Across the world, pirates are setting sail on the high seas again, costing shippers and insurers hundreds of millions of dollars, after declining since the 2009 hijacking of the Maersk Alabama off Horn of Africa.
Once contained by international policing efforts, piracy appears to be staging a comeback. According to a new report from watchdog group Oceans Beyond Piracy, seafaring incidents involving kidnap for ransom jumped last year, with West Africa and Asia becoming prime targets. The latter’s Sulu and Celebes Seas, neither of which saw any attacks at all in 2015, combined for 21 in 2016, the organization said in its State of Maritime Piracy report.
Overall, Asia led the way with 125 instances of piracy, while West Africa had 95: Those figures included armed robbery, hijackings, kidnappings and ship boardings.
The shores of Africa remain attractive to pirates, with an estimated 90 percent of all its exports and imports moving across the high seas. In East Africa alone, where Capt. Richard Phillips’ Maersk Alabama was hijacked in 2009, pirates originating from Somalia cost businesses nearly $2 billion last year in ransoms, security, insurance and other preventative measures. The hijacking was depicted in the 2013 movie “Captain Phillips,” starring Tom Hanks.
In 2009, Somali pirates established a “stock market” in Haradheere, a small fishing village northeast of Mogadishu, to fund their hijacking activities off the Horn of Africa. More recently, Somali outlaws successfully hijacked a commercial oil ship for the first time in five years, underscoring the rising dangers to vessels sailing the high seas.
Gerry Northwood, the COO at MAST, the maritime risk management consultancy, told CNBC there is still a considerable danger to commercial vessels.
“If presented with an opportunity, pirate investors will gladly return to the business model which proved so lucrative between 2008 and 2010,” said Northwood, a former Royal Navy counter-piracy commander. He referred to a time frame where piracy was rampant, reflected in the $7 billion the shipping industry was forced to cough up in 2010, according to OBP data.
‘Dipping their toe in the water once more’
At its peak, piracy in East Africa prompted NATO, the European Naval Force and U.S. Combined Maritime Forces to create an international coalition. Dubbed “Operation Ocean Shield” by NATO, the effort dramatically curbed attacks on the high seas, with not a single ship having been captured by pirates off the Horn of Africa between 2012 and 2016.
However, MAST’s Norwood said the rise in attacks could be seen as pirates “dipping their toe in the water once more.”
A NATO official told CNBC via email: “Given the complete lack of attacks during [2012-2016], Allies agreed that the mission had achieved its military objectives — but that the Alliance would keep a close eye on developments.” Should the need arise, however, allies could restart counter-piracy patrols, he added.
According to the U.S. Navy, certain vessels have been able to fend off attacks themselves, or at least hold off attackers until naval forces arrived on scene. Still, MAST data show that of 48 instances of piracy in the first quarter of 2017, 36 were either boardings or outright hijackings.
Piracy in the South China Sea
For pirates, trade ships remain to be an attractive target in Asian waters as well: In this year alone, MAST reported 17 maritime crime incidents across Indonesia, the Philippines and Malaysia. About $40 billion worth of cargo passes through the area annually, with at least $700 million in Indonesian coal exports going to the Philippines.
According to MAST, commercial vessels may already be rerouting around these islands, and any escalation of tensions in the area — such as China’s territorial dispute in the South China Sea — could disrupt trade and give pirates a new opening in the Far East.
“It is clear is that the maritime environment is linked to global events and not immune to crime and terrorism in their many forms,” Northwood said.