Study of Somali piracy falsifications 2012

Category :- Stats&Reports

Author :-  Editorial

 
Posted on June 9, 2013, 9:46 pm
 
 Frankly, I believed that with evaporating of the Somalia piracy we’ll walk off the so-called “Studies on The Economic Cost of Somalia Piracy” (SECS further on), which were diligently concocted by “Oceans beyond Piracy (OBP)” Foundation, whatever this Foundation really is. I didn’t expect any excuses or remorse from either OBP staff, or those who initiated and supported those Studies – IMO, BIMCO and a number of other institutions, which regretfully, represent the shipping in the eyes of general public.

I was wrong, of course. OBP is very much alive and as shamelessly as ever concocted a new Study, “The Economic Cost of Somali Piracy 2012”.

Below is the Summary of my Study of this new falsification. I analyzed not all of the categories of the “cost” of the piracy, but only the most “heavy” ones, those which constitute the main bulk of the “losses” which unsuspicious of their mighty evil pirates still inflict upon the world economy. That’s why, for example,  I don’t check the sum of the ransoms – it is vanishingly small in comparison with billions created by ingenious researches in other categories.

SECS is intentionally entangled, the purpose of it is explained in the Summary.  The first SECS, SECS 2010, was 25 pages thick. Next one, SECS 2011, far outreached the naivety of the beginning, and was 62 pages thick. This newest one is again record-breaking, consisting of 80 pages. The less is the piracy, the more voluminous are the Studies.

From the Economic Cost of Somali Piracy 2012 Foreword:

“We have found that the report fully lives up to the high standards necessary to earn respect and credibility among all antipiracy stakeholders in Government and Shipping Industry alike, and for the report to constitute an informed and constructive contribution to the anti-piracy debate”.

-- Michael Lund, Deputy Secretary General, BIMCO

With this appraisal in mind, let’s begin.

Voytenko Mikhail

 

OBP Studies:

Economic Cost of Somali Piracy 2010 download http://www.odin.tc/files/secs10.pdf

Economic Cost of Somali Piracy 2011 download http://www.odin.tc/files/secs11.pdf

Economic Cost of Somali Piracy 2012 download http://www.odin.tc/files/secs12.pdf

 

Maritime Bulletin:

Study of Somali piracy falsifications 2010

http:/www.odin.tc/files/Study_of_Somali_piracy_falsifications10.pdf

 

Study of Somali piracy falsifications 2012 full report

http:/www.odin.tc/files/Study_of_Somali_piracy_falsifications12.pdf

 

 

The Summary

1.

The OBP researchers already made three Studies, for years 2010, 2011 and 2012. The backbone of the Somalia Piracy Economic Cost is the number of the transits through HRA (High Risk Area). That figure determines actual losses suffered by the shipping.

Each Study is based on absolutely different methodology for calculating the number of transits. The lesser was the piracy threat, the bigger was the number of transits.

2010: 27,775

2011: 42,450

2012: 66,612

There are two basic known statistics to estimate the number of transits – Suez Canal statistics, and statistics of tanker traffic via Hormuz Strait. According to these statistics (some 25,000 transits, and that’s the main bulk of HRA transits), plus rough estimation of other traffics, the total number can’t be more than 36,000.

There is substantial traffic of other types of cargo vessels via Hormuz Strait, there is some traffic to/from port of East Africa, but those traffics can’t, even theoretically, be equal to, not to mention bigger, than the main bulk of traffic through Suez and via Hormuz.

With all the resources and support they have, OBP researchers could easily get the lacking statistics on Hormuz Strait and East Africa traffic, but instead, they invented a new method, which simply can’t be proved or contradicted, because it can not be checked.  All AIS messages sent from the HRA over a sixteen day period in both 2011 and 2012 were collected by ExactEarth’s satellites and licensed to OBP for use in this report. They claimed they processed some 1 million AIS signals. According to the data they use, there should be some 132,000 transits through HRA, more than all known traffic in all of Indian ocean, together with Malacca Strait States local traffic and fisheries! So much for the accuracy of the one million AIS messages method!

