MARITIME RISK FORECAST Managing Risk Maximising Opportunity

Transcription

1 MARITIME RISK FORECAST 2015 Managing Risk Maximising Opportunity

2 Published by Control Risks, Cottons Centre, Cottons Lane, London SE 1 2QG. Control Risks Group Limited ( the Company ) endeavours to ensure the accuracy of all information supplied. Advice and opinions given represent the best judgement of the Company, but subject to Section 2 (1) Unfair Contract Terms Act 1977, where applicable, the Company shall in no case be liable for any claims, or special, incidental or consequential damages, whether caused by the Company s negligence (or that of any member of its staff) or in any other way. Copyright: Control Risks Group Limited All rights reserved. Reproduction in whole or in part prohibited without the prior consent of the Company.

3 TABLE OF CONTENTS Introduction 1 AMERICAS 3 ASIA 7 EAST AND WEST AFRICA 11 Europe and the Arctic 15 MIDDLE EAST AND NORTH AFRICA 19 Maritime Risk AnalySIS 22

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5 Introduction Public interest in maritime crime may have waned in parallel to a reduction in hijacks off Somalia in recent years, but maritime risk remains firmly on the international agenda. The number of incidents of piracy and armed robbery at sea rose by 26% in 2014, according to Control Risks records the highest level of activity since 2011 during what proved to be a transitional year for global piracy. tom patterson Attacks perpetrated by Nigerian groups in the Gulf of Guinea declined by 12% in 2014 and Somali pirate activity accounted for just 4% of the global total. Elsewhere, in a development that reflected a geographical shift in maritime crime, the Americas overtook Africa in terms of absolute numbers of incidents. Asia, meanwhile, not only accounted for the majority (30%) of attacks but also registered the highest level of activity for over a decade. Despite the obvious threat posed by piracy, a greater proportion of maritime operators are likely to be affected by broader political, operational and security risks in the year ahead. Civil conflict and political instability in countries adjacent to key waterways will complicate mobilisation and transhipment. Geopolitical uncertainty over Russian sanctions will continue to impact dry bulk, container and tanker shipping. Oil and gas operators will face further scrutiny from activist groups over Arctic drilling. Meanwhile, an increase in the number of migrants fleeing conflicts in North Africa and the Middle East will place further strain on Mediterranean shipping routes. These are just some of the themes to be found in the pages ahead. The maritime domain in many ways represents the ultimate complex and hostile operating environment. Maritime operators have a high risk tolerance and have expertly mitigated a variety of offshore hazards for centuries, but remain exposed to fluid and ever-changing dynamics onshore. In our Maritime Risk Forecast 2015, Control Risks analyses some of the key issues that are likely to impact the maritime community over the next 12 months. Tom Patterson Associate Director, Maritime 1

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7 AMERICAS Onika Adeneye Maritime risk in the Americas is varied and covers a diverse range of geographies, from complex inland riverine systems to ports along the Pacific, Atlantic and Caribbean coasts. The region is often overlooked in discussions of maritime security in favour of global piracy hotspots in Africa and Asia. This is partly because of the high-profile nature of incidents elsewhere, but also because of an absence of robust incident-reporting mechanisms throughout the Americas. Effectively collating incidents in the Americas requires intensive public source research. This paints a very different picture to the simplistic yachts and thefts narrative often trotted out. Control Risks recorded 163 maritime related incidents in 2014, Americas: Reported incidents by type and area, 2014 including 72 armed robberies; 43 thefts; nine hijacks, two of which involved tankers along the Amazon River; and three kidnaps. The false perception that piracy and armed robbery at sea only affects local vessels in the region exacerbates the issue of under-reporting. Although the majority of cases continue to involve fishing and passenger vessels, Control Risks registered several incidents in 2014 in which larger commercial vessels were targeted, including bulk carriers, liquefied natural gas (LNG) tankers and oilfield vessels. Two such incidents involved significant levels of violence directed towards crew members Caribbean Central America North America South America THEFT ROBBERY KIDNAP HIJACK ATTEMPT ASSAULT APPROACH ACTIVISM 3

