Citizens' Issues
Another piracy attack on Fairchem Bogey; the threat to national security and economic growth just gets bigger

India's national security and economic growth are at risk at the hands of a ragtag bunch of pirates, who can reach within miles of the Indian coast and pick up whatever they want, when they want. This is the bigger issue, which gets subsumed while emotions well up on the issue of the seafarers in captivity for months

Twenty-one families all over India must have woken up on Friday, 19 August 2011, breathing a sigh of relief that their breadwinners on board the MT Fairchem Bogey (IMO No. 9423750) were out of the piracy-infested waters in and around Oman. Anchored just about 4-5 miles off Salalah in Oman, the Marshall Island flagged tanker was partially loaded with methanol and waiting to berth inside the port to load some more.

Methanol, without going into details, is as dangerous to transport as petrol, if not more so. And under some circumstances, like if there is a change in pressure or higher ambient temperature, it can be much more dangerous. It's not a job for every seafarer. You certainly have to be one among a special breed of highly committed, experienced and trained seafarers to work on a modern tanker. Carrying methanol puts you a cut above this lot, too, and people who work on such ships are worth every dollar they earn, and more. Put it this way, even without the additional stress and risk of piracy, there is bound to be enough on the minds of the officers and crew on board a methanol carrier tanker ship.

So, when on the morning of Saturday, 20 August 2011, a fairly large group of pirates, in multiple boats, swarmed the Fairchem Bogey, the first thing on the minds of the people on board, over and above their own personal safety, would probably have been to ensure that the ship and the cargo or residual cargo on board did not suddenly become a huge explosion.

There is a huge port nearby, with a big city next to it, and millions of lives to think about. Then, and only after they had taken these precautions, would they have-in all probability-headed for the safe area/citadel on board. By that time it was simply too late. The pirates had taken over, and with guns to their heads, the ship pulled up anchor and set sail in a south-westerly direction towards Somalia.
After all, nobody in their wildest of dreams could have imagined that such an audacious raid would take place hardly 4-5 miles from a port considered to be so safe, that the minimum level of anti-piracy safety also known as BMP-1, was in position at Salalah. Even Mumbai, far away from the piracy lanes, is kept at BMP-3 most of the time. That this part of the world is observing Ramadan is a fact that, also, cannot be overlooked.

BMP (best management practices) for anti-piracy along with some other details are provided here.

Here are some points that must be taken into account.

1) 4-5 nautical miles is less than the distance that you see most ships anchored off the Gateway of India. That's the reality. One of the tourist boats at the Gateway would take an hour or more to cover that distance in good weather and longer during the monsoon. We already know the level of coordination that exists between the authorities if in case something like this happened off an Indian port.

2) BMP levels sound very good on paper, but, in reality, on working ships with bare minimum safe-manning levels, they tend to stress and over-strain the already over-worked staff to a point where there is simply no bandwidth left to do everything that the management ashore recommends. This is specially on ships carrying dangerous cargoes. You simply do not have people left over for security duty, and even if there were, how much can they do with fire hoses? In many cases that this writer has heard of, the pirates simply walk around the seamen with the hose, and cut the hose with a sharp knife. End of resistance.

So now, 21 families are being consoled and counseled, and my contemporaries at the ship-management company (Anglo Eastern, in Mumbai) as well as the Directorate General of Shipping, are again putting into effect their post-piracy processes. This includes ensuring that senior management are in contact with families, offering full support, and now, in the case of some of the better companies, double salaries while under capture by pirates.

There is really no more benefit in hitting the authorities on their heads anymore, for not taking steps which could have prevented such incidents. After all, what good would armed guards with guns be on a tanker carrying methanol? In addition, as has been explained to me, Delhi is deaf to all entreaties and logic as far as trying to explain the connection between piracy in the Arabian Sea and the larger issues of national security and protecting the Indian economy are concerned.

Let's face it, about 6% of the world's seafaring community is from India. About 10% of tanker officers are from India. These numbers are simply not enough to make a dent on anything, even if the Indian government takes some unilateral action in the context of Indian seafarers on Indian or foreign flag vessels.

