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Wednesday 27 February 2019

Held to ransom: anatomy of a hijack

  • Ten years ago pirates made Somalia’s coastal waters among the most dangerous on Earth
  • Soaring ransom demands – and payments – forced western navies to intervene
  • For the first time an academic has reconstructed a hijacking to show the right and wrong way to negotiate with pirates

Warning: this article begins with some strong language

By Anja Shortland

A: Tell him fuck you, fuck you, and fuck your white ass motherfucking boss…

S: OK, you take care Ismail

A: Just watch me what I do, just watch me and tell your boss the same thing. Tell him fuck you too, you motherfucking white bastard.

S: I will tell him that, OK, and I will speak to you later, OK.

FBI transcript of the CEC Future negotiation between ‘A’ – a negotiator hired by pirates – and ‘S’ – his counterpart in a Danish shipping firm

Somali Piracy

Put yourself in the shoes of an aspiring pirate for a moment. Imagine you and some good friends know how to get alongside a promising target, scramble up to deck level, and subdue any crew resistance. But what are you going to do when you are on the bridge?

Armed Somali pirates

How much to ask for? At the start of the Somali piracy crisis the pirates had little idea what the ships were worth to their owners. In 2005 and 2006 pirates hijacked a few slow, older cargo ships alongside the usual fishing trawlers. They were ransomed for between $20,000 and $300,000, but in 2007, a sea change occurred. The owners of the Danica White, a small cargo ship with five Danish crew members on board, reportedly paid the full $1.5 million ransom demand to retrieve their ship after eighty-three days.

This set pirates’ minds whirring. So, the next group of pirates demanded a $1 million ransom for the Japanese tanker Golden Nori and left satisfied after a six-week negotiation. In early 2008, a new record was reached with $2 million for the French luxury yacht Le Ponant. Fewer and fewer merchant ship-owners settled below the million-dollar mark. The Spanish government re-educated pirates about the value of fishing trawlers with a lightning quick $1.2 million ransom for the Playa di Bakio. Poor young men started to dream dreams of avarice, and shrewd businessmen developed an infrastructure that could support negotiations beyond the limits of on-board supplies. The scene was set for the arrival of the CEC Future.

The French luxury yacht Le Ponant

The CEC Future hijack

The MV CEC Future was owned by Clipper Group, a Danish firm. It was attacked by a pirate gang far off the coast of Somalia on 7 November 2008. They shot a rocket-propelled grenade across the bow and when they aimed the next grenade at the bridge the captain surrendered. The pirates boarded and directed the vessel to their stronghold of Eyl in Puntland. Here the pirates recruited Ali Mohamed Ali, a returnee from the US with excellent English and some previous experience of mediating in piracy cases, as their translator and negotiator. Ali conveyed the pirates’ first ransom demand of $7 million to the ship-owner on 10 November.

The first record we have is from that afternoon. By then Clipper’s incident management team is assembled and advised by a highly experienced consultant. The company has also engaged a professional communicator, Mr S, to handle the negotiation and the contacts with the crew.

If Ali expects an immediate counter-offer from Clipper he is disappointed. He’s told to ‘be patient’. Clipper is sending a clear message that they will not be pushed around. They next make contact more than two days later.

By this time, the pirates have allowed the crew members to phone home; presumably in the hope of raising the pressure on Clipper. Mr S announces that tomorrow at the same time there will be an offer in response to the pirates’ demand. He phones the ship as promised at 17.55 and conveys the first offer: $400,000.

The Mogadishu waterfront

The pirates are on a steep learning curve. At sea, the naval coalition patrolling in the Gulf of Aden is joined by ever more nations, raising the risk of attacks being interrupted. But the open seas are simply too big to patrol. For pirates with the spirit to venture far from home shores, there are rich pickings. Some innovate by tying their attack skiffs to motherships and used the winds and currents of their old trade routes to drift far into the ocean. That’s how they’re able to threaten targets like the CEC Future, for which, at the start of the bidding process, Clipper expects to pay a ransom in the region of $1.2 million.

They want to get the crew home safely as fast as possible. At the same time they are determined not to contribute to ransom inflation. They’ll pay no more than the going rate, or so they hope.

On and off the Curve

The next important conversation takes place the following day, 15 November. Ali roundly rejects the offer of $400,000. “You have to understand that these people are not amateurs,” he says. In an interview Ali told me the pirates interpreted Clipper’s relatively swift opening offer of $400,000 as extremely encouraging and tried to push for a ransom of $7 million. Then Mr S indicates that Clipper is looking to settle for a ransom ‘below 2 million’. The pirates get the message that Clipper’s target figure is $2 million. They counter with a demand for $5 million.