8 Risks continue to vary by locality The nature and impact of piracy and armed robbery varies by locality. Operators in South America, for example, are more likely to witness incidents of port and anchorage crime targeting larger commercial vessels, whereas North America (including Mexico) is likely to see more thefts and robberies targeting smaller local vessels. Meanwhile, Central America and the Caribbean experience high numbers of low-level thefts involving leisure vessels. Americas: Breakdown of incidents by vessel type, 2014 LOCAL 48.5% 163 INCIDENTS Seasonal changes also play a role. For example, along the Pacific coast in Mexico, incidents involving local fishing vessels significantly increase during shrimping season, which typically occurs between September and March. However, Control Risks data shows that piracy and armed robbery are not the only forms of maritime risk in the Americas. In the year ahead, a combination of domestic and external factors are likely to drive trends in maritime risk. PASSENGER 0.6% OILFIELD 1.2% TANKER 3.1% MISCELLANEOUS 0.6% MILITARY 0.6% FURTHER PORT STRIKES AND PROTESTS LIKELY High on the list of risks to watch in 2015 is maritime activism, particularly in ports and terminals. The region has some of the most organised port-specific labour unions globally. These were particularly active throughout 2014 and look set to remain so in the coming year. Strikes and protests occur for a variety of reasons and often relate to port privatisation, salary disputes, labour conditions and environmental concerns. Strikes across multiple ports in Chile in January 2014 caused financial losses of millions of dollars. Meanwhile, a two-week strike in October 2014 by workers at the Costa Rican ports of Moín and Limón resulted in violent protests involving roadblocks and clashes with security forces that delayed cargo operations. In extreme cases, activism has also been known to affect the safety of crew, as seen in 2013, when port workers in Brazil s Port Santos boarded the Chinese-flagged vessel Xhen Hua 10 in protest at the government s plans to modernise the nation s ports. South America to remain primary focus for port and anchorage crime LEISURE 29.4% UNKNOWN 7.4% CARGO 8.6% Port and anchorage crime low-level theft and robbery will also remain a persistent, albeit under-reported, issue throughout the region in The majority of incidents are likely to occur in South America, particularly in Brazilian, 4

9 Colombian and Guyanese ports. In the last year, several vessels were targeted while at anchor or berthed in these countries, including bulk carriers, tankers and supply vessels. Organised criminal groups regularly use territorial waters and ports to transport illicit weapons, money, fuel and drugs destined for the US, Europe, Africa, East Asia and Australasia. Such activities will continue to pose security and operational risks to the commercial maritime sector in Over the past year, several significant drug seizures have been reported in major ports, highlighting the continued ability of criminal groups to operate, particularly in Mexico and Brazil. Despite placing the Pacific port of Lazaro Cardenas, Mexico, under military control in November 2013, local security forces seized 119,000 tons of illegally mined minerals in a series of raids at 11 sites in the port in March Elsewhere in Brazil, security forces in the same month seized almost four tons of cocaine connected with Brazil s most extensive organised criminal group, the First Capital Command (PCC), in the country s largest port, Port Santos. Colombia, which have in recent years invested heavily in ports and terminals, the majority of regional ports lack the capacity to meet the demands of increasing vessel sizes or the bureaucratic capacity to process growing maritime traffic. This has led to long waiting times for vessels awaiting entry into ports. As a result, investment in maritime infrastructure is likely to remain high on the agenda of regional governments, particularly in light of the expansion of the Panama Canal, scheduled to begin operations at the beginning of 2016, which is projected to provide a much needed boost to regional trade. Corruption at ports will also remain an issue. Inadequate port infrastructure has contributed to a variety of corrupt practices within ports, including demands for facilitation payments by customs and port officials. In the last two years, there have been several scandals implicating officials and port authorities in countries including Colombia, Honduras, Panama and Brazil. With countries such as Brazil taking an increasingly strong anti-corruption stance through legislation such as the Clean Company Act 2014, maritime operators will need to factor in corruption risk when operating in the region. Inadequate maritime infrastructure to constrain growth Although not a new phenomenon, inadequate maritime infrastructure will continue to constrain growth throughout the region in With the exception of countries such as Panama, Chile and 5