Next, all calculations on deciding vulnerabilities of ships used to take into account maximum speed, as well as the effect of the ship's wake and bow wave, as she sped past. Now, with this revival of attacks while at anchor, which is one step further into outright hijacks and piracy, a whole new approach will have to be figured out because there are bound to be copycat attacks soon, especially as the monsoon weakens over the Arabian Sea. Incidentally, being attacked while the ship is at anchor is nothing new, but it was usually all about quickly stealing whatever they could lay their hands on and running away.
Yes, ships have been purloined from anchorages in the past-certain liberation movements in neighbouring countries were known to do so, killing the crew members in the bargain and then using the ships for their own purposes. But hijacking a ship for ransom, pure and simple monetary, has not been heard of in a long while, barring the still unresolved case of the MV Arctic Sea which was hijacked from the English Channel a few years ago.

There is really not much one can do or suggest anymore, because the authorities as well as the ship owners and ship managers are comfortable with the concept that the Indian seafarers on board are collateral damage, who knew what they were letting themselves in for when they chose to work on such high-risk ships in high-risk areas carrying high-risk cargoes. However, one can only hope that the ship owners and ship managers offer as much support as possible to the families of the seafarers on board, and more.

Because, this is for sure, the ship and cargo on board is certainly heavily insured for any and all risks. This needs to be extended to the seafarers too. If, at the end of the day, it is all about money for all the players in such episodes (owners, insurers, pirates, cargo interests, and others) then the seafarers need to be covered too. Because, the fact remains, nobody promised us a risk-free career when we came out to sea, lured as much by the glamour as the money. The glamour is now history; so if it is all about money, then so be it. That's as far as the seafarer is concerned.
But the larger picture, the one that the Indian government needs to really get concerned about, is the threat to India's national security and economic growth. Both are now at risk, at the hands of a ragtag bunch of pirates, who can reach within miles of the Indian coast and pick up whatever they want, when they want. This is the bigger issue, which gets subsumed while emotions well up on the issue of the seafarers in captivity for months. And for just that reason, the attitude of the Directorate General of Shipping, ship owners, managers and unions, of keeping everything hush-hush, is almost anti-national. Come out, and be done with it, let the media in on whatever is happening. Because the issues are much bigger.



Anil Devli

5 years ago

A few points from INSA (Indian National Shipowners Association) to provide Indian shipping’s perspective on this issue.

The usage and utility of armed guards has been debated much as various international fora including at the IMO who has finally come out with a position on the use of Armed Guards, as have other international associations or agencies such as BIMCO, ICS, and ISF. The use of armed guards on merchant vessels was discussed at the 89th session of the IMO in May 2011 and interim guidance on the employment of privately contracted armed security personnel on board ships transiting the high risk piracy area was approved.

The use of such PCASP is not considered as an alternative to Best Management Practices (BMP) and other protective measures. Placing armed guards on board as a means to secure and protect the vessel and its crew is only an additional measure at best, and something which all Indian ship owners would do in discussion and in consultation with the Master of the vessel. However, much of this is academic since we are awaiting permission from the GoI to employ such Privately Contracted Armed Security Personnel (PCASP). We have been told that such a policy should be released soon. Incidentally, it is not unknown for tankers to have used PCASP’s on board their vessels.

However, while the usage of PCASP’s are an interim measure, INSA has always advocated the use of our Naval Personnel, (trained commandos) who would be posted on Indian flag vessels in order to secure the safety of the crew, the cargo and the vessel. The comfort factor to the Indian seafarer of having somebody from his own armed forces guarding him is immense but equally important is the fact that having our own Navy guarding our ships ensures that the national security angle within our ports and our coastal waters is also secured. INSA hopes to see a positive comeback from the Indian government on this.

It would be erroneous to assume that some ship owning company is always at fault whenever an Indian seafarer is in peril. As it is incorrect to suggest that ship owners and ship managers are comfortable with seafarers on board being the collateral damage. On the contrary, Indian flag ship owning companies have shared a long relationship with its crew – with several of them rising from the rank of trainee cadets over the years.

What in fact has broken this bond and increased attrition rates within the Indian shipping industry by facilitating large migration of Indian seafarers to foreign flag companies – is Indian government’s policy of differential taxation. The wages of an Indian seafarer on board Indian flag vessel are subject to tax whereas those paid for doing a similar voyage on a foreign flag vessel is tax free. By incentivizing, this policy has fueled the drain from Indian flag ships to foreign flag vessels.