They made the final number as 66,612. How? It goes without explanations and illustrations of their “methodology”. It goes on trust, so to say. They just said …we made a fairly significant downward adjustment in the number of ships

 

According to OBP Study for year 2012, there are some unknown to shipping and humankind traffics in Indian ocean, which are equal in volume to the known ones. It just can’t be explained by a mistake or by applying a wrong methodology. It can only be explained by an intentional falsification in order to achieve pre-ordered figure of the so-called Somalia Piracy Economic Cost. I, for my calculations, applied a figure of 36,000 transits, collecting every traffic I could think of, and making all possible stretches. The real figure should be less than the one I applied, but so be it. Just in case, you know.

(See II. The number of transits)

 

2.

In estimating the cost of Navy presence in Indian ocean, the OBP researchers didn’t explain and didn’t take into account the difference between the basic cost of Navy ships and aircrafts, and the cost of their employment in the mission. According to OBP methodology, the Navy don’t cost anything at all when not involved in anti-piracy operation. Hence the cost of the Navy presence, estimated by OBP as some $1,02 billion, is a falsification. We can’t calculate the real cost, because we don’t know military budgets and spendings. But whatever that real cost is, it simply can’t be $1,02 billion, claimed by OBP, because the Navies do cost something, employed in missions or not, sailing around or being docked in their bases. The real cost is the difference between regular annual cost of the ship, and the cost of its employment in the mission.

Also, OBP made, from research point of view, a very grave mistake by not estimating the effectiveness of Navy mission. The truth is, Navies utterly failed to protect shipping from piracy. Private security and some serious changes, which took place in Somalia, did the job, not Navies.

(See I. The Cost of Military Operations)

 

3.

In estimating the cost of the wire protection, OBP researchers excelled themselves in their findings. They didn’t ask the suppliers of the barbed wire in Suez or Singapore, they didn’t ask the ship owners, they found in Internet a company based in California, which sells wire and ornamented fence to luxury villas, and used the cost taken from that company’s website price-list. OBP decided it wasn’t enough, and used absolutely unexplained, or to be more exact, twisted, logic, to calculate the cost of one-transit wire protection. According to OBP, the cost of wire protection per vessel is $16,000. According to the information I gathered from ship owners, it falls within the range of $500 – $4,000. I estimated the cost of barbed wire as $28 -72 million, most probably it does not exceed $40 million, simply because I applied in all my calculations apparently exaggerated 36,000 number of transits. Hence the final figures: $28 -72 million against OBP’s $447,888,000. OBP made the wire cost at lest 6 times more expensive than it really is. Mistake of the researchers? Or falsification again?

 

4.

There is one very important subject of War Risk Insurance Premiums. The gist of the subject is the understanding of those Premiums – are they paid because of the piracy threat, or because Lloyd’s War Committee made them a must? The principal question in determining the cost in insurance is the character of war-risk insurance. As it stands, it’s not a necessary and justified insurance to be bought by a sensible ship owner, it’s to put it straight, an act of piracy in itself. Using Somalia piracy as a pretext, London-based insurers enforced on the shipping war-risk insurance, and enjoy tremendous profits for quite a number of years.

Predictably, OBP didn’t raise this principal question in their 2012 Study, which actually, makes all their War Risk Premium Cost calculation meaningless. Nevertheless, I checked their calculations and expectedly, found some, to put it mild, exaggerations.

(See VII. The Cost of Piracy-Related Insurance)

 

5.

I meticulously studied other types of Costs presented in SECS, such as the Cost of Increased Speed, or Re-Routing, finding some of them quite amusing. For example, to prevent any outside check of their Cost of Increased Speed assessment, they illustrated their calculations by BIMCO’s Curves, provided by BIMCO specially for the occasion. Those Curves are unreadable and make any check of the OBP methodology impossible. One has to find the graphics showing the correlation between fuel consumption and speed elsewhere. I found, and the results were very interesting.

There is rather simple and realistic approach to estimate the cost of all anti-piracy measures which could be taken by the ship owner. With the availability of armed guards and with safety they guarantee – the only guarantee ship owners actually want – all other measures can be estimated in comparison with the cost of armed guards, making all the OBP assessments just useless, unless they were made to achieve a pre-ordered figure of Somalia Piracy Economic Cost.

