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Somali pirates fight over record ransom

Owners of a Greek-flagged oil tanker dropped a record ransom payment of $5.5 million to $7 million on the deck of the ship today, prompting Somali pirates to release the Maran Centaurus.

By Scott BaldaufStaff writer / January 18, 2010



Johannesburg, South Africa

Ransoms to Somali pirates have reached a historic high, as owners of the Maran Centaurus – a Greek-flagged oil tanker – dropped a ransom payment of $5.5 million to $7 million on the deck of the ship today.

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The payment, which prompted Somali pirates in the port of Haradheere to release the ship, marks a dramatic escalation in ransom payments since the $3 million payment for the Saudi owned oil tanker Sirius Star last year. While US and European navies continue to patrol shipping lanes off the Somali coast, there has been no letup in pirate attacks, and pirates, if anything, appear to be becoming even more effective at capturing ships.

“They are getting much more profitable, in part because they are much more effective at capturing ships,” says Roger Middleton, an expert on Somali piracy at Chatham House, a think tank in London. By venturing further out to sea, and using mother ships, pirate crews have improved their success ratio to 40 out of 100 hijacking attempts last year from 40 out of 200 the year before, he says.

Escalating payments and higher success rates call into question the effectiveness of the high-profile international naval patrolling in the Gulf of Aden and Arabian Sea.

There are countless hundreds of small Somali pirate skiffs operating off the Somali coast, and an unknown number of “mother ships” out in deeper waters as far away as the Seychelles Islands, which pirates use to get close to commercial ships before sending speedboats for the final assault. While some commercial shippers have begun arming their crews to defend themselves – and major UN relief shipments often travel through the danger zone under naval convoy – the growing success of Somali piracy shows that mere military means are not the solution.

A Nairobi-based group that follows shipping trends in the region, Ecoterra International, said that the ransom money is now being held “in a heavily guarded house in Haradheere,” a coastal city north of Mogadishu. Gunfights between rival pirate gangs broke out after the ransom money was delivered, and two pirates were reportedly killed. A pirate spokesman named Hassan told the Reuters news agency that the crew was safe.

Somalia has been without an effective government since 1991, when warlords overthrew the government of Siad Barre. Fighting among clans for control of Somalia has left the country unable to feed itself, and forced millions of Somalis from their homes and hundreds of thousands of Somalis into refugee camps throughout the region. The current transitional federal government of President Sheikh Sharif Ahmed, which controls a five-square block area of the capital, Mogadishu, is virtually surrounded by unfriendly Islamist militias, and survives only because of an African Union-backed peacekeeping force of 4,000 soldiers, which controls the seaport and airport and routes into town.

Lack of government onshore means that there are no consequences for bad behavior by Somali citizens at sea, security experts say, and the only long-term solution to Somali piracy is to establish a credible government that can exert its will over more parts of the country. Until then, says Mr. Middleton, piracy is likely to continue, and companies will continue to pay ransom.

“For the people who negotiate these ransoms, it makes sense to pay a higher ransom earlier,” Middleton says. “If you have a shipload of oil that was valued at $50 a barrel when it left port, and by the time it’s released the value could be $40 a barrel. So for the company being hijacked, the cost of the ransom is worth it. But obviously, for the overall campaign against piracy, that’s not helpful at all.”

Indeed, it only seems to have encouraged pirates to demand more.

“We’ve seen an audaciousness to their demands in the past – they would ask for 20 to 30 million [dollars] but their expectation would be [for] 1 or 2 million,” says Middleton. “But now the payments have been $2 million, and $3 million, and $5 million, so that makes quite a difference.”

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