South East Asia
Cargo Theft: Better Organised, More Lethal

With an estimated three quarters of the world’s incidence of piracy concentrated here, Asian waters have emerged as the most troubled and dangerous areas for the international transshipment of cargo. Piracy, however, is only the most dramatic manifestation of various patterns of cargo theft, pilferage and misappropriation that inflict a direct cost on the transportation industry estimated at US $ 30 to 50 billion each year.

The estimates are rough, simply because cargo theft, despite its magnitude, is yet to be separately documented by the multiplicity of concerned authorities across the world, as also because of a range of ‘black holes’ in national laws and international legal regulations – including, particularly, the device of rampant ‘flags of convenience’ registration in the shipping industry – that make collusive criminal operations difficult to monitor or control.

The magnitude of the problem can, in some measure, be assessed by the anecdotal crime data available with official agencies in India. Thus, during year 1998, property worth a total of INR 14,771 million was reported stolen across the country – a growth a 12 per cent over the previous year. The value of stolen property increased by over 365 per cent over the preceding decade. While separate data is not available for such crimes involving the theft of cargo, it was found that 14.2 per cent of dacoities (armed robberies by criminal gangs) occurred on highways and another 2 per cent on the railways. Similarly, 24 per cent of all robberies occurred on Highways, and 1.6 per cent on railways. In addition, 3.6 per cent and 5.2 per cent of reported theft occurred on highways and railways, respectively. In addition, a significant proportion of such dacoities, robberies and thefts also occur in commercial establishments and transit facilities for transportation, such as warehouses and freight forwarding yards.

A large proportion of the various patterns of cargo theft are opportunistic and involve a significant measure of collusion with the transporters as well as security and enforcement personnel. Nevertheless, at least some sectors of industry – certainly the movement of coal in India, both by road and rail – are dominated by well organized mafia working in tandem with corrupt officials, and the illegal appropriation and movement of coal in India’s eastern States is immense, and has occasionally been estimated to be as high as half the total output of some of the coalfields located there.

In India, over 70 per cent of total cargo movement within the country is by road, and the remaining 30 per cent by rail. These are the points of core vulnerability, with large numbers of small private operators, poor security procedures, extended en route delays, and the general inefficiency of operations adding to the risks. Nevertheless, given the total volumes of the inland movement, the problem of cargo theft – and especially of container movement – is still not perceived as a major consideration in macroeconomic or commercial decision-making. While data on other South Asian countries is fragmentary, the position regarding inland movement of cargo in the rest of the region would tend to be comparable.

There are, however, rising concerns within the shipping industry relating to the security of cargo and of crew on the primary sea routes through Asian waters, which account for an estimated 45 per cent of total cargo movement across the globe. While the total number of incidents are, in themselves, not high – at 335 incidents worldwide in year 2001, down from a peak of 469 such attacks in 2000 – the increasing gravity of such incidents, the risks to and loss of life (21 crewmembers and passengers killed, and 210 taken hostage in 2001), and the progressive involvement of organized criminal gangs, as well as of some terrorist organizations in many of the more important incidents is a matter of rising concern. These are in contrast to an earlier and dominant pattern of what have been described as ‘maritime muggings’ (opportunistic attacks by small and unorganized groups of criminals, which still account for an estimated 85 per cent of all attacks at sea). Incidents of the hijacking of entire shiploads – which doubled to 16 in year 2001 over the previous year – suggest the growing involvement of organized and transnational operators who have an elaborate infrastructure, not only for the execution of the primary and extensive act of heavily armed piracy – which is often several days in the execution – but also for disposal of large volumes of contraband as well as, on occasion, of the hijacked ship itself under a new and forged identity. The greater use of violence and sophisticated arms in such crimes is another and growing danger.

South Asia accounted for 54 acts of piracy in 2001 (of which India: 27, down from 35; and Bangladesh 24, down from 55 in 2000), none of which could be considered attributable to large scale or transnational organized criminal operations. It is South East Asia, with some of the busiest sea-lanes in the Malacca Straits, the Singapore Straits and in the Indonesian seas that have been the greatest cause of concern over the past years. There were a total of 154 attacks and another 88 attempted attacks at sea in South Asian waters in year 2000, and the region accounted for as much as 54 per cent of the total such incidents worldwide. The situation did show conflicting signs in 2001, with a sharp drop in attacks in the Malacca Straits from 75 incidents in 2000 to 17 – substantially as a result of vigorous patrolling by Malaysian authorities. It was Indonesian waters, with at least 91 attacks in 2001 (up from 86 in 2000), which were the greatest cause for concern, not only because of the sheer number, but in view of reports that terrorists from the Free Aceh Movement (GAM) and the Abu Sayyaf Group have been involved in some of these incidents. GAM had made explicit threats to disrupt shipping in the region. There are also concerns that terrorists may use a hijacked ship – particularly a fuel or LPG tanker – for a catastrophic suicide terrorist attack.

Criminal organizations engaged in piracy have substantially benefited as a result of jurisdictional quarrels between nations and legal loopholes in national and international laws as a result of which "international waters are still the no man’s land of the global economy." Few pirates are ever apprehended or punished, and there is reason to believe that a large number of lesser incidents go entirely unreported. There are, of course, indications that the sharp drop in incidence of piracy in the Malacca Straits are a result of increased patrolling by, and greater cooperation between India and Malaysia, and there are real possibilities of US-Indian-Malaysian joint patrolling of the Straits. Such gains, however, will tend to be illusory as long as they are restricted to particular areas and to a few nations, and would incline, by and large, to ‘squeeze out’ the criminal organizations into other contiguous areas where security is poorer, rather than to eliminate their operations altogether. In the absence of bilateral and regional arrangements to combat piracy, to ensure efficient exchange of available intelligence on a real time basis, to make the necessary investments in maritime security and policing, and to harmonize national and international laws to overcome current procedural and jurisdictional conflicts and secure convictions in a majority of cases of piracy, the trends could well be expected to worsen. This is particularly the case as criminals at sea benefit from modern technologies and management techniques applied to transnational criminal organizations and operations, as well as from a possible association with terrorist groups with their immensely higher proclivities to violence.

(Edited version published in Pinkerton Global Intelligence Services, August 30, 2002.)