Business Day (Johannesburg)
Artwell Dlamini
19 November 2008
Johannesburg — SOUTH African shipping companies say the surge in sea piracy cases has left them saddled with higher maritime insurance and transport costs.
Dave Rennie, CE of the freight services division at Grindrod, said yesterday that piracy had implications for insurance and this affected all shipping firms. Southern Chartering MD Neil Lepine-Williams said piracy placed "extra insurance costs" on shipping companies sailing in Somalian waters.
Lepine-Williams said insurance costs were rising to the point where some ship owners refused to sail their vessels in pirate -infested waters, especially around the Horn of Africa.
Most piracy incidents occur in the Gulf of Aden, which lies between Somalia and Yemen, and links the Red Sea with the India Ocean. Other piracy hot spots include the sea off Nigeria, Tanzania and Brazil, around Indonesia and in the Singapore Straits.
In the past week 14 piracy incidents were reported worldwide with the majority of these attacks taking place in the Gulf of Aden, according to the International Maritime Bureau's Piracy Reporting Centre.
In some of these robberies, pirates kidnapped crew members and demanded ransom.
Referring to Somalian waters, Lepine-Williams said there had been 58 piracy attacks so far this year.
Ian Smith, MD of International Marine Insurance Managers, which underwrites on behalf of Lloyd's of London, said some international insurance companies had resorted to paying ransoms, running into a couple of millions of dollars, to recover cargo and vessels.
Over time, insurance companies might end up "loading" or adding extra premiums to cover their exposure to piracy , said Smith.
Lepine-Williams said piracy had not caused "much chaos" for South African companies.
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