MS Risk Blog

Released Chinese Ship Returns to Port

A Chinese fishing vessel, the Liaoning Generic Fishing No. 25000, seized by the North Korean navy in the Yellow Sea earlier this month, safely docked in its home port of Dalian on the evening of Saturday, June 1st. While there have been reports that no ransom was paid in this instance, the incident demonstrates significant potential risks for shipping operating near the Democratic People’s Republic of Korea’s (DPRK) disputed maritime borders.

The craft and its 16 crew were seized at gunpoint on the 5th of May and taken to be held in North Korea. The ship’s owner, Yu Xuejin, was not aboard and reports that he was informed of the incident on May 10th, when unidentified North Koreans contacted him demanding 600’000 Yuan (£64’000) for the safe return of his vessel. Both Yu and official Chinese sources insist the craft was in Chinese waters, though the ransom demand claimed the vessel was captured because it had strayed in North Korean waters. Yu was ordered to pay the money to a company in Dandong, a Chinese city on the border between the PRC and DPRK with a large population of ethnic Koreans, many of whom retain contact with relatives in the secretive North Korean state.

Instead of paying, Yu contacted the Chinese Ministry of Foreign Affairs (MFA) and publicised his case on China’s micro blogging services, leading to marked public outrage within the PRC. The MFA made representations to the North Korean authorities and successfully secured the release of the vessel and crew on the 21st of May. Yao Guozhi, the captain, claims the crew was kept in poor condition with very little food, though they were able to continue with fishing operations for a time after their release.

While China and North Korean are officially allies, the relationship has become increasingly strained since the end of the Cold War. Beijing finds itself frequently at odds with Pyongyang, and there is significant public demand within China for a firmer diplomatic stance regarding its unpredictable neighbour.

In fact, this incident is only the most recent of numerous acts of piracy in the sea between China and the Korean peninsula. In May last year, 3 Chinese fishing vessels and their 29 crew were taken in similar circumstances in the Yellow Sea, with a ransom of 1.2 million Yuan (£130’000) demanded. In this instance, the captives were reportedly starved and severely beaten while in North Korean custody. Commenting on the most recent incident, a Liaoning Maritime and Fisheries official observed:

“Whatever you call North Korea – rogue state or whatever – these kind of cases just keep on happening. We had such cases last year and the year before. There’s very little we can do to prevent them”

Exact figures for the number of incidents remain unknown – in the past, many Chinese would pay the ransoms, which were at the time very small. This helped ensure incidents were kept out of the public eye. Demands for increased payment in recent cases perhaps indicate the North Koreans responsible have found the piracy profitable and may be escalating their activities as a result.

However, it is extremely unlikely last month’s seizure of the Chinese vessel represents official North Korean policy. North Korea cannot claim to have an entirely coherent state or military, and government entities including the armed forces became weak and disorganised when a disastrous famine killed an estimated 5 – 10% of the population in the mid-1990s.

As a result of the famine, a huge black market formed which is now the most significant economic force within the DPRK. While the current situation is nowhere near as extreme as in the 1990s, the state bureaucracy often fails to supply basic necessities. With the North Korean won essentially worthless access to foreign hard cash for use on the black market is crucial for even the most basic standards of living – cross-border criminality such as smuggling has proliferated dramatically as a result.

Piracy in the Yellow Sea is very likely another symptom of this trend. North Korean armed forces personnel are extremely poorly paid and often malnourished, and many become involved in criminal activity to supplement their meagre earnings. As such the most likely culprits in last month’s incidents, and identified as such by the Chinese victims, are North Korean naval forces acting opportunistically.

While broader state involvement is doubtful, some level of co-operation with local officials is likely, though the exact identity of the Koreans involved remains unknown. Additionally, reporting from similar incidents in the past has suggested the possible involvement of Chinese-Koreans, perhaps indicating a connection with ethnic Korean organised criminality based in the aforementioned border city of Dandong.

North Korea does not recognise the Northern Limit Line, the de facto maritime boundary with South Korea, and has operated beyond it in the past, while its maritime borders with China remain extremely fluid. Disputed territorial claims in the area and lack of strong authority in the DPRK have created a cat and mouse game of border incursions between vessels of both Koreas and Chinese ships. Chinese pirates also operate in the Yellow Sea, and killed a North Korean soldier in 2009. North Korea has a history of capturing South Korean ships, and reportedly continues to hold a total of 427 South Korean sailors and fishermen captive, though this activity has lessened dramatically since a peak in the 1970s.