In this context too, INSA has demanded several times that the tax treatment for Indian seafarers on Indian flag ships should be on par with that on foreign flag but we have yet to see the government do something about this.

The casualty in all of this is the Indian seafarer and the Indian ship owner. These two are the only entities left holding the baby. There has been little hesitation in certain quarters to term Piracy as a “business” since every stakeholder seems to be raking in money – from the underwriters who charge additional premiums to the negotiators, insurers, security companies and of course the pirates. It is the seafarer who faces personal risk and a responsible ship owning company who has to attempt and resolve the issue at the earliest and in the best possible manner.

While our Navy has done an excellent job in controlling piracy within the coastal zone of India and has been extremely active in tackling pirates and their vessels in the Indian Ocean region, we at INSA believe that it is time for the Indian government to escalate this to the United Nations Security Council. An international force under the aegis of the United Nations against the scourge of Piracy is the only definitive answer.

INSA believes that the media can play an extremely important role in building public opinion that would make action by United Nations Security Council inevitable. However, other than a few articles on piracy, one does not see much policy shaping or opinion creating endeavours by our media. We at INSA would be more than happy to share information/data with the media as we appear to be in consonance on the core issues – safety of Indian nationals, future of shipping, trade, economy and above all national security.



In Reply to Anil Devli 5 years ago

Dear Mr. Devli/INSA, thank you for writing in, thank you for reaching out, and thank you for the points brought up.

A full response shall be provided to you on INSA address after consulting with the editors of MONEYLIFE.

I would like to respond interim as follows;-

# On armed guards, in the specific case of the FAIRCHEM BOGEY, which as you know is an American controlled ship operating under the Marshall Islands FOC, there were armed guards on board till the 18th of August. they were then withdrawn because SALALAH anchorage was considered 'safe'.

# However, on the larger issue of armed guards onboard merchant ship, taking into account a variety of issues including lifeboat capacity, accomodation, line of command, inter-personal issues, port state issues, much still remains to be done. A strong flag state like India can, if it chooses to, bulldoze its way on this subject if it wants to.

# To blame the exit of Indian seafarers from Indian flag to foreign flag only for reasons of taxation is to miss the woods for the trees. This is another subject which can be debated at length.

# The media is not some sort of tap, to be switched on and off at will, as your last para suggests. In the first instance, INSA and its members will need to open themselves up for much more scrutiny from the media, on a variety of issues like:-

=how many INSA members are also owners/operators of foreign flag/FOC vessels.
=where is INSA on wage negotiations with Indian seafarers.
=why are Indian seafarers on Indian ships not treated as "employees" by INSA members, but instead, kept on contractual basis.
=what is INSA's position on citadels and non-armed responses onboard Indian flag ships.
=what is INSA's position on additional insurance as well as compensation for Indian seafarers on Indian ships who end up in trouble of any sort including piracy.
=what is INSA's position on the RPS Rules 2005 from DGS, which acts as a direct counter-punch to anything that INSA expects wrt employing Indian seafarers?

=Most of all, what is INSA doing to encourage media to interact with Indian seafarers on Indian ships, along the lines of what, for example, the Indian Armed Forces are doing lately?

There is a lot that INSA can and should do, instead of just picking on one aspect - taxation. Today Indian seafarers on Indian flag ships are not given shore leave in Indian ports, they are treated like rubbish by the vast variety of "authorities" who are inter-acting with ships in port, the big issue of still keeping seafarers on contractual "wages" instead of on employment is ofcourse mentioned.

Thank you for writing in. I would certainly wish to take these issues forward, but please look within - when was the last time INSA came out strongly on issues pertaining to the way shipping is being destroyed in India, especially Indian flag?

The answer, Mr. Devli, lies in the simple fact that most of the INSA members have more ships under foreign / FOC flag than under Indian. So obviously, where do the real interests lie?

