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Piracy in Somalia's waters and the Gulf of Aden has become a major international issue. Navies from various countries have deployed ships to patrol the area, striving to prevent pirate attacks. Nevertheless, there are times when these pirates still succeed in seizing a ship.
When such an event occurs, the pirates typically won't release the vessel until they receive a substantial ransom, often amounting to millions of dollars. However, there is much more about these pirates that remains unknown. Here are 10 shocking revelations about them.
10. They Avoid Repairing Their Vehicles
Pirates are among the highest spenders in Somalia. They spend their money so extravagantly that they quickly fall back into the poverty they once tried to escape. Currently, prominent pirate leaders are complaining that they can burn through $1 million in no time.
After getting their portion of a ransom, pirate leaders waste it on luxury cars, women, parties, alcohol, and khat. The more prudent ones invest in grand houses, though they still squander their wealth just like the others. Their preferred vehicle is the Toyota Land Cruiser, priced around $30,000. With the high cost of fuel in Somalia, they also spend an additional $30,000 on refueling.
In Somalia, pirates enjoy great respect, and the quickest way to lose that admiration is by repairing a damaged vehicle. The moment a Land Cruiser gets even a minor dent or a cracked windshield, the pirate opts to buy a new one instead of fixing it.
9. Pirates Operate A Stock Exchange Where Investors Buy Shares In Hijackings
Pirates are often uncertain about finding a ship to hijack. Even when they do spot one, they can’t be sure they'll manage to board it. Since financing a series of potentially unsuccessful chases is costly, pirates have turned to the Somali public for funds. Nowadays, they rely on investors who buy shares in a pirate stock exchange.
The stock exchange is highly structured, with over 72 pirate factions (referred to as 'maritime companies') listed. Investors purchase shares in hopes of striking it rich. Interestingly, shares don’t always need to be bought with money; items like AK-47s and rocket-propelled grenades are also accepted as currency.
8. Pirates Don’t Earn Much
Despite raking in millions of dollars from ransom payments, pirate foot soldiers—the ones who take the risk of navigating rough seas in small boats, hoping to find a ship to attack—receive only between $30,000 and $75,000 from the ransom. Pirates who bring along their weapons or ladders earn an additional $10,000.
Investors who buy shares on the stock exchange often see the biggest returns. When a ransom is paid, investors and other stakeholders receive their share. A portion of the funds is also allocated to the community for the development and upkeep of schools and hospitals. The pirates only receive whatever is left after everyone else gets their cut.
7. They've Tried to Hijack Military Warships
Pirates armed with AK-47s are fully aware they stand little chance against the heavily armed military warships patrolling the waters off Somalia. However, this has not stopped them from trying to hijack these warships, often mistaking them for cargo ships. Each time, their attempt ends in failure.
To hijack a ship, pirates approach under the cover of night. As they draw near, they fire at the ship and try to board. However, they quickly realize their grave mistake when the warship retaliates with a far superior arsenal. The pirates retreat in haste, though it’s not always a simple escape.
In April 2010, Somali pirates mistakenly targeted the USS Ashland, shooting at it in an attempt to hijack it. The USS Ashland responded with gunfire, killing one pirate, and the others were taken into custody.
The men denied being pirates, claiming instead to be smugglers. They stated that their boat had broken down after they had just transported people to Yemen. They had drifted for seven days and shot at the ship only to signal for help from the crew.
In another 2010 incident, pirates mistook the USS Nicholas for a cargo vessel and attacked it. Once they realized their error, they fled, but the USS Nicholas fired back and pursued them. Five pirates were apprehended.
Later that same year, 13 pirates were captured after attempting to hijack the Dutch warship HNLMS Tromp by mistake. Once they recognized they had targeted the wrong ship, they fled, but the HNLMS Tromp retaliated with gunfire.
In 2009, pirates attempted to board the 18,000-ton French flagship La Somme by shooting at it. As usual, the pirates quickly fled, but La Somme gave chase. The pirates surrendered without firing another shot.
Earlier that same year, they had attacked a different French warship after confusing it with a cargo ship. In another instance, they mistakenly targeted the German supply ship Spessart.
6. The Mechanics of Hijackings
Piracy off the coast of Somalia follows a relatively simple, though at times complicated, process. Before embarking on their voyages, pirates secure funding from investors. This is often done at the pirate stock exchange, as previously mentioned.
They then divide into two teams, each consisting of 12 pirates. Team A heads out on two boats in search of a ship to hijack. Once they spot one, they approach quietly under the cover of night, open fire, and attempt to board. The first pirate to board the ship is awarded a bonus. Afterward, the hijacked vessel is brought back to the Somali coast.
When the ship docks, Team A departs to attend to other matters, while Team B takes over the responsibilities. They stay with the ship and guard it until the ransom negotiations are completed. Maintaining the docked ship incurs costs, especially for feeding the crew. This is where another businessman steps in, covering the crew's expenses in return for a portion of the ransom.
