Economy

Rapacious Corporate Players Are the Real Pirates of the High Seas

Though they may be the most violent actors at sea, the Somali pirates' mercenary motives place them in the mainstream of today's shipping world.

The Somali pirates literally blown away by the USS Bainbridge were unlucky thieves. In capturing a U.S.-flagged container ship, the Maersk Alabama, and its captain, Richard Phillips, they chose the wrong target.

One sequestered U.S. captain drew more attention than the hundreds of other pirate captives, either ransomed or still in Somali custody.

The difference between the Maersk Alabama and the Somalis' other targets, however, was not just that they had picked on the most powerful nation in the world, but that they were suddenly confronting a "nation" at all.

Unlike the 18th century Barbary pirates to whom they have been compared on the superficial grounds that they are both poor Muslims feeding off nearby oceanic traffic, today's pirates are stateless actors generally operating in a medium (the ocean) of weak or even fictive states. Moreover, though they may be the most violent actors at sea, the pirates' mercenary motives and ethics place them in the mainstream of today's shipping world.

In The Wealth of Nations (1776), Adam Smith famously anticipated a world in which a relatively unfettered marketplace would maximize production, trade and wealth for all those who could participate in its self-governing mechanism.

Yet, even as he identified the welfare of "nations" with the expansion of "wealth" -- both of which, he believed, required restraint from governmental interference -- Smith notably allowed himself some wiggle room when it came to shipping and sea power. It was no accident, he suggested, that the "first civilized" nations were those around the coast of the tame Mediterranean that had first succeeded in "the infant navigation of the world."

Maintaining access to that navigable world and, if possible, control of the world's trade, it followed, was a crucial mark of national power. Thus it was, that in a much-debated section of his classic text, Smith provided ideological cover for the political protection of native sailors and a national merchant, as well as military fleet.

Though Smith's theoretical "exception" to the free market generally lapsed as a policy priority (particularly once Great Britain proved that free trade itself would help it rule the waves), vestiges of his logic remain in play.

The U.S., for example, long without a competitive oceangoing merchant fleet, has sought since World War I to maintain at least a minimal seagoing capacity by governmental subsidy. In the latest version of this principle, the Maritime Security Program subsidizes some 60 U.S.-flag vessels -- with U.S. officers and U.S. crew -- in foreign commerce, with the proviso that they can be summoned in event of emergency by the secretary of defense.

Thus did the Maersk Alabama, originally commissioned as the Alva Maersk by the Danish shipping giant A.P. Moller-Maersk Group, enter the MSP fleet in October 2004 and find itself, under contract from the U.S. government, delivering food relief off the coast of Africa in April 2009 -- with able backup from the U.S. Navy.

But the Maersk Alabama is the rare exception. For the most part, world shipping today is the prototype for "globalization," the reign of private marketplace competition over any other national or political consideration.

In keeping with a pattern of deregulation that has steadily grown since World War II, shipowners (commonly centered in the richer Western countries and Japan) have evaded the labor and tax laws of their home states by registering their vessels as "flags of convenience" or governmental weaklings like Panama, Liberia, the Marshall Islands and Antigua and Barbuda.

Crucially, in sidestepping domestic legislation, shippers have also availed themselves of a worldwide labor market, brimming with desperate, unemployed laborers eager for jobs under virtually any available terms. So it is that the largest supplier of today's merchant mariners -- and the pirates' hostage list -- is the Philippines, followed by Russia, Ukraine, China and India.

Somalia itself offers an eager maritime labor force, though, like so much else in the failed state, it has little infrastructure by which to train and properly certify its nationals for "legitimate" crewing opportunities.

Yet, while the "anarchy" of Somalia is front-page news, the larger culture of rapacious seaborne commerce goes largely unremarked. Not only do Third World sailors on flags of convenience regularly lack trade union rights or any other means to withstand extended voyages and shortchanged paychecks, but law-abiding shipowners themselves face a host of scheming and underhanded operators.

Indeed, the Alva Maersk, the ship now known as the Maersk Alabama, had fallen victim to this other set of brigands even before it encountered the Somalis. According to court papers filed by the Moller-Maersk Group, the company had been conned for millions of dollars in 2004 by a group of Kuwaiti-based Indian nationals who allegedly forged high-value bills of lading for low-value goods and then subsequently sued Maersk for losing goods that had never been shipped in the first place.

As part of the extended scheme, the conspirators were able to detain the Alva Maersk for several months as collateral in Kuwait until released for a payment of nearly $2 million -- the same amount that the Somalis, five years later, were reportedly demanded for the release of Phillips.

By one measure, news of the successful mano a mano rescue on the high seas seems the perfect escape from the depressing litany of banking high jinks, business collapse and budgetary shortfalls that have dominated the news in recent weeks.

In reality, the fate of the Maersk Alabama and General Motors on the one hand, and global seafarers and Somali fishermen on the other are tied together. They all have a stake in a functioning world economic order -- one that balances opportunity in the marketplace with rules and standards that protect the lives and essential welfare of the players themselves.

Moreover, rather than rely on the occasional national lawman sailing in to take out the bad guys, we had better come up with a more comprehensive, multilateral system of justice upon the waves as well as the land.

Leon Fink is distinguished professor of history at the University of Illinois, Chicago, and is writing a book about the global regulation of maritime labor.
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