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Securing the sea supply chains
The challenge of terrorism and modern piracy at the Somali coasts
A thesis submitted to the Bucerius/WHU Master of Law and Business Program in partial fulfillment of the requirements for the award of the Master of Law and Business (“MLB”) Degree
Efstathios A. Vasileiou July 25, 2014
12,344 words (excluding footnotes) Supervisor 1: Prof. Dr. Stefan Spinler, WHU
Supervisor 2: Cpt. Christos V. Maragos, CVM Ltd.
Acknowledgements
The author would like to extend his courtesy to Mr. Christos Maragos for his
guidance and support in the realization of this paper. Special thanks to Professor Dr.
Stefan Spinler for the confidence and inspiration he gave from the very beginning to
this assignment. I must thank the members of the administration team of the MLB
program for their patience, their kind, stoical and pious way of dealing with every
last-minute crisis that erupted during the writing of this thesis and the calmness they
inspired to troubled spirits.
Securing the Sea Supply Chains
1
TABLE OF CONTENTS
“Securing the sea supply chains, the challenge of terrorism and modern piracy at
the Somali coasts”.
1. Introduction………………………………………………………………………2
2. Recognizing the importance of a secure supply chain in maritime transport
for international trade.
2.1. The importance of maritime transport for the contemporary international
trade…………………………………………………………………………...4
2.2. Sectors of the economy and trade affected by the disruption of a constant flow
of supplies…………………………………………………………………….7
2.3. Dangers perturbing a supply flow and the needs of Risk Management………8
2.4. Modern terrorism and piracy as a challenge for maritime transport………….9
3. Assessing the phenomenon of modern piracy and international terrorism
today.
3.1. The globalization of terrorism and piracy in the 21st century………………12
3.2. Activity in the Horn of Africa……………………………………………….14
3.3. Challenges for the safety of shipping and international trade……………….16
4. Confronting threats and possible security strategies in high-risk sea roads
(Somalia).
4.1. Security measures in port……………………………………………………19
4.2. Self-protection and passive protection onboard……………………………..21
4.3. Military presence in international waters. Results and new suggestions……23
4.4. Information security…………………………………………………………25
5. Revisiting the issue of logistics in a troubled world. Dealing with
contemporary security issues in different types of transport.
5.1. Protection of supply nodes and storage areas……………………………….28
5.2. Cargo tracking centers……………………………………………………….30
5.3. Alternative route evaluating centers…………………………………………31
5.4. Insurances (Means of restitution)……………………………………………33
6. Conclusion……………………………………………………………………….35
7. Bibliography…………………………………………………………………….38
8. Appendix……………………………………………………………………….......
Securing the Sea Supply Chains
2
1. Introduction
The writing of this thesis is meant to combine two of my greater interests, security
and marine logistics, into one synthetic assignment that will benefit the community of
maritime trade and supply chain management in view of the challenges of the future.
The idea behind the writing of this thesis was to provide a scientific combination of
my expertise in history, political science focused on security and the understanding of
modern logistics, with an extra analysis on maritime trade and transportation. The last
element came as a result of my experience as a maritime transport ans forward intern.
I chose this particular topic, not only because it combines perfectly my previously
obtained knowledge but also because I identified a gap between marine transporters,
logistics management and security experts. My stand is that a serious security
problem exists nowadays in the Gulf of Aden and in order to deal with it one must
first understand the root causes of this issue.
I found particular satisfaction from the fact that both my supervisors elect has shown
great interest in my views and strong confidence in my abilities to manage the
research. Both of them acknowledge the gravity of the problem and its importance as
an interesting and up-to-date concept. Next, a full four-chaptered structure has been
developed, acknowledging the issue for the importance of modern naval trade, the
problem of contemporary piracy, the ways to combat the phenomenon and the
dangers to international economy should this problem not been addressed in its
completeness.
Piracy constitutes an endemic phenomenon that can have far too great repercussions
to be ignored. Political instability in countries vital for trade routes, namely the
“chokepoints” of the Gulf of Aden, can have extremely serious results on marine
trade: Serious instability in supply chain, loss of life and ships, loss of sense of
security in marine traveling, disruptions of vital product imports, rise of product
prices, room for foul private practices in the margins of international law.
Securing the Sea Supply Chains
3
My scope is that the reader will realize through a comprehensive analysis of how a
political phenomenon (piracy) with clear historical reference in its causes and
confrontation can be and must be dealt with expeditiously.
The root causes of piracy are not resolved exclusively with military or police means,
as they lay predominantly in society and governance. Piracy is an issue far more
global than Aden. Indeed, while international action appears to suppress piracy in that
region, it seems to rise respectfully in West Africa, Central America and especially in
Southeast Asia. It will require much more concrete and perhaps non-violent actions to
produce more permanent results.
Hamburg, 24.07.2014
Securing the Sea Supply Chains
4
2. Recognizing the importance of a secure supply chain in maritime
transport for international trade
2.1 The importance of maritime transport for the contemporary international
trade
More than 32 centuries ago, the signing of the Treaty of Kadesh terminated a long
conflict between the Egyptians and the Hittites (1258 B.C.). It was to be a mutual
agreement of symbiotic co-existence between the two most powerful dynasties of the
known world. Separating the eastern Mediterranean region to spheres of influence, the
two powerful kingdoms would flourish together in peace through trade and organized
production. It was meant to be the beginning of an era of prosperity and stability. The
end of the war, however, brought a demobilization of thousands of mercenary soldiers
from both armies. Pushed by the distress of poverty and rage of their unforeseen
unemployment, those men of violence formed armed groups that began attacking the
caravans and traders in an orgy of robbery, slaughter and terror. History recorded this
as the “invasion of the Sea Peoples”, one of the most enigmatic turmoils ever to bear
witness in the human annals (Robbins, M., 2001). This prolonged insecurity and
fierce fighting caused the destruction of great cities, like Troy and Ugarit, and led the
two empires to their feet. It is perhaps the oldest example of a regional crisis as a
result of the breakdown of trade-links in an economically interconnected environment
of largely urban populations. It would require the full military power of both Egypt
and the Hittite empire and almost a century of cruel and merciless fighting to repel the
threat of this enemy and re-establish an area of security in the region (The History of
the Greek People, 2001).
One may ask, what would be the meaning of contemplating a historical event that
took place in the Bronze Age. In my opinion, it is exactly in history that one must be
exemplified in order to avoid a similar problem in the future. And the nature of a
problem remains the same, be it on bows and arrows or Kalashnikovs and RPGs:
modern urban societies rely on long trade routes of primary and processed goods to
Securing the Sea Supply Chains
5
survive and enhance their wealth. These trade routes are as essential to them as veins
for the body. Once they are cut off, the body suffers, weakens and dies.
In the contemporary world, maritime trade plays a pivotal role in commercial
transport of goods. As the organization of production and the trend of developed
industrial countries of outsourcing towards the less developed ones continues and the
exchange of goods is governed by the rules of globalization, the importance of
transportation take on a central role in the whole process. Indeed, the globalized
economic model that predominate after the end of the Cold War calls for the
specialization in production, economies of scale and the related comparative
advantages on a universal scale, without border or boundaries to intercept the
transportation of parts and end goods to the consumers (Rodrigue et al., 2013, p. 158).
As a result, land, air and sea transportation becomes of the essence for the continuum
of the production and supply chain (see scheme 1).
Globalization is a fact beyond reasonable contest. It has been said that arguing against
that reality is as valid as arguing against the laws of gravity, as reported by the UN
Secretary General Koffi Annan (Corbett & Winebrake, 2008, p.4). World production
has shifted from the western countries to the developing world. The developed
countries retained the scepter of Research and Development and outsourced in an
attempt to lower the cost of production. The consumption of the final products is still
higher in developed countries, although evidence suggests that this is likely to change
in the future. The traditional view that sees the western populations as super-
consumers tends to be mitigated and ultimately overturned by an exponential growth
in the consumer habits of rising economies. In any case, an enormous volume of
products, in raw or processed form, needs to be transported between the areas of
manufacture to the area of consumption (Corbett & Winebrake, 2008, p. 6-7). Study
analyses in Europe and the United States reveal that transport trade has been in a
steady increase since the 1950s and that this development is responsible for the
multiplication of wealth amongst the general population (IHS Global Insight, Inc.,
2009, pp. 2-25 and EUROSTAT, 2014, Maritime transport of goods - quarterly data,
EU ports activity).