The North Korean navy is poorly equipped, and for the most part limited to operations in or just beyond it’s territorial waters – the major shipping lanes in the Bohai Strait and similar likely remain outside the reach of most DPRK vessels. Nevertheless, any ships in the Yellow Sea and Korea Bay should be aware of the contentious environment and the potential for DPRK naval forces to engage in opportunistic acts of piracy.

While the political situation on the Korean peninsula has recently begun to calm down again, escalation is almost certain to reoccur in the future. In case of dramatically increased tensions, DPRK violations of South Korean or Chinese waters would be expected, with the North Koreans unlikely to respect the status of any neutral shipping in the area.

Prison Attack in Niger

In what appears to be a third attack carried out by suspected Islamist militants, officials in Niger have confirmed that twenty-two inmates escaped from the main prison in Niger’s capital on Saturday.  This latest attack comes just days after Islamist militants claimed responsibility for two suicide attacks that were carried out on a military base and a uranium mine in northern Niger on May 23.  At least twenty-five people were killed in those attacks.  The Movement for Unity and Jihad in West Africa (MUJAO) and an al-Qaeda affiliated group, the Signed-in-Blood Battalion, which is led by Mokhtar Belmokhtar, have claimed responsibility for the two attacks, indicating that they were in retaliation for Niger’s military intervention in Mali, which effectively drove them out of the northern regions of the country earlier this year.

Justice Minister Marou Amadou has confirmed that during Saturday’s prison break in Niamey, three guards were killed.  Although there are conflicting reports pertaining to the events surrounding the prison incident, sources have indicated that weapons had been smuggled into the jail while some of the escapees were prisoners who were facing terrorism charges.  According to Niger’s Justice Minister, “it has emerged from initial investigations at the site that the aggressors obviously benefited from outside complicity regarding the weapon introduced into the prison.”

Officials have indicated that the attack began when a prisoner, believed to be a Sudanese member of MUJAO, grabbed a gun from a guard and proceeded to shoot three guards and a civilian.  Members of the group who were stationed outside the prison then proceeded to open fire.  Sources have indicated that four inmates inside the prison had participated in the attack.  Residents reported seeing gunmen firing at guards at the entrance to the prison at around 15:00 local time.  Nigerien gendarmes later arrived at the prison in order to help the guards, who remained under fire for about forty-five minutes, while police blocked off all roads leading to the facility.

While little information about the prison escapees has been released, officials have confirmed that Malian national Cheibane Ould Hama, who was convicted of killing four Saudi tourists and a US citizen, was amongst those who escaped.  Hama killed four Saudis in an attack on a convoy that was travelling near the border between Mali and Niger in 2009.  He killed an American national in 2000 in front of a bar in Niger’s capital.  Officials have confirmed that he is currently being “actively sought.”  The escaped prisoners are a danger to the region and officials in Niger have called on the citizens of all countries in West Africa to “remain calm” and to exercise their “duty to be vigilant.”

Although Niger has seen a number of kidnappings and attacks occur on its territory in recent years, a number of which have been claimed by al-Qaeda in the Islamic Maghreb (AQIM), the latest string of attacks are directly linked with Niger’s participation in the ongoing war in Mali.  Consequently, it is likely that such attacks will continue to be carried out and will likely target Westerners and Western interests.

In a separate incident, officers from Niger’s anti-terror squad killed one person and wounded another on Sunday when they opened fire on what they have indicated was a suspicious-looking four-by-four with tinted windows that had been driving back and forth in front of their headquarters.  According to Niger’s Justice Minister, the officers had given the “usual warnings” before firing the shots in order to stop the vehicle.  He further indicated that the car’s two other occupants have been taken into custody.

With three attacks occurring in Niger over the last two weeks, MS Risk advises against all travel to the following regions of the country:  all areas of the country north of the city of Abalak, including the Air Massif region; the province of Agadez (including the road linking Assamakato Agadez and the city of Agadez); areas of Tahoua province north of the city of Tahoua, including the city itself; the area of Tillaberi province north of Niamey, including the road from Niamey to Gao and the road from Niamey to Menaka; areas within 40km of the border with Nigeria in the provinces of Diffa, Maradi and Zinder.  There is a high threat of terrorism and kidnapping in Niger.  Any companies and employees currently in Niger are advised to remain vigilant and to continue to monitor the developments.

