GraSPP-DP-E-09-003 and OPU-DP-E-09-001

Privatising Anti-Piracy Services inStrategically Important Waterways:
Risks, Challenges and Beneﬁts

Carolin Liss
October 2009

Ocean Policy Unit

GraSPP Discussion Paper E-09-003

OPU Discussion Paper E-09-001

本ペーパーは、日本財団の助成を受けた「総合海洋基盤（日本財団）プログラム」の活動の一環として開催した「海賊に関する国際ワークショップ」において当初発表されたものです。

GraSPP-DP-E-09-003 and OPU-DP-E-09-001

Privatising Anti-Piracy Services inStrategically Important Waterways:
Risks, Challenges and Benefits

Carolin LissAsia Research Center, Murdoch University
Murdoch WA 6150
Email: C.Liss

murdoch.edu.au

Note: This paper was initially presented at “International
Workshop on Maritime Piracy” organized by GraSPP’s
Ocean Policy Education and Research Unit.

GraSPP Discussion Papers can be downloaded without charge from:http://www.pp.u-tokyo.ac.jp/
Discussion Papers are a series of manuscripts in their draft form. They are not intended forcirculation or distribution except as indicated by the author. For that reason Discussion
Papers may not be reproduced or distributed without the written consent of the author.

Privatising Anti-Piracy Services in Strategically Important Waterways: Risks,
Challenges and Benefits
Carolin Liss, Murdoch University

Introduction
In the past few years, an increasing number of Private Security Companies (PSCs – also
sometimes referred to as Private Military Companies, PMCs) have emerged offering andconducting Anti-Piracy Services. These companies offer services in addition to security
provided by states and their government agencies. PSCs are today hired to provide anti-piracy
services in different parts of the world, but mostly in strategically important waterways where
piracy is a serious security concern. This paper examines the employment of PSCs in two
such waterways, namely the Malacca Straits and the Gulf of Aden, and discusses the risks,challenges and benefits of privatising maritime security.
Privatising Anti-piracy Services
Since the end of the Cold War, it has become increasingly clear that many (non-traditional)
security threats, such as terrorism, transnational crime or environmental degradation, cannot
be addressed by individual states and their national agencies alone. As a result, the lines
between national and international security have become blurred and security challenges aretoday met by a range of diverse state and non-state actors. For example, multi-lateral
institutions, such as the UN or NATO, have become more and more involved in addressing
security threats, but have often encountered operational difficulties. Furthermore, a range ofprivate and other non-state actors have emerged as part of the new security landscape andplay an important role in conflict and disaster zones as well as in responses to criminal andradical politically motivated acts. One example of these new private actors is PSCs.
Most PSCs have emerged in the past 20 years, offering a vast menu of military andsecurity services. The rise of PSCs can be attributed to a range of interconnected factors. First,
PSCs operating around the world emerged as part of a much wider process of privatisation of
public services and state sector enterprises, including, for example, education, healthcare andthe supply of utilities such as water and electricity. This process was part of the neo-liberal
revolution, which aimed to extend the assumptions of neo-classical economics into generalpolicy prescriptions; hence, privatisation in tandem with trade liberalisation, deregulation andfiscal austerity became core policy foci.1
Other political and geo-strategic factors also played a role in the rise of the private
military industry. Most important among them are the global and national changes in both
politics and security generated by the end of the Cold War, including the changing nature ofconflict after 1989 and the downsizing of major armies, particularly so in the former Soviet
1See: Christopher Colclough and James Manor, States or Markets? Neoliberalism and the Development Policy
Debate, Oxford: Clarendon Press, 1991. Garry Rodan, Richard Robison and Kevin Hewison (eds), The Political
Economy of South-East Asia, Second Edition, Melbourne: Oxford University Press, 2001. John Harriss.
Depoliticising Development, London: Anthem Press, 2002. Joseph Stiglitz, Globalisation and Its Discontents,
Camberwell: Penguin, 2002.

1

Union but also in the US and Britain. The latest increase in demand for PSC services is linked
to the War against Terrorism, including the conflict in Iraq.2
The demand for private military and security services around the world comes in partfrom the maritime sector. Indeed, PSCs are today employed to secure the world’s oceans, ormore precisely, commercial vessels, yachts, cruise ships, offshore energy installations,container terminals and ports. To address these security challenges, PSCs offer a wide rangeof services. These include risk and vulnerability assessment and consulting for ship owners
and port operators, training of naval and maritime security forces, insurance fraud and cargocrime investigation and protection of offshore oil platforms against rebel or terrorist attacks
in politically volatile regions.
Most companies active in the maritime sector also offer a range of anti-piracy services,
ranging from risk consulting to the recovery of hijacked vessels. Not all companies, however,offer all anti-piracy services, with some solely providing risk consulting or vessel tracking.
Yet most PSCs seem to offer many or most of the major anti-piracy services, namely:






Risk Assessment and Consulting
Training of Crews, Port Authority Personnel or Military and Law Enforcement Units,
and Vessel Tracking
Provision of (Armed) Guards onboard Vessels or Vessel Escorts
Crisis Response, Investigation and Recovery of Hijacked Vessels and Cargoes, andthe rescue of Kidnapped Crewmembers
Fisheries Protection and Protection of Fishers against Poachers and Pirates

