….Implications for the maritime sector
Maritime
piracy, armed robbery and terrorism are terms used to describe violent acts
carried out by malevolent actors operating at sea. We typically correlate the
latter with acts of war committed by rogue ideologues, while the former
connotes criminal activities committed by brigands for profit.
Such
characterisations are shortsighted and fail to demonstrate the true meaning of
the terms. Moreover, they invite conjecture about the nature of these threats
and the factors that give rise to them.
Recent
suggestions that a nexus may be forming between pirates and terrorists add
further obfuscation to understanding the differences between them. Although
there are similarities between the perpetrators of these acts, there are also
defining characteristics that allow us to distinguish one from the other.
Policymakers
must be able to clearly distinguish these two phenomena in order to develop
effective counter-measures.
The intent of this paper, however, is to
establish the implications from the rising incidence of piracy along the West
African Coast (Gulf of Guinea) on Ghana’s growing maritime sector.
There
has been an increase in piracy and armed robbery against ships operating on the
coast of West Africa or Gulf of Guinea. In
the last two years, there have been quite a number of reported piracy cases
which threaten to undermine the safety and security of the maritime industry
across the sub-region.
It
has been reported that Piracy in the Gulf of Guinea has now overtaken piracy in
Somalia waters. A report by the International Maritime Bureau (IMB) and other
seafarers’ groups indicate that 966 sailors were attacked along the West
African Coast in 2012, compared with 851 off the Somali coast which previously
recorded higher numbers of attacks.
Unfortunately,
maritime
piracy along the coast of West Africa differs from that off Somalia and may
eventually prove harder to deal with. While on
the Somali coast there is a large concentration of patrolling warships --
from the US Navy, NATO, the EU and others as well as reconnaissance aircraft,
all acting in a coordinated fashion -- the Gulf of Guinea has several national
coastlines to patrol with no single unified policing body.
The sudden increase of pirate activities in the
Gulf of Guinea and the increasing threat of terrorism in neighbouring Nigeria
have raised grave security concerns to oil shipments in the West African
sub-region; and these are undoubtedly too close for comfort as far as
Ghana’s oil installations are concerned.
Definition
Despite
serving as the representative body for international peace and stability, the
United Nations (UN) does not offer a satisfactory definition for terrorism, armed
robbery at sea or piracy. For instance,
piracy is defined by the UN in Article 101 of its Convention on the Law of the
Sea (UNCLOS) as an act of violence or robbery carried out for private ends
against another ship or person while on the high seas (Division for Ocean
Affairs and the Law of the Sea, 1982). This definition is ambiguous and
restricts how states may pursue piratical instances vis-à-vis international
law.
Similarly,
the UN has not been able to provide the international community with an
acceptable definition for terrorism. Not having a universal definition for
terrorism is problematic in itself, but it becomes more difficult when states
must distinguish between piracy, terrorism, and other acts of maritime
depredation.
Implications for Ghana’s Maritime Sector
The
current situation of increase in reported maritime piracy and armed robbery cases
along the Gulf of Guinea should be a major concern to maritime Authorities, as
it surely will have negative consequences on the maritime sector in West Africa
-- and Ghana, for that matter.
Apart
from the insecurity and high business cost this threat poses to the maritime
sector of West African states along the West African coast, there is also the
risk of reduced competiveness of shipments to and from West Africa going through
the Gulf of Guinea. Some of the most foreseeable
negative impacts of this development on Ghana’s maritime sector would include:
1.
High freight cost
Due to the insecurities along the Gulf of Guinea
arising out of the many reported piracy cases, ship owners and charterers would
be circumspect in traversing the Gulf of Guinea because of the potential of
piracy attacks. Consequently this may increase the cost of freight of shipments
to the West African Coast which includes Ghana’s maritime domain.
2.
High insurance premiums
The increasing incidence of piracy in the Gulf of
Guinea may also lead to higher insurance premiums -- leading to higher
importation costs. Ship charterers will
surely increase their insurance premiums to mitigate any potential effects of
pirate attacks.
3. Increase cost
of shipments
The cost to the shipper will certainly increase
because of the high freight and insurance cost as a result of measures to
mitigate the risk of piracy for vessel on voyages along the West African coast
and Ghana.
4. Lower vessel
calls at the ports.
Increased piracy attacks if unchecked have the
potential of eventually increasing the risk profile of the West African Coast,
and this will serve as a drawback to vessel calling at our ports -- which would
eventually render our ports redundant.
5. Loss of
revenue to the state
The maritime sector in Ghana is by far the highest contributor
to our revenue base. More than 80% of Ghana’s revenue comes from levies and
taxes from imports. Lower vessel calls at our ports would certainly affect our
cargo throughput, and hence assure lower revenue generation.