Securing the Sea Supply Chains
6
The gradual liberalization of trade rulings and the technological breakthrough in
shipbuilding have resulted in an unprecedented development of maritime trade, a
trend which is expected to continue in the decades to come at an annual rate of 2.4%
(Stopford, Martin, 2010, p.6). This growth, which was became apparent especially in
the seaborne trade, revolutionized the global economy to such a degree that shipping
became synonym to global trade and economic upliftment (EPA, Reducing Air
Pollution from International Transportation, epa.gov). A series of technological
milestones, such as the construction of the steel hull, the introduction of steam and
later diesel engines to sails and the use of freight containers in transportations resulted
to maritime trade being the most important pillar of the world economy. In the words
of Dr. Stopford, director at Clarcson plc in his presentation on “How Shipping
Changed the World” at the Global Maritime Environmental Congress in Hamburg
four years ago: “If shipping stopped for 3 months, so would modern life as we know
it” (Stopford, Martin, 2010, p.6).
According to the International Maritime Organization nowadays 90% of the total
transportation volumes are carried out by sea (IMO, International Shipping Facts &
Figures 2012, p.7). This makes the maritime transport the champion of transport
modes. The reason is simple: seafaring trade is by any comparison the safest, most
reliable and most cost effective way of transportation for passengers and cargo
(International Chamber of Shipping, Shipping and World Trade). The fact that
roughly 72% of the planet is covered by water makes the sea route a tax-free highway
for merchant ships to deliver transported goods everywhere in the world. If those
numbers impress you, one can continue by stating that the transport of fuel alone is
dependable by the sea transport. 26,805 million barrels of oil are transported daily
through the seas (EIA, World Oil Transit Chokepoints Report, 2012, pp. 6-8). 3,73
million barrels transit every single day through the Red Sea route, between the
“chokepoints” of the Suez Canal and the “Gates of Grief” (Bab el-Mandeb) between
Djibouti and Yemen, 13,9% of the world daily transport of oil (scheme 2). Merchant
ships transport an average of 1.2 tons of cargo for every single person in the world
every year, a number that corresponds to 3 tons for residents of rich countries like in
the E.U. (2009 figures) (Stopford, Martin, 2010, p.2).
Securing the Sea Supply Chains
7
2.2 Sectors of the economy and trade affected by the by the disruption of a
constant flow of supplies
As a system of veins connecting and vitalizing the “organic” structure of production
and consumption, maritime trade becomes essential for the well-being of the
globalized edifice of supply and demand. A possible disruption in the long
interrelated line of links of the supply chain can cause unpredictable developments
that can trigger rolled costs to the rest of the chain. A prolonged turbulence however
can result to the breakdown of the supply chain in all (Long, 2003, p.43-45).
A supply chain bases its success on the constant and predictable sequence of actions
that occur and together they constitute the puzzle of transportation. It is like an
orchestra of different musical instruments that play different tunes in different times
but together constitute a concert of unparalleled harmony any dissonance disturbs the
balance of the song and causes commotion to the whole orchestra. Imagine the course
of a product from the time it is mined as ore, then transported and melted to steel at
the foundry, forged to engine blocks, made into a car engine, assembled to a factory
into a car only to be sold as a final product to the car retailer. In every step, each
sector grants the product some extra value and the output of the final product is
dependable from the whole chain process. And each chain is as strong as its weakest
link. Logistics move the world economy. They escort and support each product from
its primary to secondary and finally to the tertiary sector of the economy. Agriculture,
livestock, mines, industry, distribution, commerce are entirely dependable from
transportations (DHL, The macroeconomic significance of logistics, 2014). The
globalization of the last twenty years and the practices of companies worldwide
distribute their production facilities in terms of efficiency favor the existence of a
thick network of transportations, without which no such endeavor would be possible.
The efficiency of transportation on a world-wide basis, rapidly and interdependently
constitutes the base of global economy, production, employment and social care. It is
because of that network and the service it delivers that we maintain the quality of our
living, the social standards and the existing employment conditions and workplaces
and it is because of the continuous development of this system that we scope to
maintain and enhance them in the future (OECD/WTO, 2013, pp.16-21).
Securing the Sea Supply Chains
8
2.3 Dangers perturbing a supply flow and the need of risk management
One of the most remarkable characteristics of the supply chain is its intrinsic
vulnerability. Stretched as it is, the flow of supplies is exposed to any type of
disturbances, be it natural (e.g. a flood, an earthquake or a volcanic eruption),
accidental (global financial crisis) or intentional (piracy attacks).
The fragility of the supply chain becomes then a question for strong minds amongst
managers, where empowering its resilience to turbulences becomes the issue. The
data most analysts are receiving are nothing but encouraging: in a series of
evaluations performed on the industry sector by Mitroff and Alpaslan in 2003 95% of
them failed the test (Schmitt et al., Leeds). In the context of globalization, the supply
chain becomes ever more stretched and its flank exposed to threats. Its branches ever
more numerous while its performance demands ever more consuming.
Disruptions are translated to a certain cost, depending on the gravity of the break
down, the ability of the chain to absorb the blow, to contain the damage and to sustain
a rhythm of continuation. How much was the loss of profit from the damage? How
great impact did this loss create to another part of the chain? How long will it take to
re-establish the previous rhythms?
In our assessment we will focus on the maritime transport through a specific route, the
Red Sea maritime road from Europe to South East Asia and South Africa and the
danger the rise of piracy and modern terrorism poses to this maritime supply chain for
transporters and commerce at large.
Above all, it becomes clear that the sustainability of a supply chain is a difficult and
crucial task; crucial not only on the breaking point of the chain but in many different
and much more important parts of the chain. Germany did not lose the First World
War because of any conspiracy; the war was lost because Germany was blockaded
from its supplies. Twenty years later they nearly did the same to England, with the
ruthless submarine war. And again the Russian campaign was lost only because of the
collapse in the German army’s supply chain: An unspeakable mistake considering that
Napoleon was driven out of Russia on the same reasons (van Crevelt, 2001).
Modern supply chain flows is a battlefield in any part of the line, where no failure is
easily sustained. The stakes are too high. In order to secure the resiliency of the
supply chain an effective real time risk management is needed. Risk assessments will
provide early warning for any deficiencies in the functioning of the procedures, they
Securing the Sea Supply Chains
9
will reveal aspects in the working routine that are not cost-effective and productive
and will assist the chain section to realize its potentials and short-comings, correct
them and respond to future challenges with greater effectiveness.
2.4 Modern terrorism and piracy as a challenge for maritime transport
Although a common definition of piracy doesn’t exist, the article 101 of the 1982
United Nations Convention on the Law of the Sea (UNCLOS) provides us with the
following definition of piracy:
Piracy consists of any of the following acts:
(a) Any illegal acts of violence or detention, or any act of depredation, committed
for private ends by the crew or the passengers of a private ship or a private aircraft,
and directed:
(i) On the high seas, against another ship or aircraft, or against persons
or property on board such ship or aircraft;
(ii) Against a ship, aircraft, persons or property in a place outside the
jurisdiction of any State;
(b) Any act of voluntary participation in the operation of a ship or of an aircraft
with knowledge of facts making it a pirate ship or aircraft;
(c) Any act inciting or of intentionally facilitating an act described in sub-
paragraph (a) or (b).”
(Source: http://www.imo.org/OurWork/Security/PiracyArmedRobbery/Pages/Default)
Modern pirates are considered a growing menace from international and regional
organizations that handle matters of maritime transportations and supply chains.
The re-emergence of piracy in certain parts of the world is closely linked with the
political disintegration and the socio-economic unrest in those states. In Somalia,
piracy came about after the shuttering of the land and the sinking of political affaires
into a civil war in the early 1990s.
Securing the Sea Supply Chains
10
There are two interesting elements linked to the piracy issue in Somalia: first, piracy
is not the only thing the unrest that dominates the land brought to surface. Drug and
human trafficking is also quite endemic and profitable, especially towards Yemen.
Second, together with piracy, the rise of radical Islam has resulted to strong ties being
forged with regional and international terrorism swooping from the Middle East and
Central Africa (Papandreou, 2011, pp. 26-28). We will address the issue of terrorism
in due course. One of the reasons the phenomenon of piracy prospers in Somalia is the
attitude of neighboring countries towards Somali piracy.
Kenya has undertaken the burden of the legal prosecution of pirates in her
territory but signs of frustration and fatigue have been long obvious.
Seychelles are worried about the consequences on their country being
negatively marked as a popular tourist destination.
Yemen has long been characterized as a “fragile state”. Criminal elements are
co-operating with Somalis in human trafficking (a very lucrative business)
while terrorist cells are endemic in the land.
(http://edition.cnn.com/2010/WORLD/meast/01/04/yemen.profile/).
According to Papandreou, Yemen and Somalia constitute the second bipole of
geopolitical instability in the wider Middle East region after India and
Pakistan.
Tanzania and Madagascar, although affected by the piracy phenomenon, do
not seem to pursuit an active part in the issue and chose to wait further
developments.