PSCs, therefore, offer preventive as well as post-attack services, addressing all types of pirate
incidents on commercial vessels and pleasure crafts. For example, hit-and-run robberies,
maybe even attacks by pirate syndicates, may be prevented through better training of thecrew or the presence of guards onboard a vessel. Shipowners whose vessels have beenhijacked can on the other hand rely on crisis management assistance during the event, or
employ a company to relocate or recover the ship or stolen cargo.
Many PSCs offering anti-piracy and other maritime services are part of, or linked to,either larger PSCs or transnational corporations outside the security industry. Many of thelarger companies that offer anti-piracy services are based in the US and Great Britain, with anumber of them having offices around the world. Moreover, a number of smaller companies
have been established in regions where demand for anti-piracy services is high, includingSoutheast Asia where piracy has been a concern over past decades. One example is
Background Asia, with headquarters in Singapore.3
2

Singer, Corporate Warriors, pp. 50-3. James L. Taulbee, 'Mercenaries, Private Armies and Security
Companies in Contemporary Policy', in Daniel N. Nelson and Laura Neack (eds), Global Society in Transition.
An International Politics Reader, The Hague: Kluwer Law International, 2002, p. 87. Deborah Avant, 'Think
Again: Mercenaries', Foreign Policy, July/August 2004,
http://www.foreignpolicy.com/story/cms.php?story_id=2577, accessed 1 September 2004. David Isenberg,'Corporate Mercenaries. Part 1: Profit Comes with a Price'.
3
Carolin Liss, ‘Private Security Companies in the Fight against Piracy in Asia’ 2005, Working Paper no. 120,
Asia Research Centre, Murdoch University, http://wwwarc.murdoch.edu.au/wp/wp120.pdf, 13 November 2005.
Carolin Liss, 'The Privatisation of Maritime Security - Maritime Security in Southeast Asia: Between a rock anda hard place?', Working Paper 141, Asia Research Centre, Murdoch University, February 2007,

2

However, anti-piracy services in general and armed services in particular have so far
not been a major business for PSCs, particularly when compared to the services provided in
Iraq. One of the most important reasons why PSCs have not done major business in this areais that pirate attacks have so-far not occurred on a scale that would have - in the eyes of
shipowners or other clients - justified the considerable extra expense of hiring PSCs. The
exception is the employment of PSCs to conduct anti-piracy services in strategicallysignificant waterways where pirate attacks on merchant vessels occur frequently, mostnotably the Malacca Straits and the Gulf of Aden.
The Malacca Straits and the Gulf of Aden: Pirates, States and PSCs
Both, the Malacca Straits and the Gulf of Aden are strategically important waterways andplay a significant role in international trade. The Malacca Straits which connects the Indian
Ocean with the South China Sea is one of the busiest waterways in the world, with more than
60,000 merchant vessels transiting the waterway each year. Tankers carrying oil from theMiddle East to countries such as China and Japan, which rely heavily on imported oil, are justsome of the vessels passing through the straits each day.4 The Gulf of Aden is also of vital
strategic importance, with more than 20,000 vessels travelling between Europe and the
Middle East, Asia and Australia passing through the area every year.5
Both waterways are consequently congested and particular care is required innavigation, forcing vessels to reduce speed to ensure safe passage. These conditions arefavourable for pirates, as they can approach the slow moving targets in their speed boats
without too much difficulty. In fact, at certain point in time over the past decades, bothwaterways have been identified as piracy hot-spots. While the scale of pirate attacks differs inthese two waterways, pirates in both areas are predominantly operating from one country –the weakest of the littoral states. In the Malacca Straits, the majority of pirates are based inIndonesia, while sea robbers from Somalia are mainly responsible for attacks in the Gulf of
Aden.
There are, however, also major differences between the two waterways and theirrespective littoral states, which shape the character of pirate attacks. Southeast Asian
countries, including those bordering the Malacca Straits, have comparatively stable
governments and have in recent decades experienced rapid economic development. Due totheir economic success in the first half of the 1990s, Southeast Asian countries were able tostrengthen and modernise their defence forces, including their navies. In 1997, the expansion
and modernisation of military forces in Southeast Asia slowed due to the Asian financial
crisis. However, most local economies, as well as military spending, recovered within a few
years. In addition, after September 11, 2001, some countries in the region, including the
http://wwwarc.murdoch.edu.au/wp/wp141.pdf. Carolin Liss, 'Southeast Asia’s Maritime Security Dilemma:State or Market?', Japan Focus, 8 June 2007, available at: http://japanfocus.org/products/details/2444.
4
On its website, the Malaysian Marine Department publishes the numbers of vessels transiting the Malacca
Straits from 1999 to 2004. In this period, the number increased from 43,964 in 1999 to 63,636 in 2004. See:
Marine Department Malaysia, 'Mandatory Ship Reporting System in the Straits of Malacca and Singapore',
http://www.marine.gov.my/service/index.html, accessed 22 June 2007.
5
Sarah Smiles, ‘Navy Plans Pirate Fight’, Age, 9 January 2009, http://www.theage.com.au/national/navy-planspirate-fight-20090108-7cw7.html, accessed 13 January 2009.

