Pirate Stock Exchange Open for Business

For those still peddling the line that piracy is carried out by poor, starving Africans, victimized by evil European fisherman, this article not only provides evidence to the contrary, but speaks to the advanced nature of it in both a business and social sense.

It is a lucrative business that has drawn financiers from the Somali diaspora and other nations—and now the gangs in Haradheere have set up an exchange to manage their investments.

[...] “Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 ‘maritime companies’ and now we are hosting 72. Ten of them have so far been successful at hijacking,” Mohammed said. “The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we’ve made piracy a community activity.”
[...] “The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools.”

Reading the article, I almost think I’m reading Global Guerillas. As pirates continue to extend their reach offshore, and Western nations continue to needlessly devise ridiculous non-lethal anti-pirate weapons, despite the fact that the problem of piracy was solved centuries ago with firearms, it would seem naive to believe a few semi-coordinated naval ships unwilling to actually use lethal force will solve the problem. If anything, I’d wager that piracy will actually increase due to the international naval presence as that will drive up the profit margin for successful raids, similar to the failed American War on Drugs where the DEA serves only to maintain and ensure the profitibility of drugs.

Lastly, given a previous Wired article discussion of the international side of the business, this blogger wonders whether such a new “stock exchange” will further internationalize the business past the traditional diaspora connections and secondly, whether this could be an early attempt, or even precedent for similar “black stock exchanges” in other illicit businesses such as drugs, weapons, people and other smuggling for example. If decentralization and internationalization are key driving forces in crime and terrorism, it would seem that “publicly traded criminal enterprise” may be a logical extension. Readers?

Munro Ferguson

MF
Date

May 12th, 2009

Tags

,

Comments

1 Comment so far.
Add yours.

The Somali pirate intelligence network

Apparently based in London and extending to include Yemen, Dubai and the Suez Canal. I was, naively I suppose, a bit surprised to read of this new element of savvy. Given enough time, ample money and counter piracy pressure the “elites” among Somalia’s pirates will wisely adapt and evolve beyond their initial primitive measures.

The Somali pirates attacking shipping in the Gulf of Aden and Indian Ocean are directed to their targets by a “consultant” team in London, according to a European military intelligence document obtained by a Spanish radio station.

The document, obtained by Cadena SER radio, says the team and the pirates remain in contact by satellite telephone.

It says that pirate groups have “well-placed informers” in London who are in regular contact with control centres in Somalia where decisions on which vessels to attack are made. These London-based “consultants” help the pirates select targets, providing information on the ships’ cargoes and courses.

In at least one case the pirates have remained in contact with their London informants from the hijacked ship, according to one targeted shipping company.

Full story here.

Chirol

Chirol
Date

April 12th, 2009

Tags

, , ,

Comments

7 Comments so far.
Add yours.

Kaplan’s Latest on Piracy

Thanks to Chief Wiggum for a head’s up on Kaplan’s latest article in the New York Times entitled “Anarchy on Land means Piracy at Sea”
.

PIRACY is the maritime ripple effect of anarchy on land. Somalia is a failed state and has the longest coastline in mainland Africa, so piracy flourishes nearby. The 20th-century French historian Fernand Braudel called piracy a “secondary form of war,” that, like insurgencies on land, tends to increase in the lulls between conflicts among great states or empires. With the Soviet Union and its client states in Africa no longer in existence, and American influence in the third world at an ebb, irregular warfare both on land and at sea has erupted, and will probably be with us until the rise of new empires or their equivalents.

Somali pirates are usually unemployed young men who have grown up in an atmosphere of anarchic violence, and have been dispatched by a local warlord to bring back loot for his coffers. It is organized crime carried out by roving gangs. The million-square-miles of the Indian Ocean where pirates roam might as well be an alley in Mogadishu. These pirates are fearless because they have grown up in a culture where nobody expects to live long. Pirate cells often consist of 10 men with several ratty, roach-infested skiffs. They bring along drinking water, gasoline for their single-engine outboards, grappling hooks, ladders, knives, assault rifles, rocket-propelled grenades and the mild narcotic qat to chew. They live on raw fish.

The skiffs are generally used to launch attacks on slightly larger crafts, often a fishing dhow operated by South Koreans, Indians or Taiwanese, taking the crews prisoner. In turn, they use the new ship to take a larger vessel, and then another, working up the food chain. Eventually, they let the smaller boats and crews go free. In this way, over the years, Somali pirates have graduated to attacking oil tankers and container ships; the bigger the vessel, the higher the ransoms, which the pirate confederations can then invest in more sophisticated equipment.

