1. Political Dynamics of Maritime Security
Good morning Admirals, I am Jim Bergeron, Political Advisor to VADM Frank Pandolfe in his hat as Commander Striking Force NATO. I am speaking in a personal capacity.
NMIOTC Conference
26-28 June 2012
James Henry Bergeron (Political Advisor, Striking Force NATO)
(Comments are personal and do not necessarily reflect US or NATO policy) 1 1 1

2. Topics Political Dimension of MSO The Global Financial Crunch
Economic Pressure on Defence Spending.
Reduction in Naval Forces
Is there a 'Pacific Pivot'?
Greater Policy Emphasis on Sea-Air Combat and Maritime Security
A Study: Somali Piracy
Smart Defence in Maritime Security: Trends and Options 2 2

3. 'Pure' Political Concerns in MSO?
National Sovereignty, enforcement of the Rule of Law
Naval Power Status/Naval Heritage
Bargaining power in international fora.
Linkage to larger strategic objectives (e.g. resolution of Somali conflict)
Pressure from shipping, law-enforcement, hostage interests groups.
Concerns over violation on international or human rights law in dealing with maritime security challenges on the high seas.
Domestic opposition to trying or incarcerating pirates at home
But in practice INSEPARABLE from financial and economic, as well as legal and humanitarian concerns – a complex problem 3 3

4. Finance: The Global Debt Context4 4

5. 5 5

6. The Decline in Capital Ships6 6

7. Budget: Impact on Defence Spending7 7

8. But Air-Sea Capabilities are Central to Policy8 8 8

9. Is there a Pacific Pivot?
- 80,000 US Army total
- 22,000 USMC total
- 8 SBCTs (2 from Europe, 6 from CONUS)
+ 1 rotational brigade to Europe
troops in Darwin (eventually)
+ 4 Aegis to Europe
+ 4 LCS to PACOM (rotational) 9 9

10. Just Another Day for Global Shipping
22,000 ships per year transit the Gulf of Aden
Note the transit route around the Cape – this is partly due to piracy with estimated loss of $3 billion/year

12. The International Response
Jun 08 – UNSCR 1816
Oct 08 - EU announces Op Atalanta
Oct-Dec 08 - NATO offers Op Allied Provider to cover gap until Atalanta begins
Dec 08 - Op Atalanta Commences
Mar-Aug 09 NATO Op Allied Protector
Jan 09 - US establishes Task Force 151; Contact Group convenes (CGPCS), Djibouti Code of Conduct agreed
Sep 09: NATO Op Ocean Shield
Russia, Japan, Singapore, Malaysia, India, China, Iran launch independent missions 12 12 12

13. 2011 – The Embrace of PASGs
2 Mar – Naval Guards Ltd rescue of MV Capricorn
20 May – IMO interim guidance on use of PASGs
22 Aug – BMP4 released, including guidance on use of citadels and armed security.
30 Oct – UK allows its flagged vessels to be licensed to carry PASGs
04 Nov – US State Dept engages governments in support of PASGs for HOA shipping. 13 13 13

14. The Results: Pirate Performance14 14 14

17. The Trends in
1. Use of minimum (deadly) force to reclaim pirated vessels now standard if crew is safe and navigation not threatened
2. Increasing costs and insurance premiums, now near the tipping point; PASGS now increasingly accepted
3. Shift to Arabian Sea, unorthodox tactics (crew placed on dhows, siezure of Fairchem Bogey in Salalah Port, Oman
4. Substantial decline in pirate success rate: effective naval tactics against mother ships, close monitoring of the shore, BMP and PASGS
5. Challenges of an austere economic climate. 17 17 17

18. Politico-Legal Issues for international forces
The Authority to deploy naval forces to combat crime on the high seas: national internal legal question
The authority to exercise universal jurisdiction – limited by some national laws
The definition and nature of the force used: military or constabulary paradigms?
The questions of arrest and detention by naval forces
Trial and Incarceration – willingness to incarcerate is the largest problem. 18 18 18

19. Politico-Legal Issues with PASGs
1. C2 relationship with Master (IMO clarified 2012)
2. Flag State, Shipowner and Union voices in authorisation for PASGs.
3. Requirements of all states where ship is within national jurisdiction, including contiguous zone (24nm), territorial waters (12mn) and in port. e.g. Suez transit.
4. liability for injury to crew or innocent third parties. Choice of law and forum issues.
5. Impact on insurance classifications- war risks clauses; potential impact on innocent passage 19 19 19

