Dryad: Indian Ocean High Risk Area Needs Rethinking
Maritime security consultant Dryad Global has released its annual analysis of worldwide maritime security incidents, suggesting that the significant security costs for transits in the Indian Ocean and through the Red Sea are no longer justified.
Despite commanding the largest premiums and associated costs of armed guards, the Indian Ocean ranks fourth in maritime crime incidents with less than one fifth of incidents of the most active region: West Africa.
Excluding geo-political events, in 2019, the Indian Ocean saw a 73 percent fall in maritime security incidents compared to 2018 and a 83 percent fall compared to 2017. In 2019, there were 16 maritime incidents in the Indian Ocean, 11 of which were outside the High Risk Area (HRA). Seven of these were geopolitical in nature and thus unlikely to be mitigated by Best Management Practices to Deter Piracy (BMP) guidelines. Four of the incidents occurred within ports.
The definition of the HRA has had some unintended consequences, with some States feeling that they have been subject to an unfair encroachment into their Economic Exclusion Zones, significantly increased shipping costs.
Contributory factors to the surge in Indian Ocean piracy were systemic influences emanating from East Africa; principally, the failure of Somalia as a functioning state and the subsequent exploitation of its territorial waters by outside parties. The view that Somalia still represents a viable risk that may precipitate a return to widespread piracy fundamentally misunderstands the complexity of risk and the forces that gave rise to piracy in the Indian Ocean, says Dryad Global.
It says the maritime industry can operate in the Indian Ocean with security and reduced cost by continuing the positive trend of effective implementation of BMP supported by investment in multi-national coordination of naval assets and capacity building of littoral states. “We believe it is far better to define the risk individually than apply the same risk profile to all operations and have to bear the costs associated with slow-to-evolve or legacy risk and insurance premium models.”
However, this year rival powers involved in the Yemen conflict may seek to demonstrate their influence in the Bab-El-Mandeb Strait and the Strait of Hormuz. Dryad Global expects the Bab-El-Mandeb Strait to continue to be a lower risk area than the Strait of Hormuz.
“Operational stability and security affecting commercial shipping in the region will largely depend upon the future direction of U.S.-Iranian relations,” says Dryad Global. “During an upcoming election cycle, it is likely that the Trump administration will not have the operating capacity, or indeed the will, to adopt as strong a posture within the region as has been seen previously. Simultaneously, seeking an external threat to engender voters or a significant foreign policy victory, could embolden Trump to escalate sanctions on Iran. A conclusion to be drawn is; the more that Trump is likely to secure a second term, the less likely he is to seek to escalate tensions in the Persian Gulf.”
Dryad Maritime says Saudi-flagged vessels face the greatest risk.