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80–347 PDF 2014

UPDATES ON EFFORTS TO COMBAT PIRACY 

(113–7) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 10, 2013 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

DUNCAN HUNTER, California, Chairman 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

FRANK A. LOBIONDO, New Jersey 

PATRICK MEEHAN, Pennsylvania 

STEVE SOUTHERLAND, II, Florida, 

Vice Chair 

TOM RICE, South Carolina 

TREY RADEL, Florida 

VACANCY 

BILL SHUSTER, Pennsylvania (Ex Officio) 

JOHN GARAMENDI, California 

ELIJAH E. CUMMINGS, Maryland 

CORRINE BROWN, Florida 

RICK LARSEN, Washington 

TIMOTHY H. BISHOP, New York 

JANICE HAHN, California 

LOIS FRANKEL, Florida 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Rear Admiral Joseph A. Servidio, Assistant Commandant for Prevention Policy, U.S. Coast Guard .......................................................................................... 3 

Rear Admiral Joseph W. Kuzmick, Director, Operations and Plans, U.S. 

Navy ...................................................................................................................... 3 

Hon. David T. Matsuda, Administrator, Maritime Administration .................... 3 

Andrew Shapiro, Assistant Secretary, Bureau of Political-Military Affairs, 

U.S. Department of State .................................................................................... 3 

Neil Smith, Head of Underwriting, Lloyd’s Market Association ......................... 3 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Howard Coble, of North Carolina .................................................................. 26 

Hon. John Garamendi, of California ...................................................................... 28 

PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE 

RECORD SUBMITTED BY WITNESSES 

Rear Admiral Joseph A. Servidio: 

Prepared statement .......................................................................................... 30 

Answers to questions from Hon. John Garamendi, a Representative in 

Congress from the State of California ......................................................... 34 

Rear Admiral Joseph W. Kuzmick: 

Prepared statement .......................................................................................... 39 

Answers to questions from Hon. John Garamendi, a Representative in 

Congress from the State of California ......................................................... 50 

Hon. David T. Matsuda: 

Prepared statement .......................................................................................... 53 

Answers to questions from Hon. John Garamendi, a Representative in 

Congress from the State of California ......................................................... 58 

Andrew Shapiro: 

Prepared statement .......................................................................................... 60 

Answers to questions from Hon. John Garamendi, a Representative in 

Congress from the State of California ......................................................... 65 

Neil Smith: 

Prepared statement .......................................................................................... 73 

Answers to questions from Hon. John Garamendi, a Representative in 

Congress from the State of California ......................................................... 77 

SUBMISSION FOR THE RECORD 

Rear Admiral Joseph A. Servidio, Assistant Commandant for Prevention Policy, U.S. Coast Guard, response to request for information from Hon. Duncan Hunter, a Representative in Congress from the State of California ........ 14 

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(1) 

UPDATES ON EFFORTS TO COMBAT PIRACY 

WEDNESDAY, APRIL 10, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COAST GUARD

AND MARITIME TRANSPORTATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:04 p.m. in Room 

2167, Rayburn House Office Building, Hon. Duncan Hunter (Chairman of the subcommittee) presiding. 

Mr. HUNTER. The subcommittee will come to order. The subcommittee is meeting this morning to review efforts by the United 

States and the international community to respond to piracy on the 

high seas and prevent future attacks. Since the subcommittee’s last 

hearing on this topic, there has been a dramatic reduction in the 

number of attacks off the Horn of Africa. I commend the industry, 

labor, the Federal Government, and the international community 

for working together and taking strong actions to improve the safety and security of the crews, vessels, and cargoes transiting those 

strategically important waters. 

Unfortunately, although the situation has improved on the East 

Coast of Africa, it has deteriorated on the West Coast. Attacks on 

vessels and mariners in the Gulf of Guinea have risen nearly 20 

percent from 2011 to 2012. Pirates are venturing further from 

shore and using more violent tactics. In just the last few weeks, pirates operating out of Nigeria hijacked more than 5 vessels, taking 

more than 20 mariners hostage, and killing 1 crewmember. 

The United States is not immune from the violence. Since 2008, 

pirates have attacked or attempted to attack 20 U.S.-flag vessels. 

Pirates took three Americans hostage, including two working on a 

U.S.-flagged offshore supply vessel in the Gulf of Guinea. In 2011 

pirates ruthlessly murdered a retired couple from southern California and their two friends from Washington State as they sailed 

through the Indian Ocean. 

In addition to the human cost, piracy impacts our economy by 

driving up the cost of moving critical commodities. By some estimates, the cost of piracy on the world economy is more than $7 billion. The cost to the U.S. taxpayer to provide Navy patrols and reimburse industry for their cost to move defense and humanitarian 

cargo through high-risk waters is immense, totaling more than $65 

million in a recent year. 

Finally, I am concerned with the impact piracy is having on our 

national security. Piracy has become a multimillion-dollar criminal 

enterprise funded by ransoms and the black market sales of stolen 

2 

oil and other cargoes. Tracking ransom payments and capturing pirate financiers has proven tremendously difficult. This is concerning, as we know terrorist groups are operating in Africa. I look 

forward to hearing from our witnesses on what actions they are 

taking to improve our ability to disrupt pirate financing. 

Piracy is recognized internationally as a crime against all nations, and it is a crime to which all nations must respond. This 

hearing provides us with a chance to examine ways to respond to 

the ongoing threat. It is important for us to find solutions to minimize if not end this threat and its impact on our citizens, economy, 

and national security. 

I thank the witnesses for appearing today, and look forward to 

their testimony. With that I yield to Ranking Member Garamendi. 

Mr. GARAMENDI. Mr. Chairman, thank you for scheduling this 

afternoon’s hearing to update the subcommittee on the progress 

made by the administration, the international governments, and 

nongovernment partners in dealing with the issue of piracy. 

You are certainly correct. Off the coast of Somalia great progress 

has been made. However, we have got issues off the coast of Africa. 

I am going to keep my remarks brief. With your permission and 

the committee’s, my opening statement could be read into the 

record. 

I do want to express appreciation to Mr. Neil Smith, the head of 

underwriting for Lloyd’s Market Association, the international marine insurers, to come here on very, very short notice to share his 

insights on how the marine insurance industry addresses this rather risky issue of piracy. 

Thank you very much, Mr. Smith. And for all the witnesses, 

thank you for your testimony today. Mr. Chairman, you have covered much of what I would say. And so, with that, I will pass back 

my time and let’s get on with the hearing. 

Mr. HUNTER. Thank the ranking member. I would like to yield 

to the only Coast Guardsman in Congress. We don’t do opening 

statements in this committee any more because it takes too long, 

but we are going to make an exception. I would like to recognize 

Mr. Coble. 

Mr. COBLE. Thank you, Mr. Chairman. Can you all hear me OK? 

Am I coming through? Thank you, Mr. Chairman. I owe you one. 

There is an old—and I, too, will be brief. I want to thank you and 

the ranking member for having called this meeting. There is an old 

adage among mariners that a rescue—that a collision at sea just 

ruins your day. Well, folks, I think to encounter a gang of murderers, thugs, pirates, all titles are appropriate, whatever way of 

ruining your day. The good news is I am told the climate is better 

now, and I am sure we will hear more about high-risk waters as 

the hearing proceeds. 

But on April 8, 2009, you remember the Maersk Alabama was 

attacked by Somalian pirates who seized the ship and took members of its crew in hostage. This was the first successful hijacking 

of an American-flag ship since the 19th century. For 4 days the 

United States Navy maneuvered three vessels into position: the 

USS Bainbridge, Halyburton, and Boxer, and, aided by the Navy 

SEALS, eliminated the pirates, rescuing Captain Richard Phillips 

and his crew. 

3 

Today, Chairman Hunter, I would like to bestow recognition to 

those brave sailors in the United States Navy and members of 

other branches that made this rescue possible. I would also like to 

pay tribute to a proud company, the Maersk Line, with offices in 

North Carolina, whose crew risks their lives every day to ship millions of tons of cargo across the world. 

Since the Maersk Alabama rescue, the United States Coast 

Guard—and thank you for recognizing me as a Coastie, Chairman, 

I appreciate that—the United States Coast Guard, the United 

States Navy have diligently worked to prevent further piracy of 

shipping lanes in the Indian Ocean and the Arabian Sea. Although 

there are still an unacceptable number of hijackings, the size of 

these bodies of water will almost guarantee attacks in the foreseeable future. It is incumbent upon this subcommittee, it seems to 

me, to furnish the help necessary so that Maersk and other cargo 

shippers will continue to keep the world economy growing well into 

the future. 

