Sunday, October 14, 2012

Baltic index up on rising panamax, capesize rates


Saturday, 13 October 2012 | 00:00
The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, rose on Friday as rates for capesizes and panamaxes increased.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, rose 2.55 percent to 926 points. The index gained nearly 5 percent this week.

The Baltic's capesize index rose 4.42 percent to 1,914 points.

Average daily earnings for capesizes, which usually transport 150,000-tonne cargoes such as iron ore and coal, were up $703 at $11,074.

In the single voyage market, the average earnings for capesizes are now $14,500 per day, RS Platou Markets analysts said in a note.

"Operators can earn a healthy margin by chartering in vessels and trading spot," RS Platou analysts said.

"While traders such as Cargill were indeed active, the global miners Rio Tinto and BHP Billiton were the main contributors to the rising rates, in our view, as they combined chartered another 6-7 capesize vessels yesterday."

Spot iron ore prices in top importer China steadied on Friday after a rally earlier this week spurred caution among buyers worried that demand in the world's top steel consumer might not rebound significantly. ΕΎ

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.

The panamax index rose 3.32 percent to 871 points, with average daily earnings up $221 at $6,937.
Panamaxes typically transport 60,000-70,000-tonne cargoes of coal or grain.

Increasing thermal coal fixtures and grain shipments strengthened panamax rates, analysts said.

Average daily earnings for handysize ships were up $1 at $6,536, while those of supramax ships were down $82 at $8,110.
 
Source: Reuters

ICBC sees Singapore as attractive ship finance hub


Sunday, 14 October 2012 | 00:00
China’s top ship financing bank ICBC is becoming far more exposed to international trades and is looking to grow its base in Singapore having just received a full banking licence to operate in the Lion Republic.

ICBC currently has 30% pure domestic ship finance business, with fully 70% coming from overseas, albeit mainly Chinese conglomerates’ overseas affiliates.

“Most of our ship finance services are international business. Some big Chinese shipping companies, such as COSCO, China Shipping, they also have many multinational business handled by our bank,” an official from the ship finance department of ICBC told SinoShip News. “RMB and US dollar transactions are both ok to us,” he added.
A few days ago, ICBC received its full banking license from Singapore giving it greater access to the Singapore market. “Before we get the license, we already had branches in Singapore providing ship finance services. The new move could help us do better in the region,” the official said. 

Source: Sino Ship News

Ship Operators Jump on Higher Dry-Bulk Rates

Saturday, 13 October 2012 | 00:00

China Shipping Development Co. (1138) and China Cosco (1919) Holdings Co., the nation’s biggest operators of dry- bulk ships, both rose the most in three weeks in Hong Kong trading because of increasing rates for hauling commodities. 

China Shipping advanced 5.8 percent to close at HK$3.48, while China Cosco added 8 percent to HK$3.66. For both companies, it was the biggest gain since Sept. 19. The benchmark Hang Seng Index rose 0.7 percent. 

Charter rates for capesizes have risen 50 percent from lows in mid-September because of increasing demand and customers having to pay more to persuade shipowners to take vessels out of lay-up, Deutsche Bank AG analysts Joe Liew and Sky Hong wrote in a note yesterday. The industry, which will probably post losses for the third quarter, may also have a better year in 2013 because slower capacity growth will revive rates, they said. 

“We are encouraged by the recent pick up in spot dry bulk shipping rates,” Liew and Hong said. Investor interest in the sector is returning “because stocks are so bombed out and rates have started to recover from lows,” they said. 

China Shipping, which also has oil tankers, is the bank’s top pick in the industry because it has lagged behind Pacific Basin Shipping Co. over the past month and has a lower price. It trades about 0.4 times the book value of its assets, compared with about 0.7 times for Hong Kong-based Pacific Basin, the analysts said. Pacific Basin closed up 2.7 percent to close at HK$3.88. 

China Shipping has tumbled 28 percent this year in Hong Kong. China Cosco, which also operates the nation’s biggest container-ship fleet, has dropped 4.2 percent. The Hang Seng Index has risen 15 percent. 

China Cosco’s has also announced plans to cooperate with China Shipping Container Lines Co. on domestic cargo-box routes. CSCL, an affiliate of China Shipping Development, is China’s No. 2 container carrier. 

The Baltic Dry Index (BDIY), a benchmark for global commodity- shipping rates, rose 3.2 percent in London yesterday. It has jumped 37 percent since Sept. 12, when it reached a seven-month low.
 