Egypt, although concerned about the trouble piracy causes to shipping avoids
assuming a more active role. Egypt controls the Suez passage which weights
greatly both in the country’s geopolitical importance and the economic gains
are considerable.
India, despite the fact that pirate attacks have been audacious enough to reach
near her shores, has yet to receive a clear stand.
Ethiopia has been the only border country to take decisive action on the state
of anarchy that dominates in Somalia. In 2006, backed by US consultants,
Ethiopian troops invaded to overturn the ICU regime and its radical islamist
group al-Shabaab, in favor of the Transitional Federal Government (TFG).
Although a success, al-Shabaab came to re-institute itself soon after the
Securing the Sea Supply Chains
11
withdrawal of Ethiopian troops. Al-Qaeda affiliated al-Shabaab remains a
point of concern among security and policy analysts in the region.
(Papandreou, 2011, pp. 28-29 & Council on Foreign Relations,
http://www.cfr.org/somalia/terrorism-havens-somalia/p9366).
Securing the Sea Supply Chains
12
3. Assessing the phenomenon of modern piracy
and international terrorism today
3.1 The globalization of terrorism and piracy in the 21st century
At first glance, piracy seems like a historical anachronism. The achievements of
modern science and intellect create the illusion that mankind has moved beyond such
violent and hideous practices. Our mind reflectively recalls images of a romantic
figure of fierce freedom and limitless adventure. The truth, however, is different.
Piracy is as endemic in human history as poverty. Emerging in the form of armed
robbery in shallow waters, piracy has always managed to rear its ugly head in times of
extreme poverty, social turmoil and weak political control. It might seem distant but
pirates have been in the Mediterranean Sea, the Black Sea and the Baltics. Julius
Caesar was captured by pirates in his youth and was retained for ransom. When his
family paid he left the pirate stronghold promising them that he would come back and
crucified them all. It took him some time but one of his first actions as a general was
to suppress piracy in the seas and make the Mediterranean a Roman “Mare Nostrum”.
Ultimately, he defeated his captors and fulfilled his promise. The Aegean Sea, now a
summer paradise was during the late Middle Ages swarming with pirates, looting,
burning and destroying everything. Much of the character of the islands owes their
creation to pirate activity: all the forests were burned and the houses built one next to
another, with thick walls to resist cannonball hits, with windows like loopholes and
narrow streets that no more than three men can walk next to another. This are the old
fortresses built to repel pirate attacks. In northern Europe, Vikings were the most
fearsome and known raiders of villages next to the sea or rivers while only in the late
19th
century, in the shores of today Algerian lied the pirate domain of Barbary coast,
destroyed by the joined efforts of British, French and Americans
(http://en.wikipedia.org/wiki/Piracy). Indeed, piracy is a reality today as it was a
reality in the not-so-distant past. The fact that the modern man of the West managed
to raise his living standards and cultivate a sense of moral values and knowledge, that
we call civilization, does not mean that the entire world has followed his example.
Securing the Sea Supply Chains
13
In the last ten years, the phenomenon of piracy has re-emerged in several parts of the
world. The most prominent ones are the Malacca strait, in South-east Asia, the Gulf of
Nigeria in West Africa and Somalia and the Gulf of Aden. The latter has been in the
spotlight because of the importance of the route to international shipping and maritime
trade (Scheme 4). Approximately 20,000 ships pass through these waters each year,
meaning to bridge the gap between East and West, carrying millions of tons of food,
fuel, machinery, electronics, ore and construction materials. It is an ever going
treasure “river” bypassing the shores of some of the poorest populations in the world.
As repercussions of a transitional world, piracy has associated with political
instability and the activism of poverty. In the vast coastline of Somalia, hundreds of
fishing villages resort to acts of piracy, hi-jacking merchant ships that dare to
approach their shores to shorten the route just a little. By piracy is meant any act of
“boarding or attempting to board any ship with the intent to commit theft or any other
crime and with the intent or capability to use force” (ICC IMB, 2011, p.3). Together,
another concept was unraveled: the concept of marine terrorist. Terrorism is yet
another “profession” that does not surprise us with its novelty. Yet, it became quite a
trend after the 9/11 attacks on US soil. Some incidents of suicide bombers involving
the United States Navy ship USS “Cole” (DDG-67) on October 2000, the 2004
“SuperFerry 14” bombing in 2004 and the tanker MV M. “Star” in 2010
(http://edition.cnn.com/2010/WORLD/meast/11/22/gulf.attacks/) gave birth to the
“marine terrorist”.
In the framework of radical Islam, especially after the 1980s, several areas in the –so
called- wider Middle East, an area almost identical to the Islamic world, reaching
from Afghanistan to West Africa and from the Caucasus to the Gulf of Aden, and
Africa, a series of terrorist organizations took refuge and managed to get organized in
cells (see scheme 3). In those cells the groups increased their numbers, trained
fighters and spies, exercised indoctrination transforming them to fanatic militants.
(Burke, 2004). These cells managed to come in contact with Somali pirates, then in
their first phase of development and shared with them weapons, tactical training,
money and –possibly- information. From that point on it is rather difficult to
distinguish between pirates, who aim at capturing and looting a ship’s cargo, avoiding
harming the crew in scope of extorting ransom and terrorist cells, who aim at special
targets, based on flag, ethnicity etc. in order to destroy. The author is not sure whether
Securing the Sea Supply Chains
14
the counter piracy actions undertaken by forces already engaged in the “War against
terror” made or cared to make such a distinction between the two groups. Sources
originating from America and the United Kingdom were much less disposed to
commit to such a distinction, naming all as terrorists and confronting them with the
same resent. On the contrary, French and German sources made a greater effort to
realize the phenomenon of piracy in its full context, starting from the history of the
land and recognizing the difficulties of the Somali people. The remarkable thing is
that the two different approaches, despite sharing the same care, the protection of the
maritime commerce and supply line, developed a completely different understanding
and draw different conclusions (Ploch et al. 2009 & DIW: The Advantage of Piracy,
2010).
3.2 Activity in the horn of Africa
Somalia holds a strategic position at the East African continent, overlooking the
mouth of the Red Sea and the Indian Ocean is controlling the shortest sailing route
between the East and the West. It shapes like a letter “J” bordering with Ethiopia and
Djibouti to the West, Kenya to the South - South-West, the Gulf of Aden to the North
and the Indian Ocean to the East. Somalia has the largest coastline in Africa; roughly
3,300 km, more than 10.3% of the overall continent. It is a poor country that based its
economy mainly in livestock and fishing (http://www.unsomalia.net/FAO/). In the
past decades the country was faced with accusations of irresponsible and wasteful
fishing methods that are harmful to maritime life and depleting the supplies. Its
economy was heavily dependable to the primary sector, namely the sea and strongly
affected by illegal fishing in its territorial waters. Still, Somalia didn’t lay an official
claim to an Exclusive Economic Zone (EEZ) until 2009. The country has been in a
state of emergency in the last 25 years, since the beginning of the Somali civil war
that caused the disintegration of the Somali state and paralyzed any government
control. The power gap that was created, the conflicting tribal and political groups and
the opportunistic practices of bordering parties led the majority of the population to
economic and social crisis.
Sources do not seem to agree as to the root causes of the development of piracy in
Somalia. Some sources talk about fishermen turning to more “profitable” targets due
Securing the Sea Supply Chains
15
to poverty (Rodrigue, 2013). Others seem to elaborate the scenario of former Somali
navy and coastguard officers defending the territorial sea of Somalia from foreign
fishermen and transit ships entering the unguarded home-waters (Maliti et al., 2009),
while there are some who dig into more conspiracy theories (Abdullahi, 2008). The
fact is that piracy was resurrected from oblivion and posed an especially hot threat to
international shipping after the 2004.
From 2005 to the year of its peak in 2011, piracy grew from a regional phenomenon
to a menace for maritime transit with international repercussions (Schemes 5-6-8).
Modern pirates differ from their historic predecessors in many aspects. Swooping
from shore-based hideouts, usually nothing but a plain fishing village at the coasts of
Somalia, they act in small groups. Their vessel of choice seems to the skiff, a slender
wooden boat, quite usual in those waters (Scheme 7a). Equipped with modern
powerful engines they can turn into high-speed chase-boats that can maneuver rapidly
around a slow and heavy merchant ship and board in minutes. The main problem is
the range of these boats which was not enough to reach deep waters, search and
pursuit their target and return to base before their fuel run out. Thus, in the first years
of the emergence of piracy, the radius of action of the pirates was limited to some
kilometers from the shores. With the merchant ships tackling the threat by avoiding
sailing too close to Somali coasts, the pirates became more bold and resourceful; at
first stage they loaded some boats with fuel tanks, which were used by the skiffs as
floating gas stations (Scheme 7b &c). When the crews were faced with the hardships
of the open sea they employed open-sea fishing vessels as floating bases of operations
(Scheme 7d). From there, pirates could sail in relative comfort, monitor shipping
movement through radar and launch surprise attacks on those who believed to be the
most attractive targets (Papandreou, 2011, pp.45-52). Scheme 8 indicates the
progressive expansion of the Somali piracy operations, which in 2010 reached from
the shores of Somalia to the Hormuz Straits and the territorial waters of India and the
Madagascar.
