As piracy attacks dwindle, ransom demands rise

Somali pirates' ransom demands are on the rise, but experts say it is a sign of desperation on their part.

Twenty-one hostages aboard the Royal Grace were freed on March 8 after more than a year in captivity after an undisclosed amount was paid as ransom. Photo courtesy EU NAVFOR

DUBAI // Ransom demands by Somali pirates are rising as tighter security cuts the number of hijack attempts.
The average ransom rose from about $4 million (Dh14.8m) in 2010 to $5m in 2011. There were 14 hijackings and 75 pirate attacks last year, down from 28 and 237 in 2011.
A strong naval presence in high-risk areas and private armed guards on merchant vessels have helped to rein in the hijackers.
"The pirates know the fight against them has succeeded, hence the increase in ransom money," said Saeed Rageh, counter-piracy minister in Somalia's autonomous Puntland region.
"Their desperation has made them charge exorbitant amounts of ransom money. This puts the hostages at risk if quick and appropriate interventions are not put in place."
Pirates have held no UAE-owned vessels since the release on March 8 of the chemical tanker MV Royal Grace and its 21 hostages after more than a year in captivity.
Experts believe the ransom paid was well over the US$1.7m relatives say was demanded in threatening phone calls by pirates.
The MV Smyrni, a tanker with 26 crew carrying 135,000 tonnes of crude oil hijacked last May, was also released last month after payment of a ransom believed to be more than $9m.
Puntland's Maritime Police Force rescued 22 crew from the UAE-owned cargo ship MV Iceberg 1 in December last year after a 13-day siege and gun battle.
Harrowing stories of torture and brutality emerged from seamen freed after nearly three years, the longest period of captivity endured by Somali pirates' hostages.
Pirates still hold at least 65 hostages, according to the International Maritime Bureau statistics, a steep fall from the 212 being held in June last year.
The backlash is more intensive negotiations, said Mr Rageh. "Danger to the crew or captives held hostage by pirates tend to increase as the days progress.
"This can be due to desperation and impatience from the pirates. Their demands will mostly increase and they might even threaten or harm the hostages just to prove a point about who is in control."
Factors such as cargo and crew determine ransom demands.
"The deciding factors are the type of ship, its cargo and age, plus the nationality of the crew - westerners attract a premium," said Jon Lee, an analyst for Compass Risk Management company, which has been involved in negotiations to free crews.
"Negotiations will play an important role; a good experienced team will help to keep the ransom down. Inexperience, or confrontational negotiation, will push the demand up.
"Another factor is how much the hijacking has cost the pirates - food supply, loans for mounting the hijack operation, pay for the pirates and support staff involved. The longer the duration, the higher the costs that have to be recovered from the ransom."
Oil tankers are high-value targets and pirates keep track of companies, owners and the media.
"Oil, raw materials and consumer goods are the most attractive, scrap the least," Mr Lee said.
"Pirates will research the owners, including the value of the cargo. They will also monitor the media to see what is being said about the vessel."
They also browbeat relatives with constant telephone calls threatening to kill hostages to speed up ransom payments.
"People cry on the phone and ask if we can check about their men," said Andrew Mwangura, the coordinator of the Seafarers Union of Kenya, who receives daily calls.
"They send emails saying, 'Please help'. If they hear someone has been killed, they ask us to check for information. Owners think cargo and ship are important. But hostages and families waiting for them - that is far more precious."
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