Source: Bloomberg


Maersk Group Hiking Container Earnings

Sunday, 14 October 2012 | 00:00

Danish industrial conglomerate A.P. Moller-Maersk A/S is targeting to raise the earnings margin of its container shipping arm, Maersk Line, to 5% higher than its peers over the next five years, Maersk Chief Executive Nils S. Andersen said. 
Speaking at the company’s meeting for investors and analysts, Mr. Andersen said Maersk Line, the world’s largest container shipping firm, is ready to assume market leadership on rates, to push up freight rates from a very low level currently and support profitability. 

Maersk suffered from poor rates and a large over-capacity in the market in 2011, and after a brief recovery of rates at the beginning of 2012, rates have plunged again in recent months, not least on the key Asia-Europe trade, which accounts for about 40% of Maersk Line’s total carried freight volumes. 

Maersk has announced it will attempt to push through marked rate hikes this fall, on Asia-Europe of $500 per standard 20-foot container. 

With the focus now on profitability, Maersk aims to grow with the market in the coming five years and thereby keep its current global market share unchanged at about 15%. 

With the expectation of sluggish growth in world trade and continued over-capacity in the shipping market, Maersk will shift its main investment focus to its three other core business areas-oil, drilling services and port operations-resulting in a drop in Maersk Line’s stake in total investments. 
Including Maersk Line, the core business areas accounted for 75% of the group’s investments in 2011, of which 38% were invested in Maersk Line. In the coming five years, Maersk Line’s stake of group investments will decline to between 25% and 30%. 

A gradual shift in the balance between container shipping, currently Maersk’s largest business area, and the other core businesses will serve to bolster the group’s bottom line against the traditionally large degree of volatility in shipping rates going forward, Mr. Andersen said.
 
Source: Manila Bulletin

Tanker market showed signs of recovery last month says report

Saturday, 13 October 2012 | 00:00



The latest monthly report from OPEC, commenting on the tanker markets during the month of September, noted that "global spot fixtures were almost stable to average 17.02 mb/d, up by 0.1% from August and a rise of 7.2% from a year earlier. OPEC fixtures increased in September from the previous month, by 270 tb/d or 2.5%, to average 10.81 mb/d, but showed a drop of 3.7% from the same period a year ago. Middle East-to-East fixtures rose by 11.7% from the previous month, while Middle East-to-West fixtures declined by 34.4%. OPEC sailings were once again almost steady at 23.89 mb/d in September, which was 0.11 mb/d or 0.4% lower than a month earlier, but 5.9% higher than the same month a year ago. Middle East sailings saw a similar monthly decline of 0.14 mb/d or 0.8% to stand at 17.52 mb/d. Crude oil arrivals in North America fell by 0.32 mb/d or 3.3% from the previous month, but rose by 13.4% y-o-y. Far East arrivals dropped by 0.26mb/d or 3% from a month ago, yet saw a gain of 5.3% over the same month last year. Europe and Asia arrivals increased by 0.8 mb/d and 0.17 mb/d, reflecting monthly gains of 7% and 3.9%, yet drops of 8.6% and 5.4% from last year’s levels respectively" it said.

Following months of under-pressure freight rates reaching the lowest levels seen so far this year for several classes in the summer, both dirty and clean sector tanker spot freight rates saw some recovery in September. The decline in freight rates, which had prevailed in recent months, reached rock-bottom levels that could not cover operational costs and thus often made voyages of no interest to the owners. September freight rate gains — though marginal — offered some hope to owners who had been putting up with depressed freight rates for some time. They had been waiting a long time to see an improvement in rates after the losses incurred when freight rates fell below operational cost levels. In September, there was a strong trend from owners to resist the prevailing low rates after they hit low levels which were not acceptable any more, with some owners refraining from fixing their vessels as “last done”. Charterers had to reduce or postpone their inquiries at a certain point, faced with the resistance shown by owners. Another factor which strengthened the owners’ stance towards the rates was the increase in bunker prices which frequently squeezed the daily return to a negative figure, despite of the common practice of slow steaming. Generally in September, the position list remained plentiful for most of the time and vessel delays and replacements were easily covered. The vessel surplus remained the main reason preventing freight rates from improving significantly.

In September, VLCC spot freight rates gained on all reported routes. While these gains, which had been sought by VLCC ship-owners who had suffered from a weak market and depressed rates for a significant period of time, were not big enough, they nevertheless brought some optimism to the VLCC tanker market in general. On average, VLCC spot freight rates rose in September by 9.2% from the previous month to average WS36, although remaining 13% lower than the same month a year earlier.

