January 12, 2015 - 15:44:34 UTC

Special Report on Siphoning of Ship Fuel/Oil at Sea in Asia - Part II

IN THE second part of a Special Report on "incidents of Siphoning of Ship Fuel/Oil at Sea in Asia', ReCAAP ISC provides an update on the escalation in the frequency of siphoning of ship fuel/oil from oil and product tankers in Asia in 2014, and focuses on the modus operandi of the perpetrators, the involvement of syndicates and organised groups, and development since the issue of the first Special Report.

Siphoning of ship fuel/oil is not a new trend, but such incidents have increased since April 2014 with 15 incidents in total reported, 12 of which saw successful siphoning carried out and 3 in which the robbers were unsuccessful.

In raising concerns on the matter of siphoning, ReCAAP ISC has worked closely with the shipping industry, governmental agencies, international organisations and ReCAAP Focal Points in sharing latest situation updates, case studies for the purpose of highlighting best practices and sharing of lessons learned, encouraging proactive actions by respective agencies in addressing the situation collectively.

Modus Operandi (MO)

In general terms, the perpetrators modus operandi in most of the incidents was fairly similar. Interest was focused on the manifest of fuel/oil onboard the vessel, and according to ReCAAP, no intention to hijack the vessel or kidnap the crew. Crew were tied up and locked in cabins as the vessel was steered to another location to conduct the siphoning onto another vessel which would come alongside. On completion of the siphoning, the perpetrators would destroy communication and navigation equipment and then steal cash and personal belongings of the crew prior to leaving the vessel. In the main, the crew were unharmed and no report of violence being involved. The MO of the 12 successful incidents of siphoning are:

a. Size of Vessel. Of the 12 incidents, majority involved tankers of less than 2000 GT. Seven incidents involved tankers between 1000-2000 GT, two incidents involved tankers of 2148 GT and 2223 GT, one incident involved a tanker of 3238 GT, one incident involved a tanker of 4080 GT and one incident involved a tanker of 5153 GT.

b. Time of Incident. All boardings occurred during hours of darkness, with nine boardings took place between 2000-2345 hrs, two between 0055-0205 hrs, and one at 0600 hrs.

c. Duration the Perpetrators were onboard Vessels. It varied from case to case, and likely involved different groups of perpetrators although Srikandi 515 renamed Photo: ReCAAP ISC it may be the same for some incidents due to the similarity in modus operandi. Of the nine incidents with reports on the duration the perpetrators remained onboard the vessels; six incidents involved the perpetrators onboard the vessels for estimated 6-10 hours, and two incidents for estimated 4-5 hours. However, in the incident involving Srikandi 515 (right), the owner ‘lost’ the tanker for 49 days (9 Oct-27 Nov 14). Investigation is ongoing as to what happened to the vessel during this period.

d. Number of Perpetrators. Of the 12 incidents, six involved 8-10 perpetrators, three involved 5-7 perpetrators, one involved 16 perpetrators and two involved 25-26 perpetrators.

e. Weapons. Majority of the incidents involved the perpetrators armed with knives and firearms (such as guns, handguns, pistols). Of the 12 incidents, eight reported that the perpetrators were armed with knives and firearms. Notably, there was no report of the firearms being discharged.

f. Treatment of Crew.In most of the incidents, the crew was tied and locked in the mess room or engine control room when the perpetrators steered the vessel to the South China Sea to carry out siphoning. The crew was not injured in most of the incidents except for minor injury sustained by the crew in two incidents; namely onboard Sri Phangnga and Sunrise 689.

g. Action by the Crew. Of the 12 incidents, SSAS was activated in four incidents, of which the maritime enforcement agencies responded to three incidents, namely Ai Maru on 14 Jun 14 (where six warships from Malaysia, Indonesia and Singapore were deployed), Oriental Glory on 16 Jul 14 (where KD Trengganu from the Royal Malaysian Navy was deployed), and Suratchanya on 15 Oct 14 (where three vessels from the Indonesian Navy were reportedly deployed).

Organised Crime and Syndicates

It is assessed that there were at least three organised groups involved in the siphoning based upon the location of siphoning and the perpetrators' MO.

