Somali pirates: how far away from us?

On 19 October 2009 the Chinese bulk carrier De Xin Hai, with 25 crew on board, was hijacked by Somali pirates in the Indian Ocean. This once again drew the world’s attention to the danger of pirate attacks. According to statistics from the International Maritime Bureau, the number of pirate attacks worldwide in the first half of 2009 reached a record high of 240, more than double the number in the same period in 2008. Pirate activities are particularly rampant off Somalia. Since the beginning of 2009, there have been more than 150 pirate attacks in the waters of Somalia and the Gulf of Aden, involving more than 30 hijacked vessels, more than 500 crew members being taken hostage and dozens of casualties. Pirate attacks have become a serious threat to international maritime safety.

A poor domestic political and economic environment and constant fighting since the outbreak of civil war in the early 1990s have all contributed to the rise of piracy in Somalia. Merchant ships traveling to and from the Suez Canal must go through Somali waters. This vital geographical location provides a large “stage” for pirates. Somali pirates have extended their activities to the south of the Red Sea in the west, Oman in the north, Madagascar in the south, and the vast waters more than 600 nautical miles away from the Somali coastline in the east.

Aiming for potentially handsome ransoms, Somali pirates do not usually harm crew members or damage vessels or cargoes. As Somali pirates have not yet been found to be backed by any political organizations or to have collaborated with any terrorist groups, it is generally considered not to be illegal for a ship owner to pay a ransom to them in order to have a ship (including the crew and cargo) released. The owner has right to claim insurance under relevant insurance contracts (hull insurance, piracy under war risks insurance or other special coverage such as kidnap and ransom insurance).

Weidong Chen is a partner of LC & Co. Rui Pan is a lawyer at LC & Co.