And I thank you again, Mr. Chairman. 

Mr. HUNTER. Thank you, Mr. Coble. Our witnesses today are 

Coast Guard Rear Admiral Joseph Servidio, Assistant Commandant for Prevention Policy; Navy Rear Admiral Joseph 

Kuzmick, Director, Operations and Plans; the Honorable David 

Matsuda, Administrator of the Maritime Administration; Andrew 

Shapiro, Assistant Secretary, Bureau of Political-Military Affairs, 

U.S. Department of State; and Mr. Neil Smith, Head of Underwriting, Lloyd’s Market Association. 

Welcome to each of you. And with that, Admiral Servidio, you are 

recognized for your statement. 

TESTIMONY OF REAR ADMIRAL JOSEPH A. SERVIDIO, ASSISTANT COMMANDANT FOR PREVENTION POLICY, U.S. COAST 

GUARD; REAR ADMIRAL JOSEPH W. KUZMICK, DIRECTOR, 

OPERATIONS AND PLANS, U.S. NAVY; HON. DAVID T. 

MATSUDA, ADMINISTRATOR, MARITIME ADMINISTRATION; 

ANDREW SHAPIRO, ASSISTANT SECRETARY, BUREAU OF POLITICAL-MILITARY AFFAIRS, U.S. DEPARTMENT OF STATE; 

AND NEIL SMITH, HEAD OF UNDERWRITING, LLOYD’S MARKET ASSOCIATION 

Admiral SERVIDIO. Good afternoon, Chairman Hunter, Ranking 

Member Garamendi, and distinguished members of the committee. 

Thank you for giving me this opportunity to speak with you today 

on piracy and the actions we have taken to prevent and respond 

to pirate attacks off the Horn of Africa and elsewhere. Piracy is a 

universal crime under international law. And despite the recent decline and successful attacks off Somalia, it remains a threat to U.S. 

vessels and mariners and those of all nations. 

The Coast Guard continues to thwart this threat through domestic regulation and policy, international standards and guidelines, 

and on-water counterpiracy operations. And we do this in close coordination with the U.S. interagency maritime industry and key 

international organizations and partners. 

The Maritime Transportation Security Act of 2002 provides the 

legal authority for the Coast Guard to regulate U.S. vessel security, 

requiring vessel owners and operators to develop security plans 

4 

that reduce and manage oil security threats, including the threat 

of piracy. Coast Guard required and approved security plans must 

include an annex to address countering piracy for vessels operating 

in high-risk waters. 

Maritime Security Directive 104–6 establishes specific requirements for U.S. vessel security measures during high-risk water 

transits. The Coast Guard, working with the interagency and industry, has revised this directive six times, including revisions regarding areas designated as high-risk waters, and expanded security protocols reflecting lessons learned from attacks. 

Working with an interagency team that includes Departments of 

State, Defense, Homeland Security, Justice, Transportation, and 

Commerce, and many subordinate agencies and commands, the 

Coast Guard has published nine piracy-related port security advisors on topics that include self defense and defense of others, international arms regulations, contracted security services, background 

screening of security personnel, and post-attack coordination. 

The Coast Guard also works with industry conducting 

roundtables and meetings with U.S. vessel owners and operators. 

Most recently we engaged U.S. company security officers for vessels 

operating in the Gulf of Guinea, and we will hold a best practices 

and lessons learned forum with them later this month. 

As the head of the U.S. delegation to the International Maritime 

Organization, the Coast Guard and our interagency partners have 

worked to pass resolutions to combat piracy, including a framework 

for international cooperation, counterpiracy guidance, and the promotion of judicial consequences. Just last month I spoke with the 

IMO Secretary General about piracy and the support IMO is providing for the development and implementation of a new code of 

conduct for the prevention and repression of piracy, and the listed 

maritime activity in west and central Africa. 

Under U.N. auspices, the contact group on piracy coordinates 

international counterpiracy efforts, and was pivotal in developing 

the best management practices for security. In its fourth revision, 

the BMP provides guidance to international shipping for hardening 

vessels against attacks, building and using citadels, and training 

voyage planning and communications with combined maritime 

forces. 

On the water, the Coast Guard leverages our maritime law enforcement core competency, and our 35-plus bilateral agreements, 

our experience with domestic and international legal frameworks, 

and our training capacity to facilitate counterpiracy operations. 

Our boarding teams are conducting anti-piracy operations in support of the U.S. Central Command, and with Combined Task Force 

151. Coast Guard international training teams and deployable law 

enforcement detachments offer tailored maritime law enforcement 

training integral to regional capacity-building and counterpiracy 

operations. 

Piracy continues to present a threat to the U.S., our mariners, 

and our maritime industry. Our response requires a broad array of 

legal authorities, operational capabilities, and partner expertise. 

The Coast Guard has a unique role to play, and remains committed 

to working with others to address the safety and security risks of 

today and the solutions for tomorrow. 

5 

Thank you again for the opportunity to be here, and I look forward to your questions. 

Mr. HUNTER. Thank you, Admiral. 

Admiral Kuzmick. 

Admiral KUZMICK. Thank you, Mr. Chairman, Ranking Member 

Garamendi, distinguished members of the subcommittee. I am Rear 

Admiral Joe Kuzmick, appearing today on behalf of the Chief of 

Naval Operations. I am happy to have the opportunity to appear 

before your committee and discuss the U.S. Navy’s ongoing 

counterpiracy efforts. 

In 2007 pirate hijackings and piracy incidents off the Somalia 

coast escalated dramatically, ultimately peaking in 2009. At this 

point, pirates could operate for weeks at a time, up to 1,200 nautical miles from the Somali coast. By 2011 the trend had reversed, 

and by 2012 the number of successful attacks dropped to only 

seven vessels, the lowest level of pirate activity since 2006. This decrease is directly attributable to industry use of best management 

practices, a robust multinational naval presence, and the increased 

use of privately contracted armed security personnel on merchant 

vessels. 

U.S. Navy is currently engaged in a Horn of Africa counterpiracy 

operations under Commander, Task Force 151. Additionally, NATO 

Operation Ocean Shield, European Union Operation Atalanta, and 

other navies operating independently conduct naval patrols off the 

Horn of Africa. These efforts are coordinated through participation 

in Shared Awareness and Deconfliction, or SHADE, meetings in 

Bahrain. 

The use of privately contracted armed security personnel, or 

PCASP, has proven extremely effective. To date no vessel with a 

PCASP has been successfully hijacked by Somali pirates. Based 

upon self-reporting from vessels transiting this area, we assess approximately 50 percent or more likely have PCASPs. As a result, 

there has been no reported pirate activity in the Mozambique 

Channel since December 2010. There have been no confirmed attacks or hijackings in the Red Sea since September 2011. There 

has been no hijacking in the Gulf of Aden since October 2011, and 

there have been no successful hijackings off the entire Horn of Africa this year. 

In the Gulf of Guinea, however, maritime criminals have not 

been as effectively shut down. There are many differences between 

piracy off the Horn of Africa and maritime crime in the Gulf of 

Guinea. Attacks conducted by Somali pirates generally take place 

in international waters, while the Gulf of Guinea attacks generally 

occur within territorial seas. Somali pirate attacks are generally hijacking for ransom, where the vessel, cargo, and crew are held for 

ransom. In the Gulf of Guinea, fuel theft, robberies, and kidnapping of crewmembers for ransom are the most common incidents. 

Hijacking for ransom is virtually absent in the Gulf of Guinea, because the coastal nations there have functional navies or coast 

guards capable of conducting law enforcement operations within 

their territorial waters. 

Just as the characteristics of piracy and armed robbery at sea 

differ between Somalia and the Gulf of Guinea, so too do the efforts 

to combat them. Theater security cooperation exercises and events 

6 

aimed at promoting professionalism and sustained capability, effectiveness, and interoperability of coastal states, navies, and coast 

guards provides a more effective means of countering this threat. 

U.S. Naval Forces Africa, or NAVAF, created Africa Partnership 

Station, or APS, to promote maritime security and maritime domain awareness in Africa. APS is a year-round capacity-building 

continuum which progresses from basic training to exercises, and 

finally into combined law enforcement operations. 

As part of APS, NAVAF developed regional maritime security exercises around the African continent. Exercise Obangame Express 

focuses on the Gulf Guinea region. Cutlass Express focuses on the 

Indian Ocean and the Gulf of Aden. And Saharan Express focuses 

on west Africa. 