3

Philippines and Indonesia, received substantial financial assistance and training from the U.S.
to strengthen the capacities of their militaries and police forces to combat terrorism.
Furthermore, while navies still play an important role in safeguarding national waters andresponding to criminal activities, they increasingly share these tasks with government
agencies such as the marine police or coast guards, many of which were established after theend of the Cold War in Southeast Asia.6
Despite the economic growth of Southeast Asian countries, their comparatively stable
political situation and the build-up of operational government forces, piracy remains a
problem in some water areas, including (until recently) the Malacca Straits. Indeed, since theearly 1970s incidences of piracy have been a concern in Southeast Asia, with pirate attacks
ranging from simple hit-and-run robberies to hijackings of vessels.7 In the early 1990s thewaters of the Malacca and Singapore Straits have been identified as the most pirate-infested
in Southeast Asia and at the beginning of the 21st century high numbers of attacks were once
again reported from the Malacca Straits. The attacks in the straits were a matter of concern,
because incidents of a serious nature, including the kidnapping of crew for ransom, have been
conducted in this area.8 To address the piracy problem, governments responded over the past
years by tightening control and increasing patrols in the Malacca Straits area. As a result, thenumber of pirate attacks in the Malacca Straits dropped since 2005.9
The situation in the Gulf of Aden area differs significantly. The piracy problem in thewaters off the Horn of Africa stems largely from the political instability of Somalia. The
country has often been described as a failed state, and has had no effective government inplace since 1991. Indeed, after the end of the Cold War, the country’s central government
collapsed and Somalia has been ruled by a succession of varying coalitions of politicians andlocal warlords. With weapons widely available, armed conflict and violence has been a
constant component of ‘politics’ in Somalia. Famine and other natural and manmade disasters
have been a further long-term burden for the country’s population. The long internal conflictin Somalia combined with natural disasters have left the country devastated. Hundreds ofthousands of people have lost their lives and an estimated 2.5 million are in urgent need ofassistance. Since January 2006 alone, an estimated 1.1 million people have been displaced in

6

Sam Bateman, ‘Asean’s Tiger Navies’, Jane’s Navy International 102.3 (1997), n. p. David Capie, ‘Between a
Hegemon and a Hard Place: The US ‘War on Terror’ and Southeast Asian-US Relations’, Pacific Review, vol17, no 2, pp.229-36. Sheldon W. Simon, ‘Asian Armed Forces: Internal and External Tasks and Capabilities’, in
Sheldon W. Simon (ed), The Many Faces of Security, Lanham: Rowman & Littlefield Publishers, 2001, p. 51.
Carolin Liss, 'Southeast Asia’s Maritime Security Dilemma: State or Market?', Japan Focus , 8 June 2007,
http://japanfocus.org/products/details/2444.
7
Warren, James Francis (2001) ‘A Tale of Two Centuries: The Globalisation of Maritime
Raiding and Piracy in Southeast Asia at the End of Eighteenth and TwentiethCenturies’, Paper presented at KITLV Jubilee Workshop, Leiden, 14-16 June, pp. 13-17. Carolin Liss,‘Maritime Piracy in Southeast Asia and Bangladesh, 1992-2006: A Prismatic Interpretation of Security’, PhD
Thesis, Murdoch University, 2008.
8
Michael Stehr, Piraterie und Terror auf See. Nicht-Staatliche Gewalt auf den Weltmeeren 1990 bis 2004.,
Berlin: Verlag Dr. Koester, 2004, pp. 58-9. The Malaysian Transport minister Chan Kong Choy recently statedthat less than 0,01% of vessels passing through the Malacca Straits are attacked. Marcus Hand, 'Malaysian
Backlash at Malacca Risk Call', Lloyds List, 13 July 2005, n. p.
9
ICC International Maritime Bureau, ‘Piracy and Armed Robbery Against Ships, Annual Report 1 January-31
December 2007’, London, January 2008, p.5.

4Somalia, with many seeking refuge in neighbouring countries.10 Given the political instability,
authorities in Somalia are unable to secure shipping in their waters. Indeed, local authorities,
as far as they exist and function, often have more pressing issues to address.
The waters off the coast of Somalia therefore did not remain trouble free. Indeed, theworld’s most blatant pirate attacks are currently taking place off the country’s coast. In thepast 12 months alone, more than 100 ships were attacked in this dangerous area. These
attacks included more than 40 hijackings of merchant and fishing vessels, with the pirates
receiving millions of US dollars in ransom money for kidnapped crew and hijacked ships.
Among the vessels attacked by pirates were the Ukrainian freighter La Faina, carrying 33
combat tanks and other weaponry, which was hijacked on the 25 September 2008, and thesuper tanker Sirius Star, taken in mid-November. The Sirius Star, a new ship worth
approximately US$150 million, is the largest vessel ever taken by pirates and was carrying acargo of crude oil with a value of US$100 million at the time of attack. While the Sirius Star
has been released in January 2009 after a ransom of reportedly US$3 million was paid, thehijacking of the super tanker clearly demonstrated the capacity of the Somali sea-robbers to
attack ships of any size.11
When attacks on vessels off the coast of Somalia became more frequent and serious
in nature, international concern about the safety of ships and crews passing the Horn ofAfrica grew. As a result, nations from around the world have sent warships to combat piracy
in the area. Among the warships and personnel patrolling the area have been ships from the
US, Canada, Britain, Germany, France, Russia, Malaysia, China and India. Many of thesevessels are part of missions sanctioned or organised by multilateral organisations, including
NATO and the EU.12 However, attacks in recent weeks, such as the hijacking of the tanker
Sea Princess II on January 2, show that current efforts to combat piracy in the region are notsufficient to prevent major attacks – despite the involvement of naval forces from countries
around the world.13

