Nigeria to Remain on Insurers’ List of Riskiest Waters
By William Clowes (Bloomberg) — Nigeria will remain on a list of the world’s riskiest waters that insurers rely on to determine how much to charge ships traveling to different countries,...
Piracy along Africa’s Atlantic coast is threatening to raise costs for the vast amount of seaborne trade that passes through the region, as the activity spreads from Nigeria into the poorly-patrolled seas of nearby Togo and Benin.
Pirates are expanding into Togo and Benin faster than Nigeria’s navy can commission new gunboats and ramp up cross-border exercises. In East Africa, rates of piracy are falling thanks to greater coordination between naval forces, but in West African waters there have been three attacks in the last two weeks, a development described by the International Maritime Bureau as alarming.
Off Nigeria’s 530 miles of coast, crossed by dozens of oil tankers each day, attacks so far this year have already nearly doubled to 21 from a total of 11 all of last year.
The IMB said one trend is clear: As Nigeria’s navy expands to confront hijackings and robberies, pirates are crossing into the less-patrolled waters of neighboring states, capitalizing on a burst of global sea trade with ports along West Africa’s coast. Some 41% of the world’s trade, worth $3.2 trillion a year, “touches Africa in some way,” according to an internal U.S. Navy policy document. That includes more than half the oil loaded onto ships the world over.
Even before the recent escalation of piracy, Nigeria lost around $600 million in export earnings due to piracy threats to its fisheries back in 2008, according to a study by the Institute for Security Studies, the latest figure available.
One reason for the surge is patchy coordination between navies in West Africa, according to Pottengal Mukundan, director of the IMB. Unlike in Somalia, where the United Nations has stepped in to coordinate antipiracy activities in the absence of a stable government, Nigeria, Togo and Benin have their own law enforcement procedures and are looking to crack down on piracy without international assistance, he said.
“There’s a real fear that the hijackings of these tankers will increase to an extent where it may not be controllable,” Mr. Mukundan said.
Some 60% of pirate attacks are never reported according to London security firm AKE Ltd., making a detailed assessment of the scale of the problem difficult, as victims are fearful of retaliation.
A helicopter from Nigeria’s navy was dispatched just last week to rescue a 23-crew oil tanker that had been hijacked just 12 miles off the Nigerian capital Lagos. By the time the rescue squad arrived, the pirates had already made off with the tanker’s oil.
Such scenes are becoming more common off Nigeria, and now are spreading to Togo, a former French colony with just 35 miles of coast line. Piracy attacks off Togo have risen to 11 this year so far from 6 in all of 2011, the IMB said this week. Three of this year’s attacks were hijackings—the first ever reported off Togo waters. In the seven years leading up to 2010, IMB reported only five attacks in Togolese waters.
While there has been little or no change to insurance premiums for oil tankers in West Africa so far, the increasing incidents of attacks could drive up premiums in the coming months, a West Africa shipbroker said. Already, more West Africa ship owners are asking for clauses that protect their ships, he said.
A spokesman for Royal Dutch Shell PLC, the biggest oil operator in Nigeria, declined to comment on the situation.
Togo’s navy lists only two small $800,000 gunboats, both donated by the U.S., in its fleet. Nigeria, by comparison, boasts one of Africa’s rare battleships: The NNS Thunder, also donated by the U.S. Navy. That gunship cruises alongside a fleet of smaller patrol boats, including one built in Nigeria.
Such ships have come with assistance from powerful navies like the U.S., France, the U.K. and Brazil. Nearly 30 nations have staged training workshops with Nigeria’s sailors, according to the U.S. naval research paper. In the harbors of megacity Lagos, hulking battleships from foreign fleets are an increasingly common sight.
“They [Nigeria’s navy] have traditionally been an under-resourced element, so they have an interest in joining with someone who can provide resources and training,” said U.S. Ambassador to Nigeria Terence McCulley, whose embassy administers four training classes a year. Around 200 sailors have been trained, he said.
“We have continued a very robust program of exercises with the navy. The navy has been a very interested and engaged partner,” Mr. McCulley said.
In turn, that has made Nigeria something of regional naval instructor for other countries in the Gulf of Guinea. Nigerian admirals also administer a training program, Operation Prosperity, for neighboring Benin, a slender nation that separates Togo from Nigeria, according to Nigerian navy spokesman Commodore Kabir Aliyu.
“The operation was initially meant for six months, but because of the successes it has recorded, it is still in force,” he wrote in an email. He said the Nigerian Navy will include Togo in future training exercises.
-By Jenny Gross and Drew Hinshaw. (c) Dow Jones & Company, Inc.
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