On 18 November Clipper raises its offer to $700,000. The additional $300,000 follows the negotiation protocol rule of decreasing increments. However, it comes very quickly after the first offer. The pirates view the swift and generous increase as a sign of weakness and Clipper’s ability to pay top dollar. Ali tells Mr S that the pirates are in no rush.

On 22 November, the captain starts to complain about conditions and supplies on board: fuel, food, and water are low. The stalemate continues until 30 November, the pirates come down to $4.9 million. Clipper counters immediately with a proportional increase of 1/50th to $714,000.

On 3 December, day 27 of the hostage crisis, Mr S confirms Clipper’s intention to stick with $714,000, so the pirates give them the silent treatment. All calls cease.

The silence is expected and Clipper waits for the pirates to make the next move. Ali calls Mr S from his private phone on 11 December, and on 12 December Mr S calls the ship. This time there are threats: to destroy the navigation equipment, take the crew off the ship, capsize the ship. Some of the threats are conveyed by the captain, who receives whispered instructions from the pirates. The pirates demand an improved offer – or else. Sticking to the protocol of never, ever responding positively to a threat, Clipper does not react and the silence resumes.

On 20 December two crew members are reported sick. On 21 December there is concern about a third crew member’s health. The Clipper team doesn’t panic. Instead, Mr S tells the pirates that because of the Christmas and New Year holidays things are unlikely to move for a while.

Over the next few days there are several conversations about next steps. But nothing is sent by fax, so officially there’s no movement.

On 29 December, the pirates’ answer finally arrives: $3.25 million. Clipper counters with $1 million. Ali and the pirates had confidently expected the new offer to be much closer to $2 million to converge above $2 million. Clipper has now revealed that they are on a completely different curve, and Ali’s outburst in response to this news betrays perplexity, anger, and anxiety: ‘you cannot put that shit in a motherfucking fax… you want to get me killed. Because I told them two million, because you told me so.’

Mr S, the shipping company negotiator, doesn’t lose his calm, but politely tells Ali that he will take all the information back to the board.

Ali is desperate to get off the ship. He calls himself the fourteenth hostage and considers suicide. The next day he proposes a deal: $2.3 million for the ship and $250,000 for new mediators and “this thing is going to be finished tomorrow morning”. Clipper rejects any possibility of finding that kind of money. The pirates need to come down to a realistic level. Ali concludes bitterly: ‘you don’t give a damn care about the crew and the vessel, right?’

The crew of the MV CEC Future

To Care or not to Care?

Watching the footage of the tense boardroom meetings and talking to Per Gullestrup it is obvious that crew welfare is in fact foremost on everybody’s mind. How do they manage to play it so cool? They know all crew members have recently had full medicals. They have also contacted the crew members’ wives, who’ve confirmed there is no medical history of concern. It doesn’t seem plausible that several crew members would conveniently develop life-threatening conditions at a critical juncture of the negotiation. In these circumstances to care is to appear not to care.

Stalemate

On 30 December – Day 54 – the captain is back on the phone, complaining once more about provisions and technical issues, as Ali goads him that ‘they don’t give a fuck about you guys’.

By this time Ali believes the problem is Mr S, drawing the negotiation out for his own private gain. The telephone number of Per Gullestrup, the CEO of Clipper Shipping, is readily available on the internet. If Ali can get the real decision maker on the phone maybe they can solve this man to man. He has tried this many times already, but on 3 January Gullestrup, worn out and frustrated by weeks of circular conversations, finally picks up the phone.

He makes several demands. He wants proof of life for the boatswain and chief engineer, and the captain has to confirm that the electronics and navigation equipment are in good working order. He says the pirates have to reduce their ransom demand and anchor the ship to conserve fuel. Ali puts the two crew members on the phone as requested. Both answer ‘proof of life’ questions and neither mentions a health problem. The captain comes back on to confirm that there is no damage to the ship.

Suspected Somali pirates

The Unexpected Breakthrough

When Gullestrup answers Ali’s call and takes over the negotiation he mentions a trip he’s planned to Brazil. It’s a business trip but that is not the message that gets through to the pirates. Ali thinks Gullestrup is going on vacation. Here he is, stranded on a ship with pirates he doesn’t like or trust, trying his best to find a solution to the stand-off, and the Clipper executives are swanning around the globe.

When Gullestrup warns on 7 January that if the pirates don’t drop anchor and preserve fuel all negotiations will cease, Ali finally believes him. A few hours later the ship is anchored. When Gullestrup asks for confirmation, the tone of the conversation has changed: ‘Yes, Yes, Sir, it is anchored.’

Ali is now convinced that the shipping company will outwait the pirates. He feels that the professional negotiators have spun out the negotiation to maximize their own fees. The pirates expected hourly updates at first – but Mr S rarely called. Now it’s up to Ali to make the pirates realize that Clipper is in the driving seat after all.