10International Crisis Group, ‘Conflict History: Somalia’, updated September 2008,
http://www.crisisgroup.org/home/index.cfm?action=conflict_search&l=1&t=1&c_country=98, accessed 20
November 2008. Mohammed Ibrahim, ‘Insurgents in Somalia Take Over Police Posts’, New York Times, 4January 2009, http://www.nytimes.com/2009/01/04/world/africa/04somalia.html?partner=rss&emc=rss,
accessed 7 January 2009. “Ethopia Begins Somalia Pullout’, BBC News, 2 January 2009,http://news.bbc.co.uk/2/hi/africa/7808495.stm, accessed 18 January 2009.Ibid. Alex Perry, ‘The Suffering ofSomalia’, Time Online, 13 November 2008, http://www.time.com/printout/0,8816,1858874,00.html, accessed
20 November 2008. Daniela Kroslak and Andrew Stroehlein, ‘Oh my Gosh, Pirates!’, International Herald
Tribune, 28 April 2008, http://www.iht.com/bin/printfriendly.php?id=12399900 , accessed 30 April 2008.
11‘Pirate boat destroyed after new raid’, Australian, 20 November 2008. Llanesca T. Panti, ‘Somali Pirates
Release Philippine Ship and Crew’, Manila Times, 14 January 2009,http://www.manilatimes.net/national/2009/jan/14/yehey/metro/20090114met1.html, accessed 15 January 2009.
Office of Naval Intelligence, ‘Worldwide Threat to Shipping Mariner Warning Information’, Civil Maritime
Analysis Department, United States, 8 January 2009.
12
Petra Sorge, ‘Alliierte gehen ohne Deutschland auf Piratenjagd’, Spiegel Online, 27 Oktober 2008,
http://www.spiegel.de/politik/ausland/0,1518,druck-584554,00.html, accessed 28 October 2008. North Atlantic
Treaty Organisation, Somalia: Successful completion of NATO Mission Operation Allied Provider’ 12
December 2008, http://www.reliefweb.int/rw/rwb.nsf/db900SID/JBRN-7M9K2N?OpenDocument, accessed 17
January 2009.
13‘Pirate boat destroyed after new raid’, Australian, 20 November 2008. Llanesca T. Panti, ‘Somali Pirates
Release Philippine Ship and Crew’, Manila Times, 14 January 2009,http://www.manilatimes.net/national/2009/jan/14/yehey/metro/20090114met1.html, accessed 15 January 2009.

5

Despite these differences in the scale and nature of pirate attacks in the Malacca
Straits and the Gulf of Aden and the differences in government responses to these incidents,
PSCs have been hired in both waterways to conduct anti-piracy services. For example, in the
Malacca Straits, Background Asia has supplied escort vessels for tankers and the Australianbased PSC Counter Terrorism International (CTI) has provided protection for a tug and avessel, with the latter departing from an oil rig and travelling through the straits.14 PSCs havealso been hired to protect ships in the Gulf of Aden area. A German shipowner has, forinstance, employed the British based company DRUM Resources to provide ex-navy
personnel to safe guard his vessels with non-lethal weapons, paying about US$50,000 for theservice. The company is reportedly protecting at least two vessels each week in this area,
sending between four to eight ex-Royal Marines to watch over a vessel.15 A second PSC
active off the Horn of Africa is the British based company Eos, which uses non-lethal
weapons and deterrence methods, such as the greasing or electrifying of hand rails and theinstallation of barbed wire in vulnerable parts of ships, to protect vessels.16

PSCs: Problems and Controversies
The involvement of PSCs in Iraq and other countries gave rise to a number of concerns about
the nature of services provided by these companies. These concerns mostly centre on the lackof transparency and public oversight of operations and business practices of PSCs andwhether the protection of national security and the provision of military services should
remain within the domain of governments, rather than the profit motivated private sector.17
These concerns have been fuelled by reports of scandals surrounding the work conducted bya number of PSCs. Allegations include overcharging, the prolonging of conflict in order toincrease their own profits, the unnecessary and irresponsible use of violence and involvementin criminal activities.18
The employment of PSCs in the maritime sector in the Malacca Straits and the Gulf ofAden could lead to similar problems and concerns, which may emerge as a result of theinternal set-up and structures of PSCs and the nature of services they provide, particularly theemployment of armed PSC personnel.