African Maritime Law Enforcement Partnership, otherwise 

known as AMLEP, is the operational arm of APS. It uses U.S. 

Coast Guard boarding teams and U.S. or international maritime 

assets, together with host nation boarding teams. While the combined teams conduct boardings at sea, the host nation retains responsibility for any arrests and resulting criminal prosecutions. 

Finally, turning to Southeast Asia, the majority of the reported 

maritime crime events are quickly executed, nonconfrontational, 

smash-and-grab operations. Most of the incidents occur while vessels are anchored or berthed, and are conducted by robbers seeking 

to steal the ship’s stores or crew’s personal belongings. Hijackings 

and hostage-taking incidents are rare. In this area, too, the U.S. 

Navy has focused efforts on theater security and cooperation events 

in an effort to strengthen partner nation maritime security capabilities. The United States Seventh Fleet has led these efforts conducting annual bilateral Cooperation Afloat Readiness and Training, or CARAT exercises, with numerous ASEAN nations and 

Southeast Asia Cooperation and Training, or SEACAT, which is an 

annual exercise that highlights maritime interdiction scenarios, including counterpiracy. 

The United States Navy remains committed to working with our 

fellow Government agencies, our international partners, and with 

industry to forge long-term solutions for regional maritime safety 

and security. Thank you for the opportunity to testify. I look forward to your questions. 

Mr. HUNTER. Thank you, Admiral. 

Administrator Matsuda, you are recognized for a statement. 

Mr. MATSUDA. Good afternoon. Chairman Hunter, Ranking Member Garamendi, members of the subcommittee, I am pleased to 

have the opportunity to appear before you today on behalf of the 

men and women of the U.S. Maritime Administration to provide an 

update on efforts to counter piracy and other maritime crimes. 

While piracy incidents off the Horn of Africa have been decreasing since 2010, as you have heard from my colleagues, it continues 

to be a significant threat in this area. At the same time, incidents 

of armed robbery in the Gulf of Guinea off west Africa have increased. And threats to mariners continue in the Straits of Malacca, Indonesia, Malaysia, and the South China Sea. 

Clearly, there are economic consequences from piracy for shipping companies which operate in these areas, like increased operations cost, from additional crew wages to employment of armed seVerDate Aug 31 2005 14:04 Nov 19, 2014 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\CG&JOI~1\2013\4-10-1~1\80347.TXT JEAN
7 

curity guards and higher fuel costs to speed through high-risk waters. But it also includes capital costs, like vessel modifications to 

harden potential targets, and higher insurance premiums, as well. 

Perhaps the most important cost of piracy is the human one. 

Crews are robbed and physically abused by pirates or held hostage 

for long periods of time, frequently experience serious post-traumatic stress disorder. The U.S. Maritime Administration recognizes 

the serious threat piracy continues to pose to shipping, mariners, 

and commerce around the world, and I would like to discuss briefly 

six areas in which our agency has taken an active role in addressing this threat. 

First, we immediately went to work collaborating with the international shipping community and foreign governments to support 

the creation—rapid creation and dissemination of best management practices for maritime operators around the world. This guidance has helped shipping companies and crews to better prepare 

themselves against pirate attacks. The Maritime Administration 

even co-chaired, along with our Coast Guard partners, Working 

Group 3 of the United Nations sponsored Contact Group on Piracy. 

The U.S. leadership clearly helped the industry get these guidelines developed and distributed. A first version was distributed 

throughout the world within months. 

Second, the Maritime Administration regularly issues advisories 

to U.S.-flag vessel operators and mariners, providing current information on piracy threats and operational guidance. These 

advisories are coordinated with Federal agencies and are disseminated widely and timely to U.S. shipping interests, containing the 

latest intelligence about piracy threats. 

Third, our agency has developed training courses for maritime 

industry security officers based on International Maritime Organization guidance, and is developing training for the use of force 

against piracy. We expect the recent updates to be completed on 

schedule, as required by the subcommittee’s recent legislation. 

Fourth, the Maritime Administration partners with the Naval 

Criminal Investigative Service to conduct vulnerability assessments 

for individual vessel operators on a voluntary basis. These Anti-Piracy Assistance Teams, or APATs, have been aboard 60 U.S.-flag 

vessels and provided extensive recommendations to vessel operators to reduce their vulnerability to pirate attacks. 

Fifth, the Maritime Administration has continued to foster collaboration with industry, labor, and Government agencies since the 

dramatic increase in piracy off the Horn of Africa began in 2008. 

Each year we have hosted meetings with key civilian and military 

officials, and at times including international industry representatives and foreign governments. In addition, our agency regularly 

arranges unclassified briefings for interested U.S.-flag operators. 

Lastly, the Maritime Administration is taking the lead on an 

international anti-piracy training initiative to improve the safety 

and welfare of seafarers. By building on a successful 2009 DOT initiative with the Government of the Philippines, we are working 

with an expanded group of nations throughout Southeast Asia, a 

region which is home to 20 percent of the world’s seafarers. This 

program, called the Expanded Association of Southeast Asian Nations Seafarer Training program, will focus on the often-overlooked 

8 

humanitarian side of piracy, like surviving in captivity, for instance. 

The Maritime Administration is proud of its many contributions 

which have helped stem the tide of piracy. However, more work remains to be done. And we will make every possible effort to continue the effective collaboration—collaborative approach with industry and our Federal partners to fight piracy. 

Mr. Chairman, I appreciate the opportunity to discuss the U.S. 

Maritime Administration’s role in addressing piracy and the subcommittee’s continuing support for maritime programs. I am happy 

to answer any questions you and the members of the committee 

might have. 

Mr. HUNTER. Thank you, Administrator. 

And next I would like to recognize Assistant Secretary Shapiro 

for his statement. 

Mr. SHAPIRO. Mr. Chairman and members of the committee, 

thank you for inviting me to discuss the national security problems 

poised by piracy and maritime crime. I have submitted a longer 

statement for the record and will offer brief opening remarks. 

When I first started this job in the summer of 2009, Somali piracy was spiraling out of control. Attacks were escalating, and pirates were expanding operations far into the Indian Ocean. In addition to the threat posed by—to innocent mariners, pirate activity 

was costing the global economy an estimated $7 billion a year. 

Somali piracy represented a perfect storm for the international 

community: a weak state in a strategically essential location harboring a rapidly growing, transnational criminal enterprise that 

threatened a vital artery of the global economy. Action had to be 

taken. This promoted former Secretary Clinton in 2010 to call for 

a new strategy into tackling pirate networks and to put pirates out 

of business. This commitment to tackling piracy has also been affirmed by Secretary Kerry. 

And now, after years of hard work, successful pirate attacks have 

plummeted. According to figures from the U.S. Navy, we experienced a 75-percent decline in overall pirate attacks in 2012, compared with 2011. We are seeing fewer attempted attacks in no 

small measure because pirates are increasingly less successful at 

hijacking ships. For example, in 2012 pirates captured just 10 vessels, compared to 34 in 2011 and 68 in 2010. Remarkably, the last 

successful Somali pirate attack on a large commercial vessel was 

on May 10, 2012, nearly 1 year ago. 

The lack of success at sea means that Somali pirates are holding 

fewer and fewer hostages. In January 2011, pirates held 31 ships 

and 710 hostages. Today, Somali pirates hold hostage just 2 ships 

and 60 mariners. That is more than a 90-percent reduction in the 

hostages held by pirates since January 2011. While having just one 

hostage is still unacceptable, the downward trend is clear. 

Now, let me be clear. Piracy remains a threat. Pirates at sea are 

still searching for ships to target as we speak. In fact, just last 

week a merchant ship successfully fended off an attack by pirates 

off the coast of Somalia. So the threat remains, but the progress 

that has been made is also real and remarkable. 

I would like to briefly outline our approach to tackling piracy off 

the coast of Somalia. 

9 

First, the United States has helped galvanize international action. All countries connected to the global economy have an interest 

in addressing piracy. We therefore sought to make this a collective 

effort and build new kinds of partnerships and coalitions. In January 2009 the United States helped establish the Contact Group on 

Piracy off the Coast of Somalia, which now includes over 80 nations 

and organizations bound together on a purely voluntary basis. The 

Contact Group meets frequently to coordinate national and international counterpiracy actions. Through the Contract Group, the 

international community has been able to coordinate multinational 

naval patrols, work through the legal difficulties involved in addressing piracy, and cooperate to impede the financial flows of pirate networks. 

