Today’s announcement on the geographical reduction of the BMP4 High Risk Area comes at a crucial time in the ongoing work against Somali piracy. The measures implemented by BMP4, along with other international efforts, have effectively stemmed the tide of hijackings that were so prevalent in recent years. The balance between appropriate levels of risk mitigation effort and avoiding complacency is vital in any diminishing risk scenario and the situation in and around the HRA is no different. So was the announcement based upon a good decision or a gamble?

 

In coming to a decision to re-define the HRA, BIMCO and its co-sponsors will have considered the overall threat context, where we have not seen a confirmed attack on a commercial vessel for well over a year, and also the capability of those engaged in the crime and their ability to return to large-scale, long-range piracy.  They will also have considered the pressures placed upon vessels with the HRA as currently defined.  Put simply, the existing HRA does not reflect the current Somali pirate threat and the associated risk of attack and hijack.  Although some might favour the status quo, in Dryad’s view, a decision to leave the HRA with its current boundaries would have been one that ignored the facts.

 

The decision to amend the size of the HRA by removing the Gulf of Oman, the majority of the Red Sea and East of 065 longitude reflects both the reality of the current threat and also the concerns expressed by some coastal states.  The last confirmed piracy incident east of 065° East was in March 2012. Reports of suspicious craft operating close to the coast of India since then have been classified as encounters with the myriad of fishing vessels operating out of west coast Indian ports and harbours. To the north, in the Gulf of Oman, the last confirmed piracy incident was in December 2012. Again, reports of suspicious vessels following and approaching MVs have been classified as either encounters with fishermen or smugglers.  Finally, whilst the Bab el Mandeb strait at the southern extremity of the Red Sea has featured many reports of suspected pirate activity, we have not seen a vessel fired upon since September 2011.  Furthermore, the only hijack to take place in this area was in July 2010.  As with the other areas detailed above, it can be seen that keeping the totality of the Red Sea in the HRA is just not supported by the evidence.

During the last three years effective anti-piracy patrols by naval assets, the provision of armed security guards, implementation of BMP4 measures and the use of timely intelligence have contained the spread of piracy in the Indian Ocean.  The revision of the HRA is a good news story, despite warnings from some in the maritime security industry who have implied that a reduction would be ill-advised.  The conditions for this development have come about as a result of a comprehensive, multi-national and industry cooperative effort that has resulted in the effective containment of Somali piracy.  From the significant contribution of international naval forces and commercially sourced armed guards, who have tackled piracy head on, to those who provided other support and confidence-building measures, including MSCHoA, UKMTO and the co-sponsors of BMP4, the HRA reduction is an important step in the process of de-escalation and a return to normality for maritime trade in certain areas of the region.  We should also commend those companies and organisations promoting stability and reconstruction on the ground within Somalia as well as those that have led the work on the judicial system that has meant that pirates have not gone unpunished; a carrot and stick approach that has added to the overall success of the multi-national operation.

 

The reduction of approximately 55% or 1.7 million square miles of ocean will give the hard-pressed shipping industry some cause for optimism with the potential for reduced operating costs, especially in areas where risk appetite and the continuance of the BMP4 area have resulted in far too many transits that have unnecessarily featured armed guards, such as Indian coastal passages to and from the Far East and the Arabian Gulf. It will also come as welcome news to the seafarers who have suffered at the hands of Somali piracy for far too long.  That is not to say that they have nothing further to fear, but it is an indication that things are much better in 2015 than they were just a few years ago and should improve the confidence of crew members when transiting through the region.

 

The news may not be so good for some Private Maritime Security Companies (PMSC), many of whom have seen their profits plummet in recent years, due to fierce competition in an over supplied market and increasingly financially savvy client base. Quality armed point defence of vessels against pirate attack comes at an understandably high cost, both financially and logistically, but it is likely that some shipping clients will push even harder to drive their costs down in the face of a reduced HRA. But here lies an important issue – the Indian Ocean covers a massive area with opportunities for embarkation and disembarkation only available at the entry and exit points to the world’s third largest ocean.  This limiting factor will inevitably result in carrying security teams for far greater distances before their armed services are required.  What was once a day’s journey from a pick up in Galle to the HRA would become an overnight transit and those that embark in Suez, as some do, will have a long trip before they reach the new boundaries of the revised HRA.  It is therefore likely that those PMSCs who are already feeling the pinch may join those that have folded in the last couple of years.  Only time will tell, but if the shipping industry pushes too hard, there is a risk that the available supply of quality guards may go down very quickly and the maritime community will be left with bargain basement, low quality offerings that may fail at the point of need.

 

In summary, it would be premature to claim total victory on piracy, but the amendment to the size of the HRA is well considered and reflects the balance of caution and progress.  The message from those who understand the security situation is unequivocal in stating that the threat remains, albeit inactive or contained at present. It is clear that the audacious long range attacks seen in 2009-2011 are not the most likely course of action and thus a de-escalation of risk posture in these areas is wholly appropriate. The re-drawing of the boundaries does reflect the criminals’ most likely course of action should the threat reconstitute itself and, in Dryad Maritime, we fully support this pragmatic decision to reduce, but not remove, the HRA. This is the first and most optimistic sign of progress toward that goal.  It will be interesting to see how the shipping, security and insurance sectors respond to this significant change.