Home Industry News LMA’s Smith gives evidence on piracy to US senators

LMA’s Smith gives evidence on piracy to US senators

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A committee of US senators has heard from the Lloyd’s Market Association (LMA) that collaborative working between the commercial sector and the broad range of Government agencies and the military has been a significant factor in the decline in piracy attacks off the coast of Somalia.

Speaking to the US House of Representatives’ Sub-committee on Coast Guard and Maritime Transportation in Washington DC last week, the LMA’s head of underwriting Neil Smith told senators that the lessons of governmental cooperation learned in Somalia could well be applied to other piracy hotspots – either now or in the future.

While the use of armed guards had helped reduce the number of attacks, Mr Smith noted, it was the improvement of conditions on land, linked to wide scale efforts of governments that was most significantly ‘pushing the statistics on Somalia in the right direction’.

Mr Smith went on to explain to the senators why Somalia had been such a challenge for the shipping and insurance community considering the market’s long history of piracy coverage. He said: “My view is that Somalian pirates introduced a different method of operation.  The traditional model took the vessel and the cargo, but the Somali game changer has been the recognition that the crew is a valuable asset for ransom.  This is a marine version of kidnap and ransom activity, rather than what we would traditionally regard as pirate activity. This leaves us with a number of longer-term questions about how the maritime community approach some of these traditional areas of cover.”

Looking to the future, Mr Smith added: “Setting Somalia aside, there has been a recent trend of attacks on vessels moving oil offshore in the Gulf of Guinea.  These incidents look, at this stage, to be a return to the more traditional model of piracy, with organised theft of portable goods from the ships and transhipment theft of the oil cargoes.

“The insurance sector is monitoring developments closely, and it is a further example of why, even though the situation in Somalia looks to be improving, the international maritime community cannot afford to relax its efforts to reduce the threat of piracy.”

Mr Smith addressed a hearing entitled Update on Efforts to Combat Piracy on Wednesday 10 April in Washington DC. The subcommittee is specifically interested in the impact of piracy on US-flagged vessels and US citizens.