6. Loss of jobs
If the spate of piracy and its attendant
consequences are not curbed, it may lead to job-losses in the maritime sector
because of the negative effects it will have on the ports’ ability to operate
at optimum levels, thereby affecting the downstream maritime sectors in terms
of job-losses.
7. Negative
impact on the national economy
Loss of revenue resulting from low productivity of
the maritime sector may have negative implications on the national economy.
There could be shortfalls in revenue, depriving the economy of needed capital
for socio-economic activities.
Loss of jobs as indicated above, owing to the
reduced port operations and parallel operators, would lead to unemployment and
effectively put more stress on the nation’s GDP.
8. High cost of
living
The failure of the maritime sector to support the
national economy as a result of growing piracy activities may also lead to
hardship and higher cost of living for the populace. Higher cost of imports will lead to higher
prices and increased inflation.
9. Reduced competitiveness
of Ghanaian shippers
The effects of increased piracy activities in the
Gulf of Guinea also affect Ghana’s maritime trade competiveness. High shipment
cost, high insurance premiums and general cost of doing business will lead to
reduced competitiveness of our shippers.
10. Risk of terrorist
activities
Piracy and Maritime Terrorism are difficult to
differentiate, and the increasing spate of piracy in the Gulf of Guinea may
lead to terrorist organisations infiltrating our maritime waters -- given that
there is also a growing level of militancy across West Africa as witnessed in Mali
and Nigeria with Islamic fundamentalist groups like Boko Haram etc.
11. Threat to
national security
Increasing piracy cases in the Gulf of Guinea have
negative implications for the national security of West African states and
Ghana.
Increased piracy and armed robbery cases may result
in destabilising West African states, including Ghana, leading to insecurity.
Maritime infrastructure such as the ports and oil installations could eventually
be potential targets for pirates and their extremist associates.
Conclusion
As indicated in respect to the various form and
shapes that maritime terrorism or piracy may take, it is clear that when they
do happen they have the capacity to cause a great deal of dislocation in supply
chains -- with disastrous consequences.
Indeed, a large-scale terrorist or pirate attack at
a major port could not only cause widespread death and damage but also paralyse
the international maritime trading system, thus causing rapid disruption to
global commerce.
In Ghana, a terrorist or pirate attack on any of
our maritime facilities and infrastructure is bound to have a telling effect on
our economy. As indicated with respect
to the value of the logistics chain, our progress and prosperity is dependent
on our international trade. Cocoa, which
remains a major foreign exchange earner, largely relies on imports to feed its
production process and has to be exported through the ports to earn vital
foreign exchange for the country.
And so
it is with the other foreign exchange-earners such as manganese, bauxite and
other non-traditional products.
Government’s Treasury relies on import and export
duties for about 70% of its budgetary requirements. There are also taxes from port operators as
well as the providers of ancillary services all through the supply chain,
banking, insurance and haulage services.
Thus, any act of maritime violence that affects the supply chain will
significantly affect government revenue and hence the provision of social
services.
Ghana has invested a lot in its infrastructure both
at the ports and off-shore. Any
destruction of these facilities through a terrorist attack or pirate activities
would represent a severe setback likely to hinder our attempts at attaining
middle-income status through export-led growth.
Any major security breach occasioned by acts of
maritime terrorism would affect the level of confidence reposed by the
international community in our transport systems, and is likely to be
disastrous as it would completely erode our competitive edge and dash our
gateway dreams.
Our ports would become “leprosy ports” where no
vessels would want to call. Where they
do not become leprosy ports, there is a great likelihood that premiums for war
risks would increase to very devastating effect.
Even though marine cargo insurance covers the risks
of terrorism and piracy during the ordinary course of transit, the
international insurance market is loath to cover specific acts of
terrorism.
An attack on our maritime infrastructure would cut
the flow of goods and services, which would stifle internal trade and lead to
hyperinflation.
Therefore, Ghana must lead the way in fighting the
growing incidence of piracy in the Gulf of Guinea for its own national interest
and that of the rest of West Africa.
Ghana must show leadership at the ECOWAS level in
tackling these difficulties because of our particular interest.
In addition, government must equip our navy to be
in readiness to repel or deal with any incidence of piracy within our
territorial waters.
This would require investment in equipment and,
more importantly, capacity building on the part of our navy personnel.
There must also be close collaboration between naval
commands and maritime Authorities among ECOWAS member-states, and intelligence-sharing
to deal with this growing spate of piracy.
Ultimately, each sovereign nation must take urgent
steps to protect its waters, and the collective objective should be to rid the
Gulf of Guinea of piracy and its attendant implications for Ghana’s maritime
security and competiveness in international trade.