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11 ASIA Sebastian Villyn Maritime security was a prominent topic of discussion in Asia in 2014, driven largely by a series of tit-for-tat exchanges at sea among regional powers. The continent is home to some of the most complex maritime territorial disputes in the world, which continue to trigger low-level clashes offshore. At the same time, a rise in incidents of piracy and armed robbery at sea over the last 12 months has fuelled perceptions of increasing offshore insecurity. According to Control Risks records, the number of incidents rose by 28% in Further skirmishes likely in South China Sea Following a year of skirmishes in the South China Sea, 2015 is likely to see further low-level confrontations between Chinese-operated vessels and Philippine naval forces and fishermen. This is most likely to be seen near to the Spratly Islands, as China continues to reject the Philippines case in the UN s Permanent Court of Arbitration and following reports that China is constructing artificial islands and port facilities on disputed areas such as Fiery Cross and Gaven Reefs. Clashes are also expected near the Paracel Islands, although these will primarily affect local Vietnamese fishing vessels confronted by Chinese ships. The potential for maritime confrontations in the East China Sea remains in 2015, particularly between China and Japan. Although the two countries are discussing the establishment of a communication mechanism that could help prevent escalation of minor crises, the bilateral territorial dispute is unlikely to be resolved anytime soon. Ongoing tensions have led to an increase in maritime capabilities and patrolling near the disputed islands. Despite some signs of a thaw in China-Japan relations, Prime Minister Shinzo Abe s push to strengthen Japan s military will likely see further build up on both sides. The maritime boundary disputes predominantly affect offshore oil and gas exploration in disputed areas, rather than commercial shipping. Seismic survey and drilling operations have been disrupted in the past, and the awarding of concessions under such volatile circumstances can expose companies to significant levels of political risk. Yet the prospects of these scuffles descending into all-out war remains slim, not least because all parties value the continuity of trade above all else. China s maritime silk route is moving closer to reality, and despite significant efforts to construct new domestically built warships, the country still lacks the naval capability to back up recent sabre-rattling in the East and South China Seas. PIRACY LEVELS TO REMAIN HIGH Control Risks in 2014 recorded the highest number of piracy incidents in Asia since 2007, and the majority of incidents were registered within the territorial waters of Indonesia and Bangladesh. Attacks are likely to see another marginal increase in 2015, given 7

12 South-East Asia: Reported hijacks by type, HIJACK FOR BUNKER FUEL HIJACK FOR BUNKER CARGO FUEL HIJACK FOR RANSOM HIJACK FOR VESSEL historic trends and the absence of new effective measures to tackle maritime crime in the most exposed countries. However, suggestions of a piracy renaissance exaggerate the severity of incidents, which are typically low-level thefts and robberies at ports and anchorages across the region. Sporadic higher-impact incidents, such as hijacking, will persist. The lucrative trade in black market fuel oil, which remains a valuable commodity in the region, will continue to drive hijacking-for-cargo involving product tankers, although this is unlikely to reach the same levels seen in Control Risks recorded 11 such cases, which was an increase of 450% compared to Meanwhile, hijacking-for-vessel theft, UNSPECIFIED predominantly involving tugs, which are later re-sold, will continue. The demand for such vessels is driven by their high usage throughout the region. Port and anchorage crime remains the most persistent threat affecting all vessels Additionally, international operators continue to be vulnerable to port and anchorage crime throughout South and South-East Asia, particularly in the southern South China Sea and the Singapore Strait, but remain relatively insulated from the more sophisticated pirate groups perpetrating high-profile hijacks. Such groups for the most part continue to target locally-flagged and -registered assets. Variable success of counter-piracy initiatives underlines limited capability of regional maritime forces Counter-piracy efforts in the region have witnessed mixed success over the past year. On the one hand, despite the increase in overall activity, Control Risks has recorded a marked reduction in successful attacks throughout the region. Many types of incidents are being deterred or averted, pointing to the increased effectiveness of hardening measures and a greater awareness of the threat among seafarers. However, at the same time, government initiatives such as the Recommended Anchorage Location (RAL) scheme in Indonesia established in late April 2014, where additional patrols were to be conducted, and enhanced naval patrols in Bangladesh have yielded limited results, and have not contributed to an overall decline in incident numbers. Conversely, Control Risks registered a rise in incidents in three of the 11 RALs during the first six months of the scheme being rolled out. Case for offshore armed security still unconvincing As was seen in the Gulf of Guinea in , an increase in incident numbers and high-profile hijacks has triggered renewed calls for armed security teams, particularly in the Singapore Strait and the southern South China Sea, where the majority of incidents continue to occur. However, 8