Protests Escalate in Turkey

The British Foreign and Commonwealth Office (FCO) has issued a travel advisory against
all but essential travel to Turkey. Demonstrations are taking place in cities across the country. Police are using tear gas and water cannons in response. Foreigners are advised to avoid all demonstrations.

Anti-government demonstrations have entered their third day as battles between police and protesters have spread to 48 cities in Turkey.

The protests initially began as a sit-in over a development project which threatened to redevelop Gezi Park, the last patch of green space in the commercial district of Istanbul. Demonstrators attempted to prevent workers from razing some of the 600 trees for the restoration of Ottoman-era military barracks which will be turned into a shopping centre.

Turkish police responded to the demonstrators by using electric shock batons and tear gas, sparking national protests against what opposition calls the government’s limiting of personal freedoms and an “increasingly conservative and authoritarian agenda”.

By Saturday, the protests had spread to over 90 separate anti-government demonstrations in 48 cities throughout Turkey. Thousands of Turkish residents in Istanbul marched on Taksim Square, chanting “shoulder to shoulder against fascism” and “government resign.” The protests mark the largest demonstrations against Prime Minister Recep Tayyip Erdoğan and his party, the Justice and Development Party (AKP), which were elected in 2002, and re-elected in 2007. Erdoğan has indicated his desire to change the constitution to allow him to run for a third term.

As clashes escalated, demonstrators attacked police cars and destroyed property. Media in the region has been shut down or limited, further stirring anger among citizens. Turkish police report 26 police officers and 53 civilians had been hurt. Unconfirmed reports from Amnesty International claim that two people had been killed and over 1,000 injured. Police arrested and detained 939 people around the nation. Most have since been released; the remainder will be put on trial.

The harsh methods used by the Turkish police have sparked outrage worldwide. On Saturday, amid outcry from the UK, US, and Amnesty International, Prime Minister Recep Tayyip Erdoğan called on the police to withdraw from the demonstrations. Erdoğan admitted to the extremism in police response; however he maintains that the redevelopment of Gezi Park was an excuse for the unrest believing his main opposition, the Republican People’s Party (CHP), are responsible stirring tensions. Edrogan also offered to speak to the protesters, however there is no clear leader of the demonstrations. The Prime Minister pledged to continue with plans to redevelop Taksim Square.

On Sunday morning, despite isolated clashes, the atmosphere is relatively peaceful, however, the protests are expected to occur in the afternoons and evenings, and are suspected to be sustained.

Militants are Threatening all of West Africa

Ghana’s President John Mahama has warned that Islamist militants pose a threat that could destabilise the whole of West Africa.  This announcement comes just days after Niger’s President indicated that Islamist militants, who attacked two sights in Niger, had come from southern Libya.  It also comes at a time when Nigeria’s army announces that armory belonging to the Lebanese group Hezbollah is discovered in northern Nigeria.

Niger

Ghana’s President Mahama has indicated that while his country has not directly been affected by the threats, no country in the region was safe if an insurgency were to take place in the region.  He further stated that while the French-led military operation had helped secure stability in Mali, the conflict was far from being over, stating that “there is the danger of asymmetric attacks like we saw in Niger the last few days, and so it is a matter that worries all of us in the sub-region.”  In turn, the operation to drive out al-Qaeda, and other allied Islamist groups, from northern Mali had showed how the whole Sahel region had “become an attractive foothold for insurgents.”

Nigeria 

Meanwhile in Nigeria, an army spokesman, Brigadier Gen. Ilyasu Isa Abba has confirmed that a cache, including 11 anti-tank weapons, four anti-tank mines, a rocket-propelled grenade (RPG) and 21 RPG missiles, 17 AK-47’s, two sub-machine guns and 76 grenades, have been found in a warehouse in the northern city of Kano.  He further indicated that three Lebanese nationals have been arrested while a fourth is still at large.  According to a military statement, one suspect, Mustafa Fawaz, was arrested on May 16 and his “confession unveiled other members of the foreign terrorists network.”  A second suspect, Abdullah Tahini, was arrested several day later while attempting to board a flight to Beirut from the airport in Kano.  The third detained Lebanese national, Talal Roda, was arrested at the Kano home on May 26 while the fourth suspect, who has been identified as Fauzi Fawad, remains to be at large.  Nigeria’s State Security Service has stated that the weapons were intended to be used against “Israeli and Western interests,” with Bassey Ettang, director of the State Security Service in Kano, noting that “this is the handwork of Hezbollah.”  He further indicated that “investigations are still ongoing to determine” if the Lebanese nationals “are really connected to Boko Haram.”