Read the rest here.

Incidentally, Michael Waller at Politicalwarfare.org, who I recently saw speak, recommends “speaking” to pirates in a language they can understand. He recommends shoot-on-sight orders with which I wholeheartedly agree. A few dead pirates hanging from the bows of American warships wouldn’t hurt either. More on that soon.

Curzon

Curzon
Date

November 21st, 2008

Tags

, , , ,

Comments

25 Comments so far.
Add yours.

Hostile Takeovers or Good Corporate Governance?

Somali piracy has become a major news item, and most are blaming Somalia’s chronic anarchy. In truth, the pirates have become a highly organized business that originates in the stable civic society of Puntland in the north, not the chaos of the warring south.

le-ponant-mv-faina-sirius-star.jpg
Somali pirates who previously targeted small vessels have grown in sophistication and have now hijacked luxuy liners, container ships, and now supertankers.

Somali piracy has been headline news over the past half year. In April, pirates off the coast of Somalia took control of Le Ponant, a French luxury yacht. In October, the Ukrainian cargo MV Faina was captured, which included in its hold 25 armormed tanks. And earlier this month, a tanker carrying oil up to $100 million in value was hijacked off the coast of Somalia. Shipping “war insurance”—covered previously at CA here—is becoming expensive, as ships such as the Sirius and Le Ponant, previously thought to be beyond the grasp of pirates, are now seen as vulnerable. The range of the Somali pirates is growing as well. Until just last month, ships were thought to be safe if they kept 200 nautical miles from Somalia, but the Sirius Star was 450 nautical miles from the coast when it was hijacked in a lightening 16 minute takeover. Read how another tanker captain avoided capture with S-manuevers and other unpredictable navigation here.

Some analysts write fearful tracts that the pirates have links with terrorists and extremists, that the chaos is a direct result of international neglect of Somalia, and try to link pirates to the islamist insurgency that control much of the south or the recent terrorist bombings in Somaliland. This is nonsense. The origins of Somali piracy are not found in the southern half of the country, where a “transitional government” is dueling the Union of Islamic Courts with the half-hearted assistance of the Ethiopian military. Somali piracy originates in Puntland, a self-declared autonomous region of Somalia at the horn, hailed for years by policymakers as a model of a stable Somali state. Read the rest of this entry »

Curzon

Curzon
Date

October 2nd, 2008

Tags

, , ,

Comments

2 Comments so far.
Add yours.

Kaplan on the Benefits, and Innocence, of Piracy

As U.S. Navy warships continue to surround the Ukrainian cargo ship holding weaponry in the Gulf of Aden recently hijacked by Somali pirates—who, realizing the reality of their situation, decrease their ransom daily—our patron saint Robert D. Kaplan writes about an unintended benefit of piracy: multilateral cooperation among the world’s navies.

The one upside of piracy is that it creates incentives for cooperation among navies of countries who often have tense relations with each other. The U.S. and the Russians cooperate off the Gulf of Aden, and we might begin to work with the Chinese and other navies off the coast of Indonesia, too. As a transnational threat tied to anarchy, piracy brings nations together, helping to form the new coalitions of the 21st century.

Kaplan also gives a beautiful summary of what life is like as a pirate, abridged and bolded below by myself:

Somali pirate confederations consist of cells of ten men, with each cell distributed among three skiffs that are ratty, and roach-infested, and made of decaying wood or fiberglass. A typical pirate cell goes into the open ocean for three weeks at a time, navigating by the stars, equipped with only drinking water, fuel, grappling hooks, short ladders, knives, AK-47 assault rifles, and rocket-propelled grenades. They bring millet and qat (the local narcotic of choice), and they use lines and nets to catch fish, which they eat raw. One captured pirate skiff held a hunk of shark meat so tough it had teeth marks all over it. Their existence is painfully rugged.

The classic tactic of Somali pirates is to take over a slightly larger dhow, often a fishing boat manned by Indians, Taiwanese, or South Koreans, and then live on it, with the skiff attached. Once in possession of a dhow, they can seize an even bigger ship. As they leapfrog to yet bigger ships, they let the smaller ships go free. Because the sea is vast, only when a large ship issues a distress call do foreign navies know to look. If Somali pirates hunted only small boats, no warship would know about the piracy.