The pirate vessels are not armed. Their sole purpose is to act as landing crafts for the
boarding teams. Pirates bare the omnipresent soviet-made Kalashnikov family of
weapons, which is very common in Africa and West Asia. It is a sturdy weapon, easy
to use, suitable for the extreme conditions of the sea, firing a powerful projectile. The
Kalashnikovs are not notorious for their accuracy but speeding in a fishing boat at 40
Securing the Sea Supply Chains
16
knots on open-sea waves doesn’t leave much to marksmanship. Usually pirates reach
at small distance and then fire short volleys of warning shots to intimidate the crew. If
that doesn’t work, spraying the superstructure and portholes will do the trick. Lately,
the widely practice of onboard armed guards and the international naval presence
have made the pirates update their equipment to light machineguns and anti-tank
Rocket launchers (RPG) (Global Security.org/Pirates). The psychological effects are
enormous, especially to the untrained and unarmed crew of merchant ship but even to
the less experienced armed guards (who are not war veterans and therefore cost less to
the ship owners).
3.3 Challenges for the safety of shipping and international trade
In the late years, the evolution of the pirate skills and boldness has taken the
international community by surprise. Perhaps, the origins or the appearance of some
malnourished, half naked men has not impressed the experts of security, who were in
a rush to underestimate them. Several plans and suggestion have been put forward to
tackle the phenomenon of piracy and the methods involved. Despite some success of
these measures that led to a drop of the hijackings, it all depends on the willingness of
shipping companies to undertake the cost of such measures.
Based on the admittance of the importance to protect the route of Aden for the sake of
international trade, we dare to make suggestions on tackling the pirate attacks.
One obvious suggestion would be to avoid passing through such a
“contaminated” route, until the naval task forces manage somehow to suppress
it (Scheme 6). There are two objections to that line. First, the alternative route
from India to Europe and America is around the Cape of “Good Hope”. This
route change adds an extra 5,000 n.miles and another 10 days to the voyage
raising the costs. Second, the Nigerian piracy is also present and in a way of
rise. It is only a matter of time until the Somali piracy is replaced with
Nigerian piracy, especially if diverting close to 20,000 ships yearly through
that passage it will make it a paradise for pirates. Then New naval Task Forces
will be needed (http://www.worldshipping.org/pdf/Suez-Canal-
Presentation.pdf).
Securing the Sea Supply Chains
17
Replace the three different naval task forces (plus the independent
“contributors”, like China, Russia etc. who want to participate but maintain
their freedom of acting). This is a suggestion that would distribute the use of
force much more efficiently and reduce costs in all. Political will is a
prerequisite.
Employ a force under the flag of the United Nations, the only global player
with the legitimacy to take action under humanitarian motive. The
multinational, joint force of warships, aerial means, ground forces and
electronic surveillance, should be in direct contact with the Somali authorities
to police the waters, provide protection to fisheries near the coast of Somalia,
train the coast guard, escort merchant ships and seek for the rise of the living
standards of people in the coastal villages. By providing those people with
food, infrastructure, jobs, training and education, you immediately eliminate
the reasons the Somali piracy ever developed and win the battle for hearts and
minds so that it will never surface again.
Some thoughts about the military branch of the operation would be to employ special
ships. Cruisers and destroyers with a displacement of thousands of tones, armed with
latest technology radar and missiles deployed against skiffs is as sufficient as chasing
a mosquito with a sledgehammer. Small sized, economic patrol vessels with a crew of
20-30 personnel are totally sufficient. If someone talks about the speed of the skiffs,
having a chase boat onboard the vessel is the rule. When the need for pursuit arises a
small crane lowers the boat and the chase begins. There have been no reports so far of
pirates managing to escape the chasing boats of the warships in Aden.
Intelligence is the key, not only to locate but to organize the marine operations.
Satellite screening of the transit corridor and the territorial waters of Somalia is ideal
but more affordable solutions exist: In the past ten years, drone technology or
Unmanned Aerial Vehicles (UAV) has developed a lot. A remote controlled plane can
stay on air for 8-16-24 or even 48 hours depending on the size and capabilities of the
model. A single operator on a land base or a ship can direct it with a joystick
receiving and transmitting real-time information. Alternatively, zeppelins have
returned undertaking the same role. Slow moving, with low fuel consumption or full
electrical charging their batteries from solar panels they can stay on air for weeks
Securing the Sea Supply Chains
18
without any need, while their greater size and lift capability allows them to employ
heavier surveillance equipment (Scheme 9).
I find I cannot stress enough that the balance point to overturn the foul phenomenon
of piracy lies not in the big guns but in the hearts and minds. Somali descended to
piracy and thievery because of the poverty of its population. The key to suppress and
utterly eliminate piracy is to help Somalia, a country of extended coastline and in a
geostrategic position to “stand on its feet” and rediscover its character.
Securing the Sea Supply Chains
19
4. Confronting threats and possible security strategies in high-
risk sea roads (Somalia)
4.1 Security measures in port
Having already analyzed the danger of piracy and terrorism for marine vessels and
crew, it is time to move to secure port establishments. A port is by definition an area
of where an orgasm of overlap different working groups is taking place. Between
administration, warehouses, technical base, load cranes and transport, ships are being
uploaded of their cargo or disembark their passengers; technicians struggle to conduct
repairs and logistical companies to carry on their task.
In the 21st century, a modern port is an area of safety and effectiveness. Modern
management has accomplished the latter and safety regulations have filled the gaps on
the first. Still, in order to continue to see a port as an area of safety in troubled
geopolitical areas such as the Horn of Africa, extra measures need to be taken to
enhance security without encumbering ongoing works.
So far, no terrorist attacks have taken place against major port areas. However, in the
last five years alone there have been five major incidents of terrorism, attacks or
attempts, on airports (Colombo –Sri Lanka 2009, Moscow –Russia 2011, Peshavar –
Pakistan 2012, Wichita –USA 2013, Jinna –Pakistan 2014), a comparably safe
transport and supply chain area. The results of an attack, no matter what the chance or
level of success are too important to ignore. An attack on a port could cause not only
considerable loss of lives and damages worth of millions of dollars but also account
for the disruption of the steady flow of the supply chain of a number of operations for
weeks or months, thus derailing any form of task scheduling on an international level,
if the transit of goods through the port includes the management of international
orders.
Maintaining the fragile balance between security and facilitated movement of goods
and working people within the compounds of the port is not an easy task.
Securing the Sea Supply Chains
20
Unavoidable compromises on both sides of the scale will have to be made. In terms of
safety and well-conduct, the International Maritime Organization has launched the
International Ship and Port Facilities Security Code (ISPS Code), which provides
detailed rules and guidance on keeping the minimum standards of safety in sea and on
dock in the spirit of the International Convention for the Safety of Life at Sea
(SOLAS).
On the basis of the ISPS regulations regarding the safety of ports, areas that are
affected by piracy action and terrorist activity should be organized according to the
security standards described on the document; the personnel operating the port
facilities be trained to react to emergency situations and direct certain actions
according to their specialty and function in the port. Regular drills within the port area
will teach the personnel to respond to different scenarios, learn the structure of the
facilities and buildings and cooperate with groups from different professional areas.
The organization of the port in an area of security and control generally calls for
segmentation. The outer perimeter of the port must be clearly signed and fenced.
Regular 24-hour watch is necessary. Observation towers are a little obsolete but
cameras with both day and night vision capacity will work just as much. The inside
area of the port must be divided into areas of different control standards: warehouse
and storage area, passenger, cargo depot, technical and repair base, administration and
monitor. Each area must be accessed from specific gateways, where security controls
will take place. Employees can be equipped with access cards enabling them to move
freely within the areas of interest and restricting them from those where the security
level is higher. All open areas and checkpoints must be adequately lighted and
monitored. A central administration point must exist to coordinate actions and tackle
arising problems. The issue of real-time communications and rapid reaction forces
providing policing, firefighting, ambulance transport or maintenance must be
addressed for an effective control over the whole port area to exist. In short, the new
perspective for a secure port organization is not much different from the picture of a
modern airport.
