maritime forecast report 2015 lr

8/16/2019 Maritime Forecast Report 2015 Lr

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MARITIME RISK FORECAST

2015

Managing Risk | Maximising Opportunity


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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 theCompany, 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 anymember of its staff) or in any other way.

Copyright: Control Risks Group Limited 2015. All rights reserved. Reproduction in whole or in part prohibited without the prior consent of the Company.


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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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MARITIME RISK FORECAST: 2015

1

Public interest in maritime crime may have waned in parallel to a reduction in hi jacks 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.

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.

INTRODUCTION

TOM PATTERSON

Tom Patterson

Associate Director, Maritime


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3

AMERICAS

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,

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 majori ty 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.

ONIKA ADENEYE

THEFT ROBBERY KIDNAP HIJACK ATTEMPT ASSAULT APPROACH ACTIVISM

90

80

70

60

50

40

30

20

10

0

Caribbean Central America North America South America

8

Americas: Reported incidents by type and area, 2014


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4MARITIME R ISK FORECAST: 2015

RISKS CONTINUE TO VARY BY LOCALITY

The nature and impact of piracy and armed robbery

varies by locality. Operators in South America, forexample, 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.

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.

FURTHER PORT STRIKES AND PROTESTS

LIKELY

High on the list of risks to watch in 2015 is maritimeactivism, 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 byworkers 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

Port and anchorage crime – low-level theft and

robbery – will also remain a persistent, albeit

under-reported, issue throughout the region in

2015. The majority of incidents are likely to occur

in South America, particularly in Brazilian,

0.6%

0.6%

PASSENGER

MISCELLANEOUS

29.4%

LEISURE

48.5%

LOCAL

8.6%

CARGO

7.4%

UNKNOWN

3.1%

TANKER

0.6%

MILITARY

1.2%

163

OILFIELD

INCIDENTS

Americas: Breakdown of incidents by vessel type, 2014


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5

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 2015. 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 2014.

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.

INADEQUATE MARITIME INFRASTRUCTURETO CONSTRAIN GROWTH

Although not a new phenomenon, inadequate

maritime infrastructure will continue to constrain

growth throughout the region in 2015. With the

exception of countries such as Panama, Chile and

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.


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7

ASIA

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 2014.

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 af fect local Vietnamese fishing vesselsconfronted 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 predominantl y

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 circumstancescan 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

SEBASTIAN VILLYN


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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 valuablecommodity in the region, will continue to drive

hijacking-for-cargo involving product tankers,

although this is unlikely to reach the same levels

seen in 2014. Control Risks recorded 11 such

cases, which was an increase of 450% compared

to 2013. Meanwhile, hijacking-for-vessel theft,

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 throughoutSouth 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 2013-14, 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,

2007 2008 2009 2010 2011 2012 2013 2014

12

10

8

6

4

2

0

HIJACK FOR BUNKER FUEL

HIJACK FOR BUNKER FUEL HIJACK FOR RANSOM

HIJACK FOR CARGO HIJACK FOR VESSEL

UNSPECIFIED

South-East Asia: Reported hijacks by type, 2007-2014


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9

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.

I

I

I

I I I

Sumatra

Java

Sulawesi

Kalimantan

Sarawak

SabahSulu

archipelago

I

I

I

I I I

Sumatra

Java

Sulawesi

Kalimantan

Sarawak

SabahSOUTH CHINA SEA

JAVA SEA

Singapore Strait

M a k

a s s a

r S t r a

i t

M a l a c c a S t r a i t

Sulu

archipelagoSOUTH CHINA SEA

JAVA SEA

Singapore Strait

M a k

a s s a

r S t r a

i t


Piracy increase

RAL, 2014 HIJACKS, 2014

Piracy decrease

KEY

Hijack for vessel

Unspecified hijack

Hijack for cargo

Hijack for bunker fuel

South-East Asia: Indonesian Recommended Anchorage Locations (RAL) and reported hijacks, 2014

I

Singapore Strait



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11

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-2011. 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

EAST AND WEST AFRICA

TIM HART

350

300

250

200

150

100

50

0

200 7 200 8 200 9 201 0 201 1 201 2 201 3 201 4

Horn of Africa: Reported incidents of piracy and armed robbery at sea, 2007-2014


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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 comingyear may see the risk-reward ratio swing back in the

favour of Somali pirate groups.

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 2013. Control Risks recorded a 12% drop

in overall activity in the Gul f 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 2013. 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.

There were two sign ificant 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

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

50

45

40

35

30

25

20

15

10

5

0

Attem pt Hija ck Kidn ap Robbe ry Thef t Assau lt Appro ach Activ ism

3

TOGO

NIGERIA

SAO TOME

GHANA

GABON

EQUATORIAL GUINEA

COTE D’IVOIRE

CAMEROON

Gulf of Guinea: Breakdown of reported incidents by type and location, 2014


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13

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

terrorism. Although attacks on the maritime

sector by terrorist groups have been rare off

Africa, the increas ing 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 Li koni ferry, which

crosses the entrance to the port of Mombasa.