Second, the United States has sought to empower the private 

sector to take steps to protect themselves from attack. We have 

pushed the maritime industry to adopt best management practices 

which include practical measures such as proceeding at full speed 

through high-risk areas and erecting physical barriers such as 

razor wire. 

But perhaps the ultimate security measure a commercial ship 

can adopt is the use of privately contracted armed security teams. 

And as Admiral Kuzmick mentioned, to date not a single ship with 

armed security personnel on board has been successfully pirated off 

the coast of Somalia. And this has been a real game changer in the 

effort to combat piracy. 

For our part, the U.S. Government has led by example. Early on 

in the crisis we permitted armed personnel aboard U.S.-flag merchant vessels. We also encourage port States to permit the transit 

of armed security teams, and work to address the varying national 

legal regimes. American ambassadors, embassy officials, members 

of our counterpiracy office at the State Department, and I, myself, 

in meetings with senior officials, have pressed key maritime countries on this issue. 

Third, we have sought to apprehend, prosecute, and incarcerate 

pirates. Today, over 1,000 pirates are in custody in 20 countries 

around the world. The United States has encouraged countries to 

prosecute pirates, and we have supported efforts to increase prison 

capacity in Somalia. But it became increasingly clear that prosecuting low-level pirates at sea was not on its own going to significantly change the dynamic. And so we have targeted pirate kingpins and pirate networks. We are collaborating with law enforcement in the intelligence community as well as our international 

partners, like Interpol, to detect, track, disrupt, and interdict elicit 

financial transactions connected to piracy and criminal networks 

that finance piracy. 

Lastly, the long-term solution to piracy is the re-establishment of 

stability in Somalia. The successful political transition in Somalia 

is clearly a step in the right direction, but much remains to be 

done. Once Somalia is capable of policing its own territory and its 

own waters, piracy will fade away. To that end, the United States 

continues to support the newly established government in 

Mogadishu. 

Before I would close I would just note that in recent months we 

have noted a disturbing increase in the incidence of maritime 

10 

crime, including piracy and armed robbery at sea off the West 

Coast of Africa, specifically in the Gulf of Guinea. While in Somalia, we faced an absence of government. In the Gulf of Guinea, the 

exact opposite holds true. There are many sovereign governments 

with varying degrees of capability, but all with their own laws and 

their own interests. The tools and relationships we built to roll 

back Somali piracy are not easily transferrable to the Gulf of Guinea. 

Success in west Africa will depend more on the political will of 

regional governments to take the steps needed to curtail criminal 

activity. We could support with capacity-building efforts and have 

an impressive list of those efforts underway. But ultimately, tackling this challenge will depend on the countries in the region. 

With that, thank you for having me today, and I look forward to 

your questions. 

Mr. HUNTER. Thank you. 

And lastly, Mr. Smith, who I understand didn’t come from New 

York or San Francisco or L.A., you actually came from London. So 

thank you. You are recognized for your statement. 

Mr. SMITH. Good afternoon, Chairman Hunter, Ranking Member 

Garamendi, and members of the subcommittee. I am pleased to be 

here today to discuss the role of the insurance sector in the ongoing 

efforts to combat piracy, and I appreciate the opportunity to do so. 

While there are a number of maritime hubs, I am speaking here 

on behalf of the Lloyd’s insurance market, based in London. I 

should also make it clear that Lloyd’s is not an insurance company, 

but is an international insurance market, where syndicates of underwriters transact business on behalf of managing agents for their 

own account and risk. Individual insurance policies are arranged 

by firms of insurance brokers authorized to transact business in 

the Lloyd’s market with syndicates. Apart from the market itself, 

the Lloyd’s Market Association is an independent organization providing services to and representing the interests of all Lloyd’s managing agents. 

It would probably be helpful if I provide to you a simple outline 

of how the hull insurance is placed in the Lloyd’s market. A shipowner will have a number of insurance policies covering their activities. But the two I focus on are the hull and machinery policy 

and the separate hull all-risks policy. Both are usually negotiated 

on an annual basis. 

The hull and machinery policy covers what we would regard as 

perils of the sea, those risks of a maritime nature which a vessel 

will face during its daily trading activities. Over many years, piracy, which has been an insured peril within the marine market for 

as long as the market has existed, was written into the hull and 

machinery policy as standard cover. The trading limitations on a 

hull and machinery policy are generally very broad, with little opportunity for hull insurers to monitor their exposures. The hull and 

machinery policy has an associated deductible, and the general 

model of piracy attacks in the late 20th and early 21st century, because of their nature, would generally fall below that deductible. 

The war policy is slightly different. Alongside the annual premium covering the majority of locations, a separate list identifies 

areas where the war risk is regarded as being enhanced. If the 

11 

owner wishes to send a vessel to one of these areas, they must notify the underwriters to negotiate the terms of the voyage. 

In recent years piracy coverage has moved from the hull and machinery policy onto the war policy. There are some technical reasons for this movement unrelated to piracy, but in this context it 

gives the insurer the opportunity to monitor the movement of vessels into high-risk areas, including areas impacted by piracy, and 

assess the steps being taken by the shipowner to mitigate the risk. 

During the initial placement process, and then subsequently, if 

a vessel is being sent into the high-risk area, an underwriter will 

pay close attention to what the shipowner is doing to protect the 

vessel. Lloyd’s insurers have supported the development of the industry-led best management practices. Insurers will look closely at 

how the shipowner is using BMP, whether it is ingrained into the 

culture of their operations, and would make an assessment and 

price dependent on these issues. 

Reference is made to the use of armed guards within BMP. But 

certainly in the early days, insurers had some reservations about 

their use without proper standards. Use of poorly trained or undisciplined guards operating without proper legal authority or rules of 

engagement could enhance the risk to the crew they are meant to 

protect, along with enhanced risk of loss or damage to the vessel 

and the cargo. The development of ISO standards in this regard is 

a great step forward. 

Why has Somalia been such a challenge for the shipping and insurance community, bearing in mind the market’s long history of 

piracy coverage? My view is that Somalian pirates introduce a different method of operation. The traditional model took the vessel 

and the cargo. But the Somali game changer has been the recognition that the crew is a valuable asset for ransom. This is a marine 

version of kidnap and ransom activity, rather than what we would 

traditionally regard as piracy activity. This leaves us with a number of long-term questions about how the maritime community 

should approach some of these traditional areas of cover. 

I should make it clear here that property insurers are not directly involved in the negotiation or payment of ransom monies. 

These negotiations take place between shipowner representatives 

and pirate groups. Proper insurers will be involved through the ancient marine concept of general average. This ensures that costs incurred for the safe completion of a maritime adventure are shared 

across all parties involved. Once an owner has declared general average, the various parties will contribute according to a complex 

charging structure, based upon the values of the ship and cargo, 

and the hull and cargo insurers will therefore be major contributors. 

Insurers have been engaged with the ongoing role of regulators 

in looking at the money trail which arises following the payment 

of ransoms. From a Lloyd’s perspective, this is a particularly important aspect of our work. Lloyd’s has a valuable brand and reputation to protect in the U.S. And so our involvement in discussions with OFAC in the practical issues arising from payment of 

ransoms has been particularly helpful. 

Bearing in mind the position of the crew in relation to the current problems, I should note that crew liability is not covered by 

12 

hull and cargo underwriters, but rather by the Protection and Indemnity Clubs, mutual groups funded by the shipowners. Traditionally, P&I Clubs are not involved in funding GA payments, but 

property insurers feel that this is an issue that we should look to 

address on the longer term. 

Setting Somalia aside, there has been a recent trend of attacks 

on vessels moving oil offshore in the Gulf of Guinea. These incidents look at this stage to be returned to the more traditional 

model of piracy with organized theft of portable goods from the 

ships and transshipment theft of the oil cargoes. The insurance sector is monitoring developments closely, and it is a further example 

of why, even though the situation in Somalia looks to be improving, 

the international maritime community cannot afford to relax its efforts to reduce the threat of piracy. 

I will be happy to respond to any questions you may have, or to 

expand on any of my comments further, if it would be helpful. 

Thank you. 

Mr. HUNTER. I would like to thank everybody for their testimony. 

I told my kids that I was having a hearing today on piracy this 

morning, and they laughed. Unfortunately, Jack Sparrow and Disney took a lot of the reality off of piracy for that generation of kids. 

So we will scare them back into shape. 