Rates for VLCC trading on the Middle East-to-East route increased by 8.3%. Similarly, on the West Africa-to-East route they rose by 8.1% from a month earlier, while the Middle East-to-West route saw a greater gain of 12%. Despite these monthly gains, freight rates on all reported routes showed a drop, by 11%, 7% and 22% respectively, from the same month a year earlier. The increase in rates was registered mainly in the first two weeks of the month. The first week of September witnessed a rush of inquiries and fixtures for VLCCs on a scale that had not been seen for some time. The influx of activity had a modest positive effect on freight rates in an over-supplied tonnage market, which limited the outcome to gains of only a few WS points. And the second week of September maintained the gains registered in the first week, despite a lower level of activity which came about with the completion of September cargo-fixing. The ample supply of vessels continued to be the main factor controlling the VLCC rates in September, although the tonnage list was in better condition than what had been seen during the summer.

Following the already low levels in August, Suezmax average freight rates declined by a further 1.8% in September. Spot freight rates for the West Africa-to-US Gulf Coast route ended the month flat, to stand at WS55 points. Suezmax trading in the West Africa market was stable in September, with no improvement from the previous month. West African tonnage demand remained quiet, with a growing list of available vessels. The same applied to the Northwest Europe-to-US route, which dropped by 3.7% from the previous month to WS52 points. In an annual comparison, the two routes dropped by 19% and 4% respectively. Mid-September saw more activity, as October inquiries came alongside a slight improvement in freight rates. Towards the end of the month, the inquiry flow was steady, yet it hardly achieved any rate improvement.

As seen in previous months, the Aframax market in September continued to be oversupplied, with ships remaining idle due to a lack of cargoes and an increase in bunker prices, and this resulted in daily earnings reaching zero in some cases. Aframax saw the weakest performance this month among the dirty sectors. Aframax spot freight rates declined on all reported routes in September, with the exception of the Indonesia-to-East route, which increased by 12.2% from August to average WS101 points, offsetting the drops seen on other routes. Annually, this reflected an increase of 10%. The Caribbean-to-US East Coast fell by 4.3% in September to average WS89 points, despite a fair amount of activity and a reasonable number of inquiries. However, freight rates did not improve, even though the ship list was shorter by the end of September as some vessels were cleared, in addition to the fact that the influence of the hurricane season had been totally absorbed. Rates seen for Aframax in the Caribbean have reached their lowest level in 2012 so far. The Mediterranean to Mediterranean route saw limited inquiries and weak Aframax demand in general. Even the increase in activity in the third week of September had no real tangible effect on rates in the Mediterranean area. Aframax saw less demand to load from Primorsk, due to scheduled maintenance in mid-September.

Nikos Roussanoglou, Hellenic Shipping News Worldwide




Saturday, October 6, 2012

New Merchant Navy Law to enter into force in Angola

05 Oct 12 - 19:52
On 27 October 2012 o regulate all maritime and port activities
Ports2.jpgA new Merchant Navy Law, which seems to regulate all maritime and port activities in a consistent manner, will enter into force in Angola on 27 October 2012.
Among others, the Merchant Navy Law will govern the following matters:
  • navigational, technical and security rules applicable to all vessels operating in Angola;
  • registration duties and procedures for national and foreign vessels calling in Angolan ports;
  • licensing and other requirements applicable to marine- and port-related activities, including commercial activities carried out by ship owners and shipping agents; and
  • port administration rules and the legal framework applicable to activities carried out there.
Source: GAC Hot Port News Bulletin, www.gac.com/hpn

Sulphur Limit Bunker Dispute in port of Rotterdam

05 Oct 12 - 18:54
Vessel detained for breaching the North Sea SECA regulations
UK-pi-logo.jpgThe UK P&I Club has been made aware of a case concerning an entered vessel which was detained for breaching the North Sea SECA regulations despite receiving bunkers which appeared, according to the bunker delivery note, of being within the required limits.
An entered vessel was detained recently in the port of Rotterdam for burning fuel in the North Sea SECA which had a higher than regulated amount of Sulphur.  The bunker fuel in question was supplied to the vessel by a bunker supplier in a North African port prior to arrival in Rotterdam.
The Dutch authorities carried out a port state inspection of the vessel, including an analysis of the bunker fuel on board.  The results of the fuel analysis found levels of sulphur in the bunker fuel to exceed those permitted under the North Sea SECA regulations.  The vessel was subsequently detained.
The vessel's owner protested the detention on the grounds that the vessel had been sold the bunker fuel under false documentation and sought to expunge the detention from the vessel's record.  The Dutch authorities refused to acknowledge the role of the bunker supplier and rejected the members appeal.
Bunker delivery notes are received in good faith and taken at face value however, in this particular case this has proven to be detrimental to the vessel.
The UK P&I Club would stress the importance of collecting and maintaining meticulous records of all bunker fuel received.  Recording and logging all bunker delivery notes for use in defending any future claims.  Additionally the proper and concise upkeep and maintenance of the Oil Record Book (ORB) is imperative.
For more information, click here
Source: The UK P&I Club

