Maritime Guns On Hire Adapt To Change

Cash-strapped maritime security firms are being forced to use fewer costly elite guards and to diversify into other businesses such as cyber security, as a steep decline in Somali pirate attacks and hotter competition erode fast-thinning margins.

Hundreds of security firms sprang up over the past seven years to offer protection to shipping companies, with scores of merchant vessels being boarded and sailors taken hostage in pirate raids off the coast of conflict-torn Somalia.

However, attacks in the Gulf of Aden and Indian Ocean have dropped from a peak of 237 in 2011 to just 10 in the first nine months of this year, the lowest since the piracy scourge began in 2008, according to the International Maritime Bureau.

The fall has been helped by using armed guards, deploying naval forces and defending ships with barbed wire or fire hoses.

The cost of using guards has also halved as the sector has become more competitive, which though good for ship owners is bad for security firms.

“Day rates for embarked teams are continuously being squeezed to rock bottom,” said retired rear admiral Vasilis Politis, managing director of Greek armed guard company Marine Security International.

The price for a security team to protect a ship has slumped from an average of $40,000 per voyage to around $18,000-$20,000, said Gerry Northwood, who previously commanded the British Royal Navy’s Counter Piracy Task Group which detained 13 Somalis after an attack on a tanker in 2012.

A typical team comprises three or four guards, working round the clock and armed with semi-automatic weapons to maximize fire power and rifles for accuracy and range.

Faced with a tougher operating environment, some firms have switched from using former U.S. and British marines and special forces to cheaper alternatives including guards from India, the Philippines and Estonia, said Ian May, Asia manager for Protection Vessels International.

Declining revenue has encouraged industry consolidation. Ambrey Risk, one of the biggest firms, bought the maritime security division of rival Drum Cussac this month, while Gulf of Aden Group Transits shut in July.

Peter Cook, chief executive of the Security Association for the Maritime Industry (SAMI), said its membership had fallen from a high of 180 companies in November 2012 to 140, and he anticipated further falls.

Companies are trying to expand into new areas including cyber security for ships and the offshore industry, port security and training coast guards.

Some are also offering protection in areas where piracy has increased such as West Africa, with 23 attacks recorded up to September this year, and Asia, where almost 100 attacks were reported in the waters off Singapore, Indonesia and Malaysia.

However, restrictions on privately contracted armed guards in West Africa and the low level of violence normally used in attacks in Southeast Asia mean firms cannot necessarily replicate their Indian Ocean operations, said Mark Thomas, Asia Pacific business development manager at Dryad Maritime in Singapore.

Despite the drop in attacks, the Gulf of Aden still remains vital for the security business, with a fifth of global trade passing through it and at least 40 per cent of ships transiting the area had armed guards in July, according to SAMI.

Former British naval captain Northwood, who is chief operating officer at Maritime Asset Security and Training, said there were still probably two or three cases of Somali pirate boats probing the defenses of ships a month.

For now, naval patrols are set to continue. The European Union expects to extend its anti-piracy operations for another year and NATO is extending its to the end of 2016.

“If companies stop using armed guards and the naval presence disappears then we would not have to wait for too long for another wave of successful attacks,” said Madis Madalik, chief operating officer of Estonian-based ESC Global Security.

In another news, the European Court of Human Rights says France violated the rights of Somali pirates who had attacked French ships and has ordered compensation for them over judicial delays.

The nine Somali pirates should get thousands of euros because they were not immediately brought before a French judge, the court ruled.

One is to get 9,000 euros (£7,000) and the others sums of up to 7,000 euros.

The judges faulted France for keeping them in custody for an extra 48 hours.

The pirates had held French citizens hostage after seizing a French-flagged cruise ship and a French yacht in 2008.

The French military captured the pirates on the Somali coast in two operations, after the hostages had been released for ransoms of $2.1m (£1.3m) and $2m.

Indian Ocean shipping has been plagued by pirate gangs operating off Somalia in recent years, but international naval action in the region has sharply reduced the attacks.

Days in custodyBefore transferring the pirates to France, the authorities held one group for four days and the others for six days and 16 hours.

But the extra 48 hours of custody on French soil violated the pirates’ right to liberty and security under the European Convention on Human Rights, the court ruled.

The convention’s Article 5.3 “was not designed to give the authorities the opportunity to intensify their investigations for the purpose of bringing formal charges against the suspects”, a court statement said.

The judges argued that the time between their arrest and transfer to France was already enough for France to draw up charges, instead of delaying for another 48 hours.

Court judgements are binding on signatories to the convention.

The judges did not challenge France’s right to arrest the pirates inside Somali territory, under UN anti-piracy rules.

Source Credits: Keith Wallis in Reuters, BBC News Europe

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