Office of Naval Intelligence, ‘Worldwide Threat to Shipping Mariner Warning Information’, Civil Maritime
Analysis Department, United States, 8 January 2009.
14
David Boey, 'Ship Owners Using Hired Guns. Guards Provide Anti-piracy Security for Vessels in Regional
Waters', Straits Times, 8 April 2005, p. 3. Author’s Interview.
15
Barbara Hans, ‘Reeder ruesten gegen Piraten-Attacken’. Barbara Hans, ‘Experten setzen Schmierfett zur
Piratenabwehr ein’, Spiegel Online, 20 November 2008, http://www.spiegel.de/panorama/justiz/0,1518,druck591393,00.html, accessed 21 November 2008.
16‘Private Security Firms Join Battle against Somali Pirates’, Fox News, 26 October 2008,
http://www.foxnews.com/printer_freindly_story/0,3566,444103,00.html accessed 21 November 2008.
17
International Consortium of Investigative Journalists, 'Making a Killing. The Business of War', Center for
Public Integrity, 2003, http://www.publicintegrity.org/bow/, accessed 24 November 2003. Chapter 1, p.1.
18
One of the better-known examples is the involvement of DynCorp employees in the trade and rape of woman
and children in Bosnia and Kosovo in 2000. See: International Consortium of Investigative Journalists, 'Making
a Killing. The Business of War'. Chapter 2, p. 10.

6

Company structure and set-up
Many of the more crucial problems and controversies surrounding PSCs´ anti-piracy services
stem from the organisation and characteristics of the companies themselves. In interviews
with PSC employees, most commented on the large number of PSCs now offering maritime
related services and questioned the ability of the majority of these companies to actually
deliver what they promise and conduct successful operations. In fact, there have been PSC
operations that have (at least partly) failed. One example is the unsuccessful attempt by three
PSC guards to prevent a pirate attack on a tanker off Somalia. Despite the presence of theunarmed guards who worked for Anti-Piracy Maritime Solutions, a PSC with headquarters in
Britain, pirates were able to climb onboard in broad daylight. Aware that they were unable toprotect the tanker, the guards jumped overboard leaving the vessel with the pirates and crew
onboard behind. The guards were rescued by a German navy helicopter.19
The rising number of PSCs offering maritime related services can be in part attributed
to the fact that it is comparatively simple and inexpensive to set up such an enterprise. Manycompanies active in the maritime sphere only consist of a limited number of permanent staff,
an office and usually, an impressive presence on the Internet. These companies hire
additional personnel and acquire necessary equipment on a case-by-case basis, once a
contract with a client is signed, which allows the companies to run their business with limited
expenses and capital. While this arrangement can be beneficial for a client – as resources arebought and staff hired specifically for the client’s needs – it also allows companies to rapidly
dissolve and recreate themselves if need be.20 It also allows the establishment of PSCs by awide variety of players.
Similarly, information concerning the companies past and present activities, thecompany itself and the people they hire if required is usually sparse. The majority of PSCs
operating in the maritime sector seem to be founded and staffed by ex-military or ex-law
enforcement personnel, with the credentials and reputation of the company often linked topast military experiences of its founding members and employees. Therefore, mostcompanies advertise to employ former members of elite Special Forces from around theglobe, with `vast experience´. Whether or not this experience is in the maritime sector or
related to the services and tasks for which they are hired – including, for example, knowledge
about the vulnerabilities of a ship – is often unclear. To bridge this information gap and to
win a potential client’s trust companies go to great length to stress the high moral standing of
their employees. Descriptions such as ‘of good character’ or ‘men with highly tested
character’ are often used.
PSCs often rely on an impressive presence on the internet to promote their services.
Yet the lack of information about companies’ track records and real experiences in theservices they advertise is a characteristic common to all PSCs operating in the maritime
sector. All stress on their web pages that the services and operations they conduct for a client
remain confidential. While this is understandable in some cases, it offers companies the easy
19

Mike Pflanz, ‘British Crew Jump Overboard as Pirates Hijack Another Tanker off Somalia’, Telegraph, 28
November 2008, http://www.telegraph.co.uk/news/worldnews/piracy/3533644/British-crew-jump-overboard-aspirates-hijack-another-tanker-off-Somalia.html, accessed 1 December 2008.
20
This is also the case for PSCs offering non-maritime related services. See: Singer, Corporate Warriors, pp. 735.