EU asks Greece for clarification on shipping tax system

05 Oct 12 - 19:05
2011.9.21- vessel.jpgThe European Commission asked Greece to clarify the workings of the tax system for its key shipping industry which is run by some of the wealthiest people in the bailed-out country.
"The commission is currently looking at the tonnage tax and has asked for details from Greece," the office of European Competition Commissioner Joaquin Almunia said.
The tax is levied on the tonnage a ship carries in place of a tax on the shippers' profits, reportedly to the great advantage of Greece's shippers and undercutting state income from one of the country's prize economic assets.
The system was set up in 1953 when the Greek shipping industry, one of the largest in the world, was rebuilding after World War II.
Greek press reports said earlier that the Commission request was driven by pressure from Germany whose shippers are losing market share.
The Commission denied that was the case, saying it was part of an investigation to ensure that competition rules on the shipping industry were being respected across Europe.
Greece has until October 30 to reply.
Greek firms control 16.2 percent of the world's "deadweight tonnage" shipping capacity, followed by Japan with 15.8 percent, with the industry accounting for around 6.0 percent of the country's economic output.
Source: AFP

Ship captain, crew members charged for alleged illegal oil bunkering

05 Oct 12 - 14:06
2011.8.25-vessel.jpgEconomic and Financial Crimes Commission, EFCC, yesterday, charged a ship captain, Musa Mohammed and four of his crew members, before a Federal High Court sitting in Lagos, on a four-count charge of alleged illegal dealings in petroleum products.
The accused persons, Captain Musa Mohammed, Otuagoma Freeborn, James Onubi, Hassan Adekunle, Gabriel Edet Inyang and Patrick Chinedu were arrested on board a vessel M.T Takoradi, with 942.200 litres of diesel without appropriate licence required under the Petroleum Act.
The 5th accused person, Gabriel Inyang, was, however, absent in court.
The matter is before Justice Okechukwu Okeke.
The accused pleaded not guilty to the charge. Thy were alleged to have, on January 26, 2012, been accosted aboard a vessel M.T Takoradi, within Nigerian territorial waters, with one million litres of diesel on board. The accused persons were unable to give a reasonable explanation about the source of the deisel and without any clearance by Nigerian Navy authorities in charge of authorising vessels conveying petroleum.
It was learnt that Navy personnel, upon suspicion that the vessel might have been involved in acts of illegal bunkering and economic sabotage, arrested and detained the vessel and crew on board.
The court, while adjourning the matter till October 11, 2012, ordered that the accused be remanded in prison custody.
Source: Vanguard

Shell Begins Beaufort Sea Drilling Off Alaska s North Coast

05 Oct 12 - 13:37


Beaufort drilling started Wednesday
2011.9.30- oil drilling.jpgShell Oil says it has begun exploratory drilling in the Beaufort Sea off Alaska's north coast as it continues to drill in the neighboring Chukchi Sea.
Shell Alaska spokesman Curtis Smith says Beaufort drilling started Wednesday after the end of an Alaska Native whale hunt.
Smith says the company hopes to drill until the seasonal Oct. 31 deadline.
Shell announced last month it would limit drilling this year to non-petroleum zones.
The company can't drill into those zones until its spill response barge is in place, and Smith says that won't happen this year.
A containment dome on the barge was damaged in tests last month.
Royal Dutch Shell PLC has spent $4.5 billion on Arctic offshore drilling, moving ahead in spurts to overcome court challenges and scrutiny.
Source: Huffington Post

Monday, September 17, 2012

Fighting Piracy Goes Awry With Killings of Fishermen

By Alan Katz - Sep 17, 2012 8:01 AM GMT+0400

The Nordic Fighter tanker was sailing south in the Red Sea under oppressive summer heat as Mohammed Ali Quanas headed west to catch kingfish on Aug. 3, 2011, the last day of his life.
Dressed in a blue t-shirt and a traditional Yemeni red patterned skirt, Quanas began cooking the evening meal for the seven other men in the narrow, rented skiff as the sun leaned toward the horizon. With the gap narrowing between the skiff and the massive black tanker, some 25 times the length and width of their red, white and blue motor boat, they say they curved away to the northwest to keep their usual distance from merchant vessels, as did two other fishing skiffs working nearby from their home port of Hodeidah, Yemen.
Hasan Abdullah Quanas, a Yemeni fisherman, stands at the prow of the fishing boat on which his nephew Mohammed Ali Quanas was killed by shots fired from the Nordic Fighter tanker in the Red Sea on Aug. 3, 2011. Photographer: Alan Katz/Bloomberg
Sept. 17 (Bloomberg) -- Bloomberg's Alan Katz reports on how Somali piracy has brought increased security to the Indian Ocean and unwarranted killings of Yemeni fishermen. (Source: Bloomberg)
The identity card of Mohammed Ali Quanas, one of at least half a dozen Yemeni fishermen to have been shot since 2010 by soldiers assigned to protect ships from piracy according to Yemeni government officials. Photographer: Alan Katz/Bloomberg
Fighting Piracy Goes Awry as Nations Fail to Acknowledge Killing
Through his fishing Mohammed Ali Quanas, who was about 38 years old when he died, fed his parents, wife and eight children, all under the age of 10, according to his widow, Najibah Ahmed Bahri, left. Photographer: Alan Katz/Bloomberg


