Our Head of Analysis Mark Joyce argues that Iran, Brexit and industrial action currently surpass piracy among the maritime threats facing business
Iran’s seizure of a British-flagged oil tanker on 19 July is the most prominent of a recent spate of maritime security incidents spanning multiple regions. Several of these have been part of the wider fallout from Washington’s maximum pressure strategy towards Iran, including the sabotage of tankers off the coasts of the UAE in May and Oman in June.
There have also been flashpoints along other geopolitical fault lines. On 25 July, Ukrainian forces seized a Russian tanker in the Danube port of Izmail, in retaliation for Russia’s capture of three Ukrainian ships in November. Chinese vessels with armed coastguard escorts have been conducting exploration of contested waters off the Spratly Islands since early July, triggering a retaliatory naval deployment by Vietnam. Turkey is exploring for oil and gas in disputed waters off Cyprus, prompting exchanges of hostile rhetoric and threats over the last two months.
None of these incidents has anything to do with piracy. This is noteworthy given that maritime security and piracy have often been treated as virtually synonymous topics since the peak of attacks on shipping off Somalia nearly a decade ago. In the intervening years there has been a steady stream of reporting – much of it coming from the maritime security industry – warning of a growing and dynamic threat from piracy in other parts of the world.
Data suggests that piracy is in fact on a declining trajectory globally and is geographically contained. The International Maritime Bureau reports that 62 of the 75 seafarers abducted at sea in the first half of 2019 were captured in the Gulf of Guinea, whilst eight of the nine reported incidents of vessels being fired upon globally during that period were off the coast of Nigeria. This is consistent with several years of reporting showing the Gulf of Guinea to be by far the biggest hotspot for piracy and maritime criminality in the world (although with signs of improvement over the last 12 months). The waters off Indonesia and Malaysia are the second biggest cluster, but at levels well below those off West Africa, and improving so far this year.
This is not to underplay the importance of piracy to those companies who are directly exposed to it nor to assume that recent improvements will be sustained. However, it is worth stressing that the maritime threats with greatest potential impact on business resilience over the second half of 2019 will be driven less by criminality than by politics. There are three particular areas to watch.
First, there are more flashpoints ahead relating to Iran as well as continued friction resulting from Chinese assertiveness in and around the South China Sea. The greatest direct vulnerability is for shipping and exploration activities in those regions but the wider impact may not be localised nor confined to physical domains. The US military held an exercise in June simulating a cyber attack against a US seaport by a foreign adversary. This was preceded by warnings to American ship operators urgently to review their cyber defences.
Second, a no-deal Brexit on 31 October could inflict enormous disruption on maritime freight, directly impacting global trading hubs including London and Rotterdam but with knock-on effects much further afield. This is not a security issue per se, but could plausibly take on security and crisis dimensions under the worst-case scenarios involving major logistical and transport disruption.
The third area of concern is industrial action and civil unrest. Strikes have impacted food and manufacturing supply chains through ports in South Africa and Australia during July and industrial action by port and customs officials in France caused major disruption in March. Besides further flare-ups in those situations another country to monitor is Algeria, where port workers are among the most organised elements of the civilian opposition. A breakdown of the national dialogue process in the coming weeks could be a trigger for port strikes that would not only strain supply chains but also carry a threat of associated violence.
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