Thank you Al for that introduction and for inviting me here today. I also want to thank the U.S. Chamber of Commerce for the exceptional work that it does promoting U.S. business and for organizing this event on counter-piracy. This is an incredibly important issue to the United States, the international community, and to the global economy.
We live in an era of complex, integrated, and on-demand global supply chains. People in countries around the world depend on secure and reliable shipping lanes for their medicine, their food, their energy, and consumer goods. By preying on commercial ships in one of the world’s busiest shipping lanes, piracy off the Horn of Africa threatens more than just individual ships. Piracy threatens the life blood of the global economy, and therefore global security and stability.
Piracy is an issue in which the private sector, and the maritime industry in particular, are on the front lines. Commercial shipping vessels provide a constant stream of targets for Somali pirates. Over the years, thousands of crew members have been taken hostage and many in the maritime industry have lost their lives as a result of piracy. I have heard directly from the captains and crews of commercial ships about the harrowing situations they encounter as they transport the goods and merchandise that make the global economy function.
The challenge posed by piracy off the coast of Somalia is immense and represents a major threat to regional security and the global economy. As international action has been taken to address the challenge, the pirates have adapted. Flush from the money made from ransom payments, pirate operations have become more sophisticated. For instance, the use of so-called “mother-ships” has expanded greatly. Mother-ships are themselves pirated ships with hostage crews on board, making attacking or liberating these ships a significant challenge. Mother-ships launch and re-supply groups of pirates who use smaller, faster boats for attacks. They can carry dozens of pirates and tow many skiffs for multiple simultaneous attacks. This has made pirates more effective at operating in seasonal monsoons that previously restricted their activities. This has also extended the pirates’ reach far beyond the Somali Basin. Somali pirates now operate in a total sea space of approximately 2.5 million square nautical miles. To put that in context that’s roughly the size of the continental United States.
Piracy is a threat that this Administration has been working hard to address. In response, we have pursued a multilateral and multi-dimensional approach that focuses on security, deterrence, diplomacy, and prevention.
Security has increased through U.S. and multi-national naval escorts and patrols, which continue to escort convoys of commercial ships and patrol high risk waters. On any given day, up to 30 vessels from as many as 20 nations conduct counter-piracy operations in the Gulf of Aden and beyond. U.S. and international naval forces have thwarted pirate attacks in progress, engaged pirate skiffs and mother-ships, and successfully taken back hijacked ships during opposed boardings.
We have sought to deter piracy, through effective apprehension, prosecution and incarceration of pirates and their supporters and financiers. Today, over 1,000 pirates are in custody in some 20 countries around the world, many of whom have been convicted and sentenced to lengthy prison terms. Just last week the government of Seychelles accepted the handover from U.S. custody of 15 suspected Somali pirates for prosecution. These alleged-pirates were captured in early January when the U.S. Navy boarded an Iranian fishing vessel and rescued 13 Iranian mariners who were being held hostage. This ship was being used as a mother-ship from which to launch attacks on other vessels. Seychelles’ willingness to accept these pirates for prosecution demonstrates their strong commitment to combating piracy. They recognize the corrosive effect that pirates are having on the region and they are certainly punching far above their weight in the effort to address the problem. This case demonstrates the impact the United States and the international community is making in combating piracy.
But it is not just countries in the region that recognize the problem. We have also sought to rally the wider international community to address the problem posed by piracy. In January 2009, the United States helped establish the Contact Group on Piracy off the Coast of Somalia, which now includes nearly 70 nations, international organizations, and maritime trade associations, including INTERTANKO, BIMCO, and the International Chamber of Shipping. The Contact Group has helped galvanize action and coordinate counter-piracy policy among its participants.
We are seeing signs that all of these efforts are having a positive effect. The numbers demonstrate this. In 2011, even though the number of pirate attacks off the coast of Somalia increased slightly over 2010, the number of successful pirate attacks fell by nearly half. There has also been a significant drop in the numbers of ships and crew held hostage. In January 2011, pirates held 31 ships and 710 hostages. In early March of 2012 pirates held 8 ships and 213 hostages. This is still too many, but it is clear that progress is being made.
The role of the private sector has been critical. Perhaps the most significant factor in the decline of successful pirate attacks has been the steps taken by commercial vessels to prevent and deter attacks from happening in the first place. We have found that the best defense against piracy is vigilance on the part of the maritime industry. In the last few years, we have worked with industry in developing and implementing a variety of measures that are having a tremendous impact.
