Who delivers the cash to the pirates? And who else profits?
Piracy off the coast of Somalia is big business. Last year alone pirate gangs were paid an estimated £35m from holding scores of ships and hundreds of crew members to ransom.
Securing their release is the responsibility of a hidden mini-industry of lawyers, negotiators and security teams based nearly 7,000km (4,200 miles) away, in London, UK, the business capital of the world’s maritime industry…
When a ship’s owner discovers one of their fleet has been hijacked, the first port of call for them is normally to a lawyer like Stephen Askins, whose firm is one of the few that deals with kidnaps and ransoms at sea.
“We would expect to be called early,” says Mr Askins. “And how you then deal with the negotiations will be a team decision…”People will do it in different ways,” says Mr Askins, “but at the end of the day it’s somebody from the owner’s side talking to someone from the pirate’s side, negotiating their way to a final settlement.”
No two kidnaps are the same but the proliferation of attacks off the coast of Somalia in the past year means a pattern has been established where the pirates see it as a business. They may be armed and dangerous but, Mr Askins says, money is their chief motivation.
“They are negotiating for money, therefore anybody who has been on holiday and has tried to bargain with an Egyptian [market trader] for a carpet will understand how difficult it is to negotiate a conclusion. But we don’t have the option of walking away, we have got to keep negotiating.”
Somali piracy is different. Paying a ransom is not illegal under British law, unless it’s to terrorists. And while governments have failed to clamp down to hijackings, a precedent of paying up has been established. So, as soon as pirates set foot on a ship they know pay day is only a matter of time.
The going ransom rate is $1m-$2m, but getting to a final figure is like a “tense boardroom negotiation” he says…
But agreeing a ransom leads to an even bigger headache – getting the money to the pirates…”Some of these people who have done these drop offs by boat actually have to fend off pirates as they are delivering the ransom themselves,” says Mr Dickson. His firm has delivered ransoms to several pirate gangs.
All these specialist services don’t come cheap in the UK. Factor in the cost of lawyers, risk consultants, security advisers, as well as the fixed overheads, and delivering the money to the pirates “can lead to doubling the ransom amount,” says Simon Beale, a marine underwriter.
Last year Somali pirates pocketed an estimated $50m. Not all of this is going to British lawyers, negotiators and security teams but a fair chunk of it will be. It has led to some criticism, particularly in Spain, that London is profiting from crime. “I don’t think people are trying to exploit the situation,” says maritime lawyer Mr Askins. “We are very much trying to do the job we have always done at the rates we would charge in any other case.”
It’s like the classic dialogue about who’s a whore and who isn’t. It always comes down to price, doesn’t it?