Somali Piracy - UN Report on the Business Model

[David_Old_Jersey]

Links to documents

It's in PDF and as also a UN public document have been a bit more generous than usual in quoting from.............

A basic piracy operation requires a minimum eight to twelve militia prepared to stay at sea for extended periods of time, in the hopes of hijacking a passing vessel. Each team requires a minimum of two attack skiffs, weapons, equipment, provisions, fuel and preferably a supply boat. The costs of the operation are usually borne by investors, some of whom may also be pirates.

To be eligible for employment as a pirate, a volunteer should already possess a firearm for use in the operation. For this ‘contribution’, he receives a ‘class A’ share of any profit. Pirates who provide a skiff or a heavier firearm, like an RPG or a general purpose machine gun, may be entitled to an additional A-share. The first pirate to board a vessel may also be entitled to an extra A-share.

At least 12 other volunteers are recruited as militiamen to provide protection on land of a ship is hijacked, In addition, each member of the pirate team may bring a partner or relative to be part of this land-based force. Militiamen must possess their own weapon, and receive a ‘class B’ share — usually a fixed amount equivalent to approximately US$15,000.

If a ship is successfully hijacked and brought to anchor, the pirates and the militiamen require food, drink, qaad, fresh clothes, cell phones, air time, etc. The captured crew must also be cared for. In most cases, these services are provided by one or more suppliers, who advance the costs in anticipation of reimbursement, with a significant margin of profit, when ransom is eventually paid.

When ransom is received, fixed costs are the first to be paid out. These are typically:

• Reimbursement of supplier(s)
• Financier(s) and/or investor(s): 30% of the ransom
• Local elders: 5 to 10 %of the ransom (anchoring rights)
• Class B shares (approx. $15,000 each): militiamen, interpreters etc.

The remaining sum — the profit — is divided between class-A shareholders.


A quick back-of-the-envelope calculation shows that each 'class A' share can be worth north of £60k / USD90k. Comparing the GDP per capita of Somalia and the UK, that would be the equivalent of £3 milion / USD4.5 million. No wonder it is popular

To my eye seems quite plausible, especially the freemarket / eat what you catch element and I am sure also a relief for some of our members that the industry has clearly not been socialised

[Therapy]

Reading a good portion of that just reinforces my opinion of humans being the horrible creatures they are.

[sabray]

No we start off with common values tHat are mutully good the adults program some really screwed up ideals and view points. That's how we make money and wind up in the mess we see today. Short term thinking kinda Like the Roosevelt Era idea follow the sun arien's rule etc.... Brilliant short term thinking. Not sustainable though.humans atre good but we fail our ideals with denial of facts. Maybe god will fix it.

[virginia boy]

[COLOR=blue]

Originally Posted by [/COLOR

that would be the equivalent of £3 milion / USD4.5 million.

Ummm......where do I sign on?

[Eleven]

On the BBC tonight, R4, reports of a Supertanker taken by Somali Pirates.
Tanker crew not allowed firearms because of the fire risk!
Cargo valued at 100 million sterling!
My very best wishes for the recovery of the crew and I hope the scale of this action will prompt some governments to appreciate where the softly softly tactics are taking this.

Please move to new thread, I can't find the right button.

[Eleven]

A South Korean navy warship is in pursuit of a huge oil tanker, hijacked by Somali pirates in the Indian Ocean.
The 300,000-tonne Samho Dream, which was on its way from Iraq to the United States, has 24 crew on board, and is loaded with crude oil.
Reports suggest the Korean destroyer is fast enough to catch up to the tanker before it reaches the Somali coast.
Pirates targeting ships off the coast of Somalia made tens of millions of dollars in ransom payments last year.
South Korea is one of several Asian nations that have an anti-piracy warship patrolling Somali waters to guard against hijackings. Western navies are also trying to protect ships against pirate attack.
Volatile cargo
The destroyer now in pursuit of the South Korea-operated, Singapore-owned tanker was on anti-piracy patrol in the Gulf of Aden - one of the world's busiest and most dangerous shipping lanes.
It has been diverted some 1,500 km (930 miles) south-east of the Gulf to the area where the hijacking took place.

A South Korean official said the destroyer had been ordered to intercept the hijacked vessel on its expected route into Somali waters, according to Yonhap news agency.
He also expressed concern for the safety of the crew - five South Koreans and 19 Filipinos - but said the government would not negotiate with the pirates.
It is unclear what action the warship will take once it reaches the tanker.
The BBC's East Africa correspondent Will Ross says that it is extremely rare for any navy to use force once hostages have been taken.
Given the nature of the cargo there is also the risk of immense environmental damage, he adds.
Oil ambition
The value of the Samho Dream's cargo is estimated at about $170m (£111.7m).
Reuters reported that the US refiner Valero Energy Corp said it was the owner of the crude oil cargo.
It said a pirate source named Mohamed had said the ship was heading for Haradheere, the pirates' base at which many ships are held during ransom negotiations.
At least four South Korean ships have been hijacked by Somali pirates in recent years: a tuna ship with 25 crew in 2006, two ships and 24 crew (held captive for six months) in 2007, and a cargo ship with 22 sailors in September 2008.
The crew in that last attack were released after the ship's owner paid a ransom.
The first successful hijacking of a so-called Very Large Crude Carrier was of the Saudi-owned Sirius Star in late 2008.
Another VLCC, the Maran Centaurus, was taken last November and held for two months before a ransom estimated at between $5.5m and $7m was paid.