From 500 meters (1,640 feet) away, gunshots erupted from the tanker toward Quanas’s skiff and its unarmed fishermen. Two rounds pierced the water on the motorboat’s starboard side, and a third slammed into Quanas’s face, just under his right eye, according to survivors on the boat and a Yemeni Coast Guard investigation. As the bullet came through the back of his neck, Quanas moaned, held out a hand, collapsed and died.
“He was killed while he was holding some dough for dinner,” says Quanas’s uncle, Hasan Abdullah Quanas, who was in the prow and saw his nephew fall. Hasan abandoned fishing after the shooting for fear that he too could become collateral damage in the increasingly violent fight to tame piracy on the high seas.

Having Nightmares

“I still have nightmares that someone is firing at me,” he says.
Russian soldiers aboard the Norwegian-flagged ship fired the bullets that August day, according to a report from a private security team that was also on the tanker. The soldiers had been temporarily assigned to the Nordic Fighter by their country’s navy to protect the vessel as part of a Russia-led convoy navigating toward the pirate-infested Gulf of Aden, which some 23,000 ships use to move goods between Europeand Asia annually. Yemen’s coast guard confirmed there were no weapons on Quanas’s boat, but one of the other boats had guns aboard that the fishermen were authorized to carry.
Quanas, who was about 38 when he died, is one of at least seven Yemeni fishermen who have been shot and among five killed since 2009 by soldiers assigned to deter pirates, according to records supplied by the Arabian Peninsula nation. The incidents remain publicly unreported and the shooters unprosecuted, officials say.
The deaths are the product of a sharp increase in the use of weapons to fight Indian Ocean piracy, which is estimated to cost up to $6.9 billion a year, combined with allegations of fear and recklessness by guards in distinguishing fishermen from pirates.

Inevitable Mistakes

“It’s inevitable that when you have people with guns who are disconnected from the sea and are afraid, and with a crew that is afraid, they will make mistakes,” says John Boreman, marine director for the International Association of Independent Tanker Owners (Intertanko), an industry trade group.
Navies from at least 22 countries have actively tried to counter Somali piracy since 2008, responding to distress calls, intercepting suspect vessels and escorting merchant ships through the Gulf of Aden.
Since last year, commercial ships have hired a fast-growing number of private armed guards as an added deterrent. About 30 percent of the ships that registered transits in August with the European Union’s Maritime Security Center - Horn of Africareported having armed security aboard, up from about 4 percent in Feb. 2011, the first month for which the center has data.

Wrongful Shootings

The cost of military and private guards added up to $1.8 billion-a-year spent to counter piracy in 2011, according to data fromOceans Beyond Piracy, a project of Broomfield, Colorado-based non-profit One Earth Future Foundation.
Boreman, who has tried to raise public awareness about the potential for wrongful shootings, hadn’t heard about the Nordic Fighter incident until informed by Bloomberg. He says the reluctance of ships and crews to report such cases makes documenting them difficult.
The Russian Navy denies responsibility for Quanas’s death, as does the company that owns the Nordic Fighter.
Vice Admiral Viktor Chirkov, commander-in-chief of the Russian Navy, said in an interview in St. Petersburg that his guards have successfully protected cargo ships from pirates and he knew of no incidents involving deaths of fishermen.
Of the shooting on Quanas’s boat, he says, “I’m not sure they were peaceful civilians.” He declined further comment. Navy spokesman Major Vladimir Anikin said he wouldn’t answer other questions.

Shipper Denials

Herbjorn Hansson, chairman and chief executive officer of Hamilton, Bermuda-based Nordic American Tankers Ltd. (NAT), which owns the Nordic Fighter, said he was unaware of any such incident when Bloomberg News reached him by phone.
“I strongly repudiate any suggestion that people on board our ships have ever killed anyone,” Hansson wrote in a follow- up e-mail.
Norway’s Maritime Authority notified the company that Yemen had implicated the ship in the shooting, according to a Sept. 26, 2011, letter obtained by Bloomberg News.
Asked about the letter, Hansson did not address it in an e- mail reply to Bloomberg News, saying only that his company, which is traded on the New York Stock Exchange, always acts responsibly and has no issues with any flag or port state, or with any national or international agencies.
Commander Shugaa Almahdi, head of operations at the Yemen coast guard, says there is no doubt where the shots came from.

