Plunge in Gulf of Aden piracy incidents comes at a huge cost

The piracy-prone Gulf of Aden at the Horn of Africa has seen attacks decrease sharply over the last five years, but the positive development has come at a massive cost, according to data cited by Intertanko.

Tim Wilkins, regional manager Asia-Pacific & Environment Director at Intertanko’s Asia representative office in Singapore, observed that the success of curbing piracy at the Gulf of Aden has led to an economic cost of $2.2 to 2.3bn in 2014 alone.

Among the total, around $1.2bn went to hiring armed guards from PMSC (private military security companies), $805m on government and civil society costs such as naval patrols, payment of ransoms, counter-piracy operations, and $175m on insurance and labour.

“The Gulf of Aden is a success story that has come at a price,” Wilkins said at a piracy seminar held on Friday in Singapore, co-organised by Singapore Maritime Foundation (SMF) and General Insurance Association of Singapore (GIA).

“Back in 2007-2008 there was a significant rise in piracy in the Gulf of Aden and off Somalia coast. Today, we have witnessed a staggering change and dramatic drop in incidences since 2010,” he said.

While the Gulf of Aden has seen a drop in piracy incidences, the same cannot be said over at Gulf of Guinea, West Africa, a region active in oil exports. Wilkins said the pirates’ mode of operation in the Gulf of Guinea is much more aggressive compared to the Gulf of Aden.

“Regretably the problem of piracy in the Gulf of Guinea will not go away soon, mainly arising from government instability in the region,” he said.

There have been more and more attacks in the Gulf of Guinea as the pirates have seemingly realised the rich source of finance especially by targeting tankers carrying valuable oil cargoes.

Elsewhere, there could be signs of emerging threats in the Latin American region particularly in the Caribbean Sea, Wilkins noted, though the incidentw are mostly still confined to petty thieves and robberies.

He highlighted that the community at large would need to tackle the piracy problem from three key approaches, namely government support of naval forces, developments ashore particularly in countries where pirates originated, and best management practices including self-protection measures onboard ships.