2. © Chartworld Shipping Corporation Sep 2012 CHARTWORLD SHIPPING CORPORATION FOR THE FRATERNITY OF ATHENIAN HYDRIOTS PIRACY PRESENTATION HYDRA 15 th September 2012 CONFIDENTIAL

3. © Chartworld Shipping Corporation Sep 2012 The face of modern Somali pirates Russian LMG AK 47 (left) and RPG (right)

4. © Chartworld Shipping Corporation Sep 2012

5. © Chartworld Shipping Corporation Sep 2012 Piracy At A Glance (Statistics) 2005-2011  Vessels attacked worldwide (2010) (nos: 480)  Vessels hijacked worldwide (2010) (nos: 53)  Vessels hijacked worldwide (2011) (nos: )  Crew members held worldwide (2010) (1181+, of whom 8 were killed). Family members affected ashore (say) 3,500+ ?  Ransoms paid (2009) (US$ 177M)  Ransoms paid (2010)(US$ 238M)  Ransoms paid (2009+2010) (US$ 415M)  2005 Average ransom US$300,000  2005 Average negotiation time: 6 weeks  2010 Average ransom US$5,400,000  2010 Average negotiation time: 5 months  2011 Average ransom US$ 5-7M (more if laden VLCC & then double digits)  2011 Average negotiation time: 7 months

6. © Chartworld Shipping Corporation Sep 2012 Piracy At A Glance (2011 & Beyond)  “Samho Dream” (VLCC/laden) ransom US$9.5M  “Samho Dream” detained 216 days (4 April-6 Nov 2010)  Worldwide costs (ransoms, naval presence) (estimated) US$ 2 billion pa  Cost to world trade of re-routeing/extra fuel (estimated) US$2.3-3 bn pa  Somalia/ Indian Ocean/ Gulf of Aden (escalation of violence/armed interventions/ shootings eg “Beluga Nomination” & “Samho Jewelry”: Jan/Feb 2011)  Nigeria/ West Africa (violence & removal ashore of crew, cargo theft)  Indonesia/ Malacca Strait (ongoing)

7. © Chartworld Shipping Corporation Sep 2012 “Beluga Nomination” “Samho Jewelry” Some Vessels Attacked off Somalia

8. © Chartworld Shipping Corporation Sep 2012 Typical Pirate Land Bases in Somalia

9. Somalia Map (Pirates’ Strongholds)  Eyl  Hobyo  Harardhere  Political situation  New elections (impact?)  Al Shabab (politics & terrorism)  Monsoon & “hunting” seasons © Chartworld Shipping Corporation Sep 2012

10. © Chartworld Shipping Corporation Sep 2012 Pirate Equipment (Somalia) Pirate Equipment (Somalia)  Skiffs  Ladders/ Grappling Ropes (speed of ascent)  Outboard Motors  Khatt (narcotic chew)

11. © Chartworld Shipping Corporation Sep 2012 Pirate Equipment (Somalia) Pirate Equipment (Somalia)  2010/2011 (change of tactics)  Mother Ships (different types & sizes

12. © Chartworld Shipping Corporation Sep 2012 Piracy & Chartworld (Somalia) Capt Stefanos (2008) Piracy & Chartworld (Somalia) Capt Stefanos (2008)

13. © Chartworld Shipping Corporation Sep 2012 Piracy And Chartworld (Somalia) Capt Stefanos (2008) Piracy And Chartworld (Somalia) Capt Stefanos (2008)  Pirated on 21 Sept to 6 Dec 2008 (77 days)  19 Officers & crew on board (all Filipino, except 1 UKR & 1 PRC)  Vessel value (about) US$60M  Cargo of 61,000 MT coal on board. Value about US$10.50M  Ransom paid (US$ 1,200,000)  Advisers’ Fees, delivery of ransom & associated costs (US$250,000)  Loss of hire (US$3.39M)  Payments to crew (US$ 50,000)  Management time (Eur ? / US$ ?). CHW CMT=“Top Management” persons. Responsibility /stress unquantifiable  Reputational issues (not quantifiable)  We were 1 of 46 vessels subject to actual & attempted pirate attacks in 2008 in GOA/Somalia (although we were hijacked beyond “recommended safe limit”)

