Sunday, 14 November 2010

Negotiation Strategy and the Piracy Market

"To negotiate or not to negotiate, that is the question"

Ransom payments have reached a new peak. A few days ago, Somali pirates received a total of $12.3m in ransom money to release two ships (the Samho Dream and the Golden Blessing). We are dealing with highly sophisticated and organized criminals.

Pirates are getting better at what they do. The international effort which sought to combat piracy has failed.

What's going on?

Let's look at the mechanics and incentives behind piracy. A major incentive is clearly economic gains. When pirates hold property and/or crew hostage, it's difficult for shipowners/insurers/lawyers/law enforcement authorities to keep their heads cool. So how is the release of crew/property negotiated?

The fact is that little attention has been paid to this practical concern of the piracy problem. Can negotiation strategy help? What are the negotiation strategies employed with pirates? Are these the right ones? Perhaps part of the problem is how we negotiate with pirates.

States usually refuse to negotiate with terrorists for policy reasons. So why do we allow ourselves to negotiate with pirates?

We should recognize that ransom payments are counter-intuitively part of the problem.

The Piracy Market's logic is clear:
  • Ransom payments = incentive for pirates;
  • Incentives create and formalize the market for piracy;
  • The "Piracy Market" attracts new market participants;
  • The new market participants perpetuate piracy.
It's a vicious cycle that's getting worse.

But what is the alternative?

I'm trying to explore these issues in more detail. The scarcity of information and the relatively secretive nature of ransom negotiations complicates research in this area but it is hoped that I'll be able to hypothecate on what information is available so as to help stakeholders better deal with pirates in these delicate situations.

It may be that we should re-consider not only whether current negotiation strategies are effective, but - perhaps more controversially - whether we should negotiate with pirates at all.

Any contributions from lawyers/negotiators/law enforcement agents are highly welcome.

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