I am going to recognize myself really quick for just a quick question. And it goes back to the statement that I think a few of you 

made—said if there is armed guards or contractors on these ships, 

you have zero hijackings. So my question is all encompassing, going 

from the Department of State to the Navy, Coast Guard. When do 

we make the transition from us using you and using the Coast 

Guard resources, Naval resources, Department of State resources, 

and shift that to the merchant and say, ‘‘If you want to be safe, 

we recommend you have armed guards, because you have a zeropercent chance of being hijacked if you have armed guards, based 

on past statistics’’? 

And then, a question to go with that is, how do we make sure 

that the guys that are on these ships that are the armed guards 

can have weapons with them? What ports can they go into? Do you 

have to have floating arsenals—of which there are some out there, 

some are good and some are bad, from what I understand, where 

guys can actually gear up on the water once the ship leaves the 

port that does not allow Americans to have weapons. And when it 

comes to the Department of State, there have been some cases 

where even countries that allow that have detained American personnel, ship operators, and—until we pay them off, basically. 

So, that is my question. When do we shift the burden from the 

U.S. Government and the American taxpayer to the ship driver or 

the owner-operator? When does that happen and how does it happen? And what are we doing to make it happen? And what is 

standing in the way of it happening? 

And I guess, Admiral, maybe we will start with you. Admiral 

Kuzmick. I am sorry. 

Admiral KUZMICK. Yes, thank you, Mr. Chairman. 

Our feeling in the Navy is that it has been a combination of 

those efforts that has virtually eliminated Somali piracy. While it 

13 

is true that no one has been successfully hijacked when they have 

been able to shoot back, it is important. 

It has also been important that we have some Naval presence 

there that can interdict the pirates, and I think that there is room 

there for this to be reversible and that we would have to come 

back. 

It is important for us because we can do the Horn of Africa Piracy without much additional resources. We have most of the resources there assigned to contest Iran’s hegemony in the area, and 

they are there anyway. So we can often split them off to do some 

of that kind of work, and all the help we get from the other nations 

is very helpful. 

Over toward Gulf of Guinea, a little bit of a different story. I 

think some of the other witnesses may know more details about 

this than I do, but my understanding is that there are a number 

of different intricacies over there of convincing sometimes smaller 

vessels to hire personal armed security guards. 

And also the legalities, a lot of the stuff happens in shore waters. 

Those kinds of armed security teams, as you mentioned, are not capable or they are not allowed to work in there. So that is an extra 

difficulty. 

Mr. HUNTER. Admiral Servidio. 

Admiral SERVIDIO. Mr. Chairman, what the U.S. Coast Guard requires is the vessel has to do their own assessment, and based 

upon their assessment, they could determine whether they need to 

have armed security guards or additional security, but it does not 

necessarily have to be armed. 

On some vessels, due to the risk of what they are carrying, be 

it a gas, cargo or other types of things, they feel that that assessment might be that they need additional security on board, but 

they might not necessarily want them armed. 

As Admiral Kuzmick brought up, there are some challenges especially in the West Coast of Africa. Nigeria does not allow privately 

armed security to go in there. So they offer their personnel to provide some security. I know there has been some questions with 

some of that, and we have had offshore supply vessels that have 

been operating in that area for decades dealing with a security situation, and they have been able to manage that through their assessment of risks and their own practices that they put in place, 

and those have been codified now under the MTSA requirements 

for vessel security plans. 

Mr. HUNTER. Anybody else who would like to take a shot at that? 

Mr. Secretary? 

Mr. SHAPIRO. Well, I would make two points. First, for the most 

part, unless it is a U.S. Government cargo, it is the shipowners 

who are paying the costs of the private armed security teams. So 

in terms of burden sharing, it is mostly be borne by the maritime 

industry. 

In terms of the problems in various ports, the State Department 

has demarched port States to let them know that U.S.-flag vessels 

which have armed security teams will be coming through and has 

also worked through the contact group to encourage States to develop appropriate regulatory framework to allow the use of armed 

security teams. 

14 

That being said, occasionally there is a bump in the road. We are 

usually able to work it out through our embassy when there are 

those bumps and reach a satisfactory conclusion. 

Mr. HUNTER. Where is the usual dropoff/pickup point so that if 

you do not want to carry security where you do not need it and 

have to pay for it? Where would you usually pick up security? 

Where would your private contractors meet you to get on the ship? 

And then where would they transit with you to? 

Admiral SERVIDIO. Mr. Chairman, for the U.S. vessels, in our 

maritime security directive we identify where those high-risk waters are, and if a U.S. vessel transits, that is where they have to 

put in place their piracy annex and those additional security measures to address that risk. 

Again, they have done their assessment, and they make a proposal as to what it will be. But we have identified those waters, 

and they include waters in the Middle East, in Asia, in South 

America, and other areas. And, again, we have identified where 

those waters—— 

Mr. HUNTER. Are there not some actual ports though that are 

the main ports where they have to kind of jump off when they 

enter the high-risk waters? 

Admiral SERVIDIO. If you have privately armed security, there 

are some countries and there are some locations that it is 

logistically much easier to end up doing that. 

Mr. HUNTER. What countries are those? If you do not know, then 

just for the record. 

Admiral SERVIDIO. I do not know. I can get it for the record, Mr. 

Chairman. 

[The information follows:] 

The information requested is Sensitive Security Information (SSI) and cannot be provided for the record. However, a copy of this material has been 

provided to Chairman Hunter. 

Mr. HUNTER. OK. All right. Thank you all. 

With that, I would like to yield to Mr. Garamendi. 

Mr. GARAMENDI. Thank you, Mr. Chairman. 

Many questions come up here. I do thank all of you for your testimony and particularly for the success that you have had in dampening down the piracy, particularly in Somalia, and I suspect you 

will soon find similar success in the Gulf of Guinea. 

But, Admiral Servidio, you mentioned that the U.S. proposed an 

amendment to the IMO to require IMO nations to mandate adherence to the security guidance that the U.S.-flag vessels have to obtain. Apparently that was not accepted. Why? 

Admiral SERVIDIO. I really do not know the answer of what all 

of the other countries on the U.N. felt. Not all of them feel that this 

should be required. Not all of them feel the risk is as great as what 

the U.S. feels. So I really cannot speak on behalf of them, Ranking 

Member, but our desire would have been that everybody puts in 

place what we have required on U.S.-flag vessels. 

Mr. GARAMENDI. Mr. Smith, is this an insurance issue that could 

be helpful in setting a higher standard for all ships? That is, if you 

want to get insurance, then you had better abide by the standards? 

Has Lloyd’s considered that? 

15 

Mr. SMITH. I mean, this comes back to the way in which the 

BMP really are used within the London market. It is not possible 

for the market to mandate the use of BMP because BMP itself is 

not really in a format that that would work, and for as well, without the EU, we are not in a position where from an insurance angle 

we can mandate particular standards or levels. That goes for piracy 

and just general shipping safety as well. There are issues where we 

cannot mandate. 

However, it is an issue from a market perspective, where insurers, as I said earlier, will look very closely at what the shipowner 

is doing, how they are operating, when they are assessing the insurance risk. 

So if from the negotiations it can be seen that the shipowner is 

taking all reasonable steps to protect and mitigate against the 

threat of piracy, then that will be taken into account by the insurer 

during the negotiation process. 

Mr. GARAMENDI. I thought that might be the case. As a former 

insurance commissioner, I learned that the availability or the unavailability of insurance is a high motivator, and it would seem to 

me that while you may not be successful on the regulatory side, 

you could be successful on the insurance side. Simply do it or else 

I am not going to ensure you, pretty simple. So they start to do it 

because they need the insurance. 

I would like to follow along on that process with you, Mr. Smith, 

and the others if you could keep track of the success of the insurance market in promoting best practices. 

I understand the litigation issues of mandating. 

Mr. SMITH. Sure. 

Mr. GARAMENDI. But then you do not have to provide the insurance, do you, if you do not like what they are doing? 

There are numerous questions here that I really would like to get 

to, and let me see if I can move through some of those. There are 

some detailed insurance issues that I will take up with you, Mr. 

Smith, separately, but they are going to get into esoteric stuff. 

The question, Mr. Matsuda, you are appropriately looking out for 

the mariners and their well-being, which is first to avoid a piracy 

action. But when there is a piracy action, what steps can be taken 

to assist the mariners in dealing with everything from loss of 

health and life to other let’s call it post-traumatic stress issues? 

Mr. MATSUDA. Well, thank you, sir. 

