In Asian Waters, Sea Pirates Eschew Eye Patches, Steal Ships via Internet

An upswing in the number of piracies worldwide is exposing the tip of the iceberg of a problem that is becoming increasingly unstoppable in Asia.

Last month's jailing of 70 Chinese seamen convicted of piracy by the Philippines follows a violent encounter off Subic Bay in February when the Philippine Navy shot up a rogue Chinese vessel suspected of smuggling.

And the Philippine Navy is being alerted to a swelling number of reports of Chinese vessels robbing international merchant ships in the nation's waters in the past year.

Observers note that acts of piracy were not an issue in the northern Philippines until the United States Navy and Air Force withdrew from the main Philippines island of Luzon in 1992.

A recent report by the London-based International Maritime Bureau (IMB), a United Nations-supported organization that investigates maritime and shipping crimes, notes that there were 170 reported cases of piracy worldwide in 1995. Of those, 127 incidents occurred in waters in Southeast Asia, East Asia, and South Asia - location of the world's biggest shipping lanes.

The Philippines recorded 177 attacks in its waters in 1993. But only a few of those were reported to the IMB.

Piracy is no longer confined to a band of robbers boarding ships, tying up the crew, and stealing money and goods. The romanticized image of a sea robber sporting an eye patch and wielding a sword and rifle is confined to the screen.

Shipping experts now say the modern pirates are well-suited businessmen, sitting in plush offices, stealing ships and goods, sometimes even via the Internet.

What has become a recent phenomenon is the wholesale stealing or hijacking of ships. The act crosses all borders and involves all nationalities but the masterminds hide behind ghost companies, many of them based in Singapore.

The saga of any stolen ship stretches across the Asian seas. They are hijacked, renamed, and easily reflagged under Panamanian or Honduran registry. The cargo is then sold in another port, and the ships resold elsewhere.

Such phantom ship frauds, says John Martin, manager of the IMB's regional Piracy Center in Kuala Lumpur, Malaysia, "cost victims in Southeast Asia $50 million at the very least" in the last three years.

Most vulnerable areas

The areas pinpointed by the IMB as the most vulnerable to attacks and hijackings include the South China Sea area between the northern Philippines, China, Taiwan, and include Hong Kong and Macau; the Gulf of Thailand; the sea north of Java in Indonesia; and the narrow Strait of Malacca off Singapore, where 60 percent of the world's merchant tonnage passes.

Many are disturbed by the nature of these attacks. The Anna Sierra, carrying a cargo of 12,000 tons of sugar bound for Manila, was hijacked in the Gulf of Thailand in September 1995. Its crew of 25 was cast adrift on a raft with no food, water, or instruments. The crew was picked up by a Vietnamese trawler. The ship's name was changed to Arctic Sea and sailed for Beihai, a port in southern China.

The vessel was detained at Beihai at the request of the IMB. The cargo was found to have been presold to a buyer who paid an advance of $1 million to the pirates. The vessel is still in Beihai under litigation and the pirates are still on board.

Another vessel, the Greek-owned Chrysanthi, was hijacked out of Singapore in 1994. Its cargo of sugar was off-loaded in Indonesia, and a new crew came on board. Carrying a new name, Windsor 3 sailed for Penang, Malaysia, where it loaded rubber for Beihai. It then changed its name to Asoke II. When the IMB alerted the Chinese authorities to arrest the ship, it escaped in the dark, and the IMB believes it is roaming around the region under another name.

Shipping experts say the favorite destinations of hijacked ships are ports in China and northern Philippines where stolen goods are easily off-loaded with the help of local politicians, businessmen, and even military officials.

"Everyone's in it," declares Freddie Clemo, a Briton in Manila whose company Pandiman Philippines indemnifies claims against ship owners. He says rogue elements of navies, coast guards, and customs of many countries pretend to act against pirates.

"Governments are openly against piracy. But so many rice bowls are involved. They [governments] don't want to break them. There's no control," he says. Indeed there have been pacts and agreements between Thailand and Malaysia, Singapore and Indonesia, Philippines and Indonesia to curb piracy. But the problem has not declined.

Mr. Martin, the IMB regional manager, is less harsh in his judgment. He says the geographical challenges defy solutions. "You look at the Philippines, it has such a long coastline ... You will need at least 10,000 patrol boats. Indonesia is the same, there are thousands of islands for pirates and hijackers to hide."

Sometimes governments have had to act when piracy becomes too blatant. In June last year, a Macau-to-Hong Kong hydrofoil, the Guia, was hijacked by armed men. Eight crew members and 129 passengers were on board.

The gunmen destroyed all the communication equipment and diverted the vessel to the Pearl River in Chinese waters. The hijackers robbed the passengers and crew of their valuables as well as $1.6 million in cash the boat was carrying. The hijackers were eventually arrested by Chinese authorities. A court convicted them and sentenced the ringleader to death.

The IMB notes that incidents of piracy in the Hong Kong-Macau-South China area shot up from five in 1994 to 28 in 1995.

Ship owners find it too costly to reclaim their stolen ships. Mr. Clemo cites the case of the Panamanian-flagged Silver Med, which was hijacked in 1992 after it left Singapore with palm oil. Instead it was diverted to a Philippines port where it assumed a new name. The crew was arrested there. But costs of litigation shot up to over $1 million, forcing Clemo to withdraw. The Bank of Brazil made a claim. The shipyard's armed guards boarded the ship and ejected the pirates after a gun battle. The Silver Med is now in Manila Bay and the case remains unresolved. Clemo was presented the ship's bell as a consolation.

Valuable scrap

Stealing of ships had been traced to a high demand for scrap metal. Analysts say three to four vessels get stolen each year. They used to end up in Taiwan. With scrap metal selling at $160 to $190 per metric ton, buyers figure it is cheaper to buy stolen ships than new metal.

In the last two years, the industry noticed stolen ships were ending up in India as the ship-building industry there has begun to pick up.

With the Philippine economy up and shipbuilding industry picking up, shipping experts forecast a rash of stolen ships appearing here pretty soon.

Martin says his office assists shippers to identify stolen vessels. But many, in a hurry to ship their goods at the lowest freight, do not bother to check with him.

"It is commercial pressure," he says. "Shippers can help solve this problem if they check with us. But they don't. So the problem is getting worse."