One group operating in the Straits of Malacca and Singapore (SOMS) region, which is relatively less violent and not very successful - probably due to patrolling by the littoral States and joint coordinated patrols. The groups thought to be operating in the South China Sea (SCS) were likely equipped with more 'seaworthy' vessels due the prevailing sea state/condition in the SCS. Until substantiated by further input, ReCAAP assesses that one group, possibly with Indochina connections, had been active in the area, deploying larger number of perpetrators and targeting larger tankers, including Budi Mesra Dua, Sunrise 689 and Oriental Glory.

Syndicates are most likely to be involved, which is supported by the recent arrest made by the Singapore Police Coast Guard in Sept 2014 where a total of 53 men were arrested for involvement in illegal ship fuel trade. Most of these cases were considered 'insider-job' as it involved crew who siphoned fuel/oil from their own vessel. The initial investigation revealed that syndicates were behind the crime with mastermind and middlemen serving as the go-between for 'sellers' and 'buyers'.

In incidents where the perpetrators boarded and steered the vessels from one location to another in order to conduct siphoning to another vessel, syndicates and organised groups would need to have a good knowledge, or insider information, of the type of manifest onboard the victim vessel, the vessel's route, type of siphoning equipment onboard to facilitate the siphoning process, preferred location to enable the siphoning whilst avoiding detection by authorities, the scheduling of another vessel to come alongside the victim vessel at a specific time and location, storage of, and location to transfer, the stolen fuel/oil to potential buyers. The group would also need to understand the 'market' demand, including the type, grade and the 'market price' of the siphoned fuel/oil.

ReCAAP, in consultation with shipping companies, was informed that some groups have connections with, and belong to, well-organised syndicates which sell illegally siphoned fuel/oil, or employ middlemen as distribution channels, either a wholesaler or retailer themselves, to sell the stolen cargo. Networking and word of mouth are the means of linkage between buyers and sellers for cheaper bunkers, not ruling out transnational organised syndicates involvement.

In such operations, precise planning and coordination are essential. Good information networks are key. However, two incidents indicate that the 'wrong' vessels were boarded.

The incident involving New Glory (25 May), the perpetrators left the tanker after searching the cargo and realising that the vessel carried hot asphalt instead of diesel. Consequently, they took crew cash, personal belongings and then damaged communication equipment before leaving. A similar scenario occurred onboard VP Asphalt 2 (7 Dec), also carrying asphalt. Unfortunately, the Third Engineer sustained a shot to the head, discovered by the Master after the perpetrators had left the vessel.

Of note, several victim vessels' last port of call was Singapore. Of the 12 incidents, 8 vessels departed Singapore port. ReCAAP assessed that the perpetrators targeted vessels loaded with fuel/oil from Singapore refineries, which are believed to produce better quality and grade of fuel/oil.

Suspected Conspiracy

As some companies' vessels had been boarded and robbed one after another - Ai Maru, Naninwa Maru No.1, Moresby 9; and Danai 4, Orapin 4 and Orapin 2, conspiracy between perpetrators and ship's crew cannot be ruled out. Closer look at the Naniwa Maru No.1 incident, where the Master, Chief Office and Chief Engineer, left the tanker with the perpetrators, taking their personal belongings and travel documents. Opportunely, the company also failed to contact the crews' families after the incident.

Two vessels had been boarded more than once in the last two years.

Honduras-registered tanker, Ai Maru, had been boarded 5 Jun 2012 by 6 pirates in the vicinity approx 30nm off Horsburgh Lighthouse, SCS. The pirates took control of the tanker but left when they noticed a small aircraft hovering overhead in the vicinity. Two years later, 14 Jun 2014, Ai Maru was again boarded with pirates able to successfully siphon 40% of the Marine Gas Oil (MGO) cargo carried.

The other tanker targeted more than once was Honduras-registered product tanker, Moresby 9, boarded 17 Aug 2013 and 4 Jun 2014.

Also highlighted by Ship Technology, quoting OCEANUSLive.

Implications

The majority of incidents targeted MGO which is relatively costly and consequently in greater demand. Other fuel/oil types targeted were Marine Diesel Oil (MDO), Automative Diesel Fuel (ADF), Marine Fuel Oil (MFO), Diesel and Lube Oil.