13 the case for armed security in South-East Asian waters has never been particularly robust. In addition to the significant legal constraints, which remain perhaps the most prohibitive factor, the basic issue remains that an armed response would be disproportionate to the threat. Most pirate groups plying South-East Asian waters are armed with knives and handguns, but their motivation and modus operandi remain very different to those perpetrating the heavily armed, violent attacks witnessed off Africa. Instead, maritime operators should familiarise themselves with the threats pertinent to the specific areas they transit, through informed advice, and also consider appropriate vessel hardening and, in some cases, the use of of unarmed liaison officers. South-East Asia: Indonesian Recommended Anchorage Locations (RAL) and reported hijacks, 2014 SOUTH CHINA SEA h Malacca Strait Singapore Strait Sulu Sabah archipelago Sarawak Kalimantan Sulawesi Sumatra Makassar Strait JAVA SEA Malacca Strait Java KEY Singapore Strait RAL, 2014 HIJACKS, 2014 Piracy increase Hijack for cargo Hijack for vessel Piracy decrease Hijack for bunker fuel Unspecified hijack 9

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15 EAST AND WEST AFRICA Tim Hart Piracy has been the dominant maritime security issue in Africa for the past six years, driven by activity off the Gulf of Guinea and the Horn of Africa. However, operators should not focus on piracy alone. As 2014 has shown, maritime threats in Africa are both diverse and dynamic, with a combination of political, security and environmental factors set to make the maritime environment challenging for operators in the year ahead. Piracy levels off East Africa to remain low Levels of pirate activity are likely to remain low off East Africa over the next year, reflecting a decline in hijacking-for-ransom by Somali pirate groups since mid The reduction in successful attacks no large merchant vessel has been hijacked since May 2012 can be attributed to three external factors: a better educated maritime industry, a more robust naval strategy and a better protected merchant fleet. Yet despite these notable gains, a re-emergence of activity remains a risk. With the exception of a handful of high-profile arrests, Somalia s pirate networks remain largely intact. A weak central government, an absence of local security provision in key coastal communities, and a proliferation of materiel and experienced personnel from four Horn of Africa: Reported incidents of piracy and armed robbery at sea,

16 years of successful activities mean that most groups remain operational, albeit currently focused on other financial pursuits. Although the actions of the international community may have temporarily curbed the intent of pirate groups, they have not dented their capability. Despite widespread acknowledgement from stakeholders in the counter-piracy community that the recent gains are reversible, efforts are already mounting to dismantle the security measures that have proven so effective in combating the crime. Cost-squeezed operators are seeking to dispense with expensive guards, hardening measures and re-routing. Meanwhile, politicians ponder redeploying naval assets elsewhere. The coming year may see the risk-reward ratio swing back in the favour of Somali pirate groups. There were two significant developments in maritime security provision in 2014 first, the publication of an update to the Gulf of Guinea Best Management Practices addendum, providing region specific guidance to vessel operators and secondly the launch of the Maritime Trade Information Sharing Centre (MTISC) in Ghana, aiming to boost awareness and improve reporting in West Africa. These advances highlight how the maritime community is coming to terms with the threat off West Africa, and the impact is being seen offshore. Evasive manoeuvres and vessel self-protection Gulf of Guinea: Breakdown of reported incidents by type and location, measures, such as razor wire, fire hoses and citadels were used effectively in a number of attacks in 2014, contributing to a shift in targeting by pirate groups back to oil and gas support vessels off the Niger delta. Many observers have identified the February 2015 general elections as a likely driving force for offshore instability. However, while elections often trigger clashes between rival political groups, such violence is more likely to be concentrated on land and ransoms from offshore kidnaps are unlikely to play a significant part in 40 Nigeria elections to shape future maritime threats in Gulf of Guinea On the other side of the continent, pirate activity remained stable in 2014, following a sharp rise in attacks in Control Risks recorded a 12% drop in overall activity in the Gulf of Guinea in 2014, with 85% of incidents recorded off Nigeria. Despite this, kidnapping levels off the Niger delta region remained stubbornly high, having increased significantly in By contrast, the number of incidents of hijacking-for-cargo theft involving product tankers continued to decline, despite such groups increasing their operational range to include Ghanaian and Angolan waters Activism TOGO NIGERIA Approach Assault SAO TOME GHANA Attempt Hijack Kidnap Robbery Theft GABON COTE D IVOIRE EQUATORIAL GUINEA CAMEROON 12

