May 9 (Bloomberg) -- At first the video depicts a seemingly calm, sun-drenched sea from aboard the Avocet, until a pale blue skiff appears in the distance, cutting rapidly across the Indian Ocean toward the bulk ship’s starboard side.
After a tense radio exchange between the ship’s armed guards, who believe they’re under attack by pirates, their team leader steps through the bridge door and orders warning shots. Immediately, he and another guard fire dozens of rounds at the oncoming boat. The blaze of gunfire continues after the skiff crashes into the ship, with guards shooting down into the vessel, and as it then trails behind the Avocet.
“Second skiff coming in,” he shouts, then they turn and begin firing on the new boat, and the video ends.
At least some of the boats’ occupants were probably killed or injured, said Thomas Rothrauff, president of Virginia Beach, Virginia-based Trident Group Inc., which provided the ship’s security crew. He said the incident on March 25 last year was the second attempt to hijack the Avocet in three days. After spotting rocket-propelled grenades on the first skiff, the guards feared for their lives. The shootings were justified and the guards acted responsibly, Rothrauff said, firing warnings before aiming at the boat.
The gunfire exchange highlights a lack of rules governing the use of weapons on the high seas amid questions over how much force is legal and necessary to fight Somali piracy attacks, which targeted a record 237 ships last year. The video, presented at a shipping conference in December and leaked on the internet last month, has fueled debate over when is it acceptable to open fire -- and to keep shooting.
Fear of pirate attacks is creating more violent and chaotic seas, where some overzealous or untrained guards are shooting indiscriminately, killing pirates and sometimes innocent fishermen before verifying the threat, according to more than two dozen interviews with lawyers, ship owner groups, insurance underwriters and maritime security companies.
Reckless gun use at sea could put the whole industry at risk of reputational damage, said Stephen Askins, a partner at the London-based law firm Ince & Co., who has negotiated with Somali pirates for the release of hostages.
“You can’t have a Blackwater out in the Indian Ocean,” he said, referring to the 2007 incident in which Blackwater Worldwide security guards allegedly fired on and killed civilians in Baghdad.
New security companies have sprouted to cater to shipowners’ rising demand for private guards, often recruiting former soldiers from combat in Iraq or Afghanistan, as well as moonlighting police officers, they said.
‘Wild Wild West’
“It’s the Wild Wild West out there,” said James Staples, a retired U.S. merchant marine captain who spent more than 30 years working in the Indian Ocean and chased off pirates about to board his ship at 4:30 a.m. one morning in 2009 by shooting warning shots from his pistol. “There are no regulations or vetting process for these teams. The company doesn’t know who it’s getting on board. There’s no training requirement or training for lifesaving.”
Nevertheless, Staples said that based on his understanding of the incident, he believes the Avocet guards were justified.
The shipping industry is divided over whether the amount of shooting in the video was warranted, said Michael Frodl, a Washington-based chairman of C-Level Maritime Risks, a consultant with clients including ship owners and insurance underwriters.
“Some ship owners don’t want to spend money on security groups that just shoo away the pirates; they want to see pirates destroyed,” he said. “Others say you can’t import the values of warfare to what’s essentially a police action against criminals.”
There’s no doubt that pirates are a lethal and costly enemy on the high seas, with their attacks, hijackings and ransom demands translating into billions in economic losses. As vessel owners also confront rising fuel prices and cargo rates that have plunged since 2008, piracy is a problem they can ill afford.
Since 2008, gangs of Somali pirates linked to clans in the failed state on the eastern coast of Africa have carried out more than 800 attacks on ships, from private yachts to oil supertankers. Pirates hijacked more than 170 of those vessels, taking hostage some 3,400 seafarers and killing 25, according to Intercargo, an industry group representing global owners of dry cargo vessels.
Maritime piracy cost the global economy roughly $7 billion, including $530 million spent on private armed guards, according to Oceans Beyond Piracy, a project of Broomfield, Colorado-based non-profit One Earth Future Foundation. The pirate groups earned about $160 million last year through ransom payments for vessels and crew.
The Avocet’s Journey
The threat makes it tough on companies like New York-based Eagle Bulk Shipping Inc., which operates a fleet of 45 carriers, including the Avocet, that transport cargoes of minerals and grains.
The Avocet was traveling from Europe, passing through the Gulf of Aden, between Yemen and Somalia, when the pirates first approached on March 22 last year, said Trident’s Rothrauff, whose company specializes in maritime security. The pirates fired on the ship, but retreated, he said. For the next three days, the pirates followed from a larger vessel they appeared to have hijacked, their skiffs on board ready to be lowered into the water.
By the day of the videotaped shooting, the Avocet had reached a point in the center of the Arabian Sea, an area of the Indian Ocean midway between Somalia and India. Its American security team, which included former U.S. Navy SEALs, had been on alert for 72 hours, using their radar to monitor the location, Rothrauff said in telephone interviews.
