After the ransom for the Sirius Star, the highest-profile victim of Somali piracy, was delivered in January, an impromptu beach party started near Hobyu, the southern Somali town where it had been moored.
According to crew members of the Vella Gulf, a US warship which spent months watching the Sirius Star and the Faina, another captured ship, children ran around the beach, bonfires were lit and the pirates’ associates brought four-wheel drive vehicles on to the sand.
The partygoers had come for their share of the $3m (€2.4m, £2.1m) ransom the owners paid to release the crude oil tanker, the largest vessel ever hijacked. Some of those present would have seized the ship in the first place and others would have supplied it with food, according to observers. More senior members of the pirate gang would also have received a cut.
The threat of attacks like that on the Sirius Star has emerged in the last 18 months as the most serious security issue confronting the world shipping industry. According to the International Maritime Bureau, there were 111 attacks and 42 successful hijackings off Somalia during 2008.
The extra insurance costs and safety concerns are driving shipping companies to spend millions of dollars on diversions, extra security and more expensive insurance.
Yet the pirates’ business practices are effective primarily because of their simplicity. In a country where banking has ceased to function after more than a decade of chaos and in the wake of US anti-money laundering sanctions, everything is done by cash. Tens of thousands of $100 notes are airdropped as ransom payments and the cars, houses, televisions and wedding parties they fund are bought with cash.
The party shows how piracy has become embedded in Somalia’s complex society. One western military analyst says the pirates now employ “accountants” to divide up ransoms.
There are carefully worked out formulae determining how much is paid to everyone, from the lowliest guards to gang leaders. The pirates follow a code of conduct which proscribes, for example, the harming of crewmen, with fines for miscreants.
Personal ties and talent together decide how careers progress, according to Mark Genung, captain of the USS Vella Gulf. “If you’re a good pirate, I suppose you get good pirate jobs,” he says. “If you’re a bad pirate, I guess you get bad pirate jobs.”
Most significantly, the delivery of cash ransoms and their division leave no trace on systems that track and disrupt organised crime financing.
“You can’t check to see where the money is going,” the military analyst says.
Contemporary Somali piracy is generally agreed to have sprung up earlier this decade as the Hawiye clan, based around Haradere in central Somalia, tried to deter illegal dumping and fishing. They graduated from attacking vessels to seizing them for ransom.
They first attracted widespread attention with the attack on the Seabourn Spirit, a cruise ship, around 115km off the Somali coast, in 2005. That failed attempt showed the pirates already had some “mother ships” – vessels used as floating bases and able to go far further off the coast than the pirates’ small attack skiffs.
The Hawiye abandoned piracy at least temporarily when the Haradere area fell in 2006 to Somalia’s short-lived, anti-piracy Union of Islamic Courts government. The Darod, with strongholds around Eyl on the east coast and Bosasso and Caluula in Puntland on the Gulf of Aden, then stepped in.
Cash holds key to maritime crime:
The key questions on Somalia’s pirates are how far they need financing from outside and how much ransom money is invested elsewhere, writes Robert Wright. Such cross-border flows would be far easier to tackle than domestic cash movements.
Some proceeds may end up among Somali expatriates in Kenya, the Gulf, the UK or Canada, according to Roger Middleton, an Africa consultant with Chatham House, a London-based analyst. But the consensus is that most is spent in Somalia. “Once it’s been split up between the guys involved in the raid and the person co-ordinating them, they’re getting perhaps $10,000 (€8,000, £7,000) to $20,000 each,” Mr Middleton says. “Once you’ve had a big party, got married again and helped your brother out, there’s not a huge amount left.”
Keith Allen, a special agent for the US Navy’s Criminal Investigation Services, believes there must be outside sponsorship, given how heavily armed pirates are. “These guys don’t have the finances to purchase the rocket-propelled grenade launchers and rounds to become pirates,” he says.
But Captain Mark Genung, commander of the USS Vella Gulf, which has spent months tracking pirates, suspects ageing assault rifles and RPG launchers are readily available in Somalia. “I’m not convinced it takes a tremendous amount of capital to initially attempt to hijack a ship,” he says.
Abdullahi Yusuf Ahmed, a Puntlander, moved south to strongholds of Somalia’s transitional federal government when he was appointed president in 2004, according to a European diplomatic expert on the region. Many of the militiamen who had kept Puntland peaceful accompanied him.
“That tended to give a lot of freedom of action to local clan groups in Puntland, who were able to engage in piracy because there was less supervision,” the diplomatic expert says.
The initial group of Darod pirates recruited others. The military analyst calls the system a pyramid scheme, where older members move up in seniority as newer recruits join.
“They get to the point where they don’t have to go out to sea any more.”
Pirates also pay other, more senior members of their clans and local political and military groups, according to Roger Middleton, a researcher in the Africa programme at the UK’s Chatham House.
“Money goes to the senior members of your clan, in much the same way that if you were a successful businessman you would be expected to help those people out,” he says.
The Darod may have made the business more democratic, according to Daren Dickson, a senior manager at Drum Cussac, a risk consultancy. They insist on cash delivery, whereas ransoms were previously paid through banks or the informal Hawala money transfer system and controlled by warlords.
“The actual clan members now get the cut, rather than just the warlord taking it,” Mr Dickson says.
According to the diplomatic expert, the sagas of the Faina and Sirius Star suggest experience is making some pirates more sophisticated and ambitious. He believes the pirates were alerted to the presence of the Faina, which was laden with tanks and other weaponry. Captain Genung believes the shipment may have been captured by chance.
The pirates grasped the Faina’s importance quickly and eventually obtained $3.2m, far more than the $1m that had been standard. The same group – an unusual mixture of Hawiye and Darod – then captured the Sirius Star 420 nautical miles off Somalia’s east coast.
Darod groups operating from Puntland are adapting to the significant military presence in the Gulf of Aden. They often now launch several attacks, one after the other, to swamp the ability of nearby naval vessels to respond.
Captain Genung vows to adapt to meet such changes and points out that the military effort is already making pirates’ lives more difficult. The Vella Gulf helped to capture two groups of pirates totalling 16 men on February 11 and 12, while the Russian Navy has also caught some pirates in the Gulf of Aden.
However, no one involved believes such action can resolve a problem with its roots in the long-term collapse of the Somali state. Those who captured the pirates on February 11 and 12 say they must have been desperate to put to sea in such leaky, dangerous craft. Anything other than a lasting political solution on shore will only ever be a “sticking plaster”, according to the military analyst.
“You have hungry people who don’t have any legitimate way to make money,” she says. “They think, ‘We want a piece of this pie’.”
(FT, March 2, 2009, Piracy brings rich booty to Somalia)