Warm regards/Veeresh Malik


In Reply to malq 5 years ago

"# On armed guards, in the specific case of the FAIRCHEM BOGEY, which as you know is an American controlled ship operating under the Marshall Islands FOC, there were armed guards on board till the 18th of August. they were then withdrawn because SALALAH anchorage was considered 'safe'. "

Who on earth deemed Salalah as ''SAFE''???!! IF it was so called intelligence from the " "Security Company" " then they failed in their duty as a provider of services, this company would have known that Salalah certainly is NOT SAFE, nowhere within the HRA is "SAFE". I would sugest the CEO of this security company be questioned on why they allowed the team to disembark at Muscat (certainly could not have disembarked anywhere else 2 days geographically from salalah) without advising this was a dire idea!
Also I find it strange that a team would disembark at Muscat when the vessel had come from north of that location, armed teams are usually embarked and disembarked at Muscat and NOT upwards north.
SOMETHING NOT RIGHT ABOUT THAT STATEMENT of a team being disembarked on 18th. WERE THEY REALLY EVER THERE??? Doubtfull or yes they were and are inept and should foot the bill on bad advice which led to ultimately; a hijacking of that vessel they were employed to protect! This decision would have to come from the top of the chain in security...CSO of anglo eastern/owner coy OR Director/CEO of the security team company regardless of what the captain wants.


5 years ago

Further update No. 1 on FAIRCHEM BOGEY IMO 9423750

Here's an update on what reportedly happened with the FAIRCHEM BOGEY, and a sordid tale of ineptitude and lack of real concern all around, as well as the realities.

# The FAIRCHEM BOGEY was anchored about 2 miles away from the Port of Salalal (POS).
# The first boarding by pirates was at about 0500 hours local time, when there was apparently only a quartermaster on the bridge, since the ship's complement was extremely tired. Fudging of time sheets is not an unknown truth in an industry where people have to prove that they worked only about 100 hours a week.
# Alarms and MAYDAY issued on Channel 16 immediately, and then continued on Channel 16 open for all in vicinity to hear.
# More pirates boarded till about 0700 hours local time.
# The Port of Salalah immediately contacted the Royal Omani Army, Navy and Coast Guard - it appears that the Navy did not even have anybody to pick up the phone at 0500 hrs.
# It took the ship 3 hours and 20 minutes to start moving seawards under pirate control from anchor. It is assumed that about 1.5/2.0 hours was spent in getting in and then out of the citadel, some seafarers were left outside the citadel, though this is not confirmed either.
# When Royal Omani Navy deployed a patrol boat and ordered the vessel to stop or they would shoot, the response was "don't shoot they will kill us" from the ship.
# Helicopters were not deployed to attempt to put special forces onboard, also slight mist/fog, reported.
# The Royal Omani patrolboat that followed gave up the chase after about 40 nautical miles.
# An Italian and a Chinese warship which were present in Salalah declined to do anything as the incident was in Omani territorial waters.
# Some members of the ship's complement were apparently able to contact their family members.

More updates soon.


Anon UKSec

In Reply to malq 5 years ago

This crew were trained/advised in anti-piracy and therefore having 1 man on watch was totaly against NSP's in High Risk Area's. You can assume 18+ were off duty asleep. Surely 1 man bridge deck lookout would have spotted the danger and called the anti piracy drill into play.
As to the security/naval services of Oman...where is the anchorage protection measures??? At least a security zone should be placed and patrol rotated 24/7...then again, if they can't even answer a radio/telephone, then I guess I must be having a laugh to question the security zone. Anchorage charges are quite high and for that money shipping companies should now demand if they pay the fees that they should expect reasonable security measures be in place by that countries authorities. If Mombassa can do it in their current financial situation, am quite sure Oman can!
Also...why did the shipping coy/charterers not ensure the continuation of armed security as before?? I would suspect SW Monsoon season puts out a false sense of security.
I for one always advise due dilligence and vigillance throughout the High Risk Area no matter what the weather.
My thoughts go to the crew and of course their distressed families back home.

Cover shorts in further dips as the bears near short-term exhaustion

The bears are in control, but they may find it uneconomical to sell further at lower levels, as a result of which we could see the selling pressure ebb 

S&P Nifty close: 4845.65

Market trend
SHORT term: Down        MEDIUM term: Down        LONG term: Sideways

The Nifty opened marginally better last week, but relentless selling by the bears as well as capitulation by the bulls saw the Nifty crash 227 points (-4.48%). The breach of the low of the 'high wave line' pattern (which denotes 'equilibrium' between the bulls and bears) also resulted in some panic. The volumes were significantly lower and volatility high. The sectoral Indices which led the decline were BSE Reality (-7.36%),  BSE Bankex (-7.51%) and BSE IT (-5.33%), whereas the ones that outperformed were BSE FMCG (-0.25%) and BSE Oil&Gas (-3.11%).