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21
4.2 Self-protection and passive protection onboard
Aside from ports, the protection of ships on sail has been a long and complicated
headache for security analysts since the beginning of the rebirth of piracy. We can
detect four distinct periods of dealing with the piracy threat: the first period 1992-
2002 (period of sporadic attacks), the second period 2002-2008 (escalation of piracy),
the third period 2008-2011 (the “dark” years) and the fourth period 2011-today (the
late years). According to the level of the threat, or at least the perception of the gravity
of the threat by ship owners and masters, confronting the pirate attacks took different
forms.
One must always remember that a master’s first and foremost concern is the safety of
his crew and ship. Everything else comes second. Originally, merchant ships had
neither the means not was the crew trained to tackle an attack and attempt to board
while on sail. Pirates approached in fast moving skiffs, came on the side of the slow
moving vessel, tossed ropes with hooks and climbed the hull. Seizure was over, as
there is none that could oppose a man armed with a battle rifle.
The reaction of ship’s crews was proportional to the threat. Originally, attempters
were hosed down with firefighting equipment available in all vessels. The power of
the water beam was enough to deter or repulse a man without killing him. Provided it
would get him! Soon this practice was proven outdated as pirates learned to avoid
water cannons by approaching from the “blind spots” of the ship. After all,
firefighting equipment is designed to fight a fire onboard the ship and not around it.
Moreover, pirates employed armament taken from the Somali armed forces or
smugglers to impose themselves on the unarmed crew. In response, companies
addressed several “siege” experts, who suggested and to some extend passed
“medieval” technics to repulse the invader. Such were the use of a system of water
hoses overlooking the area around the ship, barbed wire (some suggested electrified)
at the edge of the deck, where the hooks were tossed, net traps for boats and skiffs
lowered with cranes around the ship, Teflon foam to make decks and hull sides
slippery and even more elaborate “non-lethal” weapons such as the optical laser
Securing the Sea Supply Chains
22
cannon, meant to temporarily blind the attackers or acoustic devices to deaf them
(scheme 9)1.
Some of these suggestions were adopted but their life was short. The dubious legal
grounds regarding the use of force by the crews and the fact that mariners were asked
to fight against determined men armed with combat guns using sonic weapons and
experimental lasers was a little too much. Soon, the employment of armed guards
became the trend for most ship owners to ensure the protection of their fortune and
men. The end of the engagement of the western forces against the anti-terrorist fights
in Afghanistan and Iraq meant there no shortage of trained professionals to escort the
ships through the dangerous seas. Usually, men were screened and asked to sign a
contract of a few days, flew to a nearby port, board and then take the same route back.
The use of armed guards brought the ships for the first time in terms with the pirates
and is responsible for the majority of failed attempts, most of the times without a shot
fired. However, the use of force remains an issue of legal debate, regardless if the
results were encouraging. Civilians are not to use force under circumstances where a
state authority may do so and the IMO opposes such practices (IMO, 2009, PIRACY
AND ARMED ROBBERY AGAINST SHIPS, §59-61, p.13). The “gap” in the law
could be found in the Chapter XI-2 – regarding special measures to enhance maritime
security. According to Regulation XI-2/8 the Master can exercise his “professional
judgment over decisions necessary to maintain the security of the ship” (International
Convention for the Safety of Life at Sea (SOLAS), 1974). In plain words, this
provides the Master of the ship to call if a situation of emergency exists and drastic
measures to safeguard the security of the ship, provided that no help can be provided
in time by a state authority. In order to avoid arbitrary interpretations of the law and
create anarchy in the seas, many states and all international organizations are against
the use of armed guards onboard ships.
In the last period of piracy, general tendencies call for a more passive strategy. Secure
structures are built within the ship in order to protect the crew. In most cases such
structures are called “citadels” and they look like massive safes. After pirates have
penetrated the ship’s defenses the crew is locked in those armored chambers, which
are completely autonomous in power supply, food and water, avoiding contact with
1 The IMO has edited the Best Management Practices (BMP4) document to provide information (pp.3-
10) and suggestion (pp.23-40) to seafarers on how to respond to piracy situations.
Securing the Sea Supply Chains
23
the pirates and therefore captivity. Deprived of the benefit of hostages to extort
ransom and trained personnel to navigate a ship of that size, pirates are left with no
choice but to abandon the ship before security forces arrive. Citadels and early
warning through electronic surveillance appears to be the latest trend in tackling
piracy (Personal communication with maritime security consultant “FDN Marine”2).
It should be noted that the employment of armed guards despite its effectiveness, has
met with the content of the international organizations and ship-owners owing to legal
reasons and financial costs respectively (The European Institute, Marmon, 2011). The
issue could escalate further if pirates reacted to armed violence by enhancing heavier
firepower (e.g. Rocket Propelled Grenades RPG) or exercised violence to mariners
held in captivity. It could also provoke pirates or terrorists to assault ships to captivate
their weaponry. The issue touches the essence of use of force in international waters
and is potentially insulting both to the international community that deals with the law
of the seas and the regional national governments of Somalia, Saudi Arabia and
Yemen, in terms of disregarding their authority to project jurisdiction. It remains still
a practice in question in many countries (Papandreou, 2011).
4.3 Military presence in international waters. Results and new suggestions
Together with the re-emergence of piracy came the role of national states to provide
protection for merchant mariners from armed threats. To tackle the attacks on the
merchant ships, three different operations have been launched to patrol the dangerous
waters: the multinational Combined Task Force 150 (25 national missions), the
Combined Task Force 151 and the “Operation Atalanta”. Combined Task Force 150
(CTF 150) is a counter-piracy task force set up in the framework of NATO’s
“Operation Ocean Shield”, the naval branch of “Operation Enduring Freedom” in the
Gulf of Aden. Combined Task Force 150 (CTF 151), on the other hand, has a counter-
piracy scope and was set up after the dramatic rise of pirate incidents in 2009. It
includes more than 30 members. “Operation Atalanta” is a military operation
undertaken by the European Union Naval Force (EUNAVFOR) in cooperation with
2 “[…] solutions for citadels and covert CCTV and comms.
This is on request from shipping companies. There certainly seems to be a moving away from armed guards and into technology for a number of reasons. […]” Mark Lewis, CEO - FDN Group (14.05.2014).
Securing the Sea Supply Chains
24
the Security Council of the United Nations to batter Somali piracy and provide
protection in the transit corridor of “Maritime Security Patrol Area” (MSPA) for
merchant and passenger ships. Also, Australia, China, India, Iran, Japan, South Korea,
Malaysia, Pakistan, Russia, Thailand, and Saudi Arabia have provided naval forces to
patrol the waters either in combination with the aforementioned Task Forces or
independently (Papandreou, 2011, pp.66-121 &
http://combinedmaritimeforces.com/ctf-151-counter-piracy/).
Although the presence of armed warships and properly trained crews filled many gaps
in the issue of armed counter-fight against terrorism and piracy in the region and has
undoubtedly provided the necessary sense of security to the seafarer community, it is
far from being a success. The patrol missions of the warships have taken much critic
from government officials and public opinion formers for the cost and utter
effectiveness of the international military. Apart from the obvious fact that pursuing a
wooden pirate skiff or captured fishing boat with a multimillion euro-worth frigate or
destroyer is not cost-effective and the danger to mistake actual fishermen for pirates
(mistakes have been made before: http://go.bloomberg.com/multimedia/piracy-
fishermen/ ), after three years of operations it becomes apparent that sea patrols may
not be enough to bring the phenomenon of piracy to a conclusive end (http://piracy-
studies.org/2012/the-eus-misguided-move-to-fight-pirates-onshore/). What is more, it
is believed that the suppressive action of the strong naval forces and the establishment
of the Internationally Recommended Transit Corridor (IRTC) for merchant vessels
has forced the pirates to operate further out in the Gulf of Aden and has thus
contributed to the widespread of piracy in the region (ZEUS, “Unravelling the Puzzle
of Piracy”, p. 25).
The answer is provided by Hippocratic medical terms: imagine a man standing in a
room with no windows. A door stays open and cold air is filling the room. The man is
feeling cold. He develops a headache, he chills, he coughs his nose goes wet. Soon, he
develops a fever, his body becomes weak and heavy and eventually his cold turns to
pneumonia and dies. The man can react. He can put on a coat and warm clothes. He
can exercise so that the blood circulation will keep him warm. He can light a fire or he
can resort to medication to battle the fever. Still, according to Hippocrates, all these
measures are in vain. The coat will not keep him warm. He cannot exercise forever.
The fire will go out and ultimately no medication will save him. The man will die. He
Securing the Sea Supply Chains
25
will die because the root-causes of his illness have remained unchanged: the door is
open and cold air is still filling the room. Hippocrates urged his students to take time
to understand the nature of the illness, find the root-causes responsible and deal with
them before proceeding to any treatment. The steps the man took to batter the illness
were not wrong. He just had to shut the door first!