In response to the threat, the shipping industry has expanded its implementation of industry-developed “best management practices” to prevent pirate boardings before they take place. These guidelines were developed to identify self-protection measures that have proven successful in preventing boarding and seizure and enabling rescues by naval forces when boarded. They include practical measures, such as:
These practices, when properly implemented, remain some of the most effective measures to protect against pirate attacks. Taken together these steps make a pirates job much harder and often give international naval vessels in the area time to respond. For instance, should a ship come under attack, razor wire can hinder pirates getting on deck. This gives a crew more time to get to a citadel inside the vessel and to notify international navies of an attack. A citadel is essentially a hardened room within the ship that is usually equipped with food and water, communications equipment, and an emergency capability to shut down the ship’s engine. It is designed and constructed to be incredibly difficult for a pirate to break into. Additionally, once the entire crew is secure inside the citadel, the captain can notify international navies that all crew are accounted for. This is invaluable information for a potential rescue mission. Properly employed best management practices are therefore making the work of pirates even harder and as a result are contributing to a declining rate in successful attacks.
Recognizing the value of these measures, the U.S. government has required U.S.-flagged vessels sailing in designated high-risk waters to take additional security measures. This includes having extra lookouts and extra communications equipment, as well as being prepared at all times to evade or resist pirate boarding. Nevertheless, we are troubled by the fact that there are commercial ships travelling in pirate-infested areas that have still not implemented these recommended security measures. Some in the shipping industry have been unwilling make basic investments that would render their crews and cargoes less vulnerable to attack. Approximately 20 percent of all ships off the Horn of Africa are not employing best management practices or taking proper security precautions. Unsurprisingly, these 20 percent account for the overwhelming number of successfully pirated ships. We have intensified our efforts to encourage commercial vessels to adopt best management practices. And I encourage anyone in industry to take proper precautions to protect their crews and their cargoes by implementing these practices.
Yet we must also recognize that best management practices do not guarantee security from pirates. Pirates operate in too large of an area for naval forces to respond quickly. The reality is that international naval forces simply might not be there to respond. The problem of piracy is one that can’t simply be solved by national governments. Therefore, we have also supported industry’s use of additional measures to ensure their security – such as the employment of armed security teams. To date, not a single ship with Privately Contracted Armed Security Personnel aboard has been pirated. Not a single one.
These teams serve as a potential game-changer in the effort to counter-piracy. This is because – and as anyone in the Navy or Marines can tell you – one of the most difficult combat maneuvers to undertake is to board a ship when coming under fire. While many expected these teams to be made up of undisciplined “cowboys” that would increase the violence at sea, from what we have gathered and observed the opposite has happened. We have not seen cases of pitched battles at sea between armed security teams and pirates attempting to board under fire. In fact, in most engagements between armed security teams and pirates, the situation ends as soon as pirates are aware these teams are on board. We have found these teams to be highly professional. In most cases, as pirates approach a ship the armed security teams will use flares or loudspeakers to warn the pirates. If the pirates keep coming, they will fire warning shots. That is usually when the interaction ends. Pirates break off the attack and turn their skiffs around and wait for another less protected target.
At the State Department, we have encouraged countries to permit commercial vessels to carry armed teams. However, we do note that this is a new area, in which some practices, procedures, and regulations are still being developed. We are working through the Contact Group and the International Maritime Organization or IMO on these issues. For instance, we have advised that armed security teams be placed under the full command of the captain of the ship. The captain then is in control of the situation and is the one to authorize the use of any force. Last September, we were encouraged to see language adopted by the IMO that revised the guidance to both flag States and ship operators and owners to establish the ship’s master as being in command of these teams.
There have been some logistical and technical issues that have arisen with armed security teams – particularly relating to weapons licensing and the transit of these teams through third countries. The United States regularly works with other governments to help resolve questions on weapons licensing to facilitate compliance with the laws of individual port States as related to firearms transfer. We engage through the Contact Group and the IMO to encourage all port and coastal States to adopt legislation that is conducive to smooth, facilitated movements of security team firearms and equipment. Currently, some States present challenges in this regard by requiring transfer to a third party while a vessel is moored in a port. Others impose fee schedules that directly charge against the presence of these weapons. In response, we have demarched port and coastal States and let them know that U.S. vessels may have firearms onboard and we request that these teams and their firearms be facilitated under applicable laws. We have also worked with the Coast Guard and Department of Transportation at the IMO and through the Contact Group to further encourage port and coastal States to develop regulations that facilitate the use of these teams aboard commercial vessels. We are working hand in glove with industry in all these endeavors to ensure these teams are both properly regulated and properly equipped.
While we are seeing progress, hijackings are still taking place. When a vessel is successfully hijacked, our foremost concern is always the safety of the crew, regardless of nationality. The U.S. government is acutely aware of the dilemma that ship owners face when ships and sailors are taken hostage. While the safety of the crew is critical, industry must face the fact that submitting to pirate ransom demands only ensures that future crews will be taken hostage. A vicious cycle has formed where ever-rising ransom payments have not just spurred additional pirate activity, but have also enabled pirates to increase their operational capabilities and sophistication. The average ransom is now at $4 million per incident and has reached as much as $12 million. Ransoms paid in 2011 totaled $135 million. Piracy, as a result, has gone from a fairly ad hoc disorganized criminal endeavor to a highly developed transnational criminal enterprise. In short, they have developed a successful business model that is hard to break.