Off-hand cruelty is the pirates’ signature behavior. “Forget the Johnny Depp charm,” one Navy officer told me. “Theirs is a savage brutality not born of malice or evil, like a lion killing an antelope. There is almost a natural innocence about what they do.”

Chirol

Chirol
Date

June 3rd, 2008

Tags

, , , ,

Comments

10 Comments so far.
Add yours.

Bye Bye Sovereignty

The UN resolution allowing other countries to violate Somalia’s territorial waters in pursuit of pirates (as discussed before here) has passed.

The UN Security Council has unanimously voted to allow countries to send warships into Somalia’s territorial waters to tackle pirates. The resolution permits countries that have the agreement of Somalia’s interim government to use any means to repress acts of piracy for the next six months.

Somalia’s coastal waters are near shipping routes connecting the Red Sea and the Indian Ocean, and the country’s government is unable to police its own coastline. Consequently, piracy is rife off Somalia’s 1,800 mile-long coast, says the BBC UN correspondent Laura Trevelyan. The resolution was drafted by France, the US and Panama.

Our correspondent says France originally wanted to expand the motion to allow piracy to be tackled in other areas, such as West Africa. China, Vietnam and Libya said they voted for the measure because it only applies to Somalia, and does not affect the sovereignty of other countries. But diplomats say the Security Council action is significant because it is using the force of international law to allow navies to chase pirates and armed robbers.

Security Council envoys are holding separate meetings in Djibouti with the Somali government and the opposition at a luxury hotel on the shores of the Red Sea.

Once you go down this route, what are the chances it will be undone? How long will it be until Somalia could realistically fight piracy as well as the West? I imagine the resolutions 6 month period of validity is a direct result of tricky questions like this.

Chirol

Chirol
Date

May 3rd, 2008

Tags

, , , ,

Comments

6 Comments so far.
Add yours.

Somalia Piracy Followup

Recently, I discussed the latest pirate attack in Somalia’s territorial waters and asked a series of questions about possible responses to it. My questions have been answered:

In February, the United Nations adopted a resolution urging member states with ships and aircraft adjacent to the coast of Somalia to be vigilant about any incidents of piracy and to protect merchant shipping, particularly involving humanitarian aid. Several nations, including the United States, are now seeking U.N. approval to go beyond international waters into Somalia’s territorial waters.

The U.S. and France introduced a draft resolution to Security Council members at a closed meeting Monday afternoon. It is co-sponsored by Britain and Panama, according to AP. The resolution allows nations to enter Somalia’s territorial waters to board, search and seize and arrest those onboard ships suspected in engaging in piracy, according to AP. Under international law, territorial waters generally extend about 14 miles from a sovereign country’s shores.

While this is not as much new as a formalization of the status quo based on Somalia’s decades of anarchy, it is a potentially important precedent whereby the UN, spearheaded by the West, infringes upon the sovereignty of a country when that country is unable to properly police and control its territory. How many more such resolutions may we see regarding other African or Asian nations?

Chirol

Chirol
Date

April 21st, 2008

Tags

, , , ,

Comments

17 Comments so far.
Add yours.

Yet Another Pirate Attack near Somalia

With the high profile abduction of a French Yacht earlier this month, it seems the fun never stops off the coast of Somalia, if by fun, you mean piracy. According to the AFP,

A major Japanese oil tanker was damaged Monday in a chase by heavily-armed pirates off the coasts of Somalia and Yemen but no one was injured, officials and crew members said. The attack came a day after a Spanish tuna fishing boat carrying a crew of 26 was seized by pirates in waters off Somalia, which has not had an effective central government for more than 17 years.

With attacks like this seemingly increasing, or at least their publicity increasing, it seems unusual that more coordinated efforts are not being proposed to deal with at least this one problem area. While piracy is indeed nothing new, its impact on global trade and security is a large one. With that in mind, I pose the following questions:

1) Will the proliferation of security companies and the outsourcing of security extend to maritime security?

2) Will the US Navy’s unparalleled role in policing the seas ever get the recognition and appreciate it deserves?

3) Will other countries finally chip in navally, or at least financially or is it not yet financially worthwhile?

While many analysts have noted nightmare scenarios like attacks in the Strait of Hormuz or of Malacca by terrorists, is it not equally likely, or at least plausible, that a similar scenario could occur due to piracy (although the ultimate effect would be unintentional)? With rising energy costs raising the cost of transportation and thus the goods which are transported, when will it make financial sense to do more? Are there any coordinated international efforts to police the seas? This is Younghusband territory, and with that, I hope he and readers can chime in.