My estimation of the cost of all anti-piracy measures except guards:

$ 350,000,000

SECS:

$ 2,565,907,810

(See The Cost of all anti-piracy measures except armed guards)

 

6.

The Somalia piracy could have been done with at least three years ago. Be the safety of the shipping real concern of international community, Navies, politicians, the UN and maritime organizations, they could make shipping absolutely safe at a cost not exceeding $ 500,000,000. The army of private guards, employed by a horde of security agencies, in no time came up out of nowhere, and provided protection for anyone willing to guarantee the safety of his vessel. The Navies could (should) do it, using the same tactics, long time ago, at a much less cost and with a privilege of absolute legality. With no other costs and losses, from ransoms to war risk premiums to re-routing etc.

(See XI. The real Cost of Somalia Piracy)

 

7.

The study of the money wasted on pirates prosecution, on conferences and working groups of the UN, explains the roots of the OBP falsification.

Three-year cost of prosecuting: $62,576,587

Three year cost of organization: $ 69,883,953

Total: $ 132,460,540

It’s too lucrative business to give it up easily which naturally, fathered the OBP Studies and researchers. They’ve been very well paid, too.

Report of the Secretary-General Ban Ki-moon pursuant to Security Council resolution 2020 (2011) http://www.securitycouncilreport.org/atf/cf/%7B65BFCF9B-6D27-4E9C-8CD3-CF6E4FF96FF9%7D/s_2012_783.pdf, presented on Oct 22 2012 during Security Council meeting, is a fantastic example of a world-scale lie. Mr. Ban Ki-moon praised for the sharp decrease of Somalia piracy international efforts, Naivies, Best Management Practice, and down the list he said, that “The deployment of privately contracted armed security personnel on-board ships and of vessel protection detachments may also have contributed to deterring pirate attacks”.

Mr. Ban Ki-moon praised the UN as the coordinator of anti-piracy campaign, he said many other amazing things, but to appreciate the real role the UN is playing in Somalia Piracy, we’d have to read the following article:

“How the UN saved the piracy” http://dangerousmagazine.com/project/hijacked-how-the-un-saved-piracy/

Article is written by a well-known US journalist and author, Mr. Robert Young Pelton, who ran for some time a news agency Somialia Report, but happened to be too honest journalist and socially responsible person to play into the UN hands.

Mr. Ban Ki-moon referred to, and mentioned among institutions which contribute most to piracy fighting success, a World Bank. World Bank issued its own Study on Somalia Piracy Economic Cost, estimating the Cost at some $18 billion. The World Bank Study deserves a special Study of course. I ran through it, and found it much more amusing than the OBP’s. Maybe I’ll study it, too, sometime.

For now, let me confine myself by saying that the World Bank has a direct interest in “fighting piracy roots”, because some of the funds allocated to it are channeled via the World Bank, hence the riotous fantasies of the “researchers” hired by World Bank.

(See X. The Cost of Counter-Piracy Organizations)

 

8.

I ask anyone interested to check my Study, to check the Study prepared by OBP, and decide whose Study of the piracy costs is more plausible, mine or OBP’s. If mine’s more trustworthy, then, I invite you to appreciate the following figures:

OBP’s budget expenditure was $889,000 in 2011, which included $25,000 towards supporting an IMB initiative to develop reporting on the violence experienced by seafarers during piracy attacks.

(From the OBP Study “The Economic Cost of Somalia Piracy 2011”)

In 2012, OBP spent $775,000 on staff salaries, meeting costs, and other expenses related to furthering its mission.

(From the OBP Study “The Economic Cost of Somalia Piracy 2012”)

2010 spendings are unknown, but surely they can’t be less than $500,000.

In 3 years the OBP spent on its’ Studies in total, $ 2,139,000.

It took me some 2 months to prepare this Study, I wasn’t busy with it 8 hours / 7 days a week. Some 6-8 hours weekly, plus several phone calls.

