Sea Pirates Attracting Outside Investors and Upgrading Their Equipment
Piracy on the water is now attracting investment capital and it’s being used to upgrade equipment, according to a U.S. Navy official and Bloomberg’s account of the story. Bloomber’s story has more detail, but the opening is set out below. As the Bloomberg story notes, crime flourishes when other work is not available.
The article notes that many ships fail to follow best practices, and thus make themselves easy targets. It’s interesting to read this and wonder how much of a subsidy our nation and others are providing to the insurance industry by providing warships and soldiers to reclaim pirated ships and protect foolish ship owners. Insurers spend lots of time placing ads claiming they find and root out lots of fraud and crime. If all those words are true, one wonders why they can’t manage their insured ships away from the pirates.
"Piracy syndicates are selling shares in planned attacks, fueled by a surge of ransom payments that help attract investors, the U.S. Chief of Naval Operations said.
Piracy syndicates in villages, mainly in largely ungoverned Somalia, solicit investors who buy shares in the attack missions and gain a corresponding share of ransoms paid by the shipping industry, Admiral Gary Roughead said.
“The ransoms fuel the business, the business invests in more capability, either in a bigger boat, more weapons, better electronic-detection means to determine where the ships are,” Roughead said in an interview in Bloomberg’s Washington Bureau today. “So it’s a business.”
The average ransom payment rose 36-fold over five years to $5.4 million last year, compared with $150,000 in 2005, according to the Louisville, Colorado-based One Earth Future Foundation. The payments are fueling increased raids, adding at least $2.4 billion to transport costs because vessels are being diverted onto longer routes to avoid attacks off east Africa, the non-profit group said earlier this year. "