By Nathan Hodge  

June 4, 2009  |  

We know that in lawless Somalia, piracy has become a lucrative business. But we don’t really know how that business really works: Who hires the crew, buys the rocket-propelled grenades and organizes the ransom. And most importantly, who divides the loot.

In a fascinating BBC special that airs today, the BBC’s Rob Walker follows the money for an inside look at how Somali “investors” organized the attack on the CEC Future, a Danish-owned cargo ship that was hijacked last year. And he gains exclusive insights into how shipping firm Clipper Projects negotiated with pirates and transferred the cash in exchange for the crew’s release.

Most crucially, Walker tracks down “Mr Ali,” the man recruited by pirates as a negotiator because of his fluent English. Walker meets him in Hargeisa, the capital of Somaliland, and Mr. Ali — real name is Ali Mohamed Ali — explains the division of labor and how much it costs to buy ammunition, food and fuel. Investors usually expect to bankroll several missions before getting a return on their investment. It can cost up to $6,000 to fund a single pirate expedition, but the ransoms can be substantial: In the case of the CEC Future, the pirates netted between $1 million and $2 million.

The most dangerous part, however, happens when the ransom arrives, dropped by parachute in a watertight container: Local merchants in the port of Eyl, who had been providing supplies to the crew on credit, also expected to be paid. Chaos broke out as other boats arrive to get their share of the ransom.

It makes for a dramatic read, but it also obscures a few tantalizing details. The shipping company is advised by an unnamed private security, which provided crucial advice and organized the ransom drop. More private security firms may be taking on this role. As Reuters reported yesterday, more shipping companies are considering putting armed security teams on board their vessels to deter pirates. The agency quotes Shipcraft chief executive Per Nykjaer Jensen, who says firms are losing patience. “They [pirates] do not like to be there when the guards are there,” Jensen said. “As long as the politicians don’t make up their minds, then we have to act ourselves.”

[PHOTO: Wikimedia]

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