From Time Magazine:U.S. and European officials insist they don't pay ransoms to pirates. And why would they? Shipping and insurance companies now routinely pay ransoms of millions of dollars, dropping sack-loads of cash from airplanes into the Indian Ocean and Gulf of Aden, despite assertions from politicians back home that the money is fueling the rampant piracy.
Here is how the system works, according to kidnap-and-ransom experts who agreed to talk to TIME: Within minutes of a vessel being seized by Somali pirates (or foreign oil workers being nabbed in Venezuela or Nigeria) the crew alerts its company headquarters. There, officials call the company's insurer, which then contracts a "response company" — private firms, like Control Risks in London or ASI Global in Houston, which are generally staffed by former military personnel experienced in hostage situations, and whose day rates can run to thousands of dollars, according to insurance brokers. Those companies begin negotiations with the kidnappers or pirates, and are usually authorized to take decisions without agreement from the shipping or oil companies concerned. Since the pirates off Somalia are motivated by money — rather than politics, as in Iraq and Afghanistan — the talks focus on one issue: the ransom amount.
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My Comment: The risks are so low. The punishment seems to be minimal. The rewards are great.
No surprise that piracy has been expanding and growing these past few years.
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