We certainly prioritize the safety and well-being of our mariners. 

The best thing they can do is have an employer, a ship operator 

who is fully complying with Coast Guard rules and standards, best 

management practices, and is staying up on all of the types of 

things that need to be done to run an operation efficiently and safely for their crews. That is our priority. 

We are certainly trying to chase down any additional things we 

can learn about being held captive, what we can learn from our foreign counterparts who have mariners who have been in that situation. Our successful interaction with the Government of the Philippines led to a former hostage coming to the U.S. and speaking 

with the maritime community. They went to the many maritime 

educational facilities, U.S. Merchant Marine Academy and others. 

16 

So we will continue to explore those avenues to learn everything 

we can. 

Mr. GARAMENDI. Again, best practices, I notice that we have a 

vote coming up, and so I am going to cut my questions short here. 

I may ask you separately, all of you, for some specific questions 

and answers. 

Mr. Chairman, I yield back. 

Mr. HUNTER. I thank the gentleman. 

We have about 5 or 10 minutes before we have to go. If you do 

not mind, we would like to continue this. We just have two votes, 

two 5-minute votes, a motion to recommit and then another one, 

and we will come right back here. 

So with that I think we have time. Do we have time to recognize 

Mr. Coble? 

I recognize Mr. Coble for 5 minutes. 

Mr. COBLE. Thank you, Mr. Chairman. 

Gentlemen, thank you all for your testimony today. 

Admiral Servidio, I have a two-part question to you. What is the 

Coast Guard doing to combat piracy off of Africa’s West Coast—(a)? 

And (b)—I had a second question here—explain to me if you 

would, Admiral, the Coast Guard standard for use of force for selfdefense of a vessel. 

Admiral SERVIDIO. Sir, the Coast Guard is doing a number of 

things for piracy. We just had a law enforcement detachment that 

was deployed on a British ship that was off the West Coast of Africa doing boardings and doing training for local as part of our capacity building. So we are involved in the capacity building side of it. 

Additionally, for U.S.-flag vessels that are operating there, we review their security plans. We approve their security plans, and we 

have had a number of different meetings with those company security officers to ensure we are taking care of our merchant mariners 

and our vessels. 

Internationally, we are working with the IMO who are supporting a code of conduct that will be established on the West 

Coast of Africa that is similar to the East Coast of Africa’s code of 

conduct so that they can use their inherent capabilities to address 

the piracy scourge much more effectively. 

As far as the use of force, sir, the U.S. has reserved sort of position when it comes to convoy or private escort vessels with regards 

to that use of force because it is a legal issue as to when you can 

use force and when you cannot use force. For self-defense you can, 

but I know some nations are looking at having private security vessels that are pretty much taking the place of military vessels, and 

there are some legal issues with that. 

Mr. COBLE. Thank you, Admiral. 

Admiral Kuzmick, the number of vessels attacked last year by 

Somalia pirates off the horn of Africa fell to the lowest level, I am 

told, since 2009. Of all the mitigating actions, which do you believe 

has had the most influence on the decreased number of attacks off 

the coast of Somalia? 

Admiral KUZMICK. Congressman, did you say the least number 

of attacks? 

Mr. COBLE. Pardon? 

17 

Admiral KUZMICK. The influence on the? The last part of your 

question. 

Mr. COBLE. I just said of all the mitigating actions, which do you 

believe had the most influence on the decreased number of attacks. 

Admiral KUZMICK. Yes, sir. Well, I would say certainly the armed 

security teams has reduced that a great deal. We have made it 

very uncomfortable for pirates to approach many of the vessels that 

transit the area because they are going to get shot at, and they decide, you know—that is very difficult for a military unit to do, 

much less a rag-tag group of pirates—to try and take a vessel that 

is shooting back. 

So that is certainly the biggest thing. That is not something that 

we are doing directly, but certainly something that we are trying 

to influence people to do. 

And then I think it is important, as well, still at the moment 

that we have the task forces that we have down there, CTF–151 

primarily with a dozen or more ships from various nations. 

There is the NATO group of, at the moment, a couple or three 

ships and another EU group of a couple or three ships. All participate and cover a huge area, but what it allows us to do is, when 

there is an act of piracy or an attack of some kind, it allows us to 

try and intervene in that skiff after they are away and they have 

decided not to attack a vessel maybe that has an armed security 

team, and we can try and interdict the pirates in that way. 

Mr. COBLE. I thank you, sir. 

One more question, if I may, Mr. Chairman. 

Mr. Matsuda, how many U.S.-flag vessels transit pirate infested, 

high-risk waters on a daily basis? 

And why must U.S.-flag vessels transit these waters? What cargo 

are they carrying, for example? 

Mr. MATSUDA. According to our information on any given day 

there are about a dozen U.S.-flag vessels in the area near the Gulf 

of Aden high-risk waters. They are carrying all kinds of goods, 

whether it is federally financed cargoes, food aid, humanitarian 

supplies, cargo for the military to support their efforts, or just commercial cargoes to and from the United States or between foreign 

countries. 

Mr. COBLE. I see. 

Thank you, gentlemen. 

I will yield back, Mr. Chairman. 

Mr. HUNTER. I thank the gentleman from North Carolina. 

We are going to go ahead and go vote, and if you would not mind, 

we will stand in recess. It will probably be 20 or 25 minutes. 

So the hearing will stand in recess, subject to the call of the 

Chair. Thank you. 

[Recess.] 

Mr. HUNTER. The subcommittee will come to order. 

Thank you, everybody, for waiting. We apologize. As you know, 

that is just kind of how it is. 

So at this time I would like to recognize the absence of Ms. 

Hahn. Mr. Southerland from Florida. 

We will not start the time yet. You can take your time. Sorry. 

Mr. SOUTHERLAND. Thank you. I have got too many papers here. 

18 

Thank you, Mr. Chairman. I would like to thank you for this. To 

me, new to the committee, it is an interesting subject, and I enjoyed reading and learning more about this. 

I am glad to see the recent reports show that there is a dramatic 

reduction in pirate attacks off the Horn of Africa, and I commend 

Coast Guard and Navy, the State Department for working together 

to develop effective strategies for dealing with this important issue. 

Additionally, we know that several high-profile raids by American and European forces have acted as a further deterrent, and I 

think the American people appreciate that. 

While I understand that a permanent solution will not be 

reached until Somalia has an effective and capable government, the 

trend of decreased incidences of piracy off the Horn of Africa is encouraging. Unfortunately, we have seen, as we have talked about 

in other questions increasing attacks off of Guinea. 

I wanted to ask a question. How exactly should both the U.S. 

and the international partners’ response differ from our response 

to piracy off the eastern coast? 

Because you have got an increase there. Just kind of in a general 

way, and I would kind of like to ask the three of you on this end 

that question as it pertains to your operations. Because you have 

got two different, obviously, regions and two different challenges. 

One we seem to be doing very well, and so if we could just start. 

Admiral SERVIDIO. Thank you very, much, sir for the question. 

What we see is that it is not only the nature of the governance 

on the East Coast that is different from the West Coast. There was 

a lack of governance on the East Coast of Africa, and in Nigeria 

and the Gulf of Guinea, you have a number of different nation 

states that have capabilities, but it is also the type of vessel. It is 

the type of operations. 

On the West Coast of Africa, there are a lot of offshore supply 

vessels and lift boats, vessels involved in petroleum. Their operations are very different than in transit or food deliveries from 

deep draft vessels on the East Coast of Africa. 

The tools that we can engage from PCAS to others, privately contracted armed security, are different. I think overall the solution 

sets, which is international cooperation with industry and working 

with the regional nations on building that capacity are going to be 

the same in general, but the specifics are going to be a little bit 

different on how we implement that on the West Coast as opposed 

to the East Coast. 

Mr. SOUTHERLAND. OK. 

Admiral KUZMICK. Well, Congressman, from the Navy’s point of 

view, I think in the Gulf of Guinea it is radically different from our 

perspective. As I said, we can sort of mooch off of the assets that 

are in the central command area already, in the Horn of Africa. In 

the Gulf of Guinea for us to provide any sort of gray hulled Navy 

ship asset to help a whole lot would be a tremendous expense, especially as compared to the eastern side, a tremendous incremental 

additional expense. 

And the other thing is that we would not be all that terribly effective. As Admiral Servidio said, you have got nation states over 

there that are functional. They may not be as functional as we are, 

but they are functional. 

19 

Mr. SOUTHERLAND. Sure. 

