Shipowners Turn to AK-47s to Halt $2.4 Billion of Piracy Off Africa, India

Shipping companies are turning to guards armed with AK-47 assault rifles to protect vessels from pirates, a trade group for security professionals said, after record numbers of attacks last year added $2.4 billion to costs.

About 20 percent of ships in the Indian Ocean and Gulf of Aden will use armed guards within the next 18 months, up from 12 percent, Peter Cook, spokesman for the Security Association for the Maritime Industry, said after a presentation yesterday in London. The group represents a fifth of private security firms offering services to shipping companies in the region, he said.

Average ransom payments jumped to $5.4 million last year, from $150,000 in 2005, Louisville, Colorado-based One Earth Future Foundation estimated in January. Attacks off Somalia were also at an all-time high, with 49 vessels and 1,016 crew members hijacked, according to the International Maritime Bureau.

“There is a wish by some shipowners to have armed guards on board and you can’t dispute the fact they are successful,” said Andrew Bardot, secretary and executive officer of the International Group of P&I Clubs, which insures 90 percent of the world fleet against liability claims. There have been no successful hijackings on ships with armed guards, he said.

Most companies have three to five guards on their payroll and hire extra staff on a freelance basis, Cook said, adding that shipowners pay about $100 million a year for the services. There are between 50 and 80 four-person teams of guards on vessels at any one time, mostly toting AK-47s, he added.

Vetting Procedures

There have been 145 attacks and 22 ships hijacked by Somali pirates in the Indian Ocean so far this year, according to the International Maritime Organization, the shipping division of the United Nations. Somali pirates added at least $2.4 billion to transportation costs in 2010 as ships were diverted to avoid attacks off east Africa, said One Earth, a non-profit group.

The IMO, which had advised shipowners to avoid using armed guards, will probably approve vetting procedures for security operators this week, paving the way for their increased use, Cook said. The organization will discuss guidelines for hiring private armed guards this week, it said by e-mail on May 9.

“The maritime security industry wants to be regulated,” said Cook, adding that his newly created trade group for companies seeking to protect shipping will allow owners to distinguish “good maritime companies” from “entrepreneurs.”

To contact the reporter on this story: Michelle Wiesebockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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