A video camera fixed to the helmet of a Trident team leader captured the action over 2 minutes, 54 seconds.
For most of a minute, the team leader speaks by radio from the bridge, instructing other guards to hold fire, before running onto the bridge wing with his assault rifle and ordering warning shots. Then the action begins. The shooting continues with only brief interruptions for the rest of the video.
One of the first shots appears to have killed or incapacitated the boat driver, causing the skiff to crash into the side of the Avocet, according to two former special-forces officers from two different European countries who viewed the video at the request of Bloomberg News. Shooting at the boat continues until the guards spot a second boat and turn their guns on it.
Rothrauff said that while it is not visible on the video, return fire from AK-47s on the skiffs barely missed the head of one of his guards.
All four ship guards had fired warning shots, and that barrage of gunfire may have provoked a firefight that masked the sound of return shots from the skiffs on the video, he said. Trident has changed its procedures, and now permits only the team leader to fire warnings.
Rothrauff said it was likely that the occupants of the skiffs were killed or injured, though he had no way of knowing.
“We’re not in the business of counting injuries,” he said.
Trident is “absolutely” satisfied its operating procedures were legal, said Rothrauff. “Full compliance with rules for use of force were in place.”
He said the crew typically videotapes all encounters, but he wouldn’t confirm that video was taken of the first attack. He declined Bloomberg’s request to review additional images, saying all video belongs to the ship owner. Eagle Bulk Shipping doesn’t discuss its security or operational procedures, said Jim Lawrence, founding partner of MTI Network, a crisis media management company, on behalf of Eagle.
The video never should have become public, said Bryan Bittner, director of operations at Eagle Shipping International (USA) LLC, a unit of Eagle Bulk Shipping.
“What we do for vessel security should remain within the realm of parties interested,” he said in an April 13 telephone interview. He referred further inquiries to Trident.
Daren Knight, a maritime security consultant and former U.K. Royal Marines commando who leads on-board security teams and who viewed the video after hearing about it from a colleague, also concluded that the armed guards hadn’t fired warning shots, turning their weapons immediately on the skiff with the gunfire appearing to quickly spiral out of control.
‘Just Not Acceptable’
“The rate of fire that went down was just not acceptable at all,” said Knight, who is based in Dublin. “All force has to be proportionate, that’s the rules for the use of force.”
“I look at that video in horror,” said Chris South, deputy director at West of England Insurance Services, a protection and indemnity club that protects ship owners against marine risks. South said the guards appear to use excessive force.
“I don’t necessarily think they were acting with a graduated, proportional, necessary response.”
One risk is that armed guards inadvertently kill fishermen, said John Boreman, marine director for the International Association of Independent Tanker Owners (Intertanko), the industry’s biggest trade group. He cited the killing of two Indian fishermen in February, allegedly by Italian soldiers detached to the Enrica Lexie tanker, as well as the difficulty in distinguishing between fishermen and pirate boats.
Spotting a gun on an approaching boat doesn’t guarantee that those aboard are pirates, he said.
Demand for Guards
When looking for clues, Boreman said, “it’s not arms anymore because we know Yemeni fishermen carry arms.”
The presence of private armed guards is escalating rapidly on ships crossing areas prone to piracy -- generally considered to include the Gulf of Aden and waters off Somalia and fanning out to the Indian Ocean, covering an area about the size of the continental United States.
Some 160 maritime security companies operate in high-risk areas, according to William Mackenzie Green, business development manager at Protection Vessels International Ltd., one of those companies. About 40 percent of the 42,500 ships that transit the region each year now use armed guards, compared to 15 percent a year ago, he said.
The armed-guard business boom is based on financial calculations by cash-strapped ship owners. Freight rates have slumped since the final quarter of 2008, and an oversupply of new ships and high fuel costs cut earnings to unprofitable levels for most types of tankers, container ships and dry cargo vessels in 2011. Container-shipping lines lost more than $11.4 billion last year, according to SeaIntel Maritime Analysis, a Copenhagen-based consultant. Eagle reported a net loss of $14.8 million for 2011, with cash generated by the fleet declining from $94.3 million to $58.3 million.
Cheaper Than Fuel
Hiring armed guards is cheaper than the extra fuel required to detour around pirate areas or to go fast enough to outrun them, according to Roland Hoeger, managing director of the shipping companies of the Komrowski Group in Hamburg, which has used such guards since one of its container ships, Taipan, was hijacked in 2010.
Armed guards cost about $60,000 for a crossing while the extra fuel for the largest container ships to go at their maximum speed comes to about $200,000, he said on April 25 at a Hanson Wade piracy conference in Hamburg.
No ship with armed guards aboard has been hijacked by Somali pirates, according to Peter Cook, chairman of the Security Association for the Maritime Industry, a group that has created an accreditation system for private guard companies. And the proportion of attacks that lead to hijackings has plummeted.
