Pirates making hundreds of millions in ransoms, as attacks intensify off Somali coast
by JOSHUA RHETT MILLER
June 5, 2012
While much of the world's economy is in the doldrums, business is booming for Somalia's pirates, whose attacks on commercial ships sailing Africa's east coast are more frequent, violent and lucrative than ever.
Pirates took in an estimated $160 million in ransoms last year, and one study predicts the number will climb to $400 million by 2015, as the high seas thieves continue their brazen reign on the Indian Ocean. Efforts by shipping companies to beef up security, and by the European Union, which has mounted airstrikes on pirate ships, have so far been met with stepped-up attacks. Chillingly, pirates are now chopping off the limbs of captives in extreme cases when the airdrop of cash isn't made quickly enough to suit them.
"It's an established, structured model, where you have Somalis who are leading and financing operations and then you have pirates who actually go out to sea and conduct the activity," Brian Green, chief of the counter-piracy branch of the Office of Naval Intelligence, told FoxNews.com of the piracy industry. "They are, more or less, foot soldiers. They find targets of opportunity, attack them with the goal of hijacking and bringing that vessel back to Somalia."
Piracy worldwide reached an all-time high in 2011, as 544 attacks against ships were reported to the International Maritime Organization, an increase of 11 percent from 2010. Nearly half occurred off East Africa, where Somali crews in small boats range hundreds of miles out into the Indian Ocean, boarding container ships sailing south toward the Mozambique Channel. Of the 17 hijackings reported to the International Maritime Bureau so far in 2012, a dozen have been off Somalia's coast.
Typically, they board the ship, overpower the crew and sail it toward any of the hundreds of islands that pepper the East African coast. They convey their demands to the shipping company, and wait. Pirates have been known to hold crews captive for months, waiting for the ransom payment. The initial demand is typically between $10 million to $20 million, eventually whittled down to $2 million to $5 million, usually after "months of negotiation," Green said.
When the company agrees to meet the pirates' demand, a small plane or helicopter flies overhead, dropping a canister by parachute near the ship. They prefer to get paid in U.S. $100 bills, according to Green.
"It's a cash transaction," he said, noting that tracing the money later is all but impossible.
Last year, pirates took in 31 ransom payments, averaging just more than $5 million apiece. With so much money at stake, and so few other prospects for the lawless sailors of Somalia, consulting firm Geopolicity predicts that figure could skyrocket to as much as $400 million by 2015. The cost to the shipping industry, in extra security and lost time, will reach $15 billion by then, according to the study.
Somali pirates recruit their crews from among the teens that roam the streets of cities such as Eyl in the northern Puntland region. Promised a "quick score," they sign on and learn the ropes at sea, according to Steve Collins, operations manager of Sea Marshals Ltd., a United Kingdom-based company that provides security teams for vessels in the pirate-infested waters of the Red Sea, Gulf of Aden, Indian Ocean and Gulf of Oman. The teen pirates are often under the influence of khat, a drug made from a native plant that induces an amphetamine-like high when chewed, as well as unpredictable behavior.
"From what we know, they are generally young men looking for a better life," Collins told FoxNews.com. "They are told piracy is a quick way to become rich and get a part of the ransom. Basically, they are given an AK-47 and are thrown onto a vessel."