No Investigation

“There was only one ship passing in that area at that time and it was that ship,” Almahdi says. Multiple fishermen aboard the three boats witnessed the incident, he added.
Generally, incidents in international waters are governed by laws of a ship’s flag state, says Christoph Hasche, managing partner of Fleet Hamburg, a law firm specialized in international shipping and trade.
Prosecutors in Norway decided against opening an investigation, in part because of the hurdles in taking soldiers to trial, says Siri Frigaard, chief public prosecutor and director of the Norwegian National Authority for Prosecution of Organized and Other Serious Crime. She said information in the file indicated the Russian soldiers fired their weapons, but declined to provide other details, citing Norwegian police secrecy laws.

Reduced Attacks

Since 2008, gangs of Somali pirates in the failed state on the eastern coast of Africa have carried out more than 800 attacks on ships, from private yachts to oil super tankers, according to the International Association of Dry Cargo Shippers (Intercargo), an industry group representing global owners of dry cargo vessels. It says pirates hijacked more than 170 of those vessels, taking hostage some 3,400 seafarers and killing 25.
The vast expansion in the use of lethal force for protection in the Indian Ocean is having the intended impact. The number of reported Somali pirate attacks from January through August 2012 fell to 70 from 191 a year earlier, according to the International Maritime Bureau, and there have been none since July 27. (To see interactive graphic, click here.)
“The presence of armed guards, whether national armed forces or private security on board merchant ships, has clearly reduced the number of successful pirate attacks significantly,” saysChris Bellamy, director of the Greenwich Maritime Institute. He added that rules on the use of force or engagement vary widely both among countries and private companies. “It could be that on this occasion the Russians were out of control.”

Special Caution

The more than 2.3 million fishermen who work along the Indian Ocean coastline means that guards must be especially cautious in assessing suspicious vessels before opening fire, says Rhynhardt Berrange, managing director of Dubai-based Global Maritime Security Solutions, which provides unarmed guards to the Abu Dhabi merchant fleet and is getting into the armed guard business as well by his clients’ request. Because many soldiers and private guards don’t know how to identify specific pirate tactics, they often mistake fishing skiffs for pirate boats, triggering unwarranted shootings, Berrange says.
“The guys don’t know what to look for so it’s easier for them just to shoot,” he says.
In Yemen, which sits across the Gulf of Aden from Somalia, the number of reported cases of shootings and harassment of fishermen is mounting.

Other Victims

Besides Quanas, unidentified international naval forces killed four Yemeni fishermen from theHadhramaut region that borders the Gulf of Aden in 2009 and 2010, according to a report by the regional fish cooperative union. Indian naval forces wounded two fishermen in separate incidents last September, according to coast guard reports that cite victim testimony, supplied by Yemen’s anti-piracy reporting center in the capital of Sana’a. One fisherman was shot in the knees and the other in the abdomen. Yemen has asked the Indian government to investigate. The spokesman for the Indian defense ministry, Sitanshu Kar, did not respond to more than two dozen requests for comment.
The Yemen coast guard and local governments have recorded reports of at least five other attacks by international ships since 2010 and allegations by 53 fishermen since 2009 citing harassment by the Indian or Russian navies. The fishermen’s union did not respond to numerous phone messages left at its office.
Yemeni fishermen aren’t the only ones who have been targeted by guards protecting ships from pirates.

No Right

Three Indian fishermen were shot and killed in two incidents this year. Two from the southern state of Kerala died in February when Italian marines allegedly fired their weapons from the tanker Enrica Lexie. Two marines are in India awaiting trial for the killings.
Italy says that the court has no right to try the soldiers because the incident took place in international waters outside of India’s jurisdiction and because the men are active-duty military personnel, according to court records Italy filed in India.
“Such a view would mean that any day, any passing-by ship can simply shoot and kill, at its will, fishermen engaged in earning their livelihood; and then get away with its act on the ground that it happened beyond the territorial waters of the coastal state,” P.S. Gopinathan, a Kerala High Court judge wrote in a May 29 judgment allowing the case to go forward. “Such a view will not merely be a bad precedent, but a grossly unjust one.”

