NORTH AMERICAN PANELNORTH AMERICAN PANEL March 21, 2011

UPDATE ON UPDATE ON PIRACYPIRACY

JOSEPH ANGELOMANAGING DIRECTOR

PIRACY OVERVIEWPIRACY OVERVIEW

IMB 2010 GLOBAL PIRACY REPORT

• 53 ships hijacked (49 in 2009)

• 1,181 seafarers captured (1,050 in 2009)

• 8 killed

• 445 reported attacks (410 in 2009)

• Somalia accounts for 92%

PIRACY OVERVIEWPIRACY OVERVIEW

2010 Worldwide Statistics (IMB)- 445 attempted incidents- 107 fired upon- 196 boardings- 53 hijackings

Major Locations (IMB)- 217 Somalia/Gulf of Aden/Red Sea- 40 Indonesia- 31 South China Sea- 23 Bangladesh- 19 Nigeria- 18 Malaysia

PIRACY OVERVIEWPIRACY OVERVIEW

Ship Type (IMB)

2009 2010

109 Bulk carrier 80

63 Containership 74

53 General cargo 63

46 Chemical carrier 63

41 Tanker 43

22 Product carrier 33

16 Tug 20

16 Fishing vessel 19

PIRACY - SomaliaPIRACY - Somalia

• 2009 Statistics (IMB) - 217 attempted incidents

- 114 fired upon- 1 boarded (not hijacked)- 47 hijackings (21% of incidents)

• 2010 Statistics (IMB) - 219 attempted incidents- 100 fired upon- 16 boarded (not hijacked)- 49 hijackings (22% of incidents)

PIRACY - SomaliaPIRACY - Somalia

Most recent 2011 statistics as of March 16 (IMB)

• 83 incidents

• 14 hijackings

• 250 seafarers taken hostage

• Currently 28 vessels and 587 seafarers being held hostage

Northernmost Attack

15 Jan 11

MV SAMHO JEWELRY

(Pirated)

Easternmost Attack

5 Dec 10

MV JAHAN MONI (Pirated)

2005 – 165 nm Off Coast

2006 – 200 nm Off Coast

2007 – 200 nm Off Coast

2008 – 445 nm Off Coast

2009 – 1,200 nm Off Coast

2010 – 1,500+ nm Off Coast

1,40

0 nm

1,450 nm

1750

nm

Haradeere

GEOGRAPHIC SPREADGEOGRAPHIC SPREAD

065E 15S

Southernmost Attack

28 Dec 10

FV VEGA 5

(Pirated)

INCIDENTS (JULY 2010 – JAN 2011)INCIDENTS (JULY 2010 – JAN 2011)

15ºS

10ºS

05ºS

0ºN

05ºN

10ºN

15ºN

20ºN

25ºN

035ºE 040ºE 045ºE 050ºE 055ºE 060ºE 065ºE 070ºE

TRANSIT PATTERNSTRANSIT PATTERNS

• N / S transit of Arabian Sea vessels keeping ever further East – running out of Ocean!

• Many vessel now transiting up the 200m contour of the Coast

Overall Situation – Pirate ActivityOverall Situation – Pirate Activity

0

2

4

6

8

10

12

14

16

Dec-0

7

Feb-0

8

Apr-0

8

Jun-

08

Aug-0

8

Oct-08

Dec-0

8

Feb-0

9

Apr-0

9

Jun-

09

Aug-0

9

Oct-09

Dec-0

9

Feb-1

0

Apr-1

0

Jun-

10

Aug-1

0

Oct-10

Dec-1

0

Nu

mb

er o

f In

cid

ents

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Su

cces

s R

atio

Pirated and Attacks

Pirated Only

Attacks Only

Stable Trend

Historical Somali Piracy Average

Pirate Success Ratio

EMERGING TRENDSEMERGING TRENDS

• Motherships

• Citadels

• Proliferation of Onboard Armed Security Teams

• More hostile actions by pirates

RECENT EVENTSRECENT EVENTS

• Republic of Korea and Malaysia retake Samho Jewelry and Bunga Laurel and freeing their crews from captivity

• Somali pirates execute a seafarer on Beluga Nomination

• Reports of torturing seafarers, hanging them over the ship’s side by ropes around their ankles with their heads under water and keelhauling

• One Earth Future Foundation report estimates that piracy is costing the global economy between $7 - $12 billion per year

OVERALL PHILOSOPHYOVERALL PHILOSOPHY

• Eliminating piracy is a SHARED RESPONSIBILITY between the maritime industry and governments,

BUT,

• Establishment of LAW AND ORDER on the high seas is the responsibility of governments

INTERTANKO FOCUSINTERTANKO FOCUS

Actions members can take

to protect themselves

Actions we want

governments to take

to protect our members

FOCUS AREAS - INDUSTRYFOCUS AREAS - INDUSTRY

• Increased compliance with Best Management Practices (BMP3)

• Updating BMP3, as necessary

• Provide Merchant Navy Liaison Officers (MNLO) to Northwood (MSCHOA)

• Citadels

• Armed guards

• Include extra costs in Worldscale

COMPLIANCE WITH BMP3COMPLIANCE WITH BMP3

COMPLIANCE WITH BMP3COMPLIANCE WITH BMP3

• According to MSCHOA, currently about 44% of ships transiting high risk area register with MSCHOA

• Overwhelming majority of ships hijacked did not register with MSCHOA or report to UKMTO

• Compliance with BMP3 significantly reduces chances of being hijacked

• INTERTANKO strongly recommends compliance with BMP3 – in particular registering, reporting and operating within the IRTC

CITADELSCITADELS

• Between 01 Sep 10 and 20 Jan 11 there have been 21 recorded incidents of citadels being used by merchant crews under attack

• Reporting suggests that the citadel was decisive in foiling 14 of these attacks

• Pirates developing tactics to breach citadels

• Advise issued by the military regarding the use of CITADELS on MSCHOA web site http://www.mschoa.org/Secure/ATM/Pages/Citadel.aspx (Password protected)

ARMED GUARDSARMED GUARDS

• The Incident database shows 21 recorded incidents since 16 Dec 08 where onboard armed security were involved in deterring attacks

• There are no recorded incidents of vessels with onboard armed security teams being pirated.