Ali explained to me later that the Clipper executives never knew the crew. They’d been hired via a crewing agent. ‘They were expendables. They were Eastern Europeans. There were no Danish sailors. If there had been, then Clipper would have paid more money in two to three weeks.’

The CEC Future pirates were a cross-clan venture, led by a senior pirate with a crew of hungry young men attracted by the promise of easy riches. Ali would try to convince the young pirates to cut the negotiation short. The new pirate season was just starting: it was time to get ready to strike again before the next monsoon would confine them to harbour.

Principals and Agents

Ali was getting scared: the pirates would be disappointed with the ransom, and they would take it out on him. Now his best-case scenario was to get away physically unscathed.

The conversation between Gullestrup and Ali therefore undergoes a shift. Ali has realized that if he is to derive any benefit from his thankless work on the CEC Future it will be by working with Clipper; by mediating rather than demanding. Ali becomes respectful; Gullestrup becomes professionally friendly.

Gullestrup appears to have the upper hand, but the cardinal rule of separation of communicator and decision maker has been broken. Ali has too much power to influence the outcome.

The Deal

In private, Clipper has resolved to pay no more and no less than the ‘market price’. When Ali comes back with a demand of $1.9 million on 12 January, Gullestrup loses patience. Both sides know a similar ship has recently been ransomed for $1.7 million. “So why do we have to go through this nonsense when they know the [ship’s name withheld] was done at 1.7? Why do I have to waste my time at 1.9?” Once more Ali is threatened with the case being handed back to Mr S. Bluntly, Gullestrup tells him “it’s time for the pirates to shit or get off the pot”.

Ali has been put in his place – but he finally knows the real budget for the ransom. He holds out for $1.7 million. There’s just one wrinkle, he says. “We need an extra hundred.” Gullestrup is sceptical – that’s $100,000 above the market price. But when Ali reveals that the additional payment will be a side-payment into a bank account and not part of the pirate ransom drop, Clipper is more positive.

The ransom paid to the pirates

Gullestrup believes the extra money will go to Ali and that it’s only natural that the man who has become his de-facto agent should have a reward. He might even be useful in other negotiations: Ali has become convincing to pirates because he has himself become convinced that shipping companies do not care. As he said later: “Ninety-seven per cent of sailors are from Eastern Europe, Philippines, Nigeria, Ghana. They are worthless to most of the owners.”

Clipper offers an extra $50,000, then $75,000, and Ali agrees.

The pirates finally leave the ship after 71 days, on 16 January. They’re disappointed and argue fiercely over how the ransom should be split. Their leader is shot in a firefight as soon as they reach the coast. Ali flees empty-handed, crossing the mountains on foot, relieved to have got away with his life.

What happens next?

Somali piracy presented insurers with a serious challenge. Ship-owners live in a ‘time is money’ world. The loss of hire, the deteriorating cargo, the reputational cost of missed deadlines, the preoccupation of the board members during a hostage incident, and the cost of repairing a ship soiled after months at anchor dwarfs the cost of the ransom. A piracy incident was likely to be a one-off. So there was a market for private negotiators who promised to prioritize the needs of the ship-owners rather than insurers. They tried to take a ‘time is money’ approach with the pirates. It didn’t work.

With rampant underemployment, the opportunity cost of haggling and waiting is low in Somalia. Once the infrastructure to avoid death and damage was in place, the pirates could just sit tight and watch the shipowners panic. Ransoms crept to $3 million, then five, then eight, then ten.

French marine commandos

More time meant more money for the pirates. Each new premium settlement drove up pirate expectations and the ransoms paid by those who could afford them. The crews of ship-owners who could not pay several million dollars stayed in Somalia for years. The laissez-faire hijack-for-ransom insurance product was doomed to fail at ransoms exceeding $3 million and year-long negotiations. Countries stepped up the naval intervention and ship-owners whizzed through the high-risk area guarded by private security companies instead – at a cost of several billion dollars a year. They do so to this day.

Reports from the region suggest ex-pirates have been going back to fishing as EU navy ships patrol the horizon. But Somalia is still a failed state. There is no robust authority on land, let alone at sea. Just two months ago a Spanish naval commander told the BBC that while piracy has been contained, “I really think the intention of going back to this business is still there”.

Further reading

  • Kidnap – Inside the Ransom Business, by Dr Anja Shortland, is a forensic study of how ransom negotiations can be controlled, and spin out of control. Anja is a reader in political economy at King’s College, London, and was guest speaker at a recent Tortoise ThinkIn
  • Colin Freeman, a former hostage of Somali pirates, shows here how piracy has spread to the Caribbean as the Venezuelan regime weakens

 

Photographs by Getty Images