So far, 2012 has been a far less successful year for the Somali pirates with only 15 vessels having been hijacked so far and the majority of those were small fishing vessels or dhows. There is no one single reason for this reduction, rather the effect of multiple factors; intervention by military forces, more widespread adoption of Best Management Practice (BMP 4) by the shipping industry as well as the increased use of Private Maritime Security Companies (PMSCs) on Merchant Vessels to name but three. While the overall statistical probability of being hijacked remains extremely low and the frequently quoted statement that no vessel with armed security embarked has been hijacked, is there a danger that the shipping industry might become complacent about the threat in the Indian Ocean?

At the recent BIMCO GUARDCON Education day in London representatives from the insurance industry were able to put their perspective across on the subject of piracy counter measures and where they saw the market moving. It was interesting to note that they felt it would be impractical to enforce the adoption of BMP 4 on their members, although it could be argued that BMP 4 should be at the heart of any layered defence against piracy. It is, perhaps, assumed that the ever increasing use of armed guards and a wide ranging insurance policy will provide the assurance and protection needed to mitigate against pirate attack.

There have also been accusations that the insurance industry is profiteering from the threat of piracy in the HRA and that perhaps the insurers have no vested interest in seeking solutions to the problem. This would undoubtedly be an unfair assessment of the situation as it is clear that the insurance market has adapted itself to better understand the problems posed by piracy as well as providing more specific, tailored products to owners and PMSCs alike. Equally, although the probability of being hijacked has reduced significantly, the impact has increased significantly; both in terms of the time a vessel might be held for and the amounts demanded in ransom – thus the insurers are exposed to higher degrees of financial risk.

Despite repeated efforts, the IMO has been unable to get all of its member states to formally declare their position on the use of PMSCs on their Flagged vessels, nor for coastal states to publish their stance on weapons being carried onboard vessels whilst within their territorial waters. Perhaps another example of complacency, this is a fundamental block to the transparency that is desperately required to better understand the risks involved in operating in the HRA and to ensure that vessels are properly protected and operating legally whilst transiting this area.

The current focus of international attention appears to be surrounding the lack of regulation of PMSCs and the calls from ship owners and insurers for some form of standards and governance for the industry. Whilst there have been various initiatives started over the last couple of years, the current efforts centre around the creation of an ISO award for the Maritime Security Industry (ISO 28007) which is due to be published in November 2012. Given the rapid rise in the number of PMSCs operating in the High Risk Area (HRA) this move is welcomed, but the ISO will only provide a framework within which good PMSCs will continue to operate – it cannot monitor their performance on a daily basis at sea. More worryingly, there are already rumours spreading that the ISO may not be fully endorsed by a number of countries which would make it less than the international standard that it should be.

All of the above potentially paints a rather bleak picture of a growing level of complacency across the industry which should definitely be guarded against. The upcoming end of the monsoon period will be a very interesting one in terms of how the pirates react and whether they will adapt their tactics to attempt to overcome increased defences on merchant ships. We shall watch this space closely…..