04/21/2011 05:35 pm ET | Updated Jun 21, 2011

It's Private Sector vs. Private Sector in the Ultimate Maritime Smackdown

Most analyses of private military and security firms has as its core starting point the fact that a private firm is doing work formerly done by public forces; usually, but not always, as a tool of a recognized, sovereign state against either another state or against certain kinds of violent non-state actors.

But private actors fighting private actors, while not unknown -- the Gulf and Zeta drug cartels fighting each other in Mexico is a contemporary example -- is rarer.

That is reason enough to pay closer attention to the use of private security firms to guard maritime shipping against Somali piracy. It is something we have not seen in many centuries. In fact, one has to go back to the days of the Romans. The Roman Republic, then the Western world's superpower, faced pirates who threatened its food supply. Ultimately, the Republic sent its general Pompey to put an end to the threat. Much later, in the late Middle Ages, the Hanseatic League, a league of merchant associations within the cities of Northern Germany and the Baltic, was formed in part to protect maritime trade from Baltic pirates.

This brings us to a paper published last year. It is "Pirates Versus Mercenaries: Purely Private Transnational Violence at the Margins of International Law" by Ansel J. Halliburton of the University of California, Davis Law School.

He probes the questions of how international law would, and should, react to purely private transnational violence.

The background is that past and current approaches to dealing with Somali piracy have run their course.

According to Halliburton, "piracy exacts a significant economic toll. The economic cost of piracy can be divided into the following categories: ransom payments, increased insurance premiums, indirect economic costs, the cost of deploying naval forces to the area, and, in a more recent trend, the cost of providing armed security teams aboard ships ... The most widely-cited estimates of aggregate ransom payments to Somali pirates are $60-80 million in 2008 and $150 million in 2009."

Trying to avoid pirates by re-routing a ship such as a tanker around the Cape of Good Hope instead of through the Suez Canal adds $3.5 million per year in additional fuel costs while cutting its delivery capacity by 26 percent.

In 2008 alone, the cost of additional war-risk insurance for a ship's passage through the
Gulf of Aden rose from $500 to $20,000 per trip. Applied to the 21,000 ships transiting the Gulf annually, the total annual cost to insure these ships could be as high as $400 million.

Piracy also imposes other indirect economic costs. For example, whenever a ship avoids the Gulf of Aden by re-routing around the Cape of Good Hope, Egypt loses out on revenue from the Suez Canal, the second-most central port in the global shipping network.

Defensive equipment such as the long-rage acoustical device (LRAD) -- which sells for over $20,000 -- emits directionally-focused and painfully-loud sound as one way to deter approach by potential attackers has since proven ineffective.

Altogether, the total economic costs of Somali piracy likely run into the billions of dollars, with some estimates as high as $16 billion per year.

Maritime piracy, like any other criminal activity, can be reduced by diversion, deterrence, or incapacitation. These options themselves depend on changing potential pirates' perceptions of risks, rewards, and opportunities. Diversion operates by providing alternative opportunities with acceptable rewards and less risk than the offense.

Deterrence increases the perceived risk of the offense. Incapacitation removes the opportunity entirely by restricting the actor's ability to commit the offense by, for example, putting him in jail.

Diversion is a nonstarter. Halliburton writes, "Somalia's ruined economy presents few compelling alternatives to piracy. Most of the country's economy is based on agriculture and remittances from abroad, and its per-capita GDP is estimated at $600 -- the fifth-lowest in the world. In contrast, one conservative analysis estimates an average individual pirate could expect to earn $15,000 for a year's work. Lucky participants in a multi-million dollar ransom stand to earn far more."

Deterrence through military response, while making pirates work more costly, ultimately does not work. International military efforts off the coast of Somalia, such as the European Union's high-profile combined naval operation, EU NAVFOR, focus on deterring piracy through a strong military presence protecting designated shipping lanes. Despite the impressive array of international cooperation and naval firepower, pirate attacks in the region have simply shifted outward into the Indian Ocean and beyond the easy reach of international patrols. Deterrence is further hampered by the frequent failure to prosecute those pirates who are captured by naval forces -- a policy derided as "catch and release."

As for incapacitation, as discussed above, the pattern of "catch-and-release" seriously impairs naval forces' ability to incapacitate pirates by putting them on trial and into prison. The alternative is to simply kill them instead. Before the birth of modern human-rights law, this had been the standard way of dealing with pirates in much of the world, and many now advocate its return.

While less costly than the current defensive policy, Halliburton does not find it a viable long term solution:

Because of Somalia's poor long-term economic and social prospects, any incapacitation through violence would be only temporary, as new recruits with little to lose and everything to gain would be attracted to piracy for the same basic economic reasons as current pirates. However, because Somalia's most active pirates operate in identified clan-based organizations, a concerted effort to incapacitate all the major pirate gangs simultaneously could likely set back piracy in the region substantially, because reconstituting the experience and operational capacity of the organizations would take some time. A concerted violent effort at incapacitation is likely to be only temporary; however, absent an enduring solution to Somalia's political problems, it could well be more effective, and cheaper, than the current approach, which is almost entirely defensive and reactive.

Given the lack of viable alternatives it is small wonder that shippers and their insurers are turning to private security forces. Halliburton writes that for a variety of reasons, "non-state actors could soon take the Somali piracy problem into their own hands by hiring private military companies to conduct offensive attacks against known pirate networks.

The remainder of his paper addresses the question of what the law would and should do with such a situation.

