Pirates increasingly gaining the upper hand

In the light of the latest events, the incentives for pirates currently far outweigh the disincentives, according to Andrew Pike, a founding partner of the maritime law firm, Van Velden Pike & Partners. “The recent capture (October 11) of the NYK bulker “Izumi” by Somali pirates and the announcement that Kenya is no longer willing to handle the arrest, trial and imprisonment of captured pirates, brings back into sharp focus the piracy issue with which the region continues to be faced.” With Seychelles now the only country in the region willing to hold piracy trials, Pike expressed his opinion that the incentives for pirates far outweighed the disincentives. Also, there remain some major concerns for South African shipowners, charterers and cargo owners arising from pirate attacks. Wearing his hat as senior lawyer and risk manager, Pike told a recent conference on piracy that the issue should be approached by all stakeholders – including those ship and cargo owners, charterers and governments – from a methodical risk management perspective. “All risks to crew, cargo, reputations, ships, sales contracts and the like need to be properly assessed for likelihood of occurrence and overall impact on the various stakeholders,” he added. “The risks, once properly assessed, then need to be managed by applying appropriate risk control measures to them.” And these controls come in a number of forms – and could include (as appropriate to each risk) anti-piracy measures; cargo insurance to deal with general average claims by shipowners and the like. However, Pike sounded the warning that, in his view, payment of a ransom to pirates for the release of ship, crew and cargo is a contravention in SA of the Prevention and Combating of Corruption Act. “Consequently,” he told FTW, “if a shipowner, for instance, were to pay a ransom and then claim a contribution in general average from the cargo interests, an SA insurer of such cargo would probably be within his rights not to pay the general average contribution under the policy – because the claim arose from an illegal act.” Interestingly, Pike added, it is not illegal in countries such as England to pay ransoms. This scenario then leaves the cargo owner on the horns of a dilemma. “Either he has to put his hand in his own pocket in order to recover his cargo, and thereby become party to the illegality,” he said, “or he must make an ethical decision and walk away from his cargo. No prizes for guessing which route most cargo owners will take.” Be that as it may, Pike believed that all stakeholders should be speaking to each other. He also suggested that a lobby to the SA government to decriminalise ransom payments in certain circumstances would also be appropriate.