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OEF Economic Cost of Piracy, 2011

OEF Economic Cost of Piracy, 2011

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Published by Firstpost
One Earth Future Foundation’s (OEF) second assessment of the Economic Cost of Piracy
One Earth Future Foundation’s (OEF) second assessment of the Economic Cost of Piracy

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Published by: Firstpost on Apr 02, 2013
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In 2011, over 30 countries contributed military forces to counter-piracy eforts in the Gulf of Aden
and Indian Ocean. The cost of these military eforts must be accounted for in two forms. First is the
administratve budgets of the ‘big three’ missions in the region: the European Union Naval Force


The Direct Economic Cost of Piracy

One Earth Future Foundaton


(EUNAVFOR) Operaton Atalanta, NATO’s Operaton Ocean Shield, and Combined Task Force (CTF) 151.
Second, the costs of military assets and vessels are borne by each contributng state under the principal
that costs ‘lie where they fall’. Natons contribute to one of the major missions through:
Navy vessels (surface combat vessels and auxiliary ships).
Maritme patrol/reconnaissance aircraf.
Vessel Protecton Detachment teams.
Military staf assigned to Operatonal Headquarters or onboard units.109
According to the former Operaton Commander of EUNAVFOR, Major General Buster Howes, there are
anywhere between 10 and 16 vessels deployed on any given day in the Gulf of Aden and Indian Ocean.110
In October 2011, a spokesman from NATO said that there were a total of 18 vessels on duty from NATO,
EUNAVFOR and CTF 151.111
Military eforts have ultmately been successful at disruptng piracy atacks in the Gulf of Aden. However,
with the region afected by piracy expanding, military eforts face an exceptonally difcult challenge of
patrolling over four million square kilometers, an area which is roughly equivalent to one and a half tmes
the size of mainland Europe, or ten tmes the size of Germany.112
According to naval authorites, counter-piracy military eforts will likely decline over the next year.
EUNAVFOR’s Chief of Staf, Captain Keith Blount has stated that EUNAVFOR will provide no more than
eight vessels in 2012, and NATO between three and four. He also noted the budgetary pressures on
many natons to reduce their defense expenditure.113

Furthermore, Commander Stein Hagalid, Branch
Head of the NATO Shipping Centre in Northwood, London, stated that both the EU and NATO military
eforts were due to expire in December 2012,
although it is expected that their mandate will
be extended.114
Given the budgetary, resource and capacity
constraints of the existng military eforts in the
region, we may see an increasing number of
vessels contributed by independent deployers,
such as China and India, over the next couple of
years. Alternatvely, the world’s largest shipping
associatons, (the Internatonal Chamber of
Shipping, BIMCO, Intercargo, and Intertanko)
also urged the UN to consider creatng a force
of armed guards to be deployed on merchant
ships to protect them against piracy atacks.115
Calculatng the economic cost of military deployments in the region is difcult. Indeed, calculatng the
cost of any military mission is a contentous issue, and there is an ongoing debate about whether costs
should include total costs of deployment, or just incremental costs. By incremental costs we refer to the
specifc, additonal costs that accrue from counter-piracy actvites, over normal military actvites. Since
military personnel, vessels, and equipment are generally already accounted for under natonal budgets,
and presumably would be statoned ‘somewhere’, the argument for assessing costs incrementally is
that only additonal costs should be accounted for. Additonal costs include factors such as vessels’ fuel
consumpton, specifc training operatons, personnel rotaton, basing costs, and specifc equipment.

One Earth Future Foundaton


The Direct Economic Cost of Piracy


In 2011, we atempted to estmate these additonal, incremental costs of military deployments. In order
to do so, we looked at fuel costs and estmated additonal operatonal costs of contributng vessels. We
atempted to track the diferent military vessels that were tasked with counter-piracy missions over the
course of 2011 (according to available informaton). It is likely that additonal vessels were deployed, that
we were not able to account for in this analysis.
We were not able to calculate the incremental cost of each specifc contributng vessel because we lacked
precise informaton about the vessels deployed, or the deployment period. On average, vessels may be
deployed for anywhere between two and six months per year. Many vessels may also be tasked with
multple missions, or may be temporarily redirected for other initatves. This was especially the case in
2011, when we witnessed vessels redeployed for military missions related to the ‘Arab Spring’ and NATO
operatons of Libya. We were also unable to calculate basing costs for military missions in surrounding
Our estmate of the cost of military operatons is based on an approximaton of the number of vessels
deployed on a daily basis. Using the fgures above on the average number of vessels deployed for the
three major operatons, as well as independent deployers, we estmate that on any given day, the vessels
deployed might be double the typical compositon of the EUNAVFOR forces (that is between fve and
ten frigates or destroyers, one auxiliary, and three maritme patrol or reconnaissance aircrafs). We then
calculate the fuel and other operatonal costs for those vessels are shown below. (Further details on the
data and methodology are included in Appendix 4.)


The Direct Economic Cost of Piracy

One Earth Future Foundaton


In 2011, we also estmated the cost of unmanned aerial vehicles (UAVs) working on counter-piracy eforts
in the Indian Ocean. There are two main types of UAVs: drones and remotely piloted vehicles. To our
knowledge, the major suppliers of UAVs for counter-piracy missions are the US, India and Spain. Since
India’s UAVs are deployed for various natonal security actvites in the region, we estmated that only a
third of those UAVs were used towards counter-piracy actvites. Again, we only included the operatonal
cost of UAVs in our total cost calculatons (and not the unit cost). Appendix 4 provides further detail on
the methodology and assumptons.
By adding up the cost of military expenditure on vessels, UAVs, and administratve costs, we estmate

that the total cost of counter-piracy military eforts
of the Horn of Africa, and in the Indian Ocean were
at least $1.27 billion in 2011.

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