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The business case for high-seas piracy
As far as illicit businesses with low risk and high rewards go, it doesn't get much better than piracy on the high seas. The profit margins can easily surpass those of the cocaine trade. "There is no reason not to be a pirate," according to U.S. Vice Admiral William Gortney, who commands the U.S. navy's Fifth Fleet. "The vessel I'm trying to pirate, they won't shoot at me. I'm going to get my money." Even pirates who are intercepted have little to fear. "They won't arrest me because there's no place to try me." Gortney's assessment of piracy's low risk came in a radio interview that focused on the Gulf of Aden, where Somali pirates have carried out a string of increasingly brazen hijackings. Last week they ventured as far as the high seas southeast of Kenya to seize a Saudi supertanker carrying $100 million (65 million pounds) worth of U.S.-bound crude. But although attention is focused on the Horn of Africa, piracy is a global phenomenon, relative impunity applies in many places, and a thick legal fog hangs over effective action. Among questions to keep lawyers busy: Can a naval vessel fire on a suspected pirate ship? It depends. Who would be held accountable for someone killed in an exchange of fire between pirates and private security personnel travelling aboard a merchant ship? Which country's jurisdiction applies, for example, to a Somali arrested on the high seas and taken aboard a Danish vessel? "One of the challenges that we have ... in piracy clearly is if you are intervening and you capture pirates, is there a path to prosecute them?" Admiral Mike Mullen, the chairman of the U.S. Joint Chiefs of Staff, explained at a recent Pentagon briefing. A rough back-of-the-envelope calculation shows that the operation to hijack the Saudi tanker, the Sirius Star, cost no more than $25,000, assuming that the pirates bought new equipment and weapons. That contrasts with an initial ransom demand to the tanker's owner, Saudi Aramco, of $25 million. "Piracy is an excellent business model if you operate from an impoverished, lawless place like Somalia," says Patrick Cullen, a security expert at the London School of Economics who has been researching piracy. "The risk-reward ratio is just huge." Interesting read. Posted by: phil_b 2008-11-28 |
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