7

option of claiming to have conducted a wide range of services, as no one is able to verify the
information given. One example that comes to mind is the vast number of companies
claiming to be experienced in, or claiming to have recovered, hijacked vessels. While a vessel
can be anything from a rubber dinghy to a super tanker, the number of hijacked vessels would
be enormous if all these claims were true. Furthermore, the lack of information about PSCs
track records is also an indicator for another, maybe more serious, problem. PSCs conduct
their operations for a specific client and are bound to follow their client’s interests. If ahijacked vessel for example is recovered, information about the hijacking and the culprits isonly given to local authorities with the client’s consent. 21 Therefore, if the client has nointerest in, or does not believe it fruitful to inform law enforcement agencies, the perpetrators
are left untouched and are able to continue their line of business.
PSC Services
The role played by PSCs in the maritime sphere is twofold, with some practical, ethical,
technical and legal problems associated with both roles. First, statements, reports and risk
assessments produced by PSCs regarding maritime security threats have increasingly
impacted on decision-making processes of governments and businesses, as well as theformation of opinion in the public sector. PSC personnel, for example, are regularlyinterviewed by the mainstream media and PSC security assessments find their way into
newspapers and other news reports. Employees of PSCs have, for instance, commented
widely on piracy in the waters off Somalia and have suggested solutions to reduce thenumber of pirate attacks, such as the employment of PSCs.22 It has to be understood, however,that by relying on political risk analysis reports and comments from PSCs, one relies on
information provided in many cases by the very companies that sell solutions to security
threats. It is therefore important to keep in mind that PSCs are primarily commercial
enterprises, aiming at producing financial profit for the company and its shareholders. The
secrecy surrounding the work of PSCs and the methods of research they employ, resulting indifficulties for outsiders to verify the information presented in PSCs reports, are a further
problem.23
Second, a number of companies provide services that are in the realm of militaries
and local law enforcement agencies. PSC employees conducting such work are often armed
with firearms, making regulation and oversight of PSC operations an important issue.
Oversight of PSCs in the Malacca Straits, the Gulf of Aden and other water areas is crucial toensure that that violence is not used excessively, that PSCs operate within national andinternational law, and that controversial ‘incidents’ involving PSCs comparable to thosewhich occurred in Iraq, will be avoided.
The use of guns by PSC employees makes the risk of unnecessary or irresponsible useof firepower a possibility. In fact, weapons in the hands of guards on a commercial cargo
21

Author’s Interview with Joe Corless, Operations Director, Gray Page Limited. Interview by author,
BalticExchange, London, 23 June 2004.
22
One example is: ‘Private Security Firms Join Battle against Somali Pirates’, Fox News, 26 October 2008,
http://www.foxnews.com/printer_freindly_story/0,3566,444103,00.html accessed 21 November 2008.
23
For a more detailed discussion see: Liss, ‘Private Security Companies in the Fight against Piracy in Asia’.
Liss, 'The Privatisation of Maritime Security - Maritime Security in Southeast Asia: Between a rock and a hardplace?'. Liss, 'Southeast Asia’s Maritime Security Dilemma: State or Market?'.

8vessels or a tanker can have devastating consequences if handled in a careless orinconsiderate, over-eager fashion. Representatives of the International Maritime Organisation(IMO) and various other maritime organisations have pointed out that armed escorts may infact escalate an already volatile situation and that a shoot-out on an oil or chemical tanker
could be disastrous.24 Fishermen can also become targets of ‘trigger-happy’ guards, as theirvessels are often difficult to distinguish from pirate vessels. Similar problems to those
associated with PSC operations in Iraq are therefore a possibility. Proponents of the use ofarmed guards on board vessels have, however, argued that PSC services at sea differ
significantly from PSC operations on land. For example, comparing PSC operations in Iraq
with anti-piracy services off Somalia, John Harris, CEO of HollowPoint Protective Services,a US based PSC pointed out that:
Our purpose is singular in nature. We provide protection for vessels, their crews and cargo. Unlike
the situation in Iraq where Blackwater is involved in both peacekeeping and protection activities,
we only respond to attacks on the vessels we protect. Our agents are highly trained to repel attacks
with the utmost regard for the safety and security of the vessels and crews.25

However, not only do PSCs active in Iraq also claim to employ only highly trained
professionals but the work they conduct, such as the protection of convoys and people
travelling through Iraq, is comparable. While killing innocent ‘bystanders’ (crewmembers or
fishermen, for example, on the sea) may be less likely at sea, the possible escalation ofviolence resulting in disastrous consequences (such as damage to a tanker), is a concern onland and at sea. Furthermore, a problem with the employment of PSCs has been that they are
only, or mostly, concerned with the safety of people or assets they protect. As Harris
explained, his employees will respond to attacks with “the utmost regard for the safety andsecurity of the vessels and crews”. The use of excessive violence is, however, often the resultof the single minded protection of PSC clients, with little consideration shown for those notpaying for the company’s services.
Furthermore, the lack of oversight and accountability of PSCs has caused concern.
Indeed, one way of reducing the risk of excessive or irresponsible use of violence is theregulation of PSCs to ensure that they comply with national and international laws. This,
however, is easier said than done, particularly in the maritime sphere, where operations often
take place at sea, either in international or national waters. Clearly, reputable PSCs have toact within the legal boundaries set by multilateral bodies and the states they are operating in.
This can be a difficult and complex task as a vessel does not only move between various
states and jurisdictions, using the right of innocent passage, but also sails under the flag of yet
another state. The question of whether or not ships are allowed to carry armed personnel
therefore depends on the one hand on the location of the ship because rules and regulations
regarding the bearing and use of weapons by private companies vary from country. Vessels
24‘Armed Guards not the Answer to Pirate Threat: Expert’ ABC News, 19 November 2008,
http://www.abc.net.au/news/stories/2008/11/19/2423600.htm , accessed 21 November 2008. Malakunas, Karl(2005) ‘Armed escorts in high demand on sea’, Peninsula,
http://www.thepeninsulaqatar.com/features/featuredetail.asp?file=mayfeatures102005.xml, accessed 13 May
2005.
25

‘“Ships Need Armed Guards,” Says Security Firm Chief’, Maritime Global Net, 20 October 2008,
http://www.mgn.com/news/dailystorydetails.cfm?storyid=9283, accessed 23 November 2008.

