New Telegraph

Kidnap: Shipping lines pay N376.3bn on security, insurance

Bayo Akomolafe

 

Shipping lines have paid N376.3billion ($818million) on security, kidnaping and cargoe insurance in the Gulf of Guinea beyond Nigerian economic zone in the last one year. About N96.12billion ($208.52 million) of the amount was paid on security following the surge in kidnap for ransom last year.

 

According to Oceans Beyond Piracy (OBP), insecurity has remained one of the biggest crimes in the maritime industry, causing immense financial and economic losses to government, ship owners, physical harm to crew members and a major threat to ocean blue economy. It noted that nine crew members were kidnapped in July, 2020 by pirates, who boarded an FPSO Sendje Barge positioned south of Bonny.

 

Accordoing to the the International Union of Marine Insurance (IUMI) increasing risk continues to blight this sector including man-made and naturally occurring incidents, noting that fires on containerships represented a significant amount of cargo loss in 2019 and had continued to surge into 2020 with a major car carrier and Very Large Crude carier (VLCC) fire.

 

It stressed that accumulation of cargo in stock and in transit has been exacerbated by COVID- 19 due to port congestion and delivery delays.

 

“This is also increasing the likelihood of damage to vulnerable cargoes such as refrigerated goods,” it added. Worried by the financial cost, a security firm, Dryad Global lamented that some pirate groups were in the country operating at long range and in deep water  beyond Nigeria’s Exclusive Economic Zone (EEZ).

 

It noted that their area of operations had expanded since last year due to lack of effective enforcement in waters neighbouring Nigeria, adding that pirates were capitalising on the opportunities that lie beyond the country’s EEZ, where vessels are less likely to be hardened against attack and less likely to have BMP West Africa recommendations in operation.

 

The firm said: “The maritime security threat within the Gulf of Guinea isn’t restricted to Nigeria’s EEZ and as the industry     well knows maritime piracy doesn’t adhere to the mapping constraints of conventional national geographic and maritime borders.” It was learnt that global impacts of the coronavirus disease 2019 (COVID-19) were already affecting the marine insurance sales market in 2020.

 

Also, the Joint War Committee (JWC) noted Nigeria north of latitude 3° north Lome, Togo to about 340 nautical miles west of Cape Lopez, Gabon in the south were uptick in pirates attacks.

 

The group explained that this   had allowed some underwriters to charge more to cover vessels that travel through the region. It stressed that the shipowners who were required to sail in the Gulf of Guinea would have to obtain the approval of their insurer before they could enter these waters.

 

An underwriter of marine war risks, Additional Premiums (APs), Chris Goddard said that cost had increased in 2020 due to a proliferation of piracy in West Coast Africa in both the marine war and kidnap and ransom market.

 

Goddard said: “The expansion of the Gulf of Guinea notification area is in direct response to the broadening of sustained attacks in the region which began increasing in 2019. The JWC’s decision will increase costs for shipowners operating in the region.

 

“However, those who widely adopt best management practice and engage in risk mitigation measures such as transit risk assessments conducted by independent maritime security experts will continue to see preferable insurance terms over their peers.”

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