Bear in mind that if in the future private security personnel are actively fighting pirates, especially if they attack pirate strongholds it on land, will be an example of much talked about, but rarely seen in real life, "military provider" firm. One has to go back to the days when South African company Executive Outcomes was fighting in Angola and Sierra Leone to find something similar.

Halliburton examines a number of legal treaties. He finds while the UN Charter does not directly prohibit private transnational violence in the same explicit terms in which it prohibits violence between states, it does provide a means for states to act against it.

On the other hand, the law of the sea provides clearer results for private violence than does general international law. Two principal treaties define piracy and related offenses: the United Nations Convention on the Law of the Sea (UNCLOS) and the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime (SUA Convention). Applying these treaties, the sea component of any attack against pirates by other private actors would likely constitute piracy or a related SUA offense.

There is a UN International Convention against the Recruitment, Use, Financing and Training of Mercenaries ("Mercenary Convention") but "It is entirely useless in the context of purely private international violence because it prohibits only the use of mercenaries by or against states in armed conflict."

Similarly there is the old Organisation of African Unity (now African Union) Convention for the Elimination of Mercenarism in Africa. But its definition is drawn narrowly to target only mercenaries working against an OAU member state or OAU-recognized national liberation movement. Because PMC attacks on pirates target neither states nor revolutionary movements, they too would fall outside both the OAU and Mercenary Convention definitions.

There are other laws that he examines but for Halliburton the bottom line normative question is should private industry be allowed to kill pirates? Or, to put it another way, should there be a piracy exception to the fundamental right to life, as embodied in the Universal Declaration of Human Rights?

Halliburton argues, "Given the strength and clarity of the prohibition against extrajudicial killing -- which is unequivocally non-derogable for anything beyond self-defense -- the obvious answer is no."

But, and this is a big but, he acknowledges many facts underlying piracy work against this absolute position.

Because they sail from predictable locations with unusual equipment (e.g., weapons and ship-boarding gear such as ladders), with reasonable efforts, pirates could be identified with precision while they are at sea even before they engage in acts of piracy. Given the absence of innocent civilians or property at sea, collateral damage there is especially unlikely, assuming the attacks occur before the pirates take hostages. Further, pirates themselves routinely violate the human rights of their hostages, notably the right to be free from arbitrary detention and the right to life. [ See this International Maritime Organization statement]

In fact, the very act of hostage-taking is a denial of the hostage's right to life. Unlike state combatants, or even many non-state combatants, pirates fail to give reciprocal recognition to the human and humanitarian rights of their hostages. Historically, pirates were regarded as "enem[ies] of the human race" -- a categorization akin to a perpetrator of modern crimes against humanity. Finally, the culpability of men in a swarm of fast boats approaching merchant vessels with assault rifles, rocket-propelled grenades, and ladders is not seriously in question. Absent evidentiary problems, it is difficult to foresee a scenario under which fair judicial proceedings would result in a not-guilty verdict for someone aboard such a boat. When so many of the circumstances militating for full human-rights enforcement are lacking, the arguments for full enforcement of suspected pirates' human rights lose much of their force.

In theory pirates could be prosecuted as the criminals they are under the UN's Convention Against Transnational Organized Crime (TOC Convention). The TOC Convention operates on any crime with a domestic sentence of four years or more, creates conspiracy offenses, and outlaws participation in organized-crime groups.

Because piracy is recognized as one of the core international crimes and carries heavy punishment worldwide, Somali pirates would clearly qualify as "organized criminal groups" committing "serious crime," and therefore would be subject to the TOC Convention.

However, a PMC chartered to fight piracy could just as easily find itself ensnared by the TOC Convention. So long as it intended to kill, any modern firm would satisfy the TOC Convention's definition of an "organized criminal group." If the PMC is hired to kill pirates, its employees could be charged with murder -- which, in all likelihood, carries a maximum sentence greater than four years in every state party to the TOC Convention.

Halliburton's conclusion is that if states really want to use private military companies as a tool to fight pirates they are going to have to step up to the international legal plate and take some action.

Because modern piracy is largely an economic crime, and because states have proven ill-suited to stop it with any of the political, legal, or military tools thus far deployed, economic actors (i.e., the shipping companies) should be given greater leeway to respond effectively. In the Somali piracy context, this means using force -- at the very least to defend against attacks in progress.

However, because pirates are unlikely to respond to anything short of major violence, the next choice is stark: either stop at defensive force -- which has so far provided little deterrence -- or grant PMCs authority to strike pirate enterprises preemptively. This boils down to an easily stated, but troubling question: should the international community accept to the economic cost of piracy (which continues to rise), or should it accept the humanitarian costs of authorizing private military force against it? If states choose the latter option, they would be essentially reverting to the maritime law of centuries past. To do so today, however, they must create an explicit exemption to the substantial body of human-rights and humanitarian law that has developed since the world last grappled with large-scale maritime piracy.

Although these bodies of law do not provide clear or complete coverage of private transnational violence, the trend toward greater coverage is unmistakable, and the human right to life is one of international law's strongest positive rights. Without a clear exemption, any authority conferred on PMCs to fight piracy would be largely rhetorical because PMCs would rightly fear prosecution under these legal regimes, especially given the strong norm against mercenarism. Whether to grant a piracy exemption to the right to life depends on whether one views piracy as qualitatively different from other crimes. Historically, piracy has been treated differently from other crimes, but whether that remains true today is less clear. That the Security Council has acted repeatedly under Chapter VII, and authorized states to go on the offensive, suggests that it may.