Once the ransom is paid, the businessman who funded the crew's care recoups his investment with interest. Team B members receive $15,000 each for their work in guarding the ship. The primary investor in the hijacking takes 30 percent of the ransom, while the other investors get their share, and a portion is allocated to the community for 'anchoring rights.' The pirates who hijacked the ship split the remainder.
5. The Process of Negotiations
Once aboard the ship, pirates sift through the documents to identify the owners. They pass this information to a negotiator, who could either be onboard or far inland. Typically a trusted relative, the negotiator reaches out to the shipping company to explain the situation.
Pirate negotiators are often under immense pressure as they must secure a satisfactory ransom for the pirates while preventing the shipowners from ending the negotiations prematurely. Pirates prefer not to hold onto ships for too long, and shipping companies rely on their vessels for business. As a result, negotiators strive to strike a balance. They also impose strict demands, such as requesting that the ransom be paid in $50 or $100 notes printed after the year 2000.
Many shipping companies have K&R—kidnap and ransom insurance for such situations. They contact their insurers, who in turn reach out to a response company. This company handles negotiations with the pirate negotiator and typically agrees on a ransom amount without the shipowners’ direct approval. Once an agreement is made, the response company arranges for a private security firm to deliver the ransom.
Throughout the negotiations, shipping companies stay in contact with their lawyers to ensure they comply with legal requirements. Lawyers typically earn around $300,000 for their work, while the response company receives $100,000. In total, securing a ship can cost an additional $1 million, on top of the ransom. Shipping companies often recover these costs, including the ransom, through their insurance.
However, pirates do not release the ship and crew immediately after receiving the ransom. They take time to count the money using their counting machines and verify that there are no counterfeit notes. The ship and crew are released only when the pirates are satisfied that everything is in order.
4. They Initially Set Out To Protect Somalia’s Waters
Somali pirates didn’t always begin their journey as pirates. After the collapse of the Somali government in 1991, foreign fishing trawlers began operating freely in Somali waters to fish. This impacted the local Somali fishermen, who relied on smaller boats and nets, as their catches steadily decreased. On occasion, the foreign trawlers would even fire at the fishermen if they got too close.
Around the same time, other foreign ships began dumping radioactive waste into Somali waters. The waste often leaked into nearby coastal villages, creating severe health issues for the locals. In response, the fishermen formed organizations like the National Volunteer Coastguard of Somalia and Somali Marines (which the pirates continue to use today) to safeguard their waters.
The fishermen would frequently capture these ships and demand ransoms for their release. Shipowners, knowing they were operating illegally, willingly paid these ransoms. Over time, the fishermen increased their demands as they saw the potential for larger sums.
Recognizing the financial potential, the fishermen expanded their operations, hijacking random ships off Somalia’s coast. Today, many pirates are not even former fishermen but simply impoverished individuals looking for a way to survive. Piracy remains Somalia’s largest industry for a reason.
3. Insurance Companies Earn More Than Pirates
Somali pirates aren't the top earners in piracy, despite receiving substantial ransoms. Most of the money goes to investors. However, the real big winners are insurance companies, who profit far more—up to ten times the amount pirates make annually.
Somali piracy generates an annual revenue between $7 and $12 billion. In 2010, it was valued at $9 billion. Yet pirates and their investors only received a small fraction—less than 2 percent—of that sum.
In 2010, Somali pirates received $148 million in ransoms, while shipowners spent $1.85 billion on insurance premiums to cover hijackings and an additional $1.4 billion on security measures.
2. Pirates Steer Clear of Hijacking Ships Owned by Prominent Somali Businessmen
In Somalia’s lawless environment, targeting the wrong people can quickly create serious issues. As previously noted, piracy in Somalia largely ceased in 2012 when cargo ships began using armed security. The pirates didn’t hijack any vessels again until 2017, when they captured an oil tanker. However, after brief ransom negotiations, they released the ship without receiving any money.
The tanker, Aris 13, was carrying oil for a powerful Somali businessman. In Somalia, 'influential' typically means the government will protect your assets, which is exactly what happened when Puntland’s marine force engaged the pirates in a gunfight.
Clan leaders were later involved in mediating between the pirates and the marines. The negotiations concluded with the pirates releasing the ship without ransom. Somali pirates tend to avoid hijacking vessels owned by influential Somali businessmen for these reasons.
1. Somali Pirates Offer Protection to Illegal Fishing Trawlers
Initially, Somali pirates targeted illegal trawlers in Somali waters. Today, however, they provide protection for these vessels, allowing them to fish freely in exchange for protection money. This shift in activity began in 2012, when cargo ships began using armed security.
Many of these illegal trawlers, seeking to maximize their profits, often use illegal fishing nets. The ships from Iran, South Korea, and Thailand are particularly notorious. In return for hundreds of thousands of dollars, pirates issue licenses to these trawlers.
Ironically, Somali fishermen are barred from fishing in the same rich waters because the pirates turn them away. On occasion, pirates even hijack the very trawlers they protect, demanding a ransom. It's unclear whether these hijackings are the result of deals gone wrong.