This is the first time that Nigerian authorities have alleged that Hezbollah has had an operational interest in the country.  Kano, and the north-eastern region of Nigeria, have suffered multiple attacks in the last three years, ever since the home-grown Islamist militant group, Boko Haram, launched an insurgency.  According to Mr. Ettang, “you can be sure that if a group like this is existing then it may even lend support to some of the local terrorista we have on the ground.”  Hezbollah is a Shiite military and political movement that is based in Lebanon.  It is considered to be a terrorist organization by the United States.

Reacting to the latest claims, a security official in Israel has indicated that Nigeria was  a “destination state for Shiite terror and global Jihad groups, which are boosting their efforts in Africa as part of international efforts.”  The source further indicated that “the cell exposed and arrested is part of a Shiite terror campaign against Western and Israeli targets around the world which has been taking place for a number of years…the possibility that members of the cell acted under Hezbollah’s orders in other African states, such as Benin, the Ivory Coast, Ghana and Sierra Leone, is also being examined.”

Troubled Waters: Suez Canal Corridor Development Project Problematic for Egypt

Background: Egypt’s government is in the beginning stages of
what some have called “the development project of the century.” The Suez Canal Corridor (SCC) development project is a comprehensive project to transform the Suez corridor into a major economic zone and prospering waterfront region.

The SCC project is intended to work through joint public and private partnerships. Developments include construction of a major Mediterranean seaport in Eastern Port Said, a “Technology Valley” in Ismailia, and an industrial zone west of the Gulf of Suez. In addition, the project features residential centres, agricultural projects spanning the length of the canal, and three new tunnels which will connect the two banks of the Canal Zone, referred to as a “bridge for development” in the Sinai.

The project is expected to take 20 years to implement, with hopes of attracting nearly US $100 billion in investments. The SCC development is estimated to create nearly one million job opportunities in Port Said, the Gulf of Suez, and Ismailia, and represents a major component of President Mohamed Morsi’s ‘renaissance’ electoral programme.

While implementation is beginning in 2013, plans for the project date back to the era of Anwar Al-Sadat. Essam Sharaf, who was Egypt’s Minister of Transportation under Hosni Mubarak, and erstwhile Prime Minister for the eight month transitional period between the end of the Mubarak regime and the current government, worked on the project for years, and became its chief architect.

In late April, Egypt’s National Authority for Tunnels signed an agreement with Spanish firm Getinsa Paymacotas to conduct technical studies on building three new tunnels underneath the Suez Canal.  Two of the tunnels will be allocated for roads, and the third will be for a railway. Several countries, including the US, Britain, France, Germany, Italy, Norway, India, Holland, Russia, China and Japan have made offers to invest in the project. Egyptian government has already signed an investment agreement with Chinese TEDA Corporation to develop part of a joint industrial zone near the Suez Canal. The Egyptian government will soon be announcing four additional companies which will be awarded contracts to work on the project. Leaders are also in talks with the Deauville Partnership with Arab Countries in Transition, an international effort launched by the G8. The Egyptian government, led by President Mohamed Morsi, hopes the organization will provide international investment to help fund the project.

Hindrances

Egyptian government circumvents advisory board: Despite the economic stimulus that SCC development promises, it has been met with many hindrances and backlash. On 24 April, the nine-member advisory team, led by  Essam Sharaf, resigned from the project after discovering that the Morsi government had created and was implementing different plans to those suggested by the advisory board. In a statement released on 25 May, the team explains that the government had cut off all means of communication with the advisory board for four months.

“We are aware of the possible damages that are likely to affect the northwest area of the Suez project as a result of implementing the government’s vision, amid the late execution plans and inappropriate policies and legislations,” the statement said.

Problems with legislative framework: A former member of the advisory team revealed that the draft law which the Morsi government had submitted  to the upper parliament (Shura Council) was highly contentious. One component allowed for development  the Suez Canal region without consulting the team. Other sections of the draft law are equally contentious: Article 1 of the draft law states that the borders of the Suez Canal region are to be outlined by presidential decree, and Article 2 says that general authority and the governing system would be decided by the president.

