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28 Jul, 2009 05:01

Cashing in on piracy

Since early 2009, pirates have carried out over 100 attacks off the Somalian coast. Two thirds have resulted in the hijacking of vessels. While the region’s waters remain menacing, insurance companies are cashing in.

A gap in the market has appeared to help shipping firms who have no choice but to send cargo through the pirate-infested Gulf of Aden. Phillip Cable used to be in the armed forces. In 2005, he set up the company Maritime Asset Security and Training or MAST which initially specialized in yachts. In the wake of a spike in piracy, he branched out in 2008 to provide security guards for Gulf of Aden-bound vessels – now 70% of his business.

"We arrange with our clients for our men to rendezvous with the ship off the coast of Djibouti or Salam in Oman and to go with the ship through the gulf of Aden helping the captain and crew to galvanize and barricade and work out what they’re going to do in the event of an incident," Phillip Cable told RT. "Firearms is a complicated legal process, only about 10% of our business is providing fire arms on board."

But legal complexities abound when it comes to weapons aboard a ship. Commercial vessels have the right of passage through international waters, but under maritime law, a ship that has armed guards may be considered hostile.

MAST’s crews make around 35 trips a month off Somalia and have been involved in 5 incidents since November.

Getting taken by pirates is statistically highly unlikely, but the consequences are potentially devastating. So as long as even the smallest threat of hijack off Somalia remains, companies all over the world will make money trying to secure vessels against it.