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Britannia’s (Insurers) Rule the Waves

• February 23, 2011 • 2:00 AM

London’s new idea to fight pirates in the Indian Ocean: an insurance-led navy.

A group of British insurers and shipping executives have started to roll out a new plan to fight pirates off Somalia, namely an industry-supported navy of 18 patrol boats meant to escort cargo ships through pirate-infested waters.

The Convoy Escort Program, a nonprofit company assembled by the Jardine Lloyd Thompson brokerage group in London, wants to sell a more efficient way to insure and protect merchant vessels, since the current method — of buying expensive ransom insurance and hoping that some navy ship will sail to the rescue if pirates attack — hasn’t lowered the risk of piracy.

Through the CEP, ship owners would be able to buy, say, a few days of war-zone insurance on the Lloyd’s of London market and also pay for a quasi-military escort past Somalia. The escort would give armed protection without the cost and hassle of armed teams on board every cargo ship. Shipowners have learned that expensive (and controversial) armed teams are one sure way to ward off a hijacking.

“The concept is that shipowners will not be paying any more than at the moment and maybe a lot less,” said Sean Woollerson from JLT. “But they will be afforded proper protection and the presence of the escorts will be a great morale booster for the seafarers.”
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Of course, a private navy could also change the atmosphere on the water off Somalia. Strict rules of engagement currently keep national navies from shooting or even arresting most pirates, and until recently, the pirates have been relatively gentle with their hostages. But the last couple of months have seen more aggression from the navies and a corresponding rise in nastiness from the pirates.

Presumably private boats would have more freedom to open fire, though no one wants to say so. The Royal Navy would have the Convoy Escort Patrol under “operational control,” but wouldn’t “manage” it, according to the London Times. “The crew would have to conform to international rules on combat and engagement,” the paper writes.

But it’s hard to imagine a naval officer facing stiff discipline if a private patrol decides to go all Blackwater.

“There will be plenty of warning before they engage anybody with firepower,” a spokesman for JLT reassured Business Insurance magazine. “Training for the teams will be intensive and the rules of engagement will be made very clear by our legal team.”

JLT doesn’t like the nickname “private navy,” and Woollerson tells me there is no exact historical precedent for this idea. “That’s the problem,” he said. “That’s what’s taken me so long.” (Organizing the CEP has taken about two years.) “It’s private working in cooperation with military. It happens all the time on land, but not on the sea. And the law of the sea is more complex than the law on land.”

When it comes to modern maritime law, of course, he’s right. But the history of British counter-piracy is no stranger to “private navies.”

The British East India Company ran ships for centuries from London to the Indian coast, and for protection against pirates, it not only built Indiamen — light, fast cargo ships armed with cannons — but organized a private fighting navy called the Maritime Service. “Soon, its ships were collaborating with the Royal Navy in hunting down pirates not only in the Indian Ocean and Bay of Bengal, but also in the Malay Archipelago and the South China Sea,” writes journalist Isla Rosser-Owen at masud.co.uk, a site about the British Muslim history.

The Maritime Service came to be called “the Bombay Marine,” and after the East India Company collapsed its men and ships formed a colonial force called the Indian Navy.

For now the CEP’s distant hope is to replace warship patrols in the Gulf of Aden and free them to work the more chaotic waters east of Somalia. But the insurers know that real success against pirates would ruin their own business model, as well as the buccaneers’.

And what then?

“I see the CEP as a self-destructing company,” Woollerson said. “Maybe in many years’ time we will no longer be needed and could donate the tonnage to a Somali coastguard.”

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Michael Scott Moore
Michael Scott Moore was a 2006-2007 Fulbright fellow for journalism in Germany, and The Economist named his surf travelogue, "Sweetness and Blood," a book of the year in 2010. His first novel, "Too Much of Nothing," was published by Carroll & Graf in 2003, and he’s written about politics and travel for The Atlantic Monthly, Slate, the Los Angeles Times, and Spiegel Online in Berlin, where he serves as editor-at-large.

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