Pirate Attacks Down as Private Maritime Security Business Booms

Private security firms see a business opportunity in Somali pirate waters.

Sept. 7, 2012— -- In the Indian Ocean, home to some of the world's busiest shipping lanes, a war rages between Somali pirates, who have attacked 800 ships and taken 3,400 hostages in the past four years, and private security firms, some run by Americans, that are deploying an increasing number of heavily armed guards aboard those ships.

For now, at least, the security firms and their armed guards appear to be winning the war -- and earning millions.

Since 2008, pirates operating off East Africa have successfully hijacked 170 ships, costing the global economy as much as $12 billion per year, killing dozens of hostages and holding the ships and their crews for ransoms of up to $9.5 million. At least 11 vessels and 188 hostages are still being held by pirates, and a hostage held for two years was executed just a week ago when his ship's owners failed to pay his ransom quickly enough.

However, in the past two years, the pirates have run into trouble. While the number of attempted pirate attacks peaked in 2011, according to the International Maritime Bureau, the number of successful attacks began to fall, from 49 ships in 2010 to 28 ships in 2011. This year, the number of attempts has plunged as well. The first six months of 2012 saw a 60 percent reduction in attacks, down to 69 incidents from 163 incidents during the same period in 2011.

In fact, since June, there has not been one successful pirate attack in the waters off East Africa, marking the longest stretch of peaceful transit through the region since piracy began to mount a decade ago .

The reasons, according to observers, are the increased presence of international naval vessels -- and the stepped-up use of armed guards, who have successfully rebuffed every attack launched against them.

"To date," said Assistant Secretary of State Andrew Shapiro, "not a single ship with privately contracted armed security personnel aboard has been pirated. Not one."

Shipping companies are now spending close to $1 billion dollars per year on private armed guards, up from a mere blip in 2008, according to Oceans Beyond Piracy, a project of Colorado-based non-profit One Earth Future Foundation. About 50 percent of commercial ships transiting across the Indian Ocean now have armed guards.

With so much money to be made, companies from all over the world, including the United States, are rushing into the anti-piracy business, often drawing from the ranks of the military's special forces. But the use of armed guards is not without controversy, with critics questioning the introduction of yet more weaponry into an already violent region.

About a dozen of the private security firms now active in the region are American, including Trident Group, Inc., a Virginia Beach-based company named after the Navy SEAL symbol.

In a video shot by Trident on March 25, 2011, Somali pirates are seen racing across the surface of the Indian Ocean to the Avocet, an American shipping vessel. As the pirates approach, Trident armed guards are told to fire warning shots. A massive burst of gunfire erupts. The skiff, its driver perhaps hit or killed, crashes into the side of the Avocet. A second skiff approaches the ship, and the firing continues. By the time the incident ends, an unknown number of pirates may have been injured or killed.

Tom Rothrauff, president of Trident, is a former Navy SEAL -- and so are all of the armed guards who work for him. At their home base in Virginia Beach, Rothrauff has his men train on a full mock-up of a ship that is complete with warning sirens, lights and the ladders pirates use to board.

He takes his recruits out on the water in the Atlantic to make sure their shooting skills are sharp. Rothrauff said not only are the Somali pirates' arsenals "very sophisticated," with rocket-propelled grenades (RPGs) and AK-47 machine guns, "they're getting better."

"They can terrorize the crew into complete submission," he said. "They are good at what they do. They are skilled and they're getting trained so it's not a cake walk. It's not a joke."

Somalia is impoverished, and job opportunities are almost nonexistent, which is why so many young men turn to piracy. One incarcerated pirate recently told the BBC that the practice is just a form of taxation.

"We catch a ship, tax some taxes, and then release them without harming or killing them," he said. "There's nothing wrong with that."

But that's not true. Many pirate hostages are brutalized, starved, forced to undergo amputations and some are killed.

"I want Americans to know that it's out there, it's real," said former Marine Joe Alvarado, now a team leader for ESPADA Logistics and Security Group, Inc., a San Antonio-based company that trains its anti-piracy recruits off the coast of Miami. "It's not pirates of the Caribbean. It's no longer guys with sabers. It's real life. It's a real threat."

Kevin Doherty, head of Nexus Consulting, an Alexandria, Virginia-based armed guard company, said Somali pirate groups have over $400 million invested in their operations.

"In 2009, we would see a skiff with one engine, three or four pirates, and they may have an AK-47," he said. "We're certainly starting to see 10 to 15 skiffs approaching ships now with 10 to 15 armed pirates with AKs and RPGs."

But Rothrauff of Trident points out that Somali pirates have never successfully hijacked a ship protected by armed guards, which he said makes the pirates furious.

"They are actively trying to work out different options and different ways of getting around guys like us," he said.

While the U.S. Coast Guard has guidelines for the use of force by American ships, there are no international laws or set standards that govern the maritime security industry in terms of reporting incidents and use of force.

"There is regulation," said Rothrauff. "Mostly for Americans, it's self-regulation."

One U.S. official, who asked not to be named, called some of these security firms "rogue companies" that are hard to govern overseas.

In a statement to ABC News, officials at the U.S. Department of State said, "The United States supports the shipping industry's responsible use of privately contracted armed security personnel, along with the broad use of industry-developed best management practices. We will continue to closely follow developments in this growing field and actively engage with industry to enact strong industry-wide standards of professional conduct for privately contracted armed security personnel safeguarding commercial shipping."

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But the members of the U.N.'s Monitoring Group for Somalia and Eritrea sent a letter to the U.N. Security Council in June expressing concern that the private companies were flooding the Horn of Africa with weapons.

"The unmonitored and largely unregulated activities of Private Maritime Security Copmanies (PMSCs) off the coast of Somalia," said the letter, "may represent a new potential channel for the flow of arms and ammunition into the region."

The Monitoring Group said the firms had already expanded their business to include the leasing of arms, had brought 7,000 new weapons into the area, and needed to be subject to international regulation.

Doherty of Nexus Consulting said he still hopes for more answers and transparency in the maritime security world.

"Life is precious and if there are folks out there using excessive force they need to be known, they need to be accountable," he said. "It would be nice for a government agency to step up and review this and say this is just or isn't. Thus far we haven't seen that happen."

ABC News' Lauren Effron contributed to this report

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