The Crimson Permanent Assurance

Paul Raven @ 23-02-2011

Those Somalian pirates aren’t going away; in fact, they’ve extended their span of operations pretty considerably, and that – combined with some recent murderings of unransomed hostages – is understandably causing concern for shipping operators (though the cynic in me notes it took the murder of white Americans to get the appropriate level of ire stoked up).

But what to do? Mercenary escorts are useful, but expensive… so collective risk mitigation is one potential answer. have you paid your piracy insurance?

The Convoy Escort Program, a nonprofit company assembled by the Jardine Lloyd Thompson brokerage group in London, wants to sell a more efficient way to insure and protect merchant vessels, since the current method — of buying expensive ransom insurance and hoping that some navy ship will sail to the rescue if pirates attack — hasn’t lowered the risk of piracy.

Through the CEP, ship owners would be able to buy, say, a few days of war-zone insurance on the Lloyd’s of London market and also pay for a quasi-military escort past Somalia. The escort would give armed protection without the cost and hassle of armed teams on board every cargo ship. Shipowners have learned that expensive (and controversial) armed teams are one sure way to ward off a hijacking.

“The concept is that shipowners will not be paying any more than at the moment and maybe a lot less,” said Sean Woollerson from JLT. “But they will be afforded proper protection and the presence of the escorts will be a great morale booster for the seafarers.”

Great idea! Well, a great idea assuming you like the idea of what’s essentially a private navy, of course… and as the Miller-McCune article goes on to point out, this is how arms-race escalations of conflict can start:

Of course, a private navy could also change the atmosphere on the water off Somalia. Strict rules of engagement currently keep national navies from shooting or even arresting most pirates, and until recently, the pirates have been relatively gentle with their hostages. But the last couple of months have seen more aggression from the navies and a corresponding rise in nastiness from the pirates.

Presumably private boats would have more freedom to open fire, though no one wants to say so. The Royal Navy would have the Convoy Escort Patrol under “operational control,” but wouldn’t “manage” it, according to the London Times. “The crew would have to conform to international rules on combat and engagement,” the paper writes.

Oh, international laws on the conduct of warfare! They always get followed to the letter, don’t they? Especially when the press aren’t around.

My concern here is that – like so many of the solutions proposed to conflicts generated by massive wealth disparities – the CEP is a cure for the symptom, but not the disease. We all know how futile a game of whack-a-mole can be, but it seems we have deep-seated species-wide jones for it nonetheless.

[ Yes, yes, I know, the Crimson Permanent Assurance turned pirate rather than protecting against pirates, but I couldn’t pass up a chance at such an obscure Python reference. Sue me. ]


Somalia: failed state, economic success?

Paul Raven @ 30-04-2010

Via the Anarcho-Transhumanism blog, here’s an interesting article that examines Somalia’s fate since the fall of Siad Barre’s dictatorship in 1991, and which points out that – despite a lack of central governance – Somalia’s economy has actually improved somewhat:

It is hard to call any country mired in poverty an economic success. Yet by most measures Somalia’s poverty is diminishing and Somalia has improved living standards faster than the average sub-Saharan African country since the early 1990s. In that sense Somalia is at least a relative success story. The most interesting part of Somalia’s success is that it has all been achieved while the country has lacked any effective central government.

For many, the “A” word—anarchy—conjures up notions of chaos. For others it simply means the absence of a single government ruling a geographic area. In this second sense, Somalia has been in a state of anarchy since the fall of Siad Barre’s dictatorship in 1991. The result has been, in general, economic development rather than chaos—although there certainly have been chaotic periods. The interesting questions are how has development been promoted and what has caused the chaos.