Due to the market price and taxes imposed on fuel/oil, illegal siphoning has become a lucrative business. The demand in underground markets indicated that siphoning attempts will continue, says ReCAAP. As such, littoral States and the shipping industry are urged to adopt a more "concrete and robust response" to address the problem collectively. A drop in the price of oil is likely to bring about a decline in its market price, however, it remains to be seen whether this will dampen demand in the underground markets.

ReCAAP points out that illegal selling of fuel/oil, in pursuit of greater profit margins by those who may compromise on the quality of the fuel/oil, to buyers seeking cheaper fuel/oil who in turn may not be too concerned about the inferior grade fuel/oil that may adversely affect vessel engines, resulting in possible pollution or environmental concerns that may arise in the vent of a collision of oil spill.

Risk Assessments

In light of the increased number of siphoning incidents in 2014, ReCAAP underscores that shipping companies face challenges to ensure the safety of not only the cargo carried, but most importantly, the safety and security of the crew. It is important that ship owners and Masters be apprised of the latest situation and locations of relatively high number of incidents. This is in order for them to avoid the route, if possible, or to exercise a high level of vigilance when passing through the region. Analysing the case studies undertaken by ReCAAP ISC, the timing of boarding and the appearance of another tanker alongside the victim vessel indicates that it is more than coincidental. It is clear that the perpetrators have prior knowledge of the manifest carried aboard the tanker, its route and its schedule. It is, therefore, important for a shipping company to maintain confidentiality on the type of manifest, the intended route and schedule of the vessel.

Recommendations

Preparedness and pro-active action by shipping companies are fundamental to the prevention of this illegal activity; and amongst the key recommendations by the ReCAAP ISC are: enhanced vigilance while underway and conduct of risk assessments, and timely reporting. Amongst other countermeasures adopted, the ReCAAP ISC recommends the following:

Conduct maritime risk analysis including threat profiling to determine potential threat in the area, identify the locations vulnerable to boarding by pirates/robbers, assess the risk involved in the route taken and formulate security plan based on the analysis;
Coordinate and inform maritime enforcement agency in the area of the planned voyage specifically if the route to be taken is vulnerable to boarding or had occurrence of boarding before;
Conduct regular crew’s background check, and mindful of the crew’s activities onboard the ship and ashore;
Review the composition of master and crew (if possible) in the event that the same person or group of crew was involved in previous piracy or armed robbery incidents; and
Preserve and collect evidence after boarding for investigation purpose. See IMO Guidelines

The ReCAAP ISC notes that there is a dire need to strengthen national coordination among the littoral States through their respective enforcement agencies to curb illegal siphoning activities. In response, more need to be done by the littoral States such as enhancing existing joint coordinated patrols by the littoral states (which is currently ongoing in SOMS) to SCS to maintain presence. To display a strong commitment and determination to clamp down illegal siphoning activities in this region, the littoral States may consider joint patrols and surveillance in the SCS to apprehend perpetrators in action in order to serve as deterrence. The ReCAAP ISC recommends the littoral States to examine the following:

Formulate standing procedures among enforcement agencies in the region to facilitate the planning of combined operations and to coordinate effective response to piracy/armed robbery incidents, including when suspicious entities were involved.
Exhaust the possibilities of utilising intelligence units of enforcement agencies by conducting combined covert enforcement operations to gather information about groups involved in siphoning activities, their mastermind, affiliates and ‘blacklist’ companies that sell illegally siphoned fuel/oil;
Establish a composite special task force or group from the Navy, Maritime Police, Air Force and other maritime enforcement agencies to conduct regular maritime presence in locations of concern;
Establish a legal framework to facilitate and enhance effective prosecution of the arrested perpetrators.

Conclusion

The ReCAAP ISC, once again, reiterates the need for collective and shared responsibilities among all concerned entities to deal and tackle with such maritime crime. The ReCAAP ISC strongly encourages ships' master and crew to exercise enhanced counter-piracy measures and report all incidents to the nearest coastal State immediately; ship owners/agents to review their respective crew, manpower and information structure to minimise/eradicate insider involvement; and urges the littoral enforcement agencies to beef up its surveillance efforts and activate timely responses when incidents were reported to them.

Original Source: ReCAAP ISC

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