Gulf Of Guinea-Renewed pirates attacks raise fresh concerns on cost of shipping

There are concerns that the cost of doing business in Nigeria and other nations in the Gulf of Guinea might shoot up, going by the renewed threat of maritime piracy. 

A maritime security firm Dryad Global, said the pirate-infested waters of the Gulf of Guinea are now the world’s most dangerous for international shipping, with at least nine vessels attacked and 89 crew hijacked for ransom so far in 2019.

Three ships, according to Dryad have repelled pirates in the last few days to the end of the year 2019, including liquefied natural gas carrier BW Lokoja and suezamax tanker Istanbul. The firm noted that at least two piracy groups working in the Gulf of Guinea are responsible for the recent spate of attacks on tankers and kidnapping of crew, although it did not name the groups.

The firm said it has “identified a mothership, which one pirate group is using to operate deep offshore, as well as a separate group that’s exploiting ambiguous and haphazard patrolling on the outskirts of Nigeria’s Economic Exclusion Zone. 

The EEZ extends for 240 nautical miles,” Dryad Global Chief Executive, Phil Diacon said: “These criminal actors are using the EEZ as a cover from Nigerian forces and the international naval forces.

“By operating on the margins of the zone, the pirates take advantage of ineffective co-ordination between Nigerian patrols and confusion about whether international forces have jurisdiction, he said.

“The mothership used by one pirate group further offshore was identified using global satellite imagery as the Togo-flagged, 3,250 dwt chemical tanker Determination 2 (IMO 8201014) according to tankertrackers.com.

“The tanker, for which no ownership, classification or insurance details are available, has not been operating with its automatic identification satellite on at all times, thereby masking its location at the times of the attacks. So-called motherships are needed for pirates to operate in waters that are well out to sea and away from the shore.

‘Another ship, the 2013-built, Nigerian-flagged, 950 dwt product tanker Adeline Jumbo (IMO 9712424) has been closely watched as well,” Diacon said. “It’s not confirmed but there’s a lot of circumstantial evidence about the movements of Determination 2,” he noted.

Meanwhile, as the issue of protection from piracy in the waters off the coast of the gulf of guinea remains in front burner, there are indications that the operations of the pirates are have grave consequences on cost of doing business. 

The International Maritime Bureau (IMB) described the passage as “one of the most dangerous shipping routes in the world” and a “world piracy hotspot”.

Notwithstanding the situation, it stated that ships still call the region, but with higher costs. “Yet, because it is such a crucial part of the regional economy, ships still sail its waters and assume the increasingly higher costs that come with the threat of maritime piracy,” it stated.

Chidi Nwaonu of UK-based security firm, Peccavi Consulting, said: “Congestion at Lagos ports and the lack of other options means that ships are spending a long time queuing, meaning there are a large amount of ships in a relatively small area to target.

“Due to that and a lack of naval presence, there is the motive of high financial reward and comparatively low risk of detection or capture.” 

Nigerian Navy has restated its commitment to fight the battle headlong, but the Head of Research at SBM Intelligence, Cheta Nwanze, said: “Nigeria doesn’t have a plan to tackle this menace yet,” He said: “Nigeria’s Navy is the most powerful in the Gulf of Guinea, but compared to the army and air force, it has been underfunded and neglected.”

That is proving costly for firms, industry experts say kidnappings at sea have become so common, they have increased the cost of operations. Businesses have to factor in the costs of independent security contractors, extra insurance, and, sometimes, ransom money. Considering all of this, Oceans Beyond Piracy estimates the economic cost of piracy in West Africa through 2017 at about $818.1 million, up from $793.7 million in the previous year.

It stated that nearly a quarter of that $818.1m was spent contracting maritime security.Insurance also represents a huge cost, as the total cost of additional war risk area premiums incurred by ships transiting the Gulf was $18.5 million in 2017 alone, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance totalling $20.7 million.

Insecurity is so rife in the region that global insurance firm Beazley now offers “Gulf of Guinea Piracy Plus,” a bespoke insurance plan for maritime crew travelling through the area. The plan provides compensation for illegal vessel seizures and crew kidnappings even in the absence of ransom demands. It tracks insured vessels on a 24-hour basis, but because the risks are so high, it limits claims to $15m.

Early in the New Year, specifically on January 2, 2020, four persons were killed and three abducted following a pirate attack on a Nigeria-flagged hopper dredger in the Gulf of Guinea. The 2,153 GT Ambika was attacked when operating some three nautical miles from the mouth of the Ramos River and nine nautical miles east of the Forcados Terminal in Nigeria.

On December 31, armed pirates also abducted eight crewmembers of the Greek-flagged tanker Happy Lady while the vessel was anchored around 2 nautical miles off the port of Limboh, in Cameroon. The kidnapped crewmembers include five Greek nationals, two Filipinos and one Ukrainian sailor. Series of attacks were also recorded in November/December last year where over 19 crewmembers were abducted and latter released.