17 political campaign financing in light of the country s ample oil revenues. Of greater importance is the legacy of the elections, namely the future of the 2009 amnesty programme for Niger delta militants. A victory for incumbent President Goodluck Jonathan is likely to see support for the programme maintained in one form or another, while an opposition victory could see the end of local buy-in and, ultimately, the re-emergence of militant activity. INTENT OF TERRORIST GROUPS REMAINS HIGH With the focus on Somalia- and Nigeria-based pirate groups, it is easy to overlook the issue of Gulf of Guinea: Breakdown of incidents by vessel type, 2014 UNKNOWN 6% TANKER 26.7% 116 INCIDENTS terrorism. Although attacks on the maritime sector by terrorist groups have been rare off Africa, the increasing ambitions of groups based in Kenya and southern Somalia could mean the shipping or offshore oil and gas sectors find themselves viable targets. A local cell likely affiliated with Nigerian Islamist extremist group Boko Haram in July 2014 attempted to attack a fuel depot in the Lagos port district. Meanwhile, Kenyan police in the same month claimed they had prevented an attack on the Likoni ferry, which crosses the entrance to the port of Mombasa. Although a maritime spectacular is unlikely in 2015, an attack on a port facility remains a very real possibility. CARGO 7.8% LOCAL 19.8% Ebola to drive further disruption to shipping in 2015 Looking beyond security risks, the greatest disruption to shipping in the West Africa region in 2014 was caused not by piracy or terrorism, but by the Ebola outbreak. Although no specific ban was imposed on maritime travel to the affected countries, Ebola clauses have increasingly been added to contracts, requiring ships to carry protective equipment and allowing vessels to seek alternative ports if the planned destination is deemed unsafe. Vessels calling at ports in the affected countries have faced subsequent delays in quarantine, enforced health inspections and even refusal of entry at their next ports of call. Oil and gas operations have also experienced logistical delays, with crew changes becoming increasingly complex. Some new offshore projects have even been put on hold. Meanwhile the outbreak has exacerbated other operational risks, such as stowaways. Any significant expansion of the outbreak to new countries in 2015 would be likely to swiftly usher in further disruption, extensive port restrictions and operational difficulties for vessels wishing to call at them. OILFIELD 31.9% MILITARY 7.8% 13