Maritime Bulletin is kept afloat, presently, by a crewing agency. Actually, it means that I’m kept alive, it’s the cost of my survival, nothing more. With the deduction of apartment cost and facilities costs, I’m left with some $200 - $250 monthly for all the rest, including food, clothes, medicine, fuel for my motorbike, books, etc. Compare the cost of me with the cost of OBP, some $60,000 monthly budget. Feel the difference.

The cost of my research is some $500.

The cost of OBP research is $775,000.

 

9.

A question arises, in light of the above. How to appreciate the doings of the UN (starting from Mr. Ban Ki-moon), of the IMO, BIMCO and many others, including of course, the OBP researchers? They were, either directly, or indirectly, involved in inventing the falsification for the purpose of profiting from it. They voice the falsification throughout the world, and using it as grounds for their demands, get by now, hundreds of millions of dollars, to fight falsified and inflated problem. They profit from these falsifications personally.

I am not a lawyer. I don’t know, if the intentional creation of a falsified Study of a falsified problem, which paves the way for the waste (theft) of multi-million funds, is a criminal act, or some act of public offence. I guess though, that it’s criminal.

If that’s the case, who’s to nail the falsifiers, is there any chance of brining them to justice? I don’t think so.

 

Voytenko Mikhail

May – June 2013

Hall of Shame

List of personalities and organizations, which make up, contribute to, or support three-year long falsification, called “The Economic Cost of Somalia Piracy”

Ban Ki-moon, UN Secretary-General

Marcel Arsenault, founder of One Earth Future Foundation OEF (with Ocean Beyond Piracy as one of the projects)

Efthimios Mitropoulos, former IMO Secretary- General

Michael Lund, Deputy Secretary General, BIMCO

Pottengal Mukundan, Head of IMB

Authors:

Lead Author 2012: Jonathan Bellish, Project Officer, OEF

Lead Author 2010-2011: Anna Bowden, Associate Director, Business Initiatives, OEF

Research Team:

Charles Marts

Andrew Lee

Eamon Aloyo

Thaddeus Cummins,

Anjuli Manrique,

Timothy Schommer,

Jim Gray,

Liza Kane-Hartnett,

Jon Huggins,

Kaija Hurlburt,

Jens Vestergaard Madsen,

Maisie Pigeon,

Urmila Venugopalan

Roberta Spivak.

Advisors and Consultants:

Peter Chalk, RAND Institute

Professor Pierre Cariou, World Maritime University, Malmȍ, Sweden

Dr. Adolf Ng, Hong Kong Polytechnic University

Dr. Theo Notteboom, ITMMA, University of Antwerp, and Antwerp Maritime Academy

Peter Sand, BIMCO Chief Shipping Analyst

Cyrus Mody, the International Maritime Bureau (IMB)

Raphael Kahn, Secure-Marine

Michael Frodl, C-Level Maritime Risks

Organizations:

IMO

BIMCO

International Chamber of Shipping

International Shipping Federation

INTERCARGO

INTERTANKO

ITF

 

Download and read full report

Right-click to download

 
 
 
 
 
 
 
 
 
3
Comment(s)
 
 
Legal definitions
 
The discussion on the differences of falsification & manipulation is worthless due to the below reasons. As far as known, criminal law theory understands the harm of act of falsification only in regard with public relations. It is mean if some person has forged any document, signature, thing, data, information and keeps it on him no harm to public relation occur on. So false is a replica, a remake or act of fantasy. It understands, if student forged a signature of professor, a farmer counterfeited a production and they never issued or released out, no public legal interests & relations would be harmed. Also, if these persons demonstrate their "production" to third person as their "art", this is not harm, no offense occured. However, if these persons lead their â��job resultâ�� with deliberately incorrect information, knowing that information is untrue or understanding that so demonstrating of it could mislead public and these persons trying that such forgery would be taken as a true, this action is qualified as offense fraud. So, any kind of action or dealing became offense if targeted to defraud public or another person. Any issued information or data is really incorrect and untrue, pursuit to presumption of innocence it is being kept as a mistake. The mistake is understood as delusion of author. But if the untrue information is a result of deliberated manipulation by facts, data and information that  are though truthful, however so dealing is a fraud tool.  Now, if  Mr. Joseph W. Escott stays it is a manipulation, he had to recognize it is a mistake or to answer the question â�� what did the public document manipulate for?
 
