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Bahamas allows guns in piracy defense

Piracy in the Gulf of Aden and off the Somali coast may seem a world away from The Bahamas, but with the fifth largest ship registry in the world, reaction to the scourge presents its own risks and potential liability to the country.

The Bahamas Maritime Authority (BMA) is now permitting guns on vessels in its registry, it’s chairman, Ian Fair, told Guardian Business in an interview Friday.  It’s the course most registries of the world have plotted in their responses to the booming business of piracy, but not without careful consideration, according to Fair.

“We have been very reluctant in the past because of the potential for liability if something went wrong,” Fair said from the offices of Butterfield Bank (Bahamas), where he serves as deputy chairman.  “There is a possibility legal action could be taken against The Bahamas, or the owners of the ship.”

On the high seas, the laws of the jurisdiction where the vessel is registered apply on board the ship.  To possess guns, for example, still requires police approval, which generally can be quickly secured if necessary, according to Fair.

But the tactic also brings with it the risk that pirates will raise the stakes themselves in response, worsening the situation with more firepower.

“There’s a worry about escalation. The minute these pirates know there are guns aboard a ship then they’re going to come along with bigger guns,” Fair said.

Fair said the policies and approach a registry takes to combatting piracy factors into the decision ship-owners make about which registry to use for their vessels. Still, its unlikely a significant factor to the success of the maritime industry, which may be a more substantial contributor to gross domestic product (GDP) in this country than many recognize, according to Fair.

The major registries of the world are mostly in-step on the issue, meaning to not allow guns on vessels may be a disadvantage, but there may not be any competitive advantage in permitting them.

Piracy, particularly off the coast of Somalia and in the Gulf of Aden, has garnered international headlines in recent years as pirates took more and bolder actions against vessels.  In recent months the coverage may have lulled, but Fair said the pirate activity has not.

“The last I heard there was over a thousand crew in captivity off Somalia.  They’re still taking vessels,” said Fair.

“We’ve had two vessels attacked in the last two months, both of which took evasive action and managed to avoid being boarded.”

Clarkson Shipping Intelligence Network (CSIN) estimated that the 33 ships successfully hijacked in the year leading up to June 2011 had a market value of $473 million, not including their cargo.  One of those vessels, the VLCC, was carrying 2 million barrels of oil, together with the vessel estimated to be worth $300 million according to CSIN.

Information on what ransoms are paid is more difficult to secure – the details of ransom arrangements are seldom made public.  But Fair estimated pirates were extorting $4-to-$5 million per ship, making it a very profitable business for them.

Those operating off the Somali coast have expanded their territories as well.  They’ve moved from the Gulf of Aden and the seas just east of Somalia, south along the Kenya coast, and further and further east into the Indian Ocean, Fair said.  The last Bahamian flagged vessel to come under attack was closer to India than it was to Somalia or the Gulf of Aden, he said.

Fair did not believe the piracy problem in Somalia would be solved until it fixed its governance problems.

“It’s a lawless country and it sort of engenders lawlessness in all activities, including piracy,” he said.

A little closer to home in terms of physical proximity, piracy is also on the rise in the Gulf of Guinea, south of Nigeria.

The shipping industry carries 90 percent of the world’s trade.

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