New Parameters

Italy has appealed to India’s supreme court. The case could establish new parameters for prosecuting shootings that occur in international waters.
Another Indian fisherman died in July when soldiers on the USNS Rappahannock, a U.S. naval supply ship, opened fire on a vessel off the coast of Dubai. The U.S. ambassador to India has promised a full investigation into the shooting. The U.S. Navy says the boat ignored warnings as it raced toward the Rappahannock, and that results of its investigation will be available once it’s completed, Lt. Greg Raelson, a spokesman, wrote in an e-mail.
Meanwhile, Oman, Yemen’s neighbour at the tip of the Arabian peninsula, has complained that armed guards in the region are behind multiple shootings of its fishermen, in what’s referred to as “drive-by shootings,” according to Capt. Philip Haslam, chief of staff of the European Union’s anti-piracy naval operation. Haslam declined to provide any further details.
Omani coast guard officials did not respond to numerous requests for comment.

Hearing Stories

“We started hearing these stories about a year ago,” says Jon Huggins, director of Oceans Beyond Piracy. Huggins, who spent 22 years in the U.S. Navy, says the lack of reliable reporting makes it impossible to know just how many fishermen have been killed in these confrontations. “Piracy and the high- risk area have pushed a lot of merchant vessels close to shore or close to fishing areas, so this is bound to happen more and more.”
Documenting cases is problematic. Most of the reports supplied by Yemen’s transport and fisheries’ ministries, as well as by its coast guard, depend exclusively on fishermen’s complaints to local police or unions. In Quanas’s case, no single account chronicles the incident from start to finish and there are some discrepancies on the trajectories of the fishing boats.

Eyewitness Testimony

Yemeni officials relied on eyewitness testimony from fishermen in Quanas’s boat and two nearby boats for their protest to Norway.
The ship’s on-board private security team from Mahe, Seychelles-based Gulf of Aden Group Transits Ltd. confirmed in a report that the Russian detail fired its weapons. The report included no information about anyone being hit.
A separate account reported by Danish consulting company Risk Intelligence’s maritime security threat monitor, MaRisk, described ship security firing on a group of three skiffs on Aug. 3, 2011, after spotting weapons in one of the boats. MaRisk would not disclose the source of its information.
Quanas’s uncle Hasan says there were no weapons in his boat. One of the other skiffs had two AK-47s on board, and the fishermen were authorized to have them, according to Almahdi, of the Yemen coast guard. He says it is typical for Yemeni fishermen to register firearms, which they bring or leave behind depending on whether they expect to fish in pirate-infested waters.

Fishermen Weapons

“They have AK-47s like we have iPhones and Blackberries,” says Nick Davis, CEO of Gulf of Aden Group Transits. “That doesn’t make them pirates.”
The Yemen coast guard concluded that all three skiffs had turned away from the ship before the shooting began; that it was clear they were fishing boats; and none were carrying typical pirate equipment, such as ladders with hooks for boarding ships.
The Nordic Fighter was heading toward pirate-infested waters between Yemen and Somalia on the day Quanas was killed. It had joined the Russian Navy-led convoy, Davis says, one of a series of group transits headed by navies in the region to help protect about $950 billion in trade shipped each year through the Gulf of Aden. The incident took place at the northern end of the pirate zone, where attacks are less frequent. Three were confirmed in 2010 and 2011 within 30 nautical miles of the Quanas shooting site, including one in which pirates boarded a merchant vessel eight days after Quanas was shot, according to Risk Intelligence.

Rifle Alerts

To alert pirates and fishermen to their presence, the detachment of six Russian soldiers aboard the Nordic Fighter “randomly” fired their rifles every two to four hours, the Gulf of Aden Transit report said, citing the ship’s captain. The private guards were hired to accompany the ship to Sri Lanka, Davis says.
A few hours after boarding the Nordic Fighter in the lower Red Sea, the private security team leader heard three to five shots fired from the bridge wing, he wrote in the report. Surfacing on deck, he observed two skiffs. One stopped, but another continued to approach, the report says. The Russian team then fired another four to six shots toward the boat, according to the report.
“I cannot be exact if the shots were at the skiff or just as warning shots near to its location,” the report says, finishing with the acronym NFTR, or nothing further to report. Davis declined to identify the team leader who wrote the report.

Dinnertime Death

Quanas sat in front of the boat’s mottled white ice chest, preparing to cook dough on the boat’s camp stove. The afternoon sun dipped toward the horizon as he and Ali Abdul Esmail Badi discussed the meal to come and their fishing plan for the evening, when the kingfish typically bite. That’s when Badi heard the gunshots and saw Quanas collapse.
Badi recalls that day nearly a year later, under a blazing 36 degree-Celsius (97 degree-Fahrenheit) July sun in Hodeidah harbor as he hauls blocks of ice aboard the same boat in preparation for another fishing trip.
“He reached out to me, here, and moaned as he fell over,” Badi says, placing himself on the weathered bench where the two were sitting and putting a hand to his shoulder as Quanas had. “We called out ‘Mohammed, Mohammed’ and then he died.”
Quanas’s uncle says that soon after, a launch carrying about 10 soldiers and a translator from a Russian naval ship approached the fishing boat and the two other skiffs, which by then had joined it. The soldiers boarded and began hitting the fishermen with the butts of their weapons, according to Hasan, Badi and Walid Abdul Rahman, another fisherman with them that day. The Russian soldiers struck Quanas’s body with their weapons to make sure he was dead, they say.

