Insurance Jottings
World’s Biggest Shipping Line Demands Action Against Piracy Surge Off West Africa
The world’s biggest shipping company demanded a more effective military response to surging pirate attacks and record kidnappings off the coast of West Africa.
The number of attacks on vessels globally jumped 20% last year to 195, with 135 crew kidnapped, the International Maritime Bureau’s Piracy Reporting Centre said in a report on the 13th January. The Gulf of Guinea accounted for 95% of hostages taken in 22 separate instances, and all three of the hijackings that occurred, the agency said.
The attacks have pushed up insurance and other costs for shippers operating off West Africa, with some resorting to hiring escort vessels manned by armed navy personnel. A P Moller-Maersk A/S, which transports about 15% of the globe’s seaborne freight, said decisive action needs to be taken.
“It is unacceptable in this day and age that seafarers cannot perform their jobs of ensuring a vital supply chain for this region without having to worry about the risk of piracy,” said Aslak Ross, head of marine standards at Copenhagen-based Maersk.
“The risk has reached a level where effective military capacity needs to be deployed.”
The Gulf of Guinea encompasses a vast tract of the Atlantic Ocean which is traversed by more than 20,000 vessels a year, making it difficult for under-resourced governments to police. Fringed by an almost 4,000-mile-long shoreline which stretches from Senegal to Angola, it serves as the main thoroughfare for crude oil exports and imports of refined fuel and other goods.
Twenty-five African governments, including all those bordering on the gulf, signed
the Yaoundé Code of Conduct in 2013 to tackle piracy. It aims to facilitate information sharing and established five maritime zones to be jointly patrolled, but has been only partially implemented and most navies remain focused on safeguarding their own waters.
Bertrand Monnet, a professor of criminal risk management at France’s EDHEC Business School who has studied piracy in Nigeria’s oil-producing Niger Delta region for 15 years, estimates that a maximum of 15 bands operate offshore West Africa, each comprising 20 to 50 members.
“The Delta both provides the launch area for the pirates but is also where they go back to when they have their kidnapped crew” to negotiate ransoms, said Max Williams, security firm Africa Risk Compliance’s London-based chief operating officer.
Suspects Arrested
Nigeria, the regional powerhouse, has taken the lead in preventing attacks and its navy says it has arrested more than 100 suspects who are facing trial under a new anti-piracy law – the first of its kind in the region. The government plans to commission nearly US$200 million of new equipment this year, including helicopters, drones and high-speed boats, to boost the navy’s capabilities.
Nigeria is committed to “ensuring that this menace of piracy is gotten rid of in our waters, so that those with legitimate business in shipping, fishing, and oil and gas can go about their business without fear,” Rear-Admiral Oladele Daji, commander of the Nigerian Navy’s western fleet, said in an interview.
Many shipowners favour a more muscular international effort modelled on the military response to hijackings offshore Somalia, which was the global epicentre of piracy from about 2001 to 2012. Armed guards and warships dispatched by the European Union, NATO and a US-led task force to protect vessels traveling through the Suez Canal, one of the world’s busiest trade routes linking Europe to Asia, helped bring the problem under control.
If national governments focus on their territorial waters –- the 12 nautical miles (14 statute miles) from their shores –- major naval powers could reduce piracy further afield in the gulf by deploying two or three frigates equipped with helicopters, said Jakob Larsen, head of maritime security at the Baltic and International Maritime Council, a Copenhagen-based shipowners’ group.
He considers such support unlikely because the sea routes aren’t as strategically important as those off Africa’s east coast. “There is little international appetite for getting involved in Nigeria’s security problems,” he said.
The Liberian Shipowners’ Council urged the Nigerian authorities to disrupt the pirates’ onshore criminal activities. Improving employment prospects for impoverished coastal communities would reduce the threat of piracy in the longer term, but won’t address the immediate problem, said Kierstin Del Valle Lachtman, the council’s secretary general.
Attacks Spread
While the west African attacks were initially concentrated offshore Nigeria, they’ve since spread to waters off Benin, Equatorial Guinea, Gabon, Ghana, Togo and Cameroon, according to Kamal-Deen Ali, executive director of the Accra-based Centre for Maritime Law and Security Africa and a former Ghanaian naval officer.
The number of violent attacks in the Gulf of Guinea has remained fairly consistent over the past decade, but abductions of more than ten people have become increasingly commonplace, said Dirk Siebels, senior analyst at Denmark-based Risk Intelligence.
The pirates are increasingly operating deeper out to sea, with kidnappings on average taking place 60 nautical miles offshore in 2020, according to the IMB. The furthest out took place in mid-July, when eight machine-gun wielding pirates boarded a chemical tanker off Nigeria’s coast and seized 13 crew members before fleeing. Only unqualified seamen remained on the Curacao Trader, which was left adrift 195 nautical miles from the coast. The crew were freed the following month.
“The perpetrators of such incidents are perfectly aware there is almost no risk of being caught,” said Munro Anderson, a partner at London-based maritime security firm Dryad Global. “That is precisely the kind of incident an international naval coalition could mitigate.”
Zurich Insurance to Stop Insuring Russia’s Nord Stream 2 Project: Sources
Zurich Insurance Group will drop out of Russia’s Nord Stream 2 project in the face of looming US sanctions against European companies who support construction of the US$11 billion gas pipeline, two sources familiar with the situation said.
Earlier this month the US State Department told companies which it suspects are helping to build the pipeline that they face a risk of sanctions as the outgoing Trump administration prepares a final round of punitive measures against the project.
Zurich, which has a big US business, is one of around 20 insurers in a consortium backing the project, one person familiar with the situation said.
The Swiss insurer declined to comment on the 16th January on specific customers, but said: “Zurich has a comprehensive compliance framework in place and is committed to fully comply with any applicable sanctions regulations.”
The Nord Stream 2 consortium said on the 15th January that preparatory work to complete the subsea gas pipeline to Germany in Danish waters can go ahead, pointing to the latest notifications by the Danish Maritime Authority.
Denmark’s Nautiskinformation notified shippers on the 14th January that prohibited areas near Bornholm would be established beginning on the 15th January for the pipe laying vessel Fortuna, assisted by construction and supply vessels.
Construction of Nord Stream 2 was initially halted in December 2019 following a sanctions threat from the United States, which wants to cut Europe’s dependence on Russian energy and sell its own liquefied natural gas to the region.
Nord Stream 2, led by state energy company Gazprom , is designed to double capacity of the existing undersea Nord Stream gas pipeline from Russia to Germany to 110 billion cubic metres per year, more than half of Russia’s overall pipeline gas exports to Europe.
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