Guards Deter Hijackings
In the first quarter of this year, the 43 reported ship incidents with Somali pirates resulted in 9 hijackings, 152 seafarers taken hostage and two mariners killed, according to the International Maritime Bureau’s Piracy Reporting Center. That is roughly half the 97 incidents, 16 hijackings and 299 mariners seized in the first quarter of 2011.
While more countries have begun allowing private armed guards to board ships bearing their flags, including the U.S., U.K., Norway, and Panama, there are no binding international rules that regulate their use. The United Nations’ International Maritime Organization issued non-binding guidelines for private armed guards last year stating that they should try to avoid using force, but if they must do so, “in no case should the use of force exceed what is strictly necessary.”
Andrew Shapiro, Assistant U.S. Secretary of State for Political-Military Affairs, said an expectation that armed guards on ships would behave as undisciplined “cowboys” and increase violence at sea has not panned out.
“We have not seen cases of pitched battles at sea between pirates and armed security personnel,” he said in a March 27 speech in Washington.
With the release of the Avocet video, a state department official said its context was insufficient for him to provide a definitive opinion about whether the guards’ actions were appropriate.
”It certainly doesn’t dissuade me or my colleagues in the U.S. government from the view that the increased use of armed security teams is purely a reaction to the increase in pirate attacks and is demonstrably effective in repelling attacks,” said Thomas Kelly, Principal Deputy Assistant Secretary of State for Political-Military Affairs. “And that is a good thing.”
Per Gullestrup, a partner at Copenhagen-based Clipper Group A/S, negotiated the release of one of the company’s ships after it was hijacked in late 2008. Clipper has used armed guards for all of its Indian Ocean crossings since March 2011.
“We know of numerous shootouts between armed guards and pirates and every time the pirates have had to break off an attack,” he said. “In our view the only 100 percent fail-proof way so far is putting armed guards on board.”
While most private armed guard suppliers say they have strict rules governing their use of force and say they make sure to verify that suspicious vessels really are pirate ships initiating an attack before shooting at them, both the video and encounters listed by the International Maritime Bureau (IMB) seem to paint a different picture.
Two entries in the IMB’s 2011 annual report record private security teams firing at skiffs at a distance of one nautical mile, or more than 2,000 yards.
“Any idea how far out you could see an AK-47 with a 10-power scope? Maybe 350 yards,” Jonah Mesritz, a former Navy SEAL who is in business development and is a guard team leader at GreySide Group, said in a presentation to ship owners in Hamburg last month. “These guys have to come in close enough for you to be able to ID these weapons.”
Incidents Not Reported
Askins, the London lawyer, said firefights aren’t being reported or investigated, and that armed guards lack the accountability and transparency demanded of the military and police.
Ship owners are asked to report all incidents or suspicious activity to either the IMB or to militaries patrolling in the region via the U.K. Maritime Trade Operation (UKMTO), but aren’t required to do so.
Reported attacks early this year were about half of what the European Union Naval Force, EU NAVFOR, expected, indicating that a large proportion of all pirate encounters may not be disclosed, according to Simon Church, industry liaison officer. That proportion is pushed down in part by the use of armed guards, Intertanko’s Boreman said. At a conference in Dubai in March, he saw a sample contract of a private armed guard supplier that specifically prohibited the ship owner from notifying UKMTO of any encounters, he said.
Eagle Shipping, whose carrier was sailing under the flag of the Marshall Islands, reported the March 25, 2011, incident to the islands’ registry, according to John Ramage, chief operating officer of International Registries Inc., which runs the registry. Eagle also reported it to the IMB, which provided this description in its 2011 annual report: “Armed security team aboard fired warning shots. The pirates aborted the attempted attack.” Eagle reported the earlier, March 22, exchange to the IMB, but the Marshall Islands has no record of that attack, according to Ramage.
The video did not come to the attention of officials with the islands’ registry until two weeks ago, Ramage said. It is his responsibility to decide if an investigation is warranted, he said, and if so, pursue one. He said he had not spoken to the security company, was unaware of injuries or deaths to those aboard the skiffs, hadn’t investigated and doesn’t plan to.
“It’s very unfortunate that the Somali pirates got injured but they shouldn’t be doing it in the first place,” Ramage said.
Officials with the U.S. Department of Justice declined to comment on whether it was investigating.
James Wilkes, managing director of Gray Page, an Oxford, England-based maritime investigation company, said an inquiry into the incident is necessary for the integrity of the shipping industry.
“It’s given enough people cause for concern that something should be done,” Wilkes said. “It can’t just be swept under the rug.”
No one should pre-judge the outcome of an investigation, he added.
“We don’t know the full circumstances, we don’t know the run-up to it, we don’t know what happen afterwards,” he said. “We only have the video to go on, but that’s why an investigation is required.”