It is fortunate that ultimately the European Union reached the same conclusion as
Hippocrates. A mere military operation with a strong force of a large fleet is not
enough to make piracy disappear. After five years of expeditious efforts by the best
navies the phenomenon of piracy shows little signs of decline. Piracy in the Gulf of
Aden has grown as a result of political insufficiency, state disintegration and extreme
poverty. Unless those elements are resolved, piracy will re-emerge as soon as the
warships withdraw. The international community, in the framework of “Operation
Atalanta” has begun initiatives to boost local economies in the coast of Somalia, the
traditional strongholds of piracy and assist the government to re-establish a form of
governance and community relief that will avert young men from resorting to piracy
and thievery3 (House of Lords: Combating Somali Piracy: the EU's Naval Operation
Atalanta”, 2010, §59-64 & Mair, 2011, pp. 37-4). At the same time EUNAVFOR is
assisting regional countries (Djibouti, Seychelles, Kenya and Tanzania) to train their
naval and coast-guard forces to take action on piracy and armed robbery in the long
run through the EUCAP NESTOR and European Union Training Mission (EUTM)
programs.
4.4 Information security
It would seem unlikely but one should consider how the terrorists/pirates receive
information for their targets. How is it possible that a skiff boat from the shores of
Somalia or a pirate mother-ship operating from the middle of the Arabian Sea or the
3 “The EU’s multi-facetted engagement in the Horn of Africa is guided by the “Strategic Framework
for the Horn of Africa”. It defines five priorities for EU action: building robust and accountable
political structures; contributing to conflict resolution and prevention; mitigating security threats
emanating from the region; promoting economic growth, and supporting regional economic
cooperation” Maritime Security Centre-Horn of Africa (MSCHOA), http://www.mschoa.org/on-
shore/about-us/eu-operation-atalanta.
Securing the Sea Supply Chains
26
vastness of the Indian Ocean can locate, evaluate and attack a loaded commercial
ship?
So far, this question was not given much thought: the area is full of rich commercial
vessels, which never travel empty-load; the circulation through the chokepoints and
the narrow maritime corridors is predictable for a person with limited navigation skills
and, really, how can one miss a 50,000 to 500,000 tones ship in the middle of the sea?
The case of the hi-jack of the MV “OLIB G”, on September the 8th
2010, for the
release of which the pirates demanded the outrageous sum of $15 million (unaware
that the vessel was mortgaged and the company’s abilities to pay were limited), is
typical of the clumsy actions of pirates at their “enterprise”. The ship and her crew of
18 were finally released almost two years later, on late July 2012, after the drop of the
ransom to $9 million with the company finally settling to $3 million (Papandreou,
2011, p.180 & http://somaliareport.com). Still, there have been reports that suggest
that other pirate attacks have been far more selective and accurate (Hansen, 2009, pp.
36-37). In fact so accurate that a form of inside information is needed to make
attackers target specific vessels. This theory rests on some observations:
1. Pirates need to target high-profile targets in order to extort ransom for the
release of the crew, the cargo and the ship;
2. The money paid to the pirates (a considerable sum of approximately $18
billion for 2013 as estimated by World Bank) should have been enough to
create a new status-quo in the whole region, especially considering the low
tech systems employed by the numerically few pirates. Still, Somalia appears
to be a bottomless barrel unable to hold and distribute the loot.
3. Since ship-owners are those who take the greatest hit by the holding of their
ship, crew and cargo, in terms of losses from delays, who is the party that
profits from piracy?
The German Institute for Economic Research (DIW) seems to put the blame to the
insurance companies. The danger of pirate attacks has made vessel insurance
premiums to rise considerably, rolling the cost to the shipping companies. In order to
keep costs low, ship-owners tend to disregard security precautions as suggested by
international organizations for maritime transports thus exposing the integrity of the
ship and the crews to dangers. Also, DIW notes that the German security and arms
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27
industry and private security providers are amongst the benefiters of piracy, resulting
to the paradox: while naval presence of war vessels increased in the last five years,
pirate attacks have intensified (DIW, The Advantage of Piracy, 2010).
Even if we do not consider the above scenario likely to happen, the best way for
pirates to target their loot is by listening to their communications on the radio. That
alone justifies that a form of code of secure communications is established for
merchant marine sailing through pirate infected waters. Modern technology, based on
encrypted communications of the military navy, can offer ready-made systems that
can be fitted to the existing radio communications. Training the crews to the use of
these systems should also be included to the costs. If shipping companies prove
reluctant to undertake the cost (like it is suggested by the DIW), they alone must bare
the responsibility for the conservation of piracy (quod erat demonstrandum).
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5. Revisiting the issue of logistics in a troubled world. Dealing with
contemporary security issues in different types of transport.
5.1 Protection of supply nodes and storage areas
Remarkable as it is, the maritime sector doesn’t appear to be as sensitive to security
procedures and trends as –for instance- the air traffic one. Although thousands of
years old, the maritime sector is still lacking the security culture that the enfant
aviation developed in only a few decades. In the previous chapter we mentioned how
the maritime ports can be secured by the implementation of some simple methods that
already apply in airports (fences, surveillance cameras, security checks, access IDs).
We also addressed the importance of a sustainable flow of supplies for the sake of
global economy. One should then wonder why is it that the maritime industry is only
now realizing the threat piracy sets for the maintenance of a steady supply chain. The
reason may be that piracy before 2008 was not regarded as a serious threat to
maritime transport and the losses that caused were manageable. However, the rise of
piracy attacks after that year, the widening radius of pirate operatives and the
aggression that came with the resurgence of radical terrorism in the greater area of the
Middle East and central Africa (an aggression that created an impact both in the ways
of pirates and their weaponry) caused the maritime experts to re-evaluate their
positions on security.
Maritime logistics –in a rather simplistic way of looking at it- is like lines of shipping
tours connecting dots all over the world. The dots are, of course, ports, warehouses
and container depot areas, where the sorting and management procedure takes place
unceasingly. After the 9/11 attacks, many people started taking the security of such
installations more seriously. Europe had surprisingly the precedence owing to the
painful lessons from home terrorism in the 1970s and 1980s. A major attack on a
supply node or storage area can be devastating in its effects not only in terms of
damages and casualties but also derailing the ever tighter working and delivery
schedules in the globalized network of transportations. It could also create a serious
blow to other means of infrastructure having to do with the communication, energy
Securing the Sea Supply Chains
29
and transportation facilities of the greater area, as warehouses and depotes are
conjoint to harbors, airports and railway junctions. In 2005, nuclear weapons analysts
Philipp Bleek, Anders Corr and Micah Zenko of Georgetown and Harvard
Universities published an article of a 9/11 alternative scenario. In that they recognize
the psychological impact of the attacks on the World Trade Center towers but
challenge the strategic impact in comparison to a medium nuclear devise being
triggered for instance in Houston port. A small nuclear attack, triggered by a small-
size bomb smuggled in the country and carried in a backpack could cause damages
worth $200 million in installations and consequent 1 trillion dollars in the long run.
Houston is the largest commercial port for foreign imports the United States and sites
the largest petrochemical complex in the world. The authors state that “[…] fewer
than 5 percent of containers shipped to the United States today are physically
inspected. Fewer than 10 percent of containers are scanned for radiation, x-rayed or
fitted with tamper-resistant locks and electronic tracking […]”
(www.hks.harvard.edu, 2005). Alarmingly, the same situation -if not worse- describes
more or less most ports on a global basis. Time management dictates that goods are
transported quickly and there is no time for security screening of all items shipped in
ports, while many commercial ports simply lack the means to perform such controls.
Regretfully, such a scenario was realized on July 11 2011, when a container load of
arms and ammunition exploded in Mari, Cyprus. The ammunition was part of a
confiscated cargo load destined probably for Syria and the containers were
neglectfully depoted in the compounds of a naval base without any protection from
the high temperatures. As a result, the sealed containers acted as ovens in the Middle
East-proxy Mediterranean island. The explosion killed 13 and injured 62 military
personnel, police and firemen that rushed to the spot after the first explosion. It was
fortunate that military bases are not close to civilian homes and are secluded areas.
However, the vastness of the explosion destroyed the nearby Vasilikos power station
at Zygi, major supplier of electricity for the island, causing chronic power failures for
months to come (http://www.bbc.co.uk/news/world-europe-14102253) (Scheme 11).
