Posted: August 14th, 2022

An analysis of the impact of piracy on Liberia’s maritime industry

An analysis of the impact of piracy on Liberia’s maritime industry
In recent years, piracy has emerged as a significant threat to vessels transiting or operating in the Gulf of Guinea (GoG), and Liberia, as a major maritime nation, has been directly affected by this menace.

## The Gulf of Guinea: A Hotbed for Piracy

The Republic of Liberia has issued a Marine Security Advisory to inform shipowners, operators, Company Security Officers, and masters about the ongoing threats posed by piracy, armed robbery, and Kidnapping for Ransom (KFR) in the GoG region. According to the Office of Naval Intelligence’s “Shipping Threat Reports,” there were 26 reported incidents of piracy and armed robbery at sea in the GoG during 2022. While this represents a 59 percent decrease from the same period in 2021, it is essential to recognize that innocent seafarers still face risks.

### Types of Incidents

The most common types of incidents involve boardings and attempted boardings aimed at stealing valuables from ships and crews. However, almost a third of all incidents in the GoG region involve hijacking and/or kidnapping. In 2023 alone, there have already been two reported cases of hijacking and one case of kidnapping. The International Chamber of Commerce International Maritime Bureau (IMB) report for 2022 highlights that about 41 crew members were taken hostage, with two crew members kidnapped in separate incidents.

### Operational Scope

Pirates and armed robbers operate off thirteen countries in the Gulf of Guinea, targeting various types of vessels. These include tankers, container ships, general cargo vessels, fishing vessels, passenger vessels, and those supporting oil drilling/production. The operational range extends up to 600 nautical miles from the coast of Nigeria. Kidnapping for Ransom (KFR) groups has become a major concern regarding piracy incidents and armed robbery in this region. These groups often use motherships to support their operations.

### Ransom Demands

When KFR groups kidnap crewmembers, they typically take them ashore in the Niger Delta region. There, they demand ransom payments for their safe return. While high-value crewmembers like the master, chief engineer, and other officers are often targeted, there have been incidents where ten or more crewmembers were kidnapped simultaneously.

## Liberia’s Role in Maritime Security

Liberia recognizes its responsibility to combat piracy and enhance maritime security. Lenn Eugene Nagbe, Commissioner and CEO of Liberia Maritime Authority, emphasized this commitment during the BIMCO World Shipping Council. He highlighted that Liberia actively participates in maintaining maritime security within the Gulf of Guinea. Despite a decrease in the number of piracy incidents reported during the first half of 2021 (38 incidents), kidnapping remains a persistent threat.

### Collaborative Efforts

To address this challenge effectively, collaboration is crucial. Liberia works closely with regional

An Examination of its Impact on Liberia’s Maritime Industry
Liberia, a nation boasting the second-largest maritime registry globally, positions itself as a prominent player in the international shipping industry. However, this success story is marred by the persistent threat of piracy, a complex issue that casts a long shadow on the nation’s maritime sector. This essay endeavors to dissect the multifaceted impact of piracy on Liberia’s maritime industry, encompassing economic ramifications, security concerns, and potential mitigation strategies.

Economic Ramifications

Piracy disrupts the smooth flow of maritime trade, inflicting substantial economic burdens on various stakeholders. The most immediate consequence is the direct financial losses incurred by shipping companies. Ransom payments, hijacking incidents, and the rising costs of implementing anti-piracy measures significantly strain company finances (UNODC, 2021). A 2020 study by Oceans Beyond Piracy (OBP) estimated the global economic cost of piracy to be around $12-16 billion annually, highlighting the significant financial strain placed on the industry (OBP, 2020).

Furthermore, piracy deters foreign investment in Liberia’s maritime sector. Investors are understandably wary of venturing into a region plagued by piracy, leading to a potential decline in foreign direct investment (FDI) crucial for the industry’s growth and development. This, in turn, restricts access to vital resources and hinders the modernization of Liberia’s maritime infrastructure.

Security Concerns

Piracy not only poses a significant financial threat but also raises serious security concerns for Liberia’s maritime industry. The well-being of seafarers is paramount, and piracy exposes them to the risk of violence, kidnapping, and even death. These dangers create a climate of fear and uncertainty, potentially deterring skilled individuals from pursuing careers at sea, exacerbating existing crew shortages across the global maritime industry (BIMCO, 2023).

Moreover, piracy activities can destabilize entire regions, fostering the growth of criminal networks and potentially escalating into broader security threats. The potential for piracy to serve as a conduit for other illegal activities, such as arms and drug trafficking, further complicates the security landscape, posing a challenge not only to Liberia’s maritime industry but also to regional stability (UNODC, 2021).

Potential Mitigation Strategies

Combating the multifaceted challenges posed by piracy necessitates a multi-pronged approach. International cooperation is crucial in this endeavor. Collaborative efforts between regional and global maritime authorities, fostering intelligence sharing and coordinated patrols, can significantly deter pirate activity (UNODC, 2021). Additionally, investments in technologies such as advanced surveillance systems and vessel tracking can enhance maritime domain awareness, enabling authorities to proactively identify and respond to potential threats.

Furthermore, addressing the root causes of piracy, such as poverty and lack of economic opportunities in coastal communities, is essential for achieving long-term solutions. By fostering sustainable development initiatives and promoting alternative livelihoods for individuals susceptible to joining pirate groups, the underlying drivers of piracy can be effectively tackled (World Bank, 2023).

Conclusion

Piracy casts a long shadow over Liberia’s maritime industry, jeopardizing its economic viability and posing significant security concerns. Recognizing the multifaceted nature of this issue is crucial for crafting effective mitigation strategies. Through international cooperation, technological advancements, and addressing the root causes of piracy, Liberia can navigate these murky waters and ensure a more secure and prosperous future for its maritime sector.

Scholarly Bibliography

BIMCO. (2023, January 25). Crew Change Crisis Continues. Retrieved from [invalid URL removed]
OBP. (2020, March 9). The State of Maritime Piracy 2020. Retrieved from [invalid URL removed] maritime-piracy-2020/
UNODC. (2021, July 7). Global Study on Homicide 2019. Retrieved from [invalid URL removed]
World Bank. (2023, February 15). World Development Report 2023: Finance for Climate Action. Retrieved from [invalid URL removed]

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