These articles are in direct opposition to Article 5 of the Egyptian constitution, which declares that the Egyptian people are the source of authority. As it stands, the draft legislation does not appear to guarantee popular or legislative overview.

On 23 May, workers at the Suez Canal Authority in Port Said stormed a conference on the project, protesting the projects terms, and the ruling party, the Muslim Brotherhood. As attendees evacuated the conference, several protesters held their shoes aloft—a very strong insult.  Individuals attending protests do not oppose the project itself. Many oppose the draft bill, and have fears for the long term ramifications, including worries that excessive foreign investment could result in risking Egyptian sovereignty of Suez Canal. Others fear that the project puts investors in beneficial positions while not guaranteeing returns to Egyptian workers or the economy. Still others are concerned that international efforts in the region could increase the threats to Egyptian national security, which are already substantial in the Sinai Peninsula.

Attempts at Reassurance:

In a speech at an SCC development conference, Egyptian Prime Minister Hisham Qandil tried to reassure the public, emphasising that the draft law can be amended while being debated by the Shura Council. Qandil also stressed that the draft law takes into account all national security and armed forces criteria, and emphasises sovereignty of the region, indicating that the projects on the land will be usufruct.

Qandil announced, “We are keenly aware of and determined to safeguard the security of our homeland. This is the position of the government and the opposition, without a doubt. There are no land sales involved in this huge project, only lease contracts.” Qandil also stated that some projects in Suez Canal region will start immediately, including the  development of the tunnels that will pass under the Suez Canal.

The statements by Qandil have not assuaged fears, particularly as the Shura Council is dominated by the Muslim Brotherhood. The public remains concerned that the draft SCC project law will be endorsed without public or legislative opinions taken into consideration. Requests have been made by the public to delay the project’s implementation until the new parliament is elected. The Egyptian military has requested deferment until the varying state bodies can guarantee that the project would be free of violations to national security. There is no word on whether these requests will be addressed.

Maritime Impact: Roughly 10% of the world’s merchandise and 20% of all ships pass through the Suez Canal. As political factors are addressed, the project is aimed at turning the canal into “a global centre for industry and logistics.”

The project will evolve in three phases: Phase 1 will focus on developing Port Said and Suez ports by 2017, and will establish a system of trans-shipment to turn those ports into global warehouses. Port Said’s 17,000 acres will include the establishment of facilities to serve the navigation traffic, businesses, tourism and industrial projects. A second container terminal (CT2) will be created on the south side of the port, and will encompass 540,000 square metres. The storage facility in east Port Said will serve giant vessels that wish to decrease the weight of their cargo as they head to Asia, Europe and North America. The plan also incorporates new wave-breaker and dock walls and railways and telecommunications equipment.

Port Said Expansion, Stages 1 through 3 (expected completion 2030):

The Port will expand to increase capacity in the General Cargo Terminal, Liquid cargo Terminal, Multi Purpose Terminal,
Dry Bulk Terminal, Agri-Shipments Terminal, Roll-On Ships Terminal and Bunker Terminal.
Expansion will also see the development of a Ship Yard.

Near Suez, the region of Ain Sukhna will serve as a base for export industries and economic activities. As in Port Said, Ain Sukhna will serve giant vessels that wish to decrease the weight of their cargo as they head to Asia, Africa and Latin America.

The second phase will include establishing an industrial zone that
hosts a variety of industries such as production of machinery, tractors, consumer goods, fertilisers, carpets, textiles and building supplies. The zone will span 190 km from north to south, and build upon existing infrastructure while developing light industrial zones. Plans include the establishment of packaging factories for products transported through the canal. Phase 2 will also see the establishment of ship maintenance centres along both sides of the Canal, and the establishment of light tourism projects on both sides.

The final phase will aim at setting up a “Technology Valley” in Ismailia, making it a centre for technology, commerce, communications, and tourism once the scheme gets off the ground. We have been told that there will be a “technology valley” in Ismailia, that a new tunnel will be built under the canal, and that an industrial zone will spring up on both sides of the canal, to be synergised by the establishment of a world-class technological university.

There has been no suggestion of anticipated disruption to maritime traffic.