Admiral KUZMICK. And our best bang for the buck is to provide 

for the occasional Navy vessel as Africa Partnership Station does 

to provide the training to improve the economic viability of those 

nations and the law abiding infrastructure to help them deal with 

their own problems. In my testimony I mention a lot of the activity 

over there is less on the high seas and more in the territorial waters that those folks patrol. 

Mr. SOUTHERLAND. Very good. Thank you. 

Mr. Matsuda. 

Mr. MATSUDA. Sir, I think to best replicate the success that we 

have had in addressing the situation in the Horn of Africa region, 

we have got to take what works and continue to do that. And that 

is taking a whole of government approach, work with the industries and the affected countries to bring about the appropriate solution. 

As my colleagues mentioned, the nature of the threat is just different. It is a different type of operation in different territory. 

These are territorial seas of nations. So we have got to be mindful 

of that, but I think that you have got the right agencies engaged, 

and that we should be able to tackle this effectively. 

Mr. SOUTHERLAND. Let me ask. For Americans who are watching 

this, I think sometimes, and again, being new to the subcommittee, 

I kind of struggle with this as well, to try to explain to—and I 

would ask the Navy to explain—I think Americans struggle in trying to figure out how a small boat with a band of people on it can 

overtake. Can you just briefly, and I know I have run out of time 

here, just briefly just describe for the American people how that 

happens? 

I mean, I think we struggle understanding the problem when a 

small boat with a band of thugs can come up and overtake a large 

tanker, and it is as much for my benefit as it is for those who may 

be watching this. 

Admiral KUZMICK. Well, Congressman, my understanding is, you 

know, you have got a large vessel at sea. You have spent a lot of 

monotonous time out there. You have got very, very minimally 

manned vessels. They are keeping the costs down. They are keeping the cost of people down, a very expensive part of that. Keeping 

the vigilance can be difficult when approached by folks that are 

armed. 

You know, if you are using these best practices that have been 

developed over the years, you are probably not going to get attacked. If you are lackadaisical about it or you take risks and you 

ignore these best practices, then it is not that difficult for somebody 

to come up to a low freeboard ship that is not moving very fast in 

decent weather and get folks with rifles on board, and once this 

happens, it is a hostage situation. 

Mr. SOUTHERLAND. Thank you. 

I know my time has expired. I yield back. 

Mr. HUNTER. I thank the gentleman. 

If he has any further questions, I would grant him unanimous 

consent to continue. 

Mr. SOUTHERLAND. Thank you. 

20 

I wanted to—hold on. Let me turn through, and I apologize. I 

have got so many questions here. I know that the Coast Guard 

issues, you know, the maritime security directives requiring vessels 

and owners to update their VSP plans to respond to the latest security threats. 

To what extent are U.S.-flag vessels complying with these directives? I mean, is this a large percentage? 

If we could, maybe, Mr. Shapiro, is that something that you 

could address? 

Mr. SHAPIRO. The percentage of ships that are being attacked? 

Mr. SOUTHERLAND. Yes. 

Mr. SHAPIRO. Well, I think that what we have seen is the percentage has dropped precipitously off the coast of Somalia. As we 

discussed earlier, the number of successful attacks has dropped to 

zero since last May. We are still seeing some attacks continuing, 

but the number of attacks that are actually taking place is much, 

much lower. We are seeing actually pirates holding press conferences announcing that they are getting out of the business because it is just not as lucrative as it once was. 

So, again, this is an example of, you know, the policy has been 

working. What I would say, just to echo what my colleagues said, 

is that the ships that do not have best management practices are 

by far the majority of those that are pirated. So at one point we 

look a look at this, and it was about 20 percent of the ships were 

not using best management practices, but if you looked at the ships 

that were successfully pirated, those were the vast majority. 

And so the importance of these best management practices in deterring and preventing successful pirate attacks has been important and something that we continue to urge. 

Mr. SOUTHERLAND. Is it fair? I know that oftentimes we have I 

am think of factories that we have here where if those transporting 

raw materials into a factory are not allowed to offload their goods, 

those factories are not accepting of these trucks and any of these 

deliveries by rail unless there has been proven a necessary level of 

insurance. 

I know, Mr. Smith, you talked about the insurance, how you insure these vessels regarding piracy. Is there a requirement that a 

port would not receive these vessels if they did not have the necessary insurance? 

And I am assuming what you are doing by requiring; if I have 

got to buy insurance, and I have taken necessary steps to mitigate 

these risks; in other words, I am a believer of the best practices as 

you all on this end of the table have outlined, and it is out there. 

If I am mandated to have this insurance, I want to have obviously 

the most reasonable premiums, and if the ports are requiring this, 

then it seems to me to be kind of a global effort to make sure these 

vessels are mandated to have the measure to prevent these acts. 

So is that something that is done in the industry? Does that 

make sense? Because I know this. That practice is required in 

American industry for our plants. So is that something that is done 

or is it looked into? 

Mr. SMITH. Sir, I can respond to that really. I mean, even in a 

broader context than piracy. Vessels have to have proper certification and insurance to be able to trade full stop. 

21 

Mr. SOUTHERLAND. I mean, in your comments you were talking 

about you had a hauling machine to really protect you in your daily 

use of the vessel. I am referring to whole risk regarding piracy. 

So are you mandated by the industry to have whole risk regarding piracy? 

Mr. SMITH. What, from the port perspective, sir? 

Mr. SOUTHERLAND. Yes. 

Mr. SMITH. Not to my knowledge. 

Mr. SOUTHERLAND. OK. 

Mr. SMITH. That is not a requirement, but from our perspective 

as the insurance as a support service to the shipping industry, as 

I said during my testimony, piracy is an insured peril under our 

contract and has been for centuries, and as far as we are concerned, it is a coverage that we would intend to continue to provide. 

The interesting aspect here with Somalia has been, of course, it 

is a different form of piracy that we are dealing with, and that is 

the challenge that we have been facing as an industry, both as an 

insurance industry and across the maritime sector as a whole. 

Mr. SOUTHERLAND. I would suggest that, and I am referring to 

the whole risk due to piracy. It just makes sense. It certainly works 

to create safer rails, safer highways. 

I know in America because we require those who transport in 

America to have necessary insurance limits or they cannot have 

their raw goods off-loaded at our factories. So it seems to be something that works. 

I will say this. I could not help, Mr. Chairman. You know, our 

country right now is going through a heated debate on guns and 

gun safety. I could not help but draw a parallel with what you 

have. I mean, I heard things today such as, you know, those ships 

who have the ability, no one has been successfully hijacked when 

they can shoot back. What a novel idea. 

I mean, I am hearing things today that if we would adopt into 

this debate that we are having in America right now, that just 

seems to be on the TV every time I turn on the TV. You have taken 

the first law of nature or self-preservation, and you are using it, 

as I think God intended us to, to protect our persons, our crew, and 

our cargo. 

And I want to say I applaud you all for your effort. It is working. 

You are talking about it today. You started the testimony today 

about how the numbers are decreasing. Why? Because we are using 

the common sense that God gave us, and I will tell you it is rare 

that I hear acknowledgment of that at the committee level. I just 

wish that we would practice the same common sense and embrace 

those God-given abilities that He expects from us to practice in 

other areas, and especially in the current environment today to rid 

ourselves of armed robbery. That was a term used today. Smash 

and grab, you know, collaboration between Government and industry, I think, working together and the American citizens to make 

sure we use the same tactics that you are. 

It is effective. It is work, and I applaud you. 

With that I yield back. 

22 

Mr. HUNTER. I thank the gentleman, and Ms. Hahn did have a 

question. I am going to go ahead and we will submit her questions 

for the record later, whatever she would like to ask. 

I would like to finish by just asking this. I am on the Armed 

Services Committee, too, and we get briefed on Africa all the time, 

and so the question is we know what is going on there. We are 

tracking it in a big way. So is there ever a parallel to what is happening on the ground there with the counterterrorist fight that 

transfer to the piracy fight? 

And if there is, how does DOD get the message out? Is it through 

MarAd? Is it through the Coast Guard? We say, ‘‘Hey, there are 

some bad guys operating in this area. They are a little bit more sophisticated,’’ or we do not think that they are the run-of-the-mill 

pirates. They could have Al Qaeda be financing or be trying to finance Al Qaeda from what they are doing. 

How do we let guys know that they are going to be in a place 

where there is going to be bad people? 