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19 Europe and the Arctic Onika Adeneye With its extensive maritime history, Europe boasts some of the world s most well-established ports and maritime infrastructure. It is the destination for some of the world s key maritime trade routes, as well as hosting the headquarters of some of the world s largest shipping companies. The region s relatively benign onshore security environment has, for the most part, been reflected offshore, with maritime piracy and armed robbery at sea very much a thing of the past. Despite this, events over the last year have highlighted the changing nature of maritime risk in the region, with activism and geopolitical disputes some of the major issues set to affect operators in the year ahead. Maritime crime in Europe generally takes the form of opportunistic low-level theft, with the majority of cases involving leisure vessels in local marinas. Control Risks recorded seven such incidents in More serious incidents such as armed robbery and hijacking are extremely rare, with criminal groups significantly more adept at using the maritime domain to transport contraband items rather than to conduct armed attacks. Direct action to increase in parallel to Arctic exploration Activism will continue to affect maritime operators over the coming year, particularly those engaged in offshore oil and gas exploration. In the last two years, Control Risks has recorded 13 incidents of maritime direct action in Europe and the Arctic, the majority of which were carried out by environmental and conservation groups. Groups have the capability to operate in a diverse range of maritime environments, including the Arctic, and have successfully targeted drill ships, drill platforms and other vessels in the past year. Operators with vessels or platforms deploying from Western European ports will remain most exposed to such groups, which are employing increasingly bold tactics despite forceful responses from regional naval forces. Tactics have included attempts to board and occupy maritime assets; harassment of vessels servicing oil and gas operations; and, more recently, attempts to use social media to highlight poor health and safety standards on board offshore platforms, generating negative reputational fallout. FROZEN CONFLICT IN UKRAINE CONTINUES TO BREED UNCERTAINTY Events in Ukraine in 2014 served to demonstrate the delicate relationship between onshore and offshore dynamics. The deterioration in Ukraine s onshore security environment, coupled with the implementation of Western-backed sanctions directed at Russia, has had a detrimental effect on the maritime sector. Port operations in the Black Sea region have been affected and cargo shipments disrupted while a power vacuum in Crimea has reportedly bolstered transnational criminal networks by opening new ports such as Sevastopol to illicit smuggling operations. 15

20 Northern Europe and the Arctic: Location of incidents of maritime activism, 2014 NORWAY Exploration contracts in Europe and the Arctic have also been affected. Over the last year, exploration projects in the Russian Arctic have been halted or postponed because of sanctions banning Western companies from providing high-tech oil equipment to Russia and supporting offshore exploration and production activities, including shale and deep-water projects. With no signs of an end to the conflict in the short term, operators will need to stay abreast of further deteriorations in the Ukrainian security environment, particularly around ports and anchorages. An end to hostilities remains unlikely in the short term. Ukraine is entering a frozen conflict phase, in which maritime operators can expect fewer direct security threats to their assets but ongoing operational uncertainty. The weakness of the ceasefire agreement became evident in the first few weeks of 2015 and there has been very little movement towards a negotiated settlement. Meanwhile, Western sanctions are expected to remain in place until at least the third quarter of The broader diplomatic relationship between the West and Russia, which was seriously damaged in 2014 by events in Ukraine, will therefore remain a wider trend affecting maritime risks in UNITED KINGDOM NETHERLANDS BELGIUM KEY Activist incidents in 2014 OIL PRICES AND ENVIRONMENTAL CONDITIONS DENT ARCTIC APPETITE The Arctic continues to see interest from nation states and oil and gas companies alike. The circumpolar states are stepping up their efforts to 16

21 establish ownership of the Arctic, with countries such as Denmark submitting official claims to the UN for an extended continental shelf in December 2014 and Russia expected to follow suit by March Formal boundary delineations are unlikely to be concluded in 2015, but infrastructure investments are in place. Areas that currently lie within undisputed territory continue to be developed, and as seen with the dip in vessel traffic in the last year, the volume of shipping transits through the Northern Sea Route (NSR) will remain dependent upon ice conditions. expected to be ratified by 1 January However, the code does not satisfy environmental groups, which continue to emphasise the environmental impact of commercial shipping operations in the Arctic. However, plummeting oil prices and uncertainty among governments, conservation groups and even offshore operators regarding the safety of current equipment and ultimate profitability of offshore drilling operations in the High North have delayed exploration activities in the Canadian, Norwegian and US Arctic. A number of accidents, including the grounding of a drilling rig off the coast of Alaska in late 2012, and the damaging of a Russian tanker struck by an ice floe in the Matisen Strait in September 2013, have drawn attention to the region s limited search-and-rescue provision, raising questions as to whether the region is ready for commercial shipping. The International Maritime Organisation (IMO) has made some headway, securing approval for amendments for a soon-to-be-mandatory Polar Code, an agreed framework aimed at mitigating environmental catastrophes and to promote safety for vessels operating in Polar regions, which is 17