14. © Chartworld Shipping Corporation Sep 2012 Chartworld And Risk Prevention/Minimisation  Office awareness  BMP4 (supported by insurers and BIMCO, INTERCARGO, INTERTANKO, IMB, Bahamas Flag, NATO a.o.)  BMP4 deals with general planning prior to transit of high risk regions, defensive steps to be taken on board & ashore & also steps to be taken if vessel attacked or boarded  Standard “kit” in office and onboard  See Anti Piracy planning chart (next slide)  Adequate food (including pork for Indian Ocean transits & fishing gear) & bunkers to be on board  Fresh water generation available  Security Consultants & on board training  See CHW “initial steps” papers (with Terra Firma) as to “early” crisis management

15. © Chartworld Shipping Corporation Sep 2012 Chartworld And Security/ Deterrent Equipment  “Hardening” issues after risk assessment  Barbed wire & fixings Capt Stefanos 0/10 (US$10,000)  Difference between razor & barbed wires (see pics A, B & C): High tensile razor wire concertina coils essential  Instructions for installation of razor wire (see recommended procedure for razor wire installation)  Bulk purchases of razor wire & strategic placing storage on board/ ashore  Citadel requirements (UK MTO Best Practice)  Citadel usefulness  Citadel costs

16. © Chartworld Shipping Corporation Sep 2012 Picture A Picture B Picture C Picture A Picture B Picture C Razor Wire Razor Wire Concertina Barbed Wire Razor Wire Razor Wire Concertina Barbed Wire Clipped & Coiled Clipped & Coiled YES YES NO YES YES NO Difference between razor & barbed wires & their purposes/functions

17. Double Razor Wire & 45˚Stanchions Good layout © Chartworld Shipping Corporation Sep 2012

18. © Chartworld Shipping Corporation Sep 2012 Logistics Of Planning/ Supply & Stowage Of Security/ Deterrent Equipment  Calculations to be made, specifications & design for hardening equipment & installation time needed for all vessels  Who responsible/accountable at office & on board?  “Signing off” & compliance with BMP4/ ISM/ ISPS  Comparisons of cost of armed /unarmed guards  New buildings & installation of fittings to receive hardening supports  Citadel supplies (consumables and contamminations etc.)  Electrification of wires? Water cannons?

19. © Chartworld Shipping Corporation Sep 2012 Training Of CHW Office & Sea Personnel  BMP4  Crew awareness of BMP4  Office awareness of BMP4  Keeping up to date (sources). Many available now.  Keeping interactive e-map/chart of PAGS (GOA/Somalia)  Office “data base” of know-how & access thereto

20. © Chartworld Shipping Corporation Sep 2012 Accountability  We have to assume/plan for the “worst”  Armed / unarmed guards (if so taken on board where?)  Armed / unarmed guards (rules of engagement)  Flag issues re armed guards  Legal /Moral issues  Directors’, Principals’ & Shareholders’ concerns re armed guards

21. Guards Rules of Engagement © Chartworld Shipping Corporation Sep 2012  BIMCO Guardcon  Insurance Issues Third Party Liability Personal Injury

22. Blackmail Capt Stefanos’ “Blackmail” & Ultimate Release  “Proof of Life”  See John Young’s delivery/ drop photos  Splitting of crews © Chartworld Shipping Corporation Sep 2012

23. Capt Stefanos’ Debrief of Master (CMT) (December 2008)  Trauma post release issues?  Size of CMT & its composition © Chartworld Shipping Corporation Sep 2012

24. “Proof of Life” (2000) “Proof of Life” (2000) “Proof of Life” (2000)  Russell Crowe  Meg Ryan  Central America (KNR)  Same as with Pirates “THIS IS A GAME. THIS IS A GAME YOU PLAY, WHETHER YOU LIKE IT OR NOT. FOR US IT IS EMOTIONAL. FOR THEM IT IS A BUSINESS. THE SOONER YOU GET COMFORTABLE WITH THAT THE BETTER” © Chartworld Shipping Corporation Sep 2012

25. Acknowledgments & Sources with Thanks Acknowledgments & Sources with Thanks (Whose material is gratefully acknowledged & for which no copyright is claimed by Chartworld) - EUNAVFOR - Hellenic War Risks Association (Bermuda) Limited - IMB/ICC - IMO - John Young - Terra Firma Risk Management Limited - UK MTO (HOA) - Various image sources