20. Political Dynamics of Land Operations
March 2012 – EU decides to take action onland against pirate groups. May strikes from air to the beach, no boots on ground.
- Adequate ISR/Intel to prevent 'civilian' collateral damage. OUP established a high standard for CDE=0 planning.
- Danger of entrapment – boats and supplies placed near non-pirate buildings or use of innocents as shields.
- Retaliation and escalation risks.
- Chance to disrupt the business model.
Maritime security cooperation appears to make such perfect sense at first glance. The basic argument is well understood and often rehearsed: the safety and security of littoral nations, and indirectly all nations, are dependent on the maritime domain. Piracy, trafficking of drugs, contraband and persons, terrorist use of the seas and the transport of WMD challenge the vital interests of all states. All elements of national power must be fused, so the saying goes, to meet this challenge. Further, no nation can combat this global and diffuse threat alone, thus international cooperation is critical. Information sharing, a common operational picture, interoperability in sensor and processing systems, joint patrols, reciprocal rights of hot pursuit, extradition arrangements all appear to be very basic common sense. And indeed there have been a number of important cooperative developments such as the US Maritime Domain Awareness (MDA) initiative, US Coast Guard Bluewater programme, the Container Security Initiative, the Proliferation Security Initiative (PSI), NATO’s Operation Active Endeavour, Operation Active Endeavour’s CTF150 in the Arabian Sea, and tri-nation maritime patrols in the Straits of Malacca. 20

21. How Important are the Costs?
Ransom $1-13M or more, averaging $4-6M per vessel
Transaction cost of paying the ransom - $500K
50-60 day negotiation period, ship not earning freight
Minimal crew maintenance – major machinery needs immediate repair; cost and further delay
Risk of liability for material breach of contract regarding the cargo
Conclusion: de minimis political concern EXCEPT if in the wrong hands 21

22. But Total Losses from Piracy $7-12 billion per year
Ransoms – avg $148 million ($238M 2010)
Insurance Premiums - $3.2B max est
Current Re-Routing Ships - $2.4B – 3.0B
Security Equipment - $2.5B max est
Naval Forces - $2.0B
Prosecutions - $31M
Anti-Piracy Organisations - $19.5M
Cost to Regional Economies - $1.25B
Approximately 10% of shipping through GoA is re-routed; w/out naval protection that would be 30% = est. $30B welfare loss. This is a political concern.
$2B naval investment is great value – but how to solve the free rider problem? 22 22 22

23. The Politics of Insurance
December 2010 – Lloyds JWC expanded the High Risk Area to the West Coast of India at 78E.
Insurance rates rose up to 300x ($500 to $150K per voyage)
3 day cover through GoA insufficient – 10 day cover now required.
Pre-2010 total cost $3.33B; in expanded zone $4.2B, total annual insurance costs now $7.5B/yr
Based on 29 attacks and 17 hijacks off India in Down to 12 attacks and 1 hijack as of June 11.
India is lobbying Lloyds to reduce the HRZ. 23 23 23

25. Maritime Security in an age of Austerity
Likely that naval efforts in MSO will decline under pressure of costs.
Naval power must be preserved for other core naval missions.
Navies must leverage the global distributed welfare gains they produce to fund the counter-piracy effort
Greater partnership with commercial shipping will be required
Legal redress follows governance in Somalia – first signs?
The navies need right-sized assets cf. Quest incident: CVN Enterprise, Aegis CG and 2 Aegis DDG's. Ultimate example of the asymmetry of the piracy phenomenon.
Shift efforts to following the money...
Act against the financiers and ringleaders (not easy) 25 25

26. ''Smart Defence' Options for Maritime Security?
DO LESS: Lower the level of ambition (globally): define and focus on core tasks
DO SMARTER: Leverage shared C4ISR to allow further reductions in deployed naval forces
POOL ASSETS: Greater commitment to SNMGs, ATALANTA, TF151. Rationalise exercises and training.
POOL RESOURCES: Explore common funding and global funding possibilities – leverage the welfare loss that an ending of MSO would trigger.
SPECIALISE: Explore greater role specialisation, linked to binding commitments.
MAKE THE CASE: Ensure governments are fully aware of the policy limitations imposed by austere operating and procurement budgets. 26 26

27. Discussion 27 27