Posted by : Watcher 
Posted on : October 17, 2013, 4:00 pm
 
 
What is manipulation, what is falsification and what is the difference between them
 
My Study of Somalia Piracy Falsifications 2012 got a critical comment from Mr. Joseph W Escott, see below. I thank Mr. Joseph W Escott for his comment, but regretfully, have to disagree with him on all points of his criticism. He titled his Comment â��Manipulation not Falsificationâ�� and tried to prove, that OBP Studies may be guilty of manipulations, but not falsifications.  â��Manipulation and falsification are not one in the same. Falsification is basically an outright lie.â�� â�� wrote Mr. Escott. Letâ��s look at just two facts and try to appreciate the scale of manipulations OBP used, and letâ��s try to find a line between manipulation and falsification.
Fact No 1 â�� the number of transits via HRA: OBP found 27,775 transits in year 2010; 42,450 in year 2011 and finally, 66,612 in year 2012. Each new Study claims the figure to be revised and estimated by using new method, and as such, to be more correct than previous. In general, number of transits through HRA must be roughly the same annually, given the short period of time in question, just three years. By all estimates based on all known data, the number of transits lies within the range of 30,000 â�� 35,000, it physically canâ��t be more than that, if weâ��re taking into account sea-going insurable vessels. Manipulation, in this case, should measure in several thousand transits more or less, but when the basic figure of all of the Study, from which originates the main body of all the piracy-related costs, can be twice or thrice more or less, one canâ��t but smell a rat here. Itâ��s not a rocket science, you know. With OBP budget of some $700,000 annually and with the support they enjoy from ALL leading maritime organizations, from UN, politicians and Navies, they should get an accurate number of transits in no time, if theyâ��re worth anything. Instead, they applied the number of transits so dramatically different each year (each time using â��new methodologyâ��), that it belies if not their honesty, then at least, their competence. Suppose theyâ��re incompetents, how then, their strikingly erroneous estimations could get such a powerful official support and recognition?  Lloydâ��s insurers by the way, already expressed their bewilderment with the latest of OBP Studies, related to Gulf of Guinea piracy. Insurers canâ��t explain the figures given in the Study, and found the total cost of war insurances paid annually to be grossly exaggerated. Basic figure again, was the number of transits, this time in Gulf of Guinea.
Fact No 2 � ransoms: Let�s go back to year 2010, to the first Study published by OBP. Let�s look at the sum of the ransoms paid to pirates in year 2009, and the way it was calculated. OBP estimated an average ransom to be $3.4 million. It was based solely on �data� provided by pirates. After each release pirates called Reuters to make a triumphant statement, announcing the sum of the ransom. The sums declared by pirates were taken on word and registered in all official statistics as something as firm, as a first-class bank�s guarantee. No other proofs were given, say from those who were paying the ransoms. I�ve been expressing my bewilderment at such a blind trust, because even Reuters correspondents could guess, that the exaggeration of ransoms, which were paid, was to the best of pirates interests. Well, Reuters and other major media failed, they preferred to stay blind. My estimation was, an average ransom in year 2009 didn�t exceed $2.4 million. Still, OBP�s games with ransom sums could be considered as �manipulation�, agreed. But what about other part of the equation? One part is an average ransom, another one is the number of ships, which were released against ransom. OBP found the number of ransomed ships as 52. I found only 31. Where did extra ships come from? It�s very simple. OBP included in the statistics of ransomed vessels all vessels which were hijacked, including local dhows and pleasure crafts, and also, including those vessels which were freed soon after the hijack, for example famous US boxship Maersk Alabama, or small sailing yacht Tanit, freed by French Special Forces (in year 2010 OBP used this unique methodology again, recording as hijacked and ransomed for example, Russian aframax tanker Moscow University, which was freed by Russian Navy two days after the hijack). According to OBP, all those ships were released after ransom was paid. According to OBP, the cost of the wooden dhow of some 100-500 tonnage, loaded with tens or hundreds tons of rice, or cement, or goats, is equal in cost to brand new panamax bulk carrier or VLCC in full load. Dear Mr. Joseph W Escott, if this is not falsification, then what is? What�s the lie which can be honored with the title of �falsification�, of what proportions and to what extent?
â��No institution, no matter the stakes, would risk its credibility by lending itself to a falsified study. However, they would be prepared to advance an idea or an opinion which is supported by statics based on empirical evidence.â�� â�� wrote Mr. Joseph W Escott. Wrong again. Not just wrong, but dead wrong. Explanation: There is the whole market for falsified, or manipulated if you like, Studies. A bunch of organizations, with UN and itsâ�� branches leading the pack, is in constant search for problem or problems, either imaginative or real, in order to fight them. They donâ��t do it for free, of course. They get the funds. Itâ��s a business in itself with tens of thousands of people involved, from naïve starry-eyed enthusiasts to hardened, cynical professionals, who lost conscience long time ago. Itâ��s all about money and power, in the end. To make problem big, professional donâ��t need the problem to be that big. More often, than not, they donâ��t need the real problem at all. All they need is the right Study, to frighten the public by scale and consequences of the invented problem. See my point? For such kind of Study, they donâ��t need people whoâ��re valuing their reputation. They need the whores. â��Think-tankâ�� theyâ��re called, but they should be called â��whore-tankâ��, thatâ��s the term which suits them much better. OBPâ��s â��fellow-researchesâ�� already got their reputation and share of the market, and reputation of being hardened, ready-to-all, falsificators, is exactly the reputation they need to get other profitable orders of other Studies.  Some two years ago I harshly criticized a Study made by one think-tank. It was a study of Somalia pirates finance, presented on one of numerous Conferences devoted to piracy problem. I was immediately contacted by the head of this think-tank, weâ��ve had a discussion, and I agreed with most of what he said, you know. I apologized and corrected my criticism. Thatâ��s the think-tank, which is valuing itsâ�� reputation! Do you believe, Mr. Joseph W Escott, that OBP and the guys behind it, donâ��t know about me and my denunciations? They know me and my Studies all too well. They donâ��t contest my Studies not because theyâ��re too big, and Iâ��m too small. No, they keep silence just because they have nothing to say, or else theyâ��d either suit me, or argue with me in open discussion, long time ago. They wonâ��t ever do anything like this, because they have no chance to stand against me in the open, and well they know that. Theyâ��re afraid actually, that the whole story would somehow attract public attention. 
There is a manipulation in this piracy scam. But the whole scheme is different, it�s not OBP manipulating facts, it�s UN and politicians, who�re manipulating general public by using falsifications, produced by OBP.
Voytenko Mikhail August 2013
 
