[Senate Hearing 111-101]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-101

              CONFRONTING PIRACY OFF THE COAST OF SOMALIA

=======================================================================

                                HEARING

                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 30, 2009

                               __________

       Printed for the use of the Committee on Foreign Relations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate





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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin       Republican Leader designee
BARBARA BOXER, California            BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey          JOHNNY ISAKSON, Georgia
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   JIM DeMINT, South Carolina
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
JEANNE SHAHEEN, New Hampshire        ROGER F. WICKER, Mississippi
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
                  David McKean, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                              (ii)        



                            C O N T E N T S

                              ----------                              
                                                                   Page

Clancey, John, chairman, Maersk, Inc., Charlotte, NC.............     8
    Prepared statement...........................................    10
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................     1
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     3
Mull, Hon. Stephen D., senior adviser to the Under Secretary of 
  State for Political Affairs with oversight responsibility for 
  the Office of the Under Secretary of State for Arms Control and 
  International Security Affairs and its related State Department 
  bureaus........................................................    28
    Prepared statement...........................................    31
    Responses to questions for the record from Senator Richard 
      Lugar......................................................    38
Phillips, Capt. Richard, master of the MV Maersk Alabama, Maersk 
  Line, Limited, Burlington, VT..................................     5
    Prepared statement...........................................     7

                                 (iii)



 
              CONFRONTING PIRACY OFF THE COAST OF SOMALIA

                              ----------                              


                        THURSDAY, APRIL 30, 2009

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:33 p.m., in 
room SD-419, Dirksen Senate Office Building, John Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Lugar, Feingold, Webb, Shaheen, 
Corker, Risch, Wicker.