9also have to comply with the laws of the vessel’s flag state. In fact, in December 2008, the
IMO’s Maritime Safety Committee recommended that flag states should work withshipowners to design policies on carrying armed PSC personnel on ships.26 Japanese ownersof vessels flying Japanese colours, for instance, have to comply with Japanese laws andapproach the Japanese ship register if changes to the policy are required.
Furthermore, given that the involvement of PSCs in protecting vessels is acomparatively new phenomenon many countries do not have sufficient and effective
regulations in place. In fact, examples from areas where armed PSC personnel have been
employed to protect ships show that these companies often operate in a somewhat grey legalzone. When asked about their operations in the Malacca Straits, for example, PSC employees
from various companies have stated in interviews with the author that in most cases theIndonesian and/or Malaysian authorities are informed about planned operations, either
through a liaison officer or a personal contact. In the process money changes hands and thecompany receives ‘permission’ to conduct its work, even though not always in writing. These‘permissions’ to operate in Indonesian or Malaysian waters are, however, not the same as
official permits issued by governments. 27 PSC operations involving armed guards in the
Malacca Straits have consequently been controversial, sparking outcries from Malaysian andIndonesian government representatives.
The employment of PSC personnel in the waters off Somalia is similarly complicatedin terms of regulations and is also ultimately more dangerous. Indeed, even thoughnewspapers have reported that officials in Puntland have welcomed the employment of PSCs
in Somali waters, the question is how much weight these statements carry. What is needed
are appropriate laws and regulations governing the use of foreign armed personnel in Somali
waters. Such regulations need, for example, to clarify whether or not PSC personnel can bebrought to justice and held responsible for their actions if they operate in an irresponsible
manner. Furthermore, approval from officials from the semiautonomous region of Puntland,or even the central government, may not be sufficient to ensure that the presence of armed
PSC personnel will not lead to more violence. Somalia’s recent history clearly shows the lackof effective government control over parts of the country, the divisions between the various
warlords and the armed groups, all of whom are engaged in the ‘politics’ of the country.28
Whether or not such armed groups and warlords look at the involvement of PSCs favourably
is uncertain. Some may, however, oppose the idea that “Western” PSCs are getting involved
in “their country” (or preventing them from getting funds/payoffs from pirate attacks). In a
worst case scenario, the presence of PSC personnel could therefore trigger violence andarmed clashes between such groups and PSC personnel.

26

Sandra Speares, ‘IMO Calls for Policy on Arming Vessels’, Lloyds List,
http://www.lloydslist.com/ll/news/viewArticle.htm?articleId=20017597485&src=rss, accessed 10 December
2008.
27
Liss, 'Southeast Asia’s Maritime Security Dilemma: State or Market?'. Carolin Liss, ‘The Role of Private
Security Companies in Securing the Malacca Straits', Maritime Studies, 157, November/December 2007, pp. 1422.
28
Some Islamists groups have already reportedly already become involved in addressing piracy. “Islamistenbereiten Angriff auf Piraten vor’, Spiegel Online, 22 November 2008,
http://www.spiegel.de/panorama/0,1518,592118,00.html, accessed 23 November 2008.

10

Hiring a PSC? The Role of the Client
Piracy in the Gulf of Aden, and to a lesser degree in the Malacca Straits is a problem for ship
and cargo owners, insurance companies and other parties with interests in international
shipping. Clearly, PSCs find work in these areas because their clients believe thatgovernment agencies are unable to provide sufficient security and to handle cases, such as
investigations into hijackings, in the victim’s interest. Difficulties in dealing effectively withsometimes corrupt government authorities (without paying bribes), are a further incentive tohire a PSC. Indeed, the employment of a private company promises the use of highly
experienced and motivated individuals, working solely in the client’s interest.
Another incentive to hire PSCs at present is the unprecedented number of serious
pirate attacks in the Gulf of Aden. Indeed, while the scale of pirate attacks in the past hasoften not justified the costs incurred by hiring a PSC, the current situation in the waters off
the horn of Africa may warrant the additional expenses. The risk of being targeted in thesewaters is at present perceived to be so high that some major shipping companies have decided
to reroute their vessels, which now have to sail past the Cape of Good Hope, adding an
additional 12 to 20 days to the journey. This will incur significant extra costs for shipowners
and, ultimately, consumers. Insurance rates for vessels passing the critical area are also
increasing. Furthermore, the costs incurred in actual hijacking are unprecedented.
Negotiations with pirates can take months and the amount of ransom paid for vessels can beas high as several million US dollars. While the attacks may not threaten world shipping as
such, the scale of the attacks may indeed make the extra costs for PSC services justifiable forship and cargo owners. Additionally, arrangements have reportedly been made between
insurance companies and at least one PSC, promising discounted premiums for those vessels
protected by guards from the security company.29 A further incentive to hire PSCs in the Gulfof Aden is the active encouragement from within the US administration and military to pay
for protection services, admitting that the multinational patrols cannot effectively protect
shipping.30
However, as discussed above, there are a number of problems and controversial issues
inherent in the private maritime security industry of which clients’ of PSCs need to be aware.
These include problems with PSCs working practices, the nature of services provided as wellas the general lack of oversight and accountability of such companies. These problems canprevent potential clients from hiring PSCs and can make it difficult for customer to choose
which company to employ. It is indeed important for clients to employ a reliable PSC
because the consequences of hiring an unreliable company can be problematic at best or
disastrous at worst – not only for the client. A ship owner, for example, has to trust acompany to have sufficient knowledge of the laws and regulations governing the company’s
operations and to choose the right kind of people to be employed as armed guards on one ofhis vessels in order to avoid accidents and excessive use of violence.
This indicates that clients indeed play a critical role. In fact, studies by scholars suchas Deborah Avant have found that the client’s willingness to operate according to
29‘Private Security Firms Join Battle against Somali Pirates’, Fox News, 26 October 2008,
http://www.foxnews.com/printer_freindly_story/0,3566,444103,00.html accessed 21 November 2008.
30
Thom Shanker, ‘U.S. Urges Merchant Ships to Try Steps to Foil Pirates’, New York Times, 20 November
2008, http://www.nytimes.com/2008/11/20/washington/20military.html , accessed 21 November 2008.