Enhancing security to harbors and warehouses crucial to the international supply
chain is only the first step towards fortifying them against attacks. The organization of
international airports is a viable model for large harbors and railway stations: guarded
perimeters, segmentation of departments with controlled access between them,
Securing the Sea Supply Chains
30
separate passenger-cargo areas and handling mechanisms, a central security authority
to manage all security concerns and surveillance and check-points in junctions. The
final project offers a balanced area of security and efficient movement, which will
guarantee that there will be no surprises. “Guarantee”, of course to the measure of
plausible: only last June Karachi International Airport was attacked by Afghani
Taliban insurgents (“More than two dozen dead as Taliban assault Pakistan's main
airport”, http://www.reuters.com/article/2014/06/09/us-pakistan-airport-attacks-
idUSKBN0EJ0TW20140609) (Scheme 12). Although airport security is designed to
tackle threats from within and not to repel enemy mechanized advances from the
outside, the Karachi attack should be a point of concern for building a buffer against
pirates and terrorists in East Africa.
5.2 Cargo tracking centers
Early warning is the key of every security operative. Having a picture of the
movement and status of means of transportation and cargo would be the need for the
21st century. This time maritime transportation has the lead. Shipping companies
provide customers and forwarding agents with an online application to track their
shipment at any time, simply by filling the container number and the order code.
Another application is providing with live information on the exact satellite location
of a ship (https://www.marinetraffic.com/) even in cases of an unforeseen delay or
weather storm. In land, transporters tend to install GPS (Global Positioning System)
to their trucks to monitor and schedule their movements
(http://www.trackyourtruck.com/). Despite the cost of such systems for land vehicles,
it rises as an ever growing trend and is expected to become a permanent device in the
future because of the advantages it offers. The American Public Transportation
Association has estimated that in early 2009 around half of the buses in the USA were
using GPS tracking device. The National Insurance Crime Bureau (NICB) highly
regards the system as an important aid in the “battle” against car theft
(Informationweek.com (3/4/2009): “Court asked to disallow warrantless GPS
tracking”, http://www.informationweek.com/architecture/court-asked-to-disallow-
warrantless-gps-tracking/d/d-id/1077257?). On air, however, despite the leading
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31
technology used, evolution has not kept its pace. Recent events revealed that air
surveillance is not what most people believed.
Contrary to popular belief that in a global traffic environment the entity of airspace is
covered by radar, the incident of flight MH 370 proved otherwise. On March the 8th
2014, a Boeing 777-200ER of Malaysia Airlines (Flight 370) lost contact with the
ground control during on a routine flight from Kuala Lumpur to Beijing less than an
hour after its take off. Despite the mobilization of the world’s largest rescue mission
no trace of the 64 meter-long modern aircraft or any of his 239 people on board were
found. The incident revealed that radars cover only a radius of some dozen kilometers
around an airport or an important air-junction (aircrafts, like ships, move to pre-
designated air corridors and move at the command of the traffic controllers). The rest
of the area is “governed” by ground-based air beacons, strategically positioned on air
traffic routes that communicate at regular time intervals with the passing aircraft
transmitting a coded message to the aircraft’s electronic devices (ACARS (Aircraft
Communications Addressing and Reporting System). The aircraft is responding
automatically to the beacon, which in turn notifies the local aviation center of the
verification of the aircraft’s course. Although the case of MH 370 is still covered by a
veil of mystery, the story reveals the need for live-time contact with the aerial
vehicles for managerial and security reasons.
5.3 Alternative route evaluating centers
Piracy and marine terrorism can have grave consequences to the planning of a supply
chain strategy, as we have already assessed on a previous chapter. Ships, aircrafts,
trains and trucks move on prearranged routes that have been chosen for their
efficiency in terms of time, safety and accessibility. Re-arranging these routes require
serious and complex planning and translate to enormous costs. In the marine sector
BMP4 guidelines call that shipping companies are responsible for altering the routes
of ships to avoid High Risk Areas (HRA), in an effort to disclaim responsibility. In
the air sector the International Civil Association Organization (ICAO) can only
provide general guidelines leaving the tactical decisions to the regional offices. Land
operations are even more complex as only national authorities can take responsibility
for organizing land transports through their sovereign soil.
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32
Still, the need for a body that will make the necessary regional evaluation and risk
assessment for altering the route of a ship, a truck or an airplane is present, be it for a
natural disaster or for unforeseen HRO due to piracy, war or conflict.
In 2010, the Eyjafjallajökull volcano eruption in Iceland had a tremendous effect on
regional and international aviation. The grounding of all aircrafts and the paralysis of
the aerial transportations, apart from causing extreme delays and physical hardship to
hundreds of thousands of travelers (some of them prestigious world leaders as nature
makes no exemptions), created a cost of €1.3 billion according to IATA
(http://news.bbc.co.uk/2/hi/business/8634147.stm), and caused great economic
dismay in Europe, Asia and Africa due to the disturbance of supply chains
(http://www.worldtradewt100.com/blogs/14-wt100-blog/post/iceland-s-volcano-does-
a-number-on-global-supply-chains). All that out of a three-month ban in air transport
in Europe.
It is imperative, I think, for the sustainability of regular supply chain transport without
much disturbance and losses, to establish “regional transportation control centers” on
a global basis. The proposal comes in accordance to the globalization of trade, as
analyzed in chapter one, and the universality of the effects that regional disturbances
have on international transportations. The regional centers must have a uniform
structure and staffed with experts in the fields of transportation management,
economics and national law and international politics. The task of these centers will
be to monitor, manage, and analyze future trends on regular or alternative routes of
any means of transport of passenger and goods. The findings of the working groups of
these centers will be approved by local government authorities and reports will be
send on a regular basis to a general center, in the form probably of an international
organization. Then, the updated measures will be implemented to ameliorate the
procedures, the timing and the performance on a regional level. On a legal level,
authority will have to be taken away from local, national governments in order to
establish these centers; a move that national governments never seem to favor and
will in all probability oppose. Still, I believe that the previous paradigm of IATA on
the field of aviation is a strong precedent for a successful endeavor.
Securing the Sea Supply Chains
33
5.4 Insurances (means of restitution)
Insurance is another aspect of piracy. The likelihood of an attack and the causing of
damages to the ship, casualties among the crew or worst: the seizure of the whole ship
and the indefinite time of captivity of all elements of the vessel (ship, crew and cargo)
until the payment of ransom caused the insurance fees for ships in transit through the
dangerous waters of the Gulf of Aden to rise dramatically.
The rise of piracy, especially after 2002, made the insurance companies to re-adjust
their policies towards the new phenomenon. While in the past piracy was treated as a
historical relic that had long before extinct from the seas, now the demand of the
shipping industry to extend the covering of insurance to modern-day pirates and
marine terrorists perils made the insurance companies to “stern-way” and provide new
service packages under a handsome price (“Insurers face tougher times as Somali
piracy drops” (Sep. 21, 2012), http://www.reuters.com/article/2012/09/21/us-
insurance-pirates-idUSBRE88K0IG20120921). Indeed, older books have a
completely different definition for the word “pirate”, considering the term obsolete
and out-of-date for modern years and preferring a general concept around “war risks”
as reason for coverage against external cause damages (Brown, 1986, pp.112-113).
Instead, the term “terrorist” and “persons acting from a political motive” were still
included in the damages to hull and cargo (Brown, 1986, pp. 172-173).
Nowadays, insurance companies and law firms seem quite familiarized to the modern
trends and despite the conservatism of books (causa proxima non remota spectator)
they seem eager to overcome deficiencies and provide solutions. Three major issues
have risen with the re-emergence of piracy:
i. Hull and Machinery (H&M) and War Risk policies
Under the Institute Time Clauses (Hulls) of 1983 and 1995, and International
Hull Clauses of 2002 and 2003, piracy is covered by insurance claims.
However, modern trends push piracy provisions to be qualified as “war risks”
for vessels entering a “listed area”, meaning –obviously- the Gulf of Aden.
ii. Protection and Indemnity (P&I) policies
Protection and Indemnity cover liability insurance to crew members,
passengers and other third parties concerning loss of life, injuries and loss of
or damage to crew or passenger effects. Special care needs to be taken as such
Securing the Sea Supply Chains
34
coverage may be lifted in case P&I damages occur as a result of piracy, with
the use of weapons of war.
iii. Kidnap and Ransom (K&R) policies
A relatively recent addition to insurance and maritime law firms, the K&R
insurance is supposed to bend the provisions of marine insurance. The
payment of ransom is prohibited in some jurisdictions and insurance
companies suggest to their clients to be particularly cautious when expressing
their request. The language used in insurance texts of today’s insurance
providers reveals that companies tend to recognize modern trends and be eager
to cover the demand of ship-owners and co-operate in ransom payment as well
as relative expenses (negotiation and public relation consultants’ fees).
(INCE & Co International Law Firm: Piracy – the insurance implications, pp. 2-10).
