The piracy that until recently was associated with the waters off Somalia has expended to the coast of West Africa. U.S. Department of Defense officials confirmed that the American captain and chief engineer of the oil platform supply ship the C-Retriever were captured Wednesday by pirates. The ship is owned by Louisiana-based marine transport company Edison Chouest. Another vessel carrying Nigerian joint task force members was attacked Wednesday afternoon.
The State Department considers this an act of piracy, not terrorism, and says it is “monitoring the situation.” The State Department website lists East Africa and the Middle East, Venezuela, the Straits of Malacca and Malaysia as regions in which piracy is a concern. The International Chamber of Commerce’s International Maritime Bureau’s (IMB) Piracy and Armed Robbery Report also lists West Africa.
In an October 17 report,) indicated that ocean piracy is at its lowest third-quarter level since 2006. For the first nine months of 2013, incidents of piracy fell to 188, down from 233 during the same period last year. Hostage-taking also declined to 266 people taken during the first months of 2013, compared to 458 for the same period in 2012. The IMB warned or continued threats off both the east and west coast of Africa.
Geopolicity estimates the cost of piracy at between $4.9 and $ 8 billion annually. Average ransoms in 2011 were about $4 million per person, according to the international law firm Ince & Co.
Companies doing business in areas subject to piracy may need to consider war-risk insurance, and to take steps to safeguard their operations and personnel. Hull and machinery risks or war risks insurance may be advised. Special kidnapping and ransom insurance also is available.
Note, however, that kidnapping and ransom insurance does not cover all geographic areas. The Nigerian delta, where these two acts of piracy occurred, are exempted by virtually all insurers. The risks are considered too high. The presence of an armed security team can reduce the risks, but leaves the company liable for other considerations. When seeking to reduce risks to crew and cargo in dangerous territory, consult your attorney as well as insurers to develop a comprehensive view of your options.