Insurers defend 'war-risk' rating for Malacca Strait

Updated On: Aug 19, 2005

London – The decision by the influential Joint War Committee (JWC) of Llyods in London to give Malacca Strait a "war-risk" rating has drawn much criticism from the multi-billion maritime industry and littoral states. The critics say the threat is overblown and the rating has added a financial burden to ships using the Strait since they now have to pay higher insurance premiums.

    However, the JWC said its decision was based on a security report which noted that pirates in the Malacca Strait were using the tactics and weapons of Islamist militants, reported Reuters. The report, which the JWC commissioned, was prepared by Aegis Defence Services last month. 
    The Aegis report said the modus operandi and weaponry employed in some pirate attacks closely resembled those used by Muslim militant groups in the region. In fact, the report added, "pirates in the Strait are now largely indistinguishable from terrorists, in terms of tactics employed and weapons used".
    It also identifies the Malacca Strait as a terrorist target, pointing to the threat of the Jemaah Islamiah, the regional arm of the Al-Qaeda terror network.
    "Recent tactics and a number of worrying incidents suggest an increased interest in attacking ships in the strait, and a serious intensification of the weaponry and techniques used," the report added. 
    On Aug 16, a meeting between the JWC, shipping associations, insurers and Aegis was held in London to discuss the issue.
    The JWC promised to review the rating on a quarterly basis. But it added that the Malacca Strait "would remain on the list until it was clear that the measures planned by the government and other agencies in the area had been implemented and were effective". 

* Pirates in Malacca Strait using terror tactics, says insurer report (The Straits Times, Aug 18)