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Reducing Piracy in Southeast Asia

August 5, 2009

Historically, the idea of piracy carries with it a romantic image of sailing ships, handsome swashbucklers like Errol Flynn, and Jolly Roger flags. But in recent years maritime piracy has become a security problem of substantial proportions. Attacks of late have most notably occurred off the Coast of Somalia and in the Gulf of Aden, where more than half of the world’s 293 pirate attacks took place in 2008. Trends indicate that pirate attacks will increase given Somali pirates ability to range further out to sea and the Somali government’s inability to counter these threats; the most notable of these attacks occurring in April when an American captain of a cargo ship was taken hostage by Somali pirates 350 miles off the country’s coastline.

But prior to 2007, the most piracy prone region in the world was not in Africa, but in Southeast Asia. Between 2000 and 2006, there were 2,463 attacks of piracy throughout the world. Of these attacks, 1,125 took place in the waters of Southeast Asia with Indonesia accounting for as much as two-thirds of all reported pirate attacks in the region. In fact, things were considered to be so risky and dangerous that Lloyd’s Market Association’s Joint War Committee (JWC) declared the Strait of Malacca in 2005 an area “highly prone to piracy, war strikes, terrorism and related perils for ocean shipping.” The JWC’s declaration resulted in the imposition of higher insurance premiums (as much as 30 percent) for ships transiting through the straits. This is significant as 40 percent of the world’s cargo and more than half of the world’s oil and liquefied natural gas passes through the Strait of Malacca. However, given the dramatic decrease of pirate attacks in the Malacca Strait, the JWC removed the body of water from its list in 2006.

So why are the Strait of Malacca and surrounding waterways no longer considered the most dangerous waterways in the world?  First and foremost, attacks are dramatically down thanks to better cooperation among the littoral states that surround the waterway – Indonesia, Malaysia, and Singapore. In November 2005, the Malaysian Maritime Enforcement Agency (MMEA), the equivalent of a coast guard, was established. Singapore has been ever vigilant in the protection of its waters given that its port is the world’s largest transshipment hub handling more than 29 million containers in 2008. Despite resource constraints, the Indonesian navy has done a remarkable job in improving security in its waters and reducing the number of pirate attacks from a high of 121 in 2003 to 28 in 2008. This statistic is all the more remarkable as Indonesia, the world’s largest archipelago, has no coast guard and its defense expenditures have been cut by 15 percent in 2009.

A long-standing U.S. foreign policy objective in Southeast Asia has been to secure the sea lines of communication so as to ensure orderly shipping markets, commercial freedom of navigation, and stability in the South China Sea. Since 2006, the U.S. has provided almost $80 million to Indonesia, Malaysia, and the Philippines under its Global Train and Equip Program to help improve these countries’ maritime security and counter-terrorism capabilities. Global Train and Equip has provided Indonesia with 12 coastal surveillance stations (including five along the Malacca Strait), nine radar stations along the Sabah coast in Malaysia, and has helped to strengthen the Philippines armed forces surveillance and interdiction capabilities. This support has not only helped to thwart piracy attacks in Southeast Asian waters, but has also helped to improve security and impede terrorists transiting between the southern Philippines, Malaysia’s Sabah, and Indonesia. So as not to impinge on any nation’s sovereignty, Global Train and Equip has been implemented in a sensitive, subtle fashion.  In addition to the U.S., Japan and India have also worked with Southeast Asia’s littoral states in conducting anti-piracy training exercises, providing equipment and other forms of technical assistance.

In 2008, more than 70,000 ships passed through the Malacca Straits to transport energy, raw materials, and finished goods. Over the past decade, shipping traffic has increased by more than 60 percent. Traffic density is projected to double to 141,000 ships by 2020 and this presents a challenge to Indonesia, Malaysia, and Singapore, as Article 43 of the United Nations Convention on the Law of the Sea says it is the responsibility of littoral states to maintain navigational aids in the strait as well as prevent pollution. The cost of doing this in 2020 could be as high as $300 million per annum. Japan’s Nippon Foundation has recommended that all ships transiting the Malacca Strait contribute a voluntary fee of 1 cent per deadweight ton cargo. This fee would generate about $40 million per year and help maintain and upgrade navigational aids in the strait. Another option could be to ask shipping companies that use the strait to make contributions as a form of corporate social responsibility. However, with the shipping industry already a highly competitive market, this idea has been resisted.

The littoral states of Southeast Asia have shown how national, bilateral, and regional measures, coupled with international support, can help significantly diminish the problem of piracy. But given the global economic downturn, there is no room for these countries and the region to be complacent. Pirate attacks doubled from 10 to 21 in Southeast Asia from April through June 2009. While these pirate attacks remain far below the number of attacks earlier this decade a possible upsurge in piracy in the region would not bode well for Southeast Asia, U.S. security interests in East Asia, and the global economy at large.

John J. Brandon is The Asia Foundation’s Director of International Relations Programs. He can be reached at jbrandon@asiafound-dc.org.

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