastline and approximately 17,508 islands. The Philippines has only a slightly smaller coastline at 36,000 kilometers and more than seven thousand islands. Both of these countries present difficult challenges in controlling piracy, as nearly endless coves, inlets, and swamps exist to conceal activity and allow for evasion. Emphasis on favorable geography also suggests that piracy, while a global phenomenon, tends to be regionally concentrated, particularly in areas close to major shipping lanes such as East Africa and Southeast Asia. Again, from the map in Figure 4 of 2012 incidents, one can easily see that the Gulfs of Guinea and Aden and the Malacca Strait witness substantial piracy. Given that trade in the greater Gulf of Aden is valued at nearly one trillion U.S. dollars a year, it is clear why would-be pirates gravitate toward these waters. The value of trade in Asia is even greater, estimated at close to ten trillion dollars a year. Much, if not most, of the trade in both regions passes through the Red Sea and the Malacca Strait. Somalia, despite having only five deep-sea ports, is only five kilometers from where the Red Sea empties into the Gulf of Aden. Both Indonesia and Malaysia directly border the Malacca Strait and possess seven times more ports than Somalia. Approximately twenty thousand ships transit through the Greater Gulf of Aden each year, and over sixty thousand vessels pass through the Malacca Strait between Sumatra and the Malay Peninsula annually, mostly going to or steaming from the South China Sea.[16] Such large numbers of targets in part help explain the prevalence of piracy in Southeast Asia and off Eastern Africa.

Piracy also flourishes where political and economic conditions facilitate corruption and criminality. Countries that suffer from piracy experience much higher levels of political fragility. The Center for Systemic Peace (CSP)[17] measures political weakness using an ordinal scale ranging from one to twenty-five, with higher values signifying increasingly fragile states. Countries experiencing piracy have fragility scores that are on average 65 percent higher than countries not suffering from piracy. The average fragility score for countries without piracy is 7.6. For countries with piracy, the average fragility score is 12.73. Indonesia scored a fifteen in the late 1990s when piracy incidents in its waters numbered more than fifty per year on average. For the last twenty years, Somalia has been coded as the closest to a failed state as there is in the international system. Its fragility score was the maximum of twenty-five in 2010, and Somalia experienced 139 incidents that same year.

Similarly, opportunities (or lack thereof) in the legal economy affect the prevalence of piracy. Unemployed youth (especially males) provide the foot soldiers both for insurgencies and pirate gangs. The per capita gross domestic product for countries experiencing piracy is only $5,172. The value for countries without piracy is more than three times higher, at $17,753. Some of the most piracy-prone countries remain some of the poorest places on Earth. Somalia had a per capita GDP in 2009 of only $512. Nigeria was slightly higher at $1,092, while Indonesia seemed comparatively wealthy at $2,349. Such poverty presents obvious challenges in combating maritime piracy. Convincing individual fishers to forego the opportunity to realize a lucrative payoff remains difficult when there are few employment alternatives. Still, it does appear that an increased naval presence that now escorts ships between Somalia and Yemen (the Registered Transit Corridor) has been successful in reducing piracy attacks. Others though, suggest that armed guards and other counter-piracy efforts on the ships themselves have likely had a greater impact. In Somalia, where the number of piracy attacks has dropped substantially in 2012 and 2013, stability on the ground also has played an important role: CSP improved the country’s coding from 25 to 21 in 2012, due to positive institution changes. A better-functioning state and the presence of an African military force have managed to counter the piracy threat from the land side.

Conclusion

Maritime piracy continues to pose problems for international shipping. Despite successes in reducing incidents in the Greater Gulf of Aden, pirates now threaten oil shipments in the Gulf of Guinea. Rather than ransoming crews and or the ships themselves, corsairs in this region prefer to siphon the oil to other ships and then sell the fuel on the black market.[18] The cost to countries in the region is estimated to be many billions of U.S. dollars each year, and the Economic Community of West African States has recently discussed deploying naval forces to the region as part of an African emergency force.

While an increased maritime security presence in the Gulf of Guinea and elsewhere may help reduce attacks against shipping vessels, more must be done on land to reduce the individual incentive to turn to piracy. High rates of unemployment and low wages for those who manage to find work push individuals toward maritime crime. Policies that promote economic growth and foreign direct investment can help reduce the demand for piracy. Further, the international community should assist the governments of piracy-prone countries in rooting out corruption that enables criminal organizations to flourish. Better public-sector wages and increased transparency can help prevent local bureaucrats and security forces from facilitating piracy and protecting pirate organizations.

Figure 1: Global Piracy Incidents, 1993-2013

Figure 2: Piracy Incidents by Region, 1992-2012

Figure 3: The Five Most Piracy Prone Countries, 2003-2012

Figure 4: Locations of Piracy Incidents, 2012

(Yellow = Attempted Attack) (Red = Actual Attack)

Figure 5: The Arabian Sea

Figure 6: State Fragility Scores for Countries with and without Piracy

Figure 7: Per Capita GDP (Current US Dollars) for Countries with and without Piracy

Notes