  OPENING STATEMENT OF HON. JOHN F. KERRY, U.S. SENATOR FROM 
                         MASSACHUSETTS

    The Chairman. Thank you very much. This hearing will come 
to order. Captain Phillips and Mr. Clancey, we're delighted to 
welcome you here today. We have a little complication in the 
schedule, which is that the Senate is going to have a vote at 
2:45.
    I'll make my opening statement. Senator Lugar will make 
his, and then we will recess for about 10 minutes only while we 
go over to vote and come back. And the minute we get back here, 
we'll pick up with your testimony. So I'd like to hold off on 
your testimony until we're able to get back here, if we can.
    Just a few years ago, most Americans viewed piracy as a 
scourge of centuries past or as the focus of a Hollywood 
introduction. Many people were not even aware of modern piracy; 
they thought of it largely as being contained to Southeast 
Asia, and no longer a serious problem even there.
    But recent events off the coast of Somalia have made piracy 
not just front-page news, but a major concern, once again, for 
shippers and for policymakers alike. Almost every day brings 
news of yet another attack on a cargo ship or a tanker carrying 
humanitarian aid, oil, or even weapons, as well as an attack on 
a usually defenseless crew.
    Today, the committee is going to consider the threat of 
maritime piracy off the Horn of Africa and examine the 
solutions available to the United States, to foreign 
governments, and to shippers, in order to confront this growing 
challenge. These attacks have claimed innocent lives and 
they've imposed a very significant financial cost on companies 
engaged in shipping, not to mention on countries engaged in 
trying to deal with this problem.
    Off the coast of Somalia last year, 42 vessels were taken. 
In 2008, pirates made an estimated $30 million hijacking ships 
for ransom. Companies are paying additional millions of dollars 
on additional insurance costs, on hiring private security, on 
retrofitting ships to make them more difficult to capture, and 
on taking vessels thousands of miles out of their way, 
sometimes all the way around the African Continent, just to 
avoid small bands of pirates.
    And the threat is not geographically contained, either. 
It's true that even as incidents of piracy off the coast of 
East Africa have skyrocketed, they've actually plummeted just 
about everywhere else. But Somali pirates are now operating 
over a thousand miles from the shores of Somalia in an area of 
more than 1 million square miles, and in shipping lanes that 
were even recently considered safe.
    To make matters worse, we know that pirates used much of 
the ransom money paid to them to buy heavier and larger caliber 
weapons and bigger engines for their skiffs to make it even 
easier for them to overtake larger vessels. They also used 
ransom money to arm and equip private militias. This is a 
dangerous and a vicious cycle and it needs to be addressed.
    Piracy goes to the heart of national security and economic 
interests. America has always been a seafaring nation, and 
securing the world's sea-lanes has been a source and a symbol 
of our strength. In the face of instability and humanitarian 
crises around the world, our ability to project our naval power 
to help ensure the free passage of goods and humanitarian aid 
is as important as it's ever been.
    Thriving on chaos and ungoverned spaces, perpetrated by 
small groups of nonstate actors, international piracy combines 
several of the great security challenges of our age.
    It's noteworthy that while our battleships could level a 
city, it came down to the precise aim of three Navy snipers 
killing all three pirates in a single moment before any of them 
could harm Captain Phillips. It came down to that sort of 
microeffort, if you will, that ultimately proved effective in 
resolving this particular incident. But no one can count on 
that in any future incident.
    We must also recognize that Somali piracy is in part a 
byproduct of the absence of the rule of law or a functioning 
government in Somalia. As chair of the Subcommittee on Africa, 
Senator Feingold is going to hold a hearing shortly that 
explores these critical questions in the broader context of 
American policy toward that country.
    And like so many of today's challenges, the renewed threat 
of piracy demands a multifaceted, multinational effort, one 
that coordinates the world's naval powers, the United Nations, 
the international shipping community, and the nations that 
border Somalia.
    At its core, piracy is a criminal act. International law is 
clear in its condemnation of piracy. This is an opportunity for 
all nations to come together and work in order to effectively 
respond. In fact, we have made significant process in 
marshaling an international enforcement effort. The men and 
women of Combined Task Force 151, which is expected to grow to 
22 nations, work hard to patrol the Indian Ocean and the Gulf 
of Aden to keep it free of pirates and to assist vessels in 
distress or under attack.
    The Contact Group on Piracy off the coast of Somalia has 
brought two dozen countries together to improve operational 
support to antipiracy operations, to strengthen judicial 
frameworks for arrest and prosecution of pirates, and to track 
financial activities related to piracy.
    I'm very confident that today's hearing will provide 
insight into some of the policy options available for 
addressing this immediate challenge and for laying the 
necessary groundwork for an effective long-term solution.
    I might add that with criminal proceedings underway, we are 
not looking here for witness testimony with respect to the 
blow-by-blow of what occurred, though indirectly, there will be 
some reference to that, obviously. We are much more interested 
in the larger issues that Captain Phillips and others can 
examine with us and help shed light on with respect to the 
policy implications here.
    We're very honored to have Captain Richard Phillips with 
us. As everybody knows, he was the captain of the merchant 
vessel Maersk Alabama, and he personally confronted pirates 
intent on holding him and his crew hostage, during which time 
they repeatedly threatened his life and the lives of crew 
members. Captain Phillips risked his own life to ensure the 
safety of his crew, knowing full well the potential 
consequences of his actions. And those actions, selfless and 
heroic, are an example for all of us. Captain, it's a great 
pleasure to have you with us today.
    And joining Captain Phillips on our first panel is John 
Clancey, the chairman of Maersk, Inc. And on our second panel, 
we will have Ambassador Stephen Mull, the Senior Advisor to the 
Under Secretary of State for Political Affairs.
    And I might mention we also have in the audience here--I 
had the pleasure of sitting with him and chatting with him for 
a little while--Shane Murphy, a resident of Massachusetts, who 
was the No. 2 officer on board the Maersk Alabama,, and 
literally from the moment that Captain Phillips was a prisoner, 
a hostage, Shane took over and also operated the ship, I might 
add, in a most heroic manner. We're delighted to welcome you 
here, Shane, and we thank you for the way in which you acted in 
the greatest traditions of a seaman.
    I welcome the insights that you bring us today because this 
is a matter of real concern for many of us and something we 
need to deal with. Senator Lugar.

 STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you, Mr. Chairman. And I join you in 
welcoming our first panel to the committee. Captain Phillips' 
leadership, his bravery during and after the pirate assault on 
his ship have been justifiably praised around the world. His 
dramatic rescue by the Navy has again demonstrated the skill 
and courage of our sailors, and he has frequently commended 
them.
    This is the only committee, Mr. Chairman and the Senate, I 
believe, where both the chairman and the ranking member have 
served in the Navy. So we come to this topic with some 
understanding of the Navy's historic mission. But piracy is not 
a new issue for our country. Article I, section 8 of the 
Constitution gives Congress the power to ``define and punish 
pirates and felonies committed on the high seas''; one of the 
few crimes named specifically in that document. What is new and 
vexing is the rapid increase in piracy and extortion targeting 
shipping off the coast of Somalia. I look forward to the 
insights of our second panel, which will address our 
government's interagency antipiracy strategy.
    These pirates, like all others before them, are motivated 
by profit. Their targets, in one of the most heavily trafficked 
seas of the world, are plentiful and soft. The payoffs are 
huge, running, as the chairman pointed out, to the millions of 
dollars in a region where the average per capita income is less 
than $2 a day. So far, piracy in the Gulf of Aden and off the 
coast of Somalia has been largely a nonlethal activity. Ashore 
in lawless Somalia and its disputed territories of Somaliland 
and Puntland, pirates have sanctuaries from prosecution, and 
the tools of their trade, small arms, skiffs, and longer range 
fishing trawlers, are plentiful as is the supply of poor young 
men willing to become pirates. Many villagers in the region are 
sympathetic to the criminals, viewing them as modern-day Robin 
Hoods, who spread their loot and don't harm their hostages.
    Ending piracy in the region will require multilateral 
cooperation. This cooperation must include the military 
coordination, but it also must involve the governments of 
proximate nations, and the shipping companies, who must change 
their practices and procedures. And while military means may be 
necessary, it is important to understand that the root cause of 
this problem is the breakdown of law and order in Somalia, 
which is what allows the pirates to operate from shore with 
impunity. This underscores the point that I and other members 
of this committee have long made. The existence of failed 
states directly threatens the national security interest of the 
United States. Failed states exist as potential safe havens for 
terrorism, drugs and arms trafficking, and piracy. Failed 
states can destabilize surrounding nations, spawn tribal or 
sectarian conflict, and intensify refugee flows.
    President Obama and Secretary Clinton, like President Bush 
before them, have emphasized that development must be an 
important pillar of our foreign policy. The Senate this year, 
in agreeing to fully fund President Obama's budget request for 
international affairs, also recognizes that if we don't sustain 
the long-term investments necessary to prevent failing states 
and to reduce the poverty that can spawn instability and 
extremism, we run the risk of paying a far higher price down 
the road.
    I look forward to the testimony of our distinguished 
witnesses. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Lugar. Let me 
note that the vote has started. So, Captain, we invite you and 
Mr. Clancey to come back here and wait in the back as you were 
before. And we will recess for about 10 minutes.

