India for redraw of piracy risk map

With pirate raids in eastern Arabian Sea virtually stopped for the past two years, India has taken up a new battle against global insurance firms to get the piracy risk map redrawn to prevent major  shipping traffic from getting uncomfortably closer to its exclusive economic zone that adversely affect Indian fishermen.

In December 2010, the Lloyd’s Market Association’s  Joint War Committee, a group of underwriters based in  London, had increased the scope of the piracy-infested region till 65 degree east longitude. The increased area was defined in the ‘Best Management Practices (BMP)’ industry document, which is strongly endorsed by  multinational forum, Contact Group on Piracy off the  Coast of Somalia (CGPCS).

On May 1, the CGPCS held its plenary meeting in New York, where India, along with Egypt and Oman, reiterated their demand for review of the High Risk Area, which it  had raised in earlier meetings too.

“This time, we pointed out with a lot of facts and  figures that there had been no incidents reported east  of 65 degree since March 2012. And even that incident  was 450 nautical miles from the Indian coast,” said a  senior Ministry of External Affairs official.

This fight, according to the Indian Government, has  become necessary to protect the interest of the Indian fishermen, whose livelihood gets hit by large cargo ships navigating these waters close to the Indian  coast, apart from ensuring that sailing through the  Arabian Sea does not mean heavy insurance premiums for  the cargo vessel operators.

“The Enrica Lexie incident, which led to the shooting  of two Indian fishermen, was a direct result,”  asserted a senior government official. The Italians had  even argued that the incident took place within the  High Risk Area, to explain the skittishness of the  marines who mistook the fishermen for pirates.

According to Indian officials, despite a lukewarm  reception from other groups and global industry bodies,  there had been a forward movement in the meeting in May that another ad-hoc meeting later this year will for the first time consider threat assessments by naval forces.

“This is a big step for us, as so far, any objective  threat assessments done by naval forces will  corroborate our position that there has been no  incidents in recent years,” he said.

A possible compromise suggested by India is that while  the piracy map may be shrunk till 65 degree longitude, “there could still be a provision for reporting of  incidents till 78 degree.”

But, despite the concerted effort, Indian officials  were aware that reducing the high risk area is an  uphill battle  with the resistance from the  global insurance industry.

“There is a lot of opposition from the insurance  industry groups, since a reduction in high risk area  would mean lesser number of ships requiring the  specific insurance that has high premium,” said the  senior official.

As per the BMP, all ships transiting through the high risk area must buy the war risk insurance. Further, they could purchase an additional kidnap and ransom  insurance, which covers ransom payment as well as other  costs like hostage negotiations. A report was released last month on the Economic Cost of  Somali piracy by a US-based non-profit group, Oceans  Beyond Piracy which  calculated that the additional  spending on war risk and kidnap and risk insurance in  2012.

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