In conclusion, maritime insurance remains an imperative asset in the engagement of
maritime transport with piracy. Owing to the increasing demand from the ship-
owners, who value the integrity of their vessels and the well-being of their crews,
insurance companies struggle to maneuver around the restrictions of an insurance map
that more and more seems obsolete to current trends. It is the opinion of the writer
that in view of the re-emergence of piracy in the seas, the employment of heavy
weaponry, the ties with radical terrorism and the violence of seizure, captivity and
ransom, the provisions of insurance policies need to be re-evaluated and change in
order to include provisions of support to companies and seafarers that have been
victims of piracy in the seas.
Securing the Sea Supply Chains
35
6. Conclusions
This assignment began as an effort to produce a scientific evaluation of the
phenomenon of modern piracy in the Gulf of Aden, the implications of its dynamics
to the maritime trade and in particular the supply chain route that passes through the
corridor of the Red Sea, bypassing the Somali coasts and the Indian Ocean.
In the first chapter, I tried to emphasize the capital importance of maritime
transportation for the international trade in a globalized world. The trends in
production and the organization of economic assets in the post-industrialized world
are utterly linked to the freedom of transportation. Billions of particles produced in all
corners of the globe must be transported in different places to be collated and produce
the final product. In such a world, the role of sustainable supply chains is imperative
for the success of the industrial production. International transportation also sustains
the distribution of food, energy and is the link between primary and tertiary
economies, between countries with developed infrastructure and countries in the
course of further development. In this enterprise, maritime transportation is the
undisputed king among other means of transportation. The enormous carrying
capacity through the “highways of the seas”, the ability to move avoiding the
formalities of national borders and the low cost of trafficking have resulted to 90% of
world trade taking place on board the merchant ships. Merchant navy sustains a
community of hundreds of thousands of seafarers, operating around 50,000 ships that
through adversities of weather and away from their families and social lives work so
that the rest of the people will have no scarcities. The maritime industry is responsible
for creating thousands of working places, assisting the world industry in keeping low
costs and thus increasing the living standards and the wealth of nations.
The fragility of this chain of supplies is more than obvious and the need to secure it is
imperative in order to avoid an economic and industrial breakdown. Natural disasters,
war, accidents menace the sustainability of that vital chain, which must be kept safe
and undisturbed to the degree possible. In this context, the value of risk management
becomes apparent for the protection of commerce and –ultimately- our whole way of
life. It is here that phenomena like piracy and international terrorism appear to
threaten the steady supply chain of global economy and freedom. Growing in areas of
Securing the Sea Supply Chains
36
outmost importance for the maritime trade, piracy and terrorism appear like the two
sides of the same coin. Aggressive, opportunistic, and dangerous, these pirates of the
21st century do not look as romantic as the known characters from novels and bedtime
stories. They are, however, just as lethal, ruthless and mysterious.
Piracy is not a novelty for the seas but in its modern version it can be just as
disturbing and fierce. In the second chapter I am trying to unravel the nature and
scopes of modern pirates, their connections with the radical terrorists, another plague
of our times, and to portrait the spread of that phenomenon in the Horn of Africa and
the threat they pose for the international marine. A special effort will have to be done
to contemplate about ways to answer to the pirate threat, existing tactics and
technologies that can be used in the fight to suppress that phenomenon.
In the third chapter, an executive report is presented on the ways to confront modern
piracy, the need for more security in general, the ways to fortify and protect our ports
and harbors from attacks from outside or from within, applied tactics for repelling
pirate attacks in the open seas and means to enhance it, the use of armed guards
onboard, results and objections from this application. Finally, I present some thoughts
on communication intelligence and security of information that is needed in modern
maritime navy.
In the fourth chapter, the issue of modern logistics in a troubled world is revisited
under a different scope. The need to protect supply nodes and storage areas, to
establish an international network of cargo tracking centers and a proposal on traffic
controllers that will evaluate and propose alternative routes in times of distress, be it
natural disasters or deliberate actions. Lastly, a sub-chapter dedicated on the relation
of marine insurances and means of restitution in case of loss or damage in connection
to piracy and maritime terrorism.
In conclusion, the resurrection of pirate activists and marine terror from the oblivion
of human history must not surprise us. It is true that modern man believed that in the
modern day 21st century violent practices of dubious morality would have been long
forgotten; hidden in the depths of human history. Still, pirates are here, now to remind
us that the nature of man is not changing so easily. The western man has tried hard –
although not always fair- to surpass his prior misery and ameliorate his life standards.
But at the end he only managed to build a wall between his happiness and other
Securing the Sea Supply Chains
37
people’s misery. Piracy is blooming in the fields of extreme poverty, watered in blood
and sorrow of a land called Somalia, where no smile is seen in the last 25 years.
Terrorism is no different. You will not find radicalism, fanaticism and men willing to
risk their lives crossing the ocean on a skiff to climb a huge container ship with
barbed wire and armed guards in the West. Only people who feel they have nothing to
lose but misery and death will call for such a life. I want to make clear in every
possible tone, that although I put such an effort to analyze the root causes and
development of piracy, I do believe that –in the long term- all these measures will not
succeed in resolving the problem. Piracy will not disappear so long the original causes
of its creation remain unsolved: poverty, political instability and lack of prospect in
the lives of the Somalis. Much like the man in the cold room, whatever his actions, we
must first “close the door” to the issues that created the problem. Then and only then
will all these measures have some effect. The end of piracy begins at the end of
misery.
Securing the Sea Supply Chains
38
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APPENDIX OF PHOTOGRAPHS
Scheme 1: Global container traffic between the continents in the last 30 years. The
volumes reveal the heavy dependency between the industrially developed countries of the
West and the rising countries of the East. Any disruption to the transportation flow could cost
a lot in money, time and reliability, which could only skyrocket end-prices. Source:
http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/map_maritime_ranges_traffic.html
Scheme 2: World chokepoints for shipping. The Red Sea route is defined between the Suez
Canal and the Bab-el-Mandeb straights. Its importance for global maritime trade is
indispensable. Source:
http://www.eia.gov/countries/analysisbriefs/World_Oil_Transit_Chokepoints/wotc.pdf
Scheme 3: Terrorist organizations in the wider Middle East and African continent. The
declared relations between Somali pirates and al-Qaeda affiliates al-Shabab has spread great
concern for the course of de-escalation in the Gulf of Aden.
Scheme 4: Map illustrating the global maritime routes. Contrary to popular belief ships
do not move randomly around the seas but follow specific corridors accurately curved in the
maritime maps in order to sail expeditiously and safe. The density of the Suez-Bab-el-
Mandeb route is more than obvious as so much as 8% of the world trade is passing through
that route. Sources: http://www.globalsecurity.org/military/world/egypt/suez-canal.htm,
http://eugeniy.org.ua/wp-content/uploads/2012/11/access-map.png
Scheme 5: Global Piracy map showing the hostile acts against ships (Red for attacks, yellow
for attempts). It is clear that the Somali coasts represent the greatest threat at this time.
Source: ICC International Maritime Bureau.
Scheme 6: Map indicating the escalation of pirate aggression off the Somali coasts in 2011.
Source: IMB Piracy Reporting Centre.
Scheme 7: Types of modern-day pirate ships, a. & c. Skiff, usual chase boat, b. Whaler
modified as a replenish-tanker, d. A “mother-ship”, a captured open-sea fishing boat used as a
floating base of operations for long-range raids. Source: Reuters, BBC, EUNAVFOR & US
Navy.
Scheme 8: As the successes of pirate attacks grew, so did their boldness. From 2005 to 2011
piracy turned from a localized phenomenon with little consequence to an international issue
Source: EUNAVFOR via http://www.globalsecurity.org/.
Scheme 9: Surveillance option for optimum results. While the use of satellites is somewhat
remote, the use of remote controlled unmanned air vehicles is ideal for 24-hour intelligence
gathering without cost.
Scheme 10: An example of a secure port facility according to ISPS standards. Source:
http://whisprwave.com
Scheme 11: Some suggestions regarding security on board. One can see: laser and sonic
weapons, fire-hose cannons, electric fence, slippery foam. Most of these suggestions were not
adopted in terms of complexity, cost and legal restrictions. Source:
http://flashpointsurvival.com
Scheme 12: Anti-piracy security measures went through many phases, sometimes applying
contestable practices.
Sources: superyachtcareers.com, paulinespiratesandprivateers.blogspot.com, cargolaw.com,
piracy-law.com.
Scheme 13: The explosion of a cargo of confiscated ammunition in Mari, Cyprus in 2011 was
ranked amongst the largest artificial non-nuclear destructions and led to the largest power
station in the island being utterly destroyed. Although as accident, it made some of the worst
nightmares of security analysts come true. Terrorist attacks in supply nodes and storage areas
are not to be taken lightly. Source: cyprusnewsreport.com & turkishnavy.files.wordpress.com/
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