11

international values (including respect for human rights and the rule of law) and promote theresponsible and proper use of force makes a crucial difference in the employment of PSCs. Ifclients insist on work in accordance with international values and local and international laws,
PSCs will (most likely) comply.31 One example how clients can make a difference comesfrom Southeast Asia: A company32 active in this region provides armed guards to protect
merchant vessels from pirates and/or terrorists and gives its customers the choice to employ
either western personnel or individuals from Asia familiar with the use of weapons. The
second option is not only cheaper, but has an additional advantage. In case such a PSC guard
is killed in a shootout with pirates, his body can be thrown overboard and if found, will most
likely be identified as a pirate, resulting in no delays for the vessel or legal problems for its
owner.33 International values or laws are clearly not present in the second option, but the
choice is left with the client, who has to make a conscious effort (and pay additional money)
to ensure that the PSC operates in accordance with international laws and values.
The ‘right’ choice may be particularly hard to make when employing PSCs to conductanti-piracy services because the maritime sphere (maybe more than most other environments)
offers incentives for clients of PSCs to disregard, or at least not insist on operations inaccordance with, international laws and standards. To start with, PSC operations in areas suchas the Malacca Straits are semi-legal at best, with payments to local navies and law
enforcement agencies the norm. Most of such operations are therefore not conductedaccording to national or international laws or standards. Furthermore, PSC services that are
conducted at sea often take place out of sight of authorities or (locatable) witnesses. It isconsequently particularly difficult to hold PSC employees responsible for their actions. This
lack of accountability of PSCs may facilitate or even encourage operations that are notconducted in line with international values and national and international laws.

Conclusion
PSCs are today hired in strategic waterways such as the Malacca Straits and the Gulf of Aden
to protect ships from pirate attacks. However, there are a number of problems andcontroversial issues inherent in the private maritime security industry. Most controversial isthe employment of armed PSC personnel either onboard merchant vessels or on escort ships.
While the presence of such armed personnel may prevent attacks, it could also escalate
already volatile situations. The employment of armed guards could, for example, enhance thelikelihood of armed conflict or spark an arms race between the two sides, increasing the risk
for seafarers.34 With the employment of armed guards already a reality, improved regulationand oversight of companies operating in the Gulf of Aden, the Malacca Straits and otherwater areas is needed.
Given these problems and controversies, potential clients should choose the PSC theywish to employ carefully. The choice is particularly difficult because the problem of limited
31

Deborah D. Avant, The Market for Force. The Consequences of Privatising Security, Cambridge: Cambridge
University Press, 2005, p.74.
32
Please note that the PSC in question here is NOT one of the companies mentioned earlier in this paper.
33
Author’s Interview.
34
See: ‘Private Security Firms Join Battle Against Somali Pirates’.

12transparency is inherent in both large, well known (but sometimes controversial) companies
such as Blackwater, and small, often unknown PSCs. Furthermore, clients have to be awarethat they play a crucial role in ensuring that PSCs operate according to international values
and national and international laws.
In regard to piracy, it is important to keep in mind that while PSCs may assist in
preventing individual pirate attacks and help victims in dealing with the aftermath of such
events, they do not address the underlying root causes of modern day piracy itself. In order tosuccessfully combat piracy and bring an end to attacks, responses to piracy have to address its
root causes, which include illegal and over-fishing, lax (international) maritime regulations,ineffective government forces, armed conflict and widespread poverty. Combating piracy canconsequently not be achieved only by those states in which pirate attacks actually occur.
Indeed, countries from around the world with an interest in maritime security, can, and needto, support these broader anti-piracy measures.

13