[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
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
__________
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
VACANCY
------
Subcommittee on Coast Guard and Maritime Transportation
DUNCAN HUNTER, California, Chairman
DON YOUNG, Alaska JOHN GARAMENDI, California
HOWARD COBLE, North Carolina ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey CORRINE BROWN, Florida
PATRICK MEEHAN, Pennsylvania RICK LARSEN, Washington
STEVE SOUTHERLAND, II, Florida, TIMOTHY H. BISHOP, New York
Vice Chair JANICE HAHN, California
TOM RICE, South Carolina LOIS FRANKEL, Florida
TREY RADEL, Florida NICK J. RAHALL, II, West Virginia
VACANCY (Ex Officio)
BILL SHUSTER, Pennsylvania (Ex
Officio)
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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UPDATES ON EFFORTS TO COMBAT PIRACY
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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 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.
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 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.
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 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 security 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 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.
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 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 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 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 zero-percent 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 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.
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?
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. 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
self-defense 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?
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.
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.
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.
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.
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.
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?
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 invented 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 likewise 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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