The histogram MACD continues to be below the median line as the trend is down. We saw the Nifty dip below the 200wema and close marginally above it during the week, raising some hopes of a recovery. We saw the S&P Nifty hit the 61.8% retracement (4,842 points) of the rise from 3,918-6,335 points, and lows of 4,675-4,786, that should also act as a crucial support. We can see in the weekly chart (above) that the trendline (in green) pegged at around 4,650 points will also provide support. Therefore, there is strong support pegged slightly lower from where at least a contra-trend rise could begin.

Here are some key levels to watch out for this week.

  • As long as the S&P Nifty remains below 4,925 points (pivot) the bears hold the advantage.
  •  Support levels are pegged at 4,717 and 4,588 points.
  • If the S&P Nifty holds above the 4,925 points level in close, it could recover to 5,053 or 5,260 points.

Some observations
Despite the bears having an upper hand they should be cautious at lower levels, especially if the Nifty dips to sub 4,900 points level. The reason are that,

1. Eight weeks (Fibonacci number) have been completed from the recent low of 5,195 points.

2. There is support from the lows of 4,786, 4,675, and in a pessimistic scenario 4,538 points.

High volatility will continue this week as the bulls try to stem the rot around the supports.

As was mentioned in the previous week, volatility remained high and the Nifty dipped below the 4,900 points mark, thus bringing it close to the support levels mentioned. The bears are in control but may now find it uneconomical to sell further at lower levels, as a result of which we could see the selling pressure ebb. Those short should cover their positions and only the adventurous ones can do some bottom fishing close to the supports, as the risk/reward ratio would then favour a bounce.

(Vidur Pendharkar is a consultant technical analyst and chief strategist at


SEBI to review consent settlement procedure

SEBI is considering changing consent orders in such a way so that they can be taken as a warning from the regulator and also a ‘name and shame’ directive for entities alleged to have indulged in market irregularities

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) is mulling changes in the way it settles probes against listed companies and various market entities through a consent procedure—an out-of-court-like settlement—as it has found the prevailing system to be lacking in uniformity, reports PTI.

In the consent settlement that is in vogue since 2007, the entity facing probe is subjected to certain fees and restrictions without admission or denial of alleged irregularities and SEBI thereafter drops its charges and the investigations.

An internal study by SEBI has, however, found that different yardsticks might have been applied in different consent cases and there is no consistency and any clear-cut uniformity in the way such cases are handled, sources said.

Subsequently, SEBI has decided to consider a revamp of its consent settlement procedure and is currently working on the required regulatory framework for the same, sources said.

SEBI has also come across cases being settled with entities from same group on more than one occasion, although a consent order is broadly considered as a warning to the related party for not repeating similar offences.

The current regulations also give some discretionary powers to SEBI officials settling the probe and the regulator would now look at bringing in detailed and exhausting rules to be followed uniformly by all its officials while settling the probe under consent procedure.

The regulator’s internal study found that there was a perception about the consent orders being mostly subjective and not adequately transparent in nature and these procedures providing an escape route to alleged offenders.

SEBI would consider changing consent orders in such a way, so that they can be taken as a warning from the regulator and also a ‘name and shame’ directive for entities alleged to have indulged in market irregularities, sources said.

The regulator would look at bringing in more clarity on how such orders should be framed, as also at what time and in which cases consent orders should be passed, sources added.

SEBI introduced consent settlement system in April 2007 with a view to cut down on its costs, time and efforts in taking up the enforcement actions. So far, the regulator has passed more than 1,000 consent orders, which includes those passed against three companies of Anil Ambani group.

Earlier in June, SEBI settled a probe against Reliance Securities for a settlement charge of Rs25 lakh and other settlement terms.

In January, two other Anil Ambani group firms Reliance Infra and RNRL (Reliance Natural Resources) had reached a settlement with SEBI after paying consent charges of a record Rs50 crore and some other restrictions.


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