Nigeria: Rising Piracy Attracts Higher Freight Charges
Oil Delta Nigeria
With 22 armed attacks on ships in Nigeria and Benin Republic in the past two months, the Bight of Benin now ranks next to the Gulf of Aden in terms of piracy. The result is that the international shipping community, including Lloyd's Maritime Association, is considering higher freight charges for imports destined to the region, reports Francis Ugwoke
There has been palpable apprehension among ship owners engaged in trade with the country over the increasing activities of pirates within Nigeria's coast in the past few weeks. Already, Nigeria and its neighbor, Benin, are being fingered as second to Somalia in terms of piracy attacks. This follows a report that while there were 58 piracy attacks on ships within the nation's coastal waters last year, there have been 22 attacks so far this year on ships trading in the Bight of Benin, a development that has caught the attention of the international shipping community.
While the International Maritime Bureau (IMB), an arm of the United Nations has warned ship owners about the dangers of piracy Nigeria, Lloyd's Maritime Association, a high profile group of shipping insurers with headquarters in the United Kingdom, is considering imposing higher freight charges on goods headed for Nigeria.
Curiously, Nigerian authorities appear helpless over the situation, which is coming at a time when efforts are being made by the federal government to boost shipping activities in the Niger Delta with the approval of N9.406 billion for the rehabilitation of the old Warri Port. The port was abandoned for over two decades for a number of reasons, including hostilities and ship hijacks by youths in the region who demand for ransom.
Piracy is a global issue which has attracted the attention of the world apex maritime organisation, the International Maritime Organisation (IMO). But with regional cooperation among countries, the menace of piracy has been curtailed in the "Straits of Malacca, Singapore, Asia and other countries.
Yet, it has not been the same in the Gulf of Aden. Early this year, U.S. President, Barack Obama approved the intervention of the elite U.S. Special Force to intervene and save an American aid worker and her Danish colleague who were kidnapped three months earlier by Somali pirates. The rescue team had flown into Galkayo, a Somalian town, during which they used helicopters to locate where the pirates were holding their victims, Jessica Buchanan and Poul Thisted and rescued them at about 2 am. Obama could not contain his joy over the successful operation of the same team that had attacked and killed the notorious terrorist Osama Bin Laden in Pakistan.
In West African sub-region, the issue of piracy has been of serious concern. It was for this reason Nigeria and Benin Republic last year entered into agreement to combine forces against piracy so that the Bight of Benin will be safe for ships navigating the region.
Rising Piracy Attacks
In January this year, the IMB in its 2011 report, fingered Somalia, Nigeria and Benin Republic as the centre of piracy in African region. On February 29, Reuters reported that pirates had attacked a Dutch cargo ship a few miles off Port Harcourt. The pirates had in the attack kidnapped the ship's master and an engineer. Prior to the February 29 incident, there was a similar attack on February 13 on another vessel off the coast of Nigeria. The sad incident left the chief engineer and the captain dead.
On March 1, Associated Press reported that pirates had attacked an oil tanker vessel off the coast of Nigeria, about 80 nautical miles from Port Harcourt. IMB's Head of Piracy Reporting Centre in Kuala Lumpur, Noel Choong, however, said that the ship managed to escape by increasing speed. Choong had expressed concern, saying, "The trend is worrying. It shows that pirate attacks off Nigeria are continuing and getting more violent." Apart from the March incident, the bureau indicated that there were other attacks that may not have been reported.
As a result of this development, Lloyd's Market Association has expressed concern that what is happening in Somalia is gradually taking shape in the West African sub-region, including Nigeria. The group had in August last year listed Nigeria and Benin Republic as risk areas where piracy has been growing like Somalia with 22 attacks recorded this year. The association is said to have scheduled a meeting where it may decide to increase freight charges for both wet and dry cargo. This is coming on the heels of repeated warnings from IMB to ships coming to do business in Nigeria and Benin Republic.
The situation is made more worrisome by the involvement of members of the Movement for the Emancipation of the Niger Delta who offered to rescue a kidnapped Russian sailors and a Filipino off the coast of Port Harcourt. But MEND turned around to threaten tanker vessels which try to prevent its members from boarding vessels, apparently for attacks. The statement credited to MEND recently, read, "We will launch rockets at the bridge and other parts of the superstructure of such uncooperative vessels, and ensure such vessels are set alight, when we eventually board."
The threat is said to have sent shivers down the spines of ship owners who were said to have reported the matter to IMB. Head of the underwriting desk of Lloyd's Market Association, Neil Smith, in his reaction to the development said, "It's always been a concern for the shipping industry. The model that's taken root in Somalia might spread to other areas." Similarly, Benin Republic's navy chief, Maxime Ahoyo was quoted saying, "Dozens of ships are already fleeing our shores due to fear of these pirates."
Perhaps what is of serious concern to the international community is the extent to which Nigerian authorities, represented by the Nigerian Maritime Administration and Security Agency (NIMASA), which is reliant on the navy can cope with the challenges of addressing this problem. A greater cause for concern, said Anthony Goldman, a UK-based analyst, in a report filed by Shipping Position, is that many of the pirates come from Nigeria "where corrupt law enforcement allows criminality to thrive." Goldman added that the illegal sale of oil had created "a culture of lawlessness" in the coastal zone. "In Somalia, you've got no government. In Nigeria there is maritime capacity, but there's the issue of the extent to which the security forces are working with armed groups," he said.
Managing Director of NPA, Engr. Omar Suleiman, last year, expressed concern over the situation and its impact on trade. Omar, in an interview with THISDAY, identified piracy as one the factors contributing to rising cost of business in the ports. He told THISDAY, "There are two important indices that contribute to the cost of shipping: one is security, but we are downplaying it.
"A vessel coming to Nigeria is insured like a vessel going to the war zone, because of piracy. Unfortunately, we are second on the piracy rating after Somalia. This particular issue is one of the silent issues that lead to costs."
Incidentally, Omar in another interview early this year, said the situation was improving. He said, "A lot has been done by NIMASA, the navy and other agencies responsible for the safeguarding outside channels. Now there is patrol from Benin Republic to the whole channel. Now we have an MOU with Cameroun. But most of these things are happening offshore not within the channels. So much has been done and if you check, the activities of piracy have gone down."
However, with the rising attacks on ships, there are doubts if Omar will still hold the same view on the piracy situation on Nigerian coastal waters and rest of the Bight of Benin. Nonetheless, General Manager, Public Affairs, NPA, Chief Michael Ajayi assured that the authority has mobilized its security apparatus to ensure that ships bringing goods to the seaports are protected.
Also, Director General of NIMASA, the agency with the statutory responsibility to provide safety for vessels navigating Nigerian waters, Dr. Ziakede Patrick Akpobolokemi, had said the agency has reduced piracy to zero levels on the Nigeria-Benin Coast. In an interview last year, he said, "As we speak now, we've been there for almost three months, and have succeeded 100 per cent as we've reduced piracy attacks from 35 in one, two months to a zero level." Akpobolokemi could not be reached at the time of filing this report to comment on the recent rise of attacks on ships in the Niger Delta.
However, the agency has under controversial circumstances engaged a private company under a 10 year contract to provide logistics to NIMASA patrol boats responsible for providing security on Nigerian coastal waters.
Reacting to the security situation, maritime lawyer, Mr. Emma Ofomata said government should move fast to address the issue because of its negative effect on the country, noting that security threats to ships navigating Nigerian waters will trigger increased ocean freight charges on imports and exports because of the insurance premium on such ships.
Ofomata added that urgent federal government action was needed to save maritime trade from the nightmare of higher ocean freight charges by the international shipping community.
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