Posted by : Editor Voytenko Mikhail 
Posted on : August 25, 2013, 8:06 am
 
 
Manipulation not Falsification
 
An interesting and informative article, but unfortunately it is some way off the mark with its lead headline of �falsification�.
Falsification is not a word that I would use to refute the findings of the OBP study. A more appropriate word would be �manipulation� - manipulation of data that, in essences, coincides with the agenda of those who commissioned the OBP study, which is basically what a lot of institutions do when they want to advance an idea or an opinion of material and beneficial interest to them.
Manipulation and falsification are not one in the same � falsification is basically an outright lie. Manipulation, on the other hand, is about taking an intrinsic truth and twisting and shaping it to fit your purpose.
No institution, no matter the stakes, would risk its credibility by lending itself to a falsified study. However, they would be prepared to advance an idea or an opinion which is supported by statics based on empirical evidence.
The problem with empirical evidence is that it can be �manipulated� to read in a positive or negative way, depending on how it is collected and presented. The reason for this has to do with how empirical evidence is gathered. In short, the process can prove to be very selective.
It is the parameters behind the collection of empirical evidence that the author should be questioning and not the study itself. The study merely advances an idea based on a set of parameters that have not, on this occasion, been clearly defined, thus leading the author to conclude that the study has been falsified, which is not the case. More appropriately the study should be seen as one side of the argument which does not embrace all the facts and is therefore limited in scope but not in veracity.
 
Posted by : Joseph W Escott 
Posted on : August 7, 2013, 4:43 am
 
 
 
 
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