No Pirates

Searching the boat and icebox, apparently for weapons, the soldiers threw overboard flour, fish, ice and spare parts, Hasan says. As he accompanied one Russian back to the military boat, the marine told him they’d come to the fishing vessel after receiving a report that the Nordic Fighter had fired on pirates, Hasan says.
“I told them there were no pirates in that area,” Hasan says. “I’ve been fishing there for 20 years and haven’t ever run into any pirates.”
Aboard the military boat, the marine picked up the telephone and made a call in Russian, Hasan says. After a few minutes, he hung up and through the translator said, “make sure you report that it wasn’t us who shot him,” Hasan said. Then he returned Hasan to the fishing boat and the soldiers left, Hasan says.

Terrifying Return

The fishermen say they motored straight home, terrified of encountering another armed tanker. They arrived back in Hodeidah about 3 a.m. and went directly to port police to file their statements.
Within hours, Yemen’s interior ministry began seeking answers, says Davis.
He says he was unaware anyone had been shot until he was called by a contact from Djibouti, an East African nation that also borders the Gulf of Aden. The caller had received word that Yemen’s Coast Guard was angry about the incident and considered Davis responsible for the death since his security team was aboard.
“Suddenly I was up for corporate manslaughter,” Davis says. He immediately had his team leader write a report. Davis says he filed the report about six hours later to Bruno Pardigon, director of Djibouti Maritime Security Services, and has heard nothing more. Pardigon says he doesn’t remember receiving the report, and that because he wasn’t in touch with the Yemeni coast guard, wouldn’t have passed it along to them had he received it.

Hugging Shore

“Security teams must understand the rules of engagement, how to deal with suspicious targets, not to shoot directly,” Almahdi says. “We are really suffering from this phenomenon.”
Yemeni fishermen have hugged closer to shore following Quanas’s death and other pirate incidents in the Gulf of Aden, says Capt. Ali Mohamed Alsubhi, Yemen’s deputy minister for maritime affairs. The result is $150 million lost by Yemeni fisheries in 2011 as the boats work waters with fewer fish, he says. About 83,000 Yemenis earn a living from small-scale fishing. More than half of the country lives below the poverty line, according to the World Bank.
“This is terrible for us,” Alsubhi says. “We can’t stop the ship and we can’t investigate these incidents all on our own.”

No Choice

Yemen has asked Norway to compensate Quanas’s family. It hasn’t received a response, Alsubhi says.
Badi, the fisherman who was beside Quanas when he was shot, stayed home for a month afterward, and then felt he had no choice but to return to the sea. “This is how we make a living,” he says. “We have to go far out. There are no fish close to the shore.”
Quanas’s dreams for his family died with him. He had been a fisherman for nearly 20 years, plying the Red Sea waters and going down through the Bab-el Mandeb straight into the Gulf of Aden when the fishing led him there, the same route merchant ships take when they steam from Europe to Asia. Through his fishing Quanas fed his parents, wife and eight children all under the age of 10, according to his 30-year-old widow, Najibah Ahmed Bahri. She rode 170 kilometers from her village with Hasan and her children piled into a white rented pickup truck to describe how their lives have changed.

Disappearing Dreams

Quanas used to bring home between 80,000 rials ($372) and 150,000 rials a month from fishing, depending on his luck and the season, says Hasan, who would get an equal cut of any profit. Hasan, who now helps clean fish and does other odd jobs around the port, brings back less than half that amount today.
Barhi speaks softly, in short phrases, hidden behind a full black veil as she describes her husband’s goal of saving to build a brick house big enough for the family, with an extra room for his parents. That’s gone forever. Instead the family remains in their straw and mud shack, relying on relatives and charity for food and clothing.
“The situation is miserable,” Bahri says as her youngest daughter wriggles on her lap in a ruffled pink hand-me-down dress purchased when the family had more means. “Who will support us? There is no future for me. All I can hope is to find some charity people to help us.”
A year after the shooting, the surviving fishermen say they fear nothing will ever be done about Quanas’s death.
“These people are killers; they killed our friend,” says Rahman, Quanas’s fellow fisherman.
Rahman puts his arm around his stick-thin belly. Still scared and sick over the death, he nevertheless turns to prepare the boat for sailing out to sea again. He has a wife and three daughters to feed and no more time to worry.
To contact the reporter on this story: Alan Katz in Paris at akatz5@bloomberg.net.
To contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.net