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23 MIDDLE EAST AND NORTH AFRICA Despite notable historical precedents, the Middle Onshore instability the primary East and North Africa has not been a piracy hotspot catalyst for offshore threats for a number of years. However, the region s the main underlying MOLDOVA geostrategic significance means that it remains Political instability has been KAZAKHSTAN central to the continuity of global maritime driver of offshore insecurity throughout the region CROATIA ROMANIA operations. Its waterways support the export of in the wake of the Arab spring. Regime changes, SERBIA BOSNIA AND large volumes of oil and gas, and harbour the in addition to ethnic, ideological and territorial HERZEGOVINA MONTENEGRO KOSOVO chokepoints strategic of the Red Sea and GEORGIA Suez clashes, have resulted in security threats to BULGARIA ALBANIA MACEDONIA shipping and oil anduzbekistan gas operations. In Egypt, Canal, which act as conduits for maritime trade fromazerbaijan KYRGYZSTAN ARMENIA commercial vessels have been targeted in rocket east to west. tom patterson GREECE Nakhchivan (AZERBAIJAN) T U R K E Y TAJIKISTAN TURKMENISTAN Middle East and North Africa: Maritime terrorism incident locations, 2014 MALTA CYPRUS SYRIA Kashmir LEBANON TUNISIA AFGHANISTAN ISRAEL IRAQ PALESTINIAN TERRITORIES I R A N JORDAN KUWAIT ALGERIA LIBYA BAHRAIN EGYPT QATAR SAUDI ARABIA NIGER SUDAN GHANA OMAN I N D I A KEY DJIBOUTI BENIN UAE YEMEN ERITREA CHAD NEP PAKISTAN NIGERIA Maritime terrorism incidents in 2014 Somaliland TOGO CAMEROON CENTRAL AFRICAN REPUBLIC SOUTH SUDAN ETHIOPIA SRI LANKA SOMALIA UGANDA CONGO CONGO (DEMOCRATIC REPUBLIC OF) KENYA 19 MALDIVES

24 attacks while transiting the Suez Canal. Meanwhile, vessels calling at Libyan ports have sustained collateral damage in the ongoing conflict there. Although security forces in both countries have been quick to shore up security around critical assets, and incidents have remained fairly low-level in nature, they demonstrate the potential operational MAJOR INCIDENTS OFF LIBYA IN AUGUST 2014 A bulk carrier, the Iron Baron V, came under fire while in Derna outer anchorage. The vessel was reportedly fired upon by a fighter aircraft. risks in waters adjacent to countries going through periods of violent transition. And while political instability does not always manifest in direct security threats offshore, it is costly for operators, which face the prospect of re-routing, crew mobilisation, and delays to cargo handling and trans-shipment. Developments in Egypt and Libya are likely to continue to shape the threat faced by maritime operators in the year ahead. 21 NOVEMBER 2014 Following increased fighting, reports emerged that an unspecified vessel was struck by projectiles in Benghazi port. The port was closed for at least a day following the incident. Libyan protesters reportedly seized a Qatar-flagged tanker anchored in Marsa el Brega port. The individuals were protesting against the state of Qatar s policies towards Libya. Assailants launched a rocket attack on Es Sider and Ras Lanuf terminals, setting fire to an oil tank before exchanging fire with pro-government forces. 3 NOVEMBER DECEMBER 2014 Deepening insecurity in Syria and Iraq has had limited impact offshore By contrast, although countries elsewhere in the region are also experiencing violent conflict onshore, this has had a limited impact on maritime security. Five years into the civil war in Syria, vessels calling at the ports of Tartous and Latakia have not faced a greater exposure to security risks, as was initially feared. Indeed, a sharp decline in tanker, dry bulk and general cargo traffic calling at those ports has been driven largely by practical and commercial considerations a decline in production and the advent of sanctions rather than an uptick in incidents involving vessels and crews. Similarly, the continued conflict between the government and Sunni extremist group Islamic State (IS) in Iraq has had a limited impact on both shipping and offshore oil and gas operations because the epicentre of the fighting is so far from the country s key ports in the Shia-dominated south. Iraq s offshore environment will remain relatively insulated from the fighting in the short term. However, Sunni militants retain the intent to mount attacks in southern Iraq and may look to do so in Maritime terrorism an enduring threat but capability of regional groups remains unproven Yemen was the scene of two of the most high-profile maritime terrorist attacks in recent history on the 20