Mr. MATSUDA. Sorry. I can start. I think this is really more of 

a question for my colleagues at the State Department and other 

places. But I can tell you that as recently as several weeks ago, 

Secretary LaHood met with the Prime Minister of Cape Verde, 

which is in a neighboring country, and the Prime Minister expressed his concern about the potential spread of piracy, smuggling 

and other criminal activities to the neighboring countries in the 

Gulf of Guinea. 

And so there is definitely some concern. These are countries that 

have established governments, unlike what is happening on the 

high seas and on the Horn of Africa, but there is definitely concern. 

We committed to work with governments that are interested in 

building those capacities as they have in other areas. 

Mr. HUNTER. Let me interrupt just really quick in the interest 

of time. What I am asking explicitly is how do you get the message 

from whoever finds out that there is bad people in a certain area 

to those ships that are traveling in that certain area? 

Who is in charge of that? Who puts the message out and how is 

it done? 

Mr. MATSUDA. I think that it is fair to say we work with all of 

our agencies here to disseminate advisories to the maritime community to make sure they are aware of the latest threats wherever 

they might be and however they might be evolving. 

Mr. HUNTER. How does that work? Like their radio beeps and it 

is you guys, an all-con message out? 

Mr. MATSUDA. We do direct messaging to the maritime operators 

that have U.S.-flag vessels. We also work with the National 

Geospatial Agency to broadcast messages, and I know that Coast 

Guard and the Navy also take separate communication means. 

Mr. HUNTER. Has that happen? 

Admiral SERVIDIO. Mr. Chairman, most vessels that at transiting 

the area check in with the Maritime Security Center, Horn of Africa, and they are the ones that are tracking it. 

There is also—— 

Mr. HUNTER. Wait. Whose department is that in? 

23 

Admiral SERVIDIO. It is not U.S., sir. It is interagency. It is international is really who is running that. I believe the U.K. is the 

ones that originally stood that up. 

Additionally, the Coast Guard is in contact with each of the company security officers for U.S.-flag vessels, and we are part of the 

intelligence community. I cannot really get into details in this 

forum, but we can talk about what we do as far as tracking vessels, 

U.S.-flag, and we have the capability to ensure people are aware 

that is a threat out there. 

Likewise, the combined maritime forces provide that similar 

service in the Horn of Africa region. 

Mr. HUNTER. So let me ask this then. Have we noticed any sophistication of the ‘‘bad guys,’’ the pirates? Are they getting more 

sophisticated, number one? 

And, number two, do you ever see them doing anything besides 

just trying to hijack and sell the goods? I mean, do you see them 

just acting with malicious intent to sink a ship or scuttle it, whatever, kill the crew, but something beyond selling the goods that are 

on it, trying to make money or trying to get a ransom? 

Mr. SHAPIRO. Well, I will say that we did see over the past few 

years the greater use of mother ships by the pirates which enabled 

them to move further and further from the coast of Somalia, getting close to the coast of India where they engaged with Indian 

naval forces. So that was a development which made the threat 

much broader than just off the coast of Somalia. 

However, as we have talked about, as industry has adopted these 

best management security practices, as navies have, you know, put 

assets in the region, we are seeing less of these mother ships out 

on the water trying to attack vessels. 

And so, you know, from that perspective we did see that innovation, but the international community responded to that innovation 

in a way that now we are seeing a reduction. 

Mr. HUNTER. Yes, go ahead, sir. 

Mr. SMITH. Chairman Hunter, could I just comment here because 

I think from our perspective it is one of those refreshing things 

that we have seen with regard to the situation in Somalia. It has 

been the degree of cooperation between the various government 

agencies, both U.S. and internationally, and the military forces and 

the commercial sector as well. 

I think from our perspective, that is one of the really refreshing 

things here, where there have been developments, trends that we 

have seen. They have been shared with us where appropriate by 

the military and the Government forces so that the industry is 

aware of them and we can act as well. And I think that has been 

the thing that has really helped in this instance with Somalia, is 

that sort of ‘‘joined up’’ thinking between both the private and the 

public sector, which has really helped here. 

And for me, the bit lesson to be learned here is that when there 

are developments in other areas we need to act in the same way. 

Thank you. 

Mr. HUNTER. Last question here. So let us go forward a little bit. 

When I went to Iraq in 2003, we had soft-skin Humvees, did not 

have any up-armored vehicles at all, and the IED was kind of inVerDate Aug 31 2005 14:04 Nov 19, 2014 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\CG&JOI~1\2013\4-10-1~1\80347.TXT JEAN
24 

vented and used a lot. So what happens when they start simply 

wanting to sink ships? 

So let us say it less of a law enforcement thing where we do not 

care about the ransom. They just want to take a ship down, or 20 

or 30, or hit as many as they can just to cause a little havoc. What 

happens then? And is anybody thinking about that? I would hope. 

Mr. SHAPIRO. I will say that when we originally made the decision to allow the use of armed security teams, there was concern 

that this would lead to an arm’s race at sea; that the pirates would 

see, you know, the weapons and try and one up with heavy weapons and that it could lead to these types of attacks. 

And what we have found is it has not happened, and the reason 

is that most of these pirates skiffs are relatively small and do not 

have the ability to carry heavy weapons. So they can attack an unarmed ship with rifles and small arms and take it over, but when 

it comes to doing the type of damage that you are talking about, 

the level of, you know, weaponry necessary for that has not really 

been taken on these smaller skiffs. 

Now, is there risk that they might, you know, try and use larger 

ships? Yes, and it is something that we have thought about, but 

we have not seen it yet, and thus far we see that when there is 

a ship that has an armed security team, rather than confront it 

they tend to look for a softer target. 

Mr. HUNTER. Did anybody understand the other part? I mean, 

the question was: is that on anybody’s lane at all? Do we not think 

that will ever happen where the ‘‘bad guys’’ try to IED our ships 

and just kind of ram them with a few hundred pounds of explosives 

just to sink them? 

We do not care about them being shot at. They do not have a 50- 

caliber on their little RIB or a fast boat, but they just have a few 

hundred pounds of explosives and they pop a hole in a ship. 

Admiral SERVIDIO. The Maritime Transportation Security Act 

under which we have the authority for U.S. vessels requires a security plan, a vessel security plan, and that was designed to address 

terrorism types of things, which are things like the fast RIB or 

other types of things coming alongside. 

Internationally, the International Port and Vessel Ship Security 

Code also addresses that. So there are some things in place. 

What we do annually is we look at our maritime security directives, and our maritime security directives, unlike the best management practices which are recommendations, are mandated for 

U.S.-flag vessels that go through the high-risk areas, and we analyze them each year to see whether they are effective for what we 

are seeing, and we make modifications as necessary. 

We are on the sixth version of the MARSEC Directive that sort 

of deals with piracy. So if we did see trends, we would be able to 

adapt to those. Likewise, industry is the ones that have adopted 

these best management practices. This is the large intergovernmental organizations for tankers, for cargo vessels, bulkers and 

others, and they are the ones that put these recommendations in 

place. 

They have recently put an amendment to best management practice or best management Plan IV to address some of the issues on 

the West Coast of Africa because it is different, and I would likeVerDate Aug 31 2005 14:04 Nov 19, 2014 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\CG&JOI~1\2013\4-10-1~1\80347.TXT JEAN
25 

wise see them adopting some of those best management practices 

as the threat changes. 

It is an intelligent adversary, and they do make modifications, 

and we have to recognize that we cannot just say that this is going 

to take care of itself and that we have succeeded, but we have to 

continually look at where we stand and what we need to be next, 

Mr. Chairman. 

Mr. HUNTER. Let me thank the panel, and I have one last question for Mr. Smith because I just read ‘‘The Wave.’’ I do not know 

if you have read ‘‘The Wave.’’ It is a good book. I recommend reading it, but here is the question if you have the answer. 

How many ships are lost at sea, big ships, cargo ships that you 

insure for no known reason? I am just curious. You are here from 

London. I figured I would just ask you. 

Mr. SMITH. Well, in fact, I mean, it is a phenomenon that we see 

occasionally. I do not have the exact figures about when the last 

time we had one, but this is one of the refreshing statistics for us, 

is that the number of large merchant vessels that just disappear 

are very few and far between. 

If you want me to find the exact figures for you, I can do so. 

Mr. HUNTER. Well, not if they are not an impressively high number. Then it is not a big deal, but OK. 

Well, with that, let me thank the panel. Thank you, Admirals. 

Thank you all for your service and your time. 

The hearing is adjourned. 

[Whereupon, at 4:14 p.m., the subcommittee was adjourned.] 

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