You’re probably thinking “Somalia – that’s the place with the pirates, right?” Correct:

Although they are a concern, this is not merely a symptom of a “failed state,” as many media reports make it out to be. In one sense, that the piracy is committed against passing foreign vessels is a tribute to the internal effectiveness of Somali customary law. The pirates are well-armed and obviously not hesitant to use violence. Yet they do not plunder Somali ships. What’s more, they interact peacefully with other Somali when they are on land. Although the total number of pirates is small, it has been estimated that 10,000 to 15,000 people are employed by the pirates indirectly in related industries such as boat repair, security, and food provision. (Other enterprising Somalis have set up special restaurants to cater to the hostages.) That pirates use voluntary market transactions to purchase goods and services on land, rather than pillage, provides some evidence that Somali law is fairly robust if even these otherwise violent people respect it when conducting their internal affairs.

Now, neither I or the authors of that article are suggesting that life in Somalia is a basket of peaches, or that a collapse of central governance is de facto a good or desirable thing. But the figures and social phenomena discussed would certainly suggest that a state of political anarchy doesn’t necessarily have to lead to a Hobbesian ‘natural’ lifestyle, and that systems for managing conflict and economics have a way of emerging from the bottom up.

Go read the whole thing.


Somalian pirate ‘stock exchange’

Paul Raven @ 03-12-2009

piratesThe Somalian tanker pirates are back in the news – apparently they’ve set up a sort of ‘stock exchange’ to handle the influx of business and investment opportunities and feed their ransom money back into the local area [via BoingBoing; image by bazylek100]

The gangs have made tens of millions of dollars from ransoms and a deployment by foreign navies in the area has only appeared to drive the attackers to hunt further from shore.

It is a lucrative business that has drawn financiers from the Somali diaspora and other nations — and now the gangs in Haradheere have set up an exchange to manage their investments.

One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.

“Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 ‘maritime companies’ and now we are hosting 72. Ten of them have so far been successful at hijacking,” Mohammed said.

First point I’d make is that this reads much like a press release – as if the Reuters guy went down, got a few quotes from the people involved (who were only too keen to put a gloss of success on the operation for the international media) and filed the copy. This is a story about bad guys, so if the bad guys want to appear like they’re really bad, why not quote ’em verbatim? I doubt things are running quite as smoothly as they’d like us to believe.

That said, the core of the story is eminently believable… and if the stuff I read in my old job as an employee of the Royal Naval Museum is to be believed, there’s considerable historical precedent. The buccaneers of the Caribbean had thriving dependent communities and investment programs, and operated with a similar degree of impunity at the peak of their powers, as did the Barbary corsairs. As the nation-state model of political power decays, I suspect we’re going to see more interstitial criminal communities arising to skim the cream from international trade – those tens of millions of dollars that the pirates are raking in aren’t comparable to the higher cost of sending navies out to stop them. Which in turn leaves the door open for the rise of mercenary navies to take on the work of protection…


The truth about Somali pirates

Paul Raven @ 17-04-2009

Jolly Rodger pirate flagWell, what do you know – there’s more to the Somalian piracy stories than meets the eye. Far from being the eye-patched privateer chancers that the term ‘pirate’ conjures up, they’re desperate people trying to make a living and protect their homeland from exploitation by more developed nations who’ve seen fit to take advantage of the political instability of the area.

Sure, their methods are rough (and definitely illegal), but what are a people without a government to defend them supposed to do when foreigners start trawling their waters for fish and dumping nuclear waste?

This is the context in which the “pirates” have emerged. Somalian fishermen took speedboats to try to dissuade the dumpers and trawlers, or at least levy a “tax” on them. They call themselves the Volunteer Coastguard of Somalia – and ordinary Somalis agree. The independent Somalian news site WardheerNews found 70 per cent “strongly supported the piracy as a form of national defence”.

No, this doesn’t make hostage-taking justifiable, and yes, some are clearly just gangsters – especially those who have held up World Food Programme supplies. But in a telephone interview, one of the pirate leaders, Sugule Ali: “We don’t consider ourselves sea bandits. We consider sea bandits [to be] those who illegally fish and dump in our seas.”

There are two sides to every story, as the old saying goes. That said, it’s interesting to note that this article is by the same guy who did the hatchet-job on Dubai the other day… [via BoingBoing; image by Paul Keleher]