ARMED GUARDSARMED GUARDS

Major concerns

• Legality for flag states and port states

• Serious potential safety concerns

• Major liability and insurance issues in the event of death or injury

• Risk of collateral damage

• Potential to provoke an escalation of fire power by the pirates (now using RPGs)

ARMED GUARDSARMED GUARDS

INTERTANKO position regarding the use of armed guards

• INTERTANKO believes it is the responsibility of the international navies to ensure the right of free passage on the high seas including the use of vessel protection detachments on merchant ships

• INTERTANKO does not advocate the arming ships' crews

• INTERTANKO believes that the use of private armed guards or private security forces onboard merchant ships has to be a matter for each individual owner or manager to assess as part of their own voyage risk assessment

WORLDSCALEWORLDSCALE

Re-raise with the Worldscale Associations (through our Worldscale Committee) the various aspects of the extra costs caused by piracy activities and their potential reflection in the Worldscale system, including:

– extra distance sailed– extra insurance costs– cost of piracy defense equipment– extra costs of crew pay

FOCUS AREAS - GOVTSFOCUS AREAS - GOVTS

• Increased "Government Will" to eradicate piracy off Somalia

• Cease the use of mother ships

• Increased prosecution of convicted pirates

• Increased naval assets in the region

• Increased public awareness to drive the desired increase in "Government Will“

• Action to address the root cause of piracy ashore in Somalia

MOTHERSHIPSMOTHERSHIPS

• Mother ships give the pirates operational range, duration and tactical use of hostages

• Range now includes most of the Indian Ocean

• More than 20 ships reported being used as motherships at different times

• Discussing options with military to “immobilize” motherships

• Major concern is reprisals against crew held hostage on motherships

PROSECUTIONPROSECUTION

• Only 3 countries involved in counter-piracy activity have "conspiracy to commit piracy" on their statute books

• For others, carrying fire arms, grappling hooks, ladders, etc. is not a criminal offence on the high seas

• Capture and release policy has no effect upon piracy

• 8 out of 10 pirates captured are released

PROSECUTIONPROSECUTION

• 29 convicted in Kenya

• 60 currently being tried in Kenya

• 17 acquitted in Kenya

• 11 convicted in Seychelles

• 9 charges dismissed in Seychelles

• 13 convicted in Yemen

• 1 convicted in the US

ASSETS ASSETS

Currently about 30 assets in the region

• European Union established an EU Naval Force(EUNAVFOR) Operation Atalanta

• Combined Maritime Force established CTF 151

• China, India, Malaysia, Rep of Korea, Russia and others

• Standing NATO Maritime Group 1 (SNMG1)

How long will the assets remain???

CONVOY ESCORT PROGRAMCONVOY ESCORT PROGRAM

• Pilot project initiated by insurance industry• 18 assets to provide convoy service in IRTC• Assets under flag of legitimacy• Under tactical command of military• $27 million initial start-up costs (EU funded?)• Average cost for transit $27,500 for three days escort• Cost neutral for industry – would include 7 day War Risk

Additional Premium and Kidnap/Ransom Insurance

• Some concerns raised

- would military assets remain in the region??

- should industry pay for eradication of piracy??- is CEP cost-effective- legal implications related to international/territorial waters

PIRACY CAMPAIGNPIRACY CAMPAIGN

• Contracted with PR firm to increase public, business and government awareness

• Phase One –- Press releases after incidents- Interviews with press and news media- Ad in Financial Times and World Street Journal- SaveOurSeafarers web site- Letters to UN SG, Heads of State and EU President

• Phase Two –- Social media (Blog, Twitter, Facebook, etc)- Actively engage policy makers- Further ads, press releases and interviews- Seek high profile name to assist in cause - Johnny Depp??

RESULTSRESULTS

Results, thus far

• >21,500 visits SOS website - 125 countries

• >5,800 letters sent

• (+1,400 letters over last weekend alone)

• 27% of website visitors sent a letter      

UN ACTIONUN ACTION

• United Nations Security Council Resolution 1851 - Contact Group on Piracy of the coast of Somalia (Jan 2009)

• Four Working Groups –

- WG1, Military and operational coordination

- WG2, Legal aspects, including arrest, detention and prosecution

- WG3, Industry awareness and lessons learned

- WG4, Diplomatic and public information

IMO ACTIONIMO ACTION

IMO Maritime Safety Committee updated guidance to governments and industry

• MSC.1/Circ.1333 - PIRACY AND ARMED ROBBERY AGAINST SHIPS “Recommendations to Governments for preventing and suppressing piracy and armed robbery against ships”

• MSC.1/Circ.1334 - PIRACY AND ARMED ROBBERY AGAINST SHIPS “Guidance to shipowners and ship operators, shipmasters and crews on preventing and suppressing acts of piracy and armed robbery against ships”

CONCLUSIONCONCLUSION• Register with MSCHOA

If they don’t know your intentions, they cannot assist you!!

• Report regular ship position to UKMTO

If they don’t know where you are, they can’t help you!!

• Assess and utilize the Best Management Practices

• Employ Self Protective Measures

THANKTHANKYOU!!YOU!!

WWW.INTERTANKO.COMWWW.INTERTANKO.COM