Piracy Alert.

Attacks against commercial ships have tripled. It's time to stop this growing barrier to maritime trade.

Piracy is back. And as in the days of Blackbeard, the piracy onslaught hinders international trade. Acts of maritime piracy range from the classic boarding and hijacking a merchant vessel on the high seas to stealing from a ship while it is anchored in port. Reported attacks against commercial ships have tripled over the past decade, increasing last year alone by 40 percent. Nearly two-thirds of the attacks in 1999 occurred in the pirate-infested waters of Asia. With 90 percent of the world's trade moving via ship and 45 percent of all shipping moving through Asian waters, piracy is becoming an increasing threat to global trade.

The United States is the world's largest trading nation. America's reliance on trade makes any attack on ships in foreign waters or ports, especially those of its trading partners, a maritime concern. Although today's pirates target their victims in ways that limit a direct U.S. response, several steps can be taken to assist other nations in improving their ability to combat piracy and reduce the threat.

MODERN MARITIME PIRACY

Today, 72 percent of all attacks on merchant vessels are committed while the ship is berthed or anchored in port, and most of the attacks on vessels at sea occur in a country's territorial waters. The targets of an attack are usually the contents of the ship's stores and safe and the valuables of its crew. Stealing a ship or its primary cargo on the high seas represents only a small portion of the reported crimes.

Almost all reported acts of piracy involve armed intruders who threaten and often injure, kidnap, or kill members of the crew. Today's pirates appear to be a heterogeneous group that includes opportunistic fishermen, common criminals, Asian mafia, and in some cases, members of the maritime security forces responsible for safeguarding shipping.

The three components of maritime industry most affected by piracy are the shippers (manufacturers that own the cargo), carriers (companies that own the vessels), and insurers of the ships and cargoes. In the highly competitive shipping market, the carriers often decide not to report incidents of piracy. They appear to prefer covering the losses out of their own resources rather than paying increased insurance costs after placing a claim or incurring delays due to an official investigation that can result in additional port costs of up to $10,000 a day. With many pirate attacks going unreported, calculating the amount of financial damage caused by this maritime crime is very difficult. Estimates range as high as $16 billion annually.

Beyond the physical danger to seamen and the loss of property, the rising costs of piracy on shippers, carriers, and insurers threaten America's diplomatic efforts in Asia. To recoup their losses from piracy, insurers raise rates for carriers that cross the more dangerous waters. Some carriers feel compelled to employ additional crew or armed guards. Both activities raise the cost of shipping.

As the United States lobbies to reduce trade barriers in Asia, these increased costs from piracy serve as a non-tariff barrier to trade. In addition, the added insurance costs and safety risks for trading in particularly dangerous ports act as an indirect economic boycott, restraining companies from conducting business with many of America's friends or allies that are unable to afford direct efforts to combat piracy.

PIRACY IN THE ASIA-PACIFIC REGION

Most of the personnel employed in Southeast Asia's maritime security forces are grossly underpaid. As a share of gross domestic product (GDP), for example, Indonesia's defense budget is the lowest in Southeast Asia. Furthermore, the value of its defense budget declined by 65 percent from 1997 to 1998 as a result of the Asian financial crisis, aggravating the already tight fiscal problems and preventing it from allocating more to its maritime security force.

In many of Southeast Asia's armed forces, a culture of corruption has evolved under years of authoritarian governments, often abetted by the military. With limited budgets, the military often cannot afford to sufficiently pay officers and lower ranking members, who then resort to "off-budget" sources of income. In countries with high tariff barriers, such as many Asian countries, smuggling is a lucrative business and works well for fencing pirated goods.

WASHINGTON'S EFFORTS TO COMBAT PIRACY

The Clinton administration's activities to battle the problem of piracy have been appropriately measured. But they are still insufficient to address the problems of piracy in the ports. For example, the U.S. Department of State and the U.S. Coast Guard have participated in regional seminars and workshops on piracy and armed robbery, and have contributed to the writing of circulars for the United Nations' International Maritime Organization (IMO).

These activities have been widely applauded by the shipping and carrier industry. To date, however, no attempt has been made by either the United States or the IMO to promulgate security guidelines for the ports themselves. Although more than 70 percent of piracy takes place in ports, no internationally sanctioned security guidelines (similar, for example, to guidelines distributed by the aviation industry) are distributed to port authorities.

In order to convince the maritime industry that Asian ports and waters are safe -- which would have the beneficial effect of reducing insurance fees and shipping costs -- the U.S. administration and Congress should take several low-profile and low-cost steps to help America's trading partners and allies combat piracy. For example:

* The State Department should recommend that governments in regions most affected by piracy widely report all steps taken to combat piracy, both to make it clear that criminals will be apprehended and to dispel any notion of complicity. In addition, the governments of the coastal states should demonstrate that the steps they have implemented result in a decrease in attacks against shipping vessels in their waters.

* The U.S. administration should encourage the International Maritime Organization to take responsibility for recommending specific port security measures. Based on recommendations and circulars distributed by the IMO, carriers and shippers are familiar with precautions that can be taken to prevent forced boarding by pirates. But as long as ports have not implemented fundamental and internationally sanctioned security measures, they will continue to be easy targets for pirates.

* The U.S. administration should encourage substantive reform of maritime security forces, particularly in Southeast Asia. Because it is highly likely that these forces are complicit in much piracy occurring today, Washington should avoid providing them with direct assistance before they have implemented concrete measures to prevent corruption.

* An additional solution to Southeast Asia's piracy problem is the SUA Convention of 1998 (the Suspension of Unlawful acts Against the safety of marine navigation). Article 10 of this act obliges coastal states in which the offenders are discovered to try them under their laws or extradite them to the flag state. Only forty-three countries have ratified the SUA Convention, none of which are countries of Southeast Asia.

CONCLUSION

Heightened U.S. participation in the battle against piracy would show support and encouragement for the United States and international maritime industry, and at the same time would discourage acts of piracy. In order to achieve substantive reductions in the number of pirate attacks, however, the governments of Southeast Asia in particular must implement strong anti-piracy measures.

To enhance trade with America, the U.S. administration must convince the governments in regions most affected by piracy to demonstrate, clearly and purposefully, their determination to crack down on corrupt maritime forces and to stem the incidence of maritime piracy.

Dana R. Dillon is Policy Analyst for Southeast Asia in the Asian Studies Center at The Heritage Foundation.