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It could be said that piracy gave birth to the property and casualty insurance industry. When ship owners and cargo shippers met at Lloyd’s Coffee House in London in the late 1600s, the talk was about the many perils of the sea, including the large numbers of pirates roaming the oceans.
Then as now, piracy was not strictly a private matter. While some piracy is undertaken simply for financial gain, often it is a politically motivated venture. Sir Francis Drake was a pirate when attacking private Spanish vessels and stealing their cargo,s but was a British hero when he helped defeat the Spanish Armada in 1588. To the Spanish he was always a pirate, but to the British he was always a hero.
Today the pirates of Somalia are also viewed in two ways. The citizens of the region’s coastal areas see the pirates bringing much needed money and goods into their communities because Somalia has a failed government that does very little for the local citizens. The rest of the world views the pirates as ruthless terrorists who are thwarting international trade.
Similar incidents are taking place in Nigeria, where pirates are holding oil tankers and their crews not only for ransom money but also to make a political statement about the government’s removal of valuable oil resources from a very poor region and its failure to return any of that money to people who are suffering.
This is not just an African concern. Bangladesh had serious piracy problems in 2003 and, although the situation has improved, it continues to be a highly monitored area.
Extremely valuable property combined with poverty and unstable political climates leads to piracy, and piracy leads to significant disruption to international trade.
This month we spoke with two experts to provide a bird’s eye view of this topic. Sarah Katz is a kidnap/ransom underwriter for Victor O. Schinnerer & Company, and Captain Darren Collins commands vessels owned by the Maersk Line.
Ms. Katz says, “the number one risk factor is waters plied [sailed], as exposure is significantly higher in the Gulf of Aden [Somalia], portions of the Red Sea and Gulf of Guinea [Nigeria] than in other areas.”
In those areas, not all ships are equally targeted by pirates.
Captain Collins explains, “The two predominant factors that increase a vessel’s likelihood of being attacked by pirates are slow speed and low freeboard [distance between the water line and the deck of the ship]. A slow-moving ship that has 10 feet of freeboard is far more likely to be targeted than a faster moving ship with 60 feet of freeboard. The slow-moving ships with low freeboard are easier to ‘catch,’ and pirates can gain access to the ship more quickly.”
Once a vessel is boarded, there is often very little resistance by the crew. “Ship captains can no longer carry guns on board a vessel to protect themselves from pirates, as once was the custom. Because of the increased level of violence around the world, countries will not allow a ship to enter their port if they know the ship is armed,” according to Captain Collins.
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