25 USS Cole (2000) and MT Limburg (2002) and remains the most likely source of future attacks in the region. Although the capability of Islamist extremist groups to mount complex offshore assaults is routinely overstated, the intent undoubtedly remains, evidenced by al-qaida in the Arabian Peninsula (AQAP) s continuing campaign targeting the Balhaf Liquefied Natural Gas (LNG) terminal. The Suez Canal, Red Sea, Gulf of Aden, Gulf of Oman and Strait of Hormuz continue to provide attractive targets. A relative improvement in relations between the West and Iran in 2014 was accompanied by fewer instances of harassment of commercial vessels by the Iranian Revolutionary Guard Corps Navy (IRGCN), but the operating environment in the Gulf of Oman will remain opaque in the year ahead. A high concentration of small boat activity, with traders, smugglers, fishermen, and state and non-state actors, complicates the threat picture. In recent years, much suspicious activity in the area has been erroneously attributed to Somali pirate groups. Vessels transiting the Gulf nevertheless still face a variety of unconventional operational risks resulting from inter-state rivalries, transnational crime, and the local pattern of life in the area. SPILLOVER effect of regional conflict resulting in heightened stowaway and smuggling risk Continuing political and social upheaval throughout the Middle East and North Africa is also likely to trigger greater risks for maritime operators elsewhere in the year ahead. Conflicts throughout the region have led to an increase in attempts by migrants to escape by sea, resulting in a heightened risk of stowaway activity in North African and Middle Eastern ports and, in particular, a dramatic uptick in the number of migrant vessels departing the North African coast bound for Europe. The issue gained increased attention in 2014 amid several high-profile accidents involving vessels carrying migrants in the Mediterranean. According to the International Chamber of Shipping (ICS), more than 600 commercial vessels were involved in the rescue of migrants at sea in 2014 alone, in what the International Organisation for Migration (IOM) described as the world s largest wave of mass migration since the end of the Second World War. Under the terms of the International Convention for the Safety of Life at Sea (SOLAS) and the United Nations Convention on the Law of the Sea (UNCLOS), all Masters are required to provide assistance to vessels in distress. Migrant vessels pose an obvious collision risk to vessels plying busy trade routes across the Mediterranean, and the rendering of assistance has in some cases created significant complications for Masters and crew. The addition of a large number of individuals on-board commercial vessels can put a strain on basic provisions and health and safety procedures, while additionally delaying onward transits while the Master and crew liaise with the relevant authorities to determine the ultimate destination of those on board. The scaling down of humanitarian naval operations by key regional states will exacerbate the impact of a rise in the number of migrants taking to sea in the next 12 months. The reduction in patrolling by warships, which is aimed to discourage would-be migrants, will have the knock-on effect of increasing the burden on the commercial maritime community. It will also increase the risk to migrants themselves, as smuggling groups employ more ruthless tactics to transport large numbers to Europe. 21

26 Maritime Risk Analysis Control Risks offers a range of research and analytical solutions to assist maritime operators in identifying and mitigating key security, political, operational and integrity risks. Our dedicated team of Maritime Risk Analysts provide: bespoke consultancy online subscription products presentations and briefings threat assessments statistical analysis forecasting expert witness reports to a wide range of companies and sectors The team maintains multiple databases focusing on a broad range of maritime risks, including: For Daily Maritime Security Updates Visit our website or maritimeinformation@controlrisks.com for a demonstration and a free trial of Maritime Security Online (MSO), our dedicated web-based platform to identify, assess and mitigate your risks in the maritime environment. MSO features: Interactive mapping and journey planner Advice and analysis Incident alerts and vessel tracking Offshore monitoring and port risks Keep up-to-date with our thinking on the latest political, security and maritime developments: piracy port and anchorage crime maritime terrorism maritime activism international maritime disputes LinkedIn: YouTube: 22

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