Security firms led by G4S are providing armed guards to ships sailing pirate-infested Somali waters, with one start-up kitting out a gunboat to lead World War II style convoys, as shipowners step up their response to constant attacks.
G4S, which provides services ranging from airport and sports event security to prison management and cash transportation, has been in the vessel security market since 2003, but only recently switched to using armed guards.
"We've been doing it at an increasing level basically as a response to customer demand because of the threat posed off the coast of Somalia and the Indian Ocean generally," a G4S spokesman told Reuters, adding that the FTSE 100 firm sees combating pirates as a big commercial opportunity.
G4S, currently serving two large Far Eastern shipowners, said it may also offer armed protection to shipping off the west coast of Africa and the Strait of Malacca, off Malaysia, both scenes of increasing pirate activity.
The switch in favour of armed vessel security comes after Britain and the United States last month reversed their opposition to it amid growing acceptance that weapons could be the best deterrent to Somali gangs who have been seizing ships and holding their crews and cargo to ransom for the last five years.
Traditionally, shipping companies and their insurers have fretted that having armed personnel onboard boats could escalate violence in the event of a pirate attack.
Other private security contractors offering protection against pirates include Typhon, a start-up chaired by Simon Murray, the ex-military chairman of commodities trading giant Glencore.
Typhon, backed by two major Asian shipping companies, plans to protect convoys of up to ten ships with an armed vessel complete with helicopter, chief executive and founder Anthony Sharpe told Reuters.
"There are some guys that say they don't like arms because it escalates the situation, but sadly it's a necessary evil. It does deter piracy," Sharpe said.
A report earlier this year estimated that maritime piracy costs the global economy between $7 billion (4.47 billion pounds) and $12 billion through higher shipping costs and ransom payments.
The International Maritime Organisation said it does not condone or condemn the use of armed guards, but has issued guidelines for shipowners who do decide to seek armed protection.
G4S said it was providing armed protection, as well as tactical and strategic advice on board large vessels such as oil tankers and container ships. It said it had averted a number of attempted pirate attacks in the Indian Ocean in recent months.
Somali pirates were holding as many as 16 vessels hostage as of November 7, including the Blida, a 20,586-tonne Algerian-flagged carrier with 27 crew members.
Earlier this year, a seafaring Somali gang seized the oil tanker Irene almost 1,000 miles from the coast of Somalia in their most long-range attack to date.
G4S, which is worth around 3.3 billion pounds, made headlines earlier this month after scrapping a planned 5.2 billion pounds ($8.2 billion) acquisition of Danish cleaning firm ISS following investor opposition to the company moving away from its security heritage.
Date: November 24, 2011 Source: Reuters