[Whereupon a recess was taken from 2:48 p.m. to 3:06 p.m.]

    The Chairman. I was going to wait for Senator Lugar, but I 
thought if I waited any longer, you might be under further 
assault here, so I'll rescue you.
    So, Captain, again we're delighted to welcome you here, and 
we look forward to hearing what you have to say.

STATEMENT OF CAPT. RICHARD PHILLIPS, MASTER OF THE MV ``MAERSK 
        ALABAMA,'' MAERSK LINE, LIMITED, BURLINGTON, VT

    Captain Phillips. Mr. Chairman and members of the 
committee, I am Capt. Richard Phillips. I'm a graduate of the 
Massachusetts Maritime Academy. I have been a member of the 
International Organization of Masters, Mates, & Pilots Union 
since 1979, and I'm a licensed American merchant mariner.
    I was captain of the Maersk Alabama when it was attacked by 
pirates off the coast of Somalia on April 8. We've returned 
home safely, and for that, my entire crew and I greatly 
appreciate the actions taken by the administration, the 
Department of Defense, and most specifically, the U.S. Navy 
SEALs, the Navy SEALs and the crew aboard the USS Bainbridge. I 
want to thank the management of Maersk and Waterman Steamship 
Corp., who handled the situation, the crew, and our families 
with great care and concern.
    And equally important, I want to publicly commend all the 
officers and crew aboard the Maersk Alabama, who responded with 
their typical professionalism in response to this incident; the 
licensed deck officers, who are members of the Masters, Mates, 
& Pilots Union; the licensed deck officer and licensed 
engineers, who are members of the Marine Engineers Beneficial 
Association; and the unlicensed crew, who belonged to the 
Seafarers International Union. They are dedicated merchant 
mariners, typical of America's merchant seamen who are well-
trained and who are ready and able to respond when necessary to 
protect the interests of our country.
    I need to make it clear at the outset that I am unable to 
discuss the incident itself because of the ongoing 
investigation and pending legal action against one of the 
pirates. But I've had a lot of time to think about the 
difficult and complex issues of protecting vessel, cargo, and 
crew in crime-ridden waters. So the focus of my comments will 
be my beliefs based on years of experiences at sea and what can 
or should be done to respond to piracy and to protect American 
vessels and crew.
    I should also say at the outset that I realize my opinions 
may differ in some ways from other recommendations you've heard 
before and may hear today from others on the panel. 
Nevertheless, I do believe that all of us in the maritime 
industry understand that it is imperative that we work together 
to address this complex problem, and I believe we are in 
general agreement on the main principles of keeping crew, 
cargo, and vessels safe.
    First, I believe it is the responsibility of the Government 
to protect the United States, including U.S.-flag vessels that 
are by definition an extension of the United States, their U.S. 
citizen crews and our Nation's worldwide commercial assets. So 
it follows, then, that the most desirable and appropriate 
response to piracy is for the U.S. Government to provide 
protection through military escorts and/or military detachments 
aboard U.S. vessels.
    That said, I am well aware that some will argue that 
there's a limit to any government resources, even America's. In 
fact, due to the vastness of the area to be covered, and the 
areas of threat are continually growing larger, our Navy, and a 
coalition of other navies currently positioned in the Gulf of 
Aden region, may simply not have the resources to provide all 
the protection necessary to prevent and stop the attacks.
    So what other things can be done? In my opinion, the 
targets, the vessels, can be hardened, even beyond what's being 
done today, and made even more structurally resistant to 
pirates. In addition, more can be done in terms of developing 
specific antipiracy procedures, tools, and training for 
American crews. I do, however, want to emphasize that contrary 
to some reports I've heard recently, American mariners are 
highly trained and do receive up-to-date training and upgrading 
at the private educational training facilities jointly run by 
the maritime unions and their contracted shipping companies.
    I've also heard as a suggestion that all we have to do to 
counter piracy is just arm the crews. In my opinion, arming the 
crew cannot and should not be viewed as the best or ultimate 
solution to the problem. At most, arming the crew should be 
only one component of a comprehensive plan and approach to 
combat piracy.
    To the extent we go forward in that direction, it would be 
my personal preference that only a limited number of 
individuals aboard the vessel have access to effective 
weaponry, that these individuals receive special training on a 
regular basis. I realize that even this limited approach to 
arming the crews opens up a very thorny set of issues. I'll let 
others sort out the legal and liability issues.
    We all must understand that having weapons aboard a 
merchant vessel fundamentally changes the model of commercial 
shipping, and we must be very cautious about how it is done.
    Nevertheless, I do believe that arming the crew as a part 
of an overall strategy could provide an effective deterrent 
under certain circumstances, and I believe that a measured 
capability in this respect should be part of the overall debate 
about how to defend ourselves against criminals on the sea.
    As for armed security details put aboard vessels, I 
believe, as I indicated earlier, that this idea could certainly 
be developed into an effective deterrent. My preference would 
be government protection forces. However, as long as they are 
adequately trained, I would not be opposed to private security 
on board.
    Of course, I realize that very clear protocols would have 
to be established and followed. For example, as a captain, I am 
responsible for the vessel, cargo, and crew at all times, but I 
am not comfortable giving up command authority to others, 
including the commander protection force. In the heat of an 
attack, there can only be one final decisionmaker. So command 
is only one of the many issues that would have to be worked out 
for security forces to operate effectively.
    While there are many new ideas and much discussing going on 
about how to deal with piracy, I would respectfully ask the 
committee to be mindful that the seafarers I've met and worked 
with over my career are resourceful, hard-working, adventurous, 
courageous, patriotic, and independent. They want whatever help 
you can offer to make the sea-lanes more secure and their work 
environment safer.
    But we realize that while preparation is absolutely 
critical, not every situation can be anticipated, and we accept 
that as part of a seafarer's life. So I will just close with a 
request for you to please proceed carefully and to please 
continue to include us in your discussions and debates.
    Thank you for this opportunity to speak, and I look forward 
to answering any questions you may have.
    [The prepared statement of Captain Phillips follows:]