The United States has a long tradition of opposing the payment of ransom, and we have worked diligently to discourage or minimize ransoms. But many governments and private entities are paying, often too quickly, serving to reinforce this cycle and incentivizing future hostage-taking. While some may consider this the cost of doing business, every ransom paid further institutionalizes the practice of hostage-taking for profit and promotes its expansion as a criminal enterprise both at sea and on land.
The issue of ransoms is no doubt an emotional one for all involved – especially the families and friends of those who are hijacked. And we recognize the unease within industry that believes government involvement will only prolong the hostage situation and increase the cost of the hijacking. Nevertheless, we strongly encourage flag states, shipowners and private parties involved in hostage crises to seek assistance from appropriate U.S. government sources in their crisis management procedures. Continued cooperation between industry and government and, most importantly, the mutual exchange of information is critical.
The American maritime industry should also know that this Administration will do everything it can to ensure the safety and security of American citizens threatened by pirates. This Administration has taken bold aggressive action when necessary, such as the rescue of the captain of the MAERSK ALABAMA in 2009 and the rescue of an American hostage and a Danish hostage in January of this year. The United States has also actively prosecuted pirates involved in attacks on U.S. vessels. To date, that totals 28 persons involved in several attacks.
Our approach to combating piracy has also taken on new dimensions. In the effort to combat piracy, we are now targeting pirate ringleaders and their networks. While expanding security and prosecuting and incarcerating pirates captured at sea is essential, we also recognize that the pirates captured at sea are often low-level operatives. Their leaders and facilitators are ashore in Somalia and elsewhere relatively unaffected. After an intensive review of our strategy, Secretary Clinton last year approved a series of recommendations which, taken together, constitute a new strategic approach. A focus on pirate networks is at the heart of our strategy.
Pirate organizers receive income both from investors and ransom payments, and disburse a portion of the proceeds of ransoms back to these investors as well as to the pirates who actually hijack the ships and hold the crews hostage. We intend to use all of the tools at our disposal in order to disrupt piracy financial flows and to identify and apprehend those who lead the pirate enterprise. We are seeking to make the business model of pirate leaders and facilitators untenable. We are making progress, as the United States has indicted and is prosecuting in the United States two alleged Somali pirate negotiators.
But it’s not just governments that need to work together to target pirate networks. This effort also depends on effective cooperation with the private sector. The United States is working to enhance cooperation between law enforcement and the maritime industry. When a hostage-taking occurs, industry can share information relating to the pirate negotiators and their negotiation tactics. This can help intelligence and law enforcement officials expand their understanding of how the pirate networks operate, which can help them in their efforts to indict and prosecute these criminals.
Progress is being made here as well. A sub-group of officials from the Contact Group recently met with shippers, insurers, and lawyers in London this past January to encourage them to regularly share information about piracy collected during hijackings. The United States also participated in a follow-on meeting with industry representatives earlier this month at the Italian Embassy here in Washington. The meeting helped demonstrate to industry the value of INTERPOL’s piracy database, which is collecting information relating to piracy suspects and attacks hijackings. This database enables law enforcement agencies worldwide to share information and is facilitating piracy investigations, resulting in an increase in piracy-related prosecutions worldwide. Additionally, the Department of the Treasury will provide industry with an overview of the enforcement process for Executive Order 13536, which targets the property of persons contributing to conflict in Somalia, and will help answer questions that industry has about this order.
In closing, while we are making important gains in combating piracy, this does not diminish the number of challenges going forward. Pirates may be having less success at sea, but this is unlikely to sap their motivation to continue seeking out new hostages for ransom. The enormous ransoms that are paid out make the kidnapping-for-ransom industry incredibly lucrative – and lucrative industries fight hard to stay in business. Indeed, the number of attempted attacks has actually risen over the last year, despite the declining number of successful attacks. Additionally, the capacity and willingness to prosecute and incarcerate pirates is limited. Our successes at sea are putting more strain on the prison systems in the region and prison capacity in the region is getting stretched. It is imperative that more nations step forward to prosecute and pirates who have been caught attacking vessels that are flagged, owned and crewed by citizens of their countries.
The greatest challenge however remains on land. The only long-term solution to piracy is the re-establishment of stability and adequate governance in Somalia. At the February 23 Somalia conference in London, Secretary Clinton once again declared the United States’ commitment to working with the international community in this effort.
But recognizing the challenges ashore does not exclude progress at sea. While there is no simple solution to modern-day piracy, we are making headway in mitigating the threats posed by piracy off the coast of Somalia. The progress that has been achieved is rooted in the close partnership that has been established between this Administration and the private sector in the counter-piracy effort. Piracy continues to pose a severe threat to the maritime industry, global trade and therefore the entire global economy. This means that governments and industry will need to continue to work hand-in-glove to address this problem. We look forward to working with you to make even more progress in the months and years ahead.
With that I will be glad to take your questions.