Marine and port risks spike in west Africa

West Africa is an area of growing concern to shipping interests around the world, with increasing numbers of marine insurers issuing warnings to their insureds.

For instance, Stuart Edmonston, head of loss prevention at the UK P&I Club, recently told IHS Fairplay that insurers were concerned over reports that the gangs are now creating new holding areas to keep crews in captivity, as they look at kidnap and ransom as a more lucrative option than theft from vessels, amid falling oil prices.

A report by Oceans Beyond Piracy reveals that there have been 32 kidnaps for ransom during 2016 in the Gulf of Guinea, surpassing the total number of incidents, 19, recorded by the International Maritime Bureau (IMB) for 2015.

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Piracy is certainly not new to west Africa, with the risk mainly concentrated in the waters near Togo, Benin, Equatorial Guinea and the Nigerian Delta.

An article by Africa Renewal magazine states: “In Africa, while piracy in Somalia’s Gulf of Aden is currently on the decline, it has spread to west Africa. Although most attacks in the region take place in Nigeria’s Niger Delta region, there have also been attacks in Benin, Ivory Coast, Ghana, Guinea and Togo, among others, according to the UN Office on Drugs and Crime (UNODC).

“In Benin, for example, taxes on trade account for half of government revenue, and 80% of these are derived from the port of Cotonou, according to UNODC figures published in March 2013. Last year, the spike in pirate attacks in west Africa led London-based Lloyd’s Market Association, an umbrella group of maritime insurers, to list Nigeria, neighbouring Benin and nearby waters in the same risk category as Somalia, says Claims Journal, a magazine for insurance professionals.”

Martin Roberts, senior analyst at IHS Country Risk, adds: “Piracy in the Gulf of Guinea is focused on kidnap for ransom and is concentrated on high value Western targets. The need for alternative funding, and ongoing militancy in the Niger Delta region, will continue to drive these risks into 2017. Onshore dynamics are affecting offshore risks.”

Developed by the west Africa and central Africa sub-region with technical support from the International Maritime Organisation (IMO), the Yaoundé Code of Conduct was adopted formally in Yaoundé (Cameroon), in June 2013 by heads of state or their representatives from 25 west and central African countries.

The Code’s primary objective is to manage and reduce considerably the adverse impacts derived from piracy, armed robbery against ships and other illicit maritime activities, such as illegal, unreported and unregulated fishing.

The 28th session of the IMO Assembly in December 2013 unanimously adopted Resolution A.1069(28) on prevention and suppression of piracy, armed robbery against ships and illicit maritime activity in the Gulf of Guinea.

To date, the Norwegian government, the UK government, the government of Nigeria, the Chinese government and the government of Japan have contributed generously to the IMO’s work in the region.

The UK P&I Club’s loss prevention department provides practical guidance to members in relation to piracy in west Africa.

The following are practical tips to members on how to avoid incidents with west African pirates:

• The ship should be operating at a heightened state of security throughout, including additional watchkeeping, roving patrols and fire hoses rigged at the railings, outside doors of the accommodation closed and locked from the inside, and temporary barriers erected around the outside stairwells. Risk of attack is particularly high when the ship is at anchor or is drifting off a port eg, close to a pilot station or when carrying out ship-to-ship transfer operations.
• For the purposes of identifying suitable measures of prevention, mitigation and recovery in case of piracy, it is imperative that a ship and voyage-specific risk assessment is performed well in advance, as recommended in Section 3 of the Best Management Practices version 4.
• Limit the use of lighting at night and reduce the power or turn off the automatic identification system (AIS). However, local laws regulating the operation of AIS should be considered and AIS should be reactivated immediately in the event of the ship being attacked.
• Review and comply with guidelines for owners, operators and masters for protection against piracy in the Gulf of Guinea.

Ports are widely regarded as the principal gateways for 90% of global trade, or even more.

According to a report by Control Risks, ports and trade in Sub Saharan Africa maritime trade have grown markedly in Africa since the 1990s.

West Africa has seen the greatest increase in shipping container traffic: a 364% rise from 1995 to 2005, according to Beyond the Bottlenecks: Ports in Sub-Saharan Africa, Ocean Shipping Consultants, June 2008.

This increase has led to significant port congestion and long waiting times at African ports.

A 2012 World Bank study found that, with the exception of Durban, cargo spent an average of 20 days in African ports, compared with three to four days in most other international ports.

The most commonly cited reasons for bottlenecks at African ports are lack of capacity, outdated and inefficient port infrastructure, administrative blockages, and corruption at port and customs authorities.

An April 2013 survey of international business attitudes to corruption, conducted by Control Risks and The Economist Intelligence Unit, found that demands for operational bribes or facilitation payments to have customs agencies process goods were a significant concern for a large proportion of business leaders.

As stated in Africa Renewal magazine, “illegal bunkering [filling ships with fuel] is enormously profitable” in Nigeria. That is the opinion of Martin Murphy, a professor at Georgetown University in Washington, DC and a Senior Fellow at the Atlantic Council of the US, a policy thinktank, writing in his article “Petro-Piracy: Oil and Troubled Waters”, published in Orbis for the Foreign Policy Research Institute.

“The scale of losses is staggering – more than $100bn worth of oil has gone missing since 1960,” adds Mr Murphy.

The damage caused by thieves has forced oil companies to shut down pipelines. Royal Dutch Shell is selling off four of its onshore Nigerian oil blocks because of the constant theft of large volumes of oil from its pipelines, United Press International reported in October 2013. As a result of the shutting down of pipelines, Nigeria is producing about 400,000 barrels a day below its capacity of 2.5 million barrels a day, according to The Economist.

The New York Times reported in September 2013 that Nigeria’s former top anti-corruption official, Nuhu Ridabu, had written a report in 2012 claiming that during the preceding decade, thieves had stolen between 6% and 30% of the country’s oil production.

According to the Risk Management Monitor, the Gulf of Guinea region accounted for 48 of the 264 incidents in 2013.

Of these, Nigerian pirates and armed robbers were responsible for 31 incidents, including two hijackings, 13 vessel boardings and 13 vessels fired upon. One crew member was killed and 36 kidnapped – the highest number of Nigerian kidnappings for five years, according to the IMB.

For marine and port operators in west Africa, the present risk situation, while daunting, masks a prosperous future in the region.

The economic prospects of the region should naturally encourage operators to find solutions to associated risks of doing business, rather than scale down operations or even vacate the region.