Although a maritime ‘spectacular’ is unlikel y in

2015, an attack on a port facility remains a very

real possibility.

EBOLA TO DRIVE FURTHER DISRUPTION TO

SHIPPING IN 2015

Looking beyond security risks, the greatestdisruption 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 por ts 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 fur ther disruption, extensive

port restrictions and operational difficulties for

vessels wishing to call at them.

7.8%

CARGO

31.9%

OILFIELD

26.7%

TANKER

6%

UNKNOWN

19.8%

LOCAL

7.8%

MILITARY

116INCIDENTS

Gulf of Guinea: Breakdown of incidents by vessel type, 2014


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15

EUROPE AND THE ARCTIC

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 wor ld’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 par t, 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 2014. 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 wil l continue to affect mar itime 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, andhave 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

increasingl y 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 safetystandards 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.

ONIKA ADENEYE


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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 sanctionsbanning 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 directsecurity 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

2015. 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 2015.

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

I

NORWAY

NETHERLANDS

BELGIUM

I

I

I

I

I

UNITED

KINGDOM Activist incidents in 2014

KEY

Northern Europe and the Arctic: Location of incidents of maritime activism, 2014


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17

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 March2015. 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.

However, plummeting oil prices and uncertainty

among governments, conservation groups and

even offshore operators regarding the safety ofcurrent 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 Mari time 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

expected to be ratified by 1 January 2017.

However, the code does not satisfy environmental

groups, which continue to emphasise the

environmental impact of commercial shipping

operations in the Arctic.


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19

MIDDLE EAST AND NORTH AFRICA

Despite notable historical precedents, the Middle

East and North Africa has not been a piracy hotspot

for a number of years. However, the region’s

geostrategic significance means that it remainscentral to the continuity of global maritime

operations. Its waterways support the export of

large volumes of oil and gas, and harbour the

strategic chokepoints of the Red Sea and Suez

Canal, which act as conduits for maritime trade from

east to west.

ONSHORE INSTABILITY THE PRIMARY

CATALYST FOR OFFSHORE THREATS

Political instability has been the main underlyingdriver of offshore insecurity throughout the region

in the wake of the Arab spring. Regime changes,

in addition to ethnic, ideological and territorial

clashes, have resulted in security threats to

shipping and oil and gas operations. In Egypt,

commercial vessels have been targeted in rocket

TOM PATTERSONI

I

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CYPRUS SYRIA

LEBANON

JORDAN

ISRAEL

PALESTINIAN TERRITORIES

EGYPTI

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Somaliland

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Maritime terrorism incidents in 2014

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Middle East and North Africa: Maritime terrorism incident locations, 2014


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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 fairl y low-level

in nature, they demonstrate the potential operational

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, whichface 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.

DEEPENING INSECURITY IN SYRIA AND IRAQ

HAS HAD LIMITED IMPACT OFFSHORE

By contrast, although countries elsewhere in theregion are also experiencing violent conflict

onshore, this has had a l imited 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 2015.

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

MAJOR INCIDENTS OFF LIBYA IN 2014

5 AUGUST 2014

3 NOVEMBER 2014 25 DECEMBER 2014

21 NOVEMBER 2014

A bulk carrier, the Iron Baron V,

came under fire while in Derna outeranchorage. The vessel was reportedly

fired upon by a fighter aircraft.

Following increased fighting, reports emergedthat an unspecified vessel was struck byprojectiles in Benghazi port. The port wasclosed for at least a day following the incident.

Libyan protesters reportedly seized a

Qatar-flagged tanker anchored in Marsa elBrega port. The individuals were protesting

against the state of Qatar’s policies towards Libya.

Assailants launched a rocket attack onEs Sider and Ras Lanuf terminals, setting

fire to an oil tank before exchanging firewith pro-government forces.


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21

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 routinelyoverstated, 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 ofOman 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 CONFLICTRESULTING 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 MiddleEastern 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 massmigration 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 bywarships, which is aimed to discourage would-be

migrants, will have the knock-on effect of increasing

the burden on the commercial mari time community.

It will also increase the risk to migrants themselves,

as smuggling groups employ more ruthless tactics

to transport large numbers to Europe.


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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:

• piracy

• port and anchorage crime

• maritime terrorism

• maritime activism

• international maritime disputes

FOR DAILY MARITIME SECURITY UPDATES

Visit our website or email: [email protected] for a demonstration and a free

trial of Maritime Security Onl ine (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:

Twitter: @Control_Risks

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