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.