    Prepared Statement of Capt. Richard Phillips, Master, ``Maersk 
             Alabama'' Maersk Line, Limited, Burlington, VT

    Mr. Chairman and members of the committee, I am Capt. Richard 
Phillips. I am a graduate of the Massachusetts Maritime Academy, I have 
been a member of the International Organization of Masters, Mates & 
Pilots Union since 1979, and I am a licensed American merchant mariner. 
I was the captain of the Maersk Alabama when it was attacked by pirates 
off the coast of Somalia on April 8. Thankfully, that episode ended 
with the successful return of the ship, its cargo of U.S. food aid for 
Africa and, most importantly, my crew. All of us have returned home 
safely and for that my entire crew and I are deeply appreciative of the 
actions taken by the administration, the Department of Defense and, 
most specifically, the U.S. Navy, the Navy SEALS and the crew aboard 
the USS Bainbridge. All of the U.S. military and government personnel 
who were involved in this situation are clearly highly trained and 
motivated professionals and I want to use this opportunity to again say 
``thank you'' to everyone involved in our safe return.
    I want to thank the management of Maersk and Waterman Steamship 
Corp. who handled the situation, the crew and our families with great 
care and concern.
    And equally important, I want to publicly commend all the officers 
and crew aboard the Maersk Alabama who responded with their typical 
professionalism in response to this incident. The Licensed Deck 
Officers who are members of the Masters, Mates & Pilots Union, the 
Licensed Deck Officer and Licensed Engineers who are members of the 
Marine Engineers' Beneficial Association, and the unlicensed crew who 
belong to the Seafarers International Union are dedicated merchant 
mariners, typical of America's merchant seamen who are well-trained and 
who are ready and able to respond when necessary to protect the 
interests of our country.
    I am honored to come before this committee today to discuss my 
views on making commercial shipping safer, and worldwide sea-lanes more 
secure from the threat of piracy.
    I need to make clear at the outset that I am unable to discuss the 
incident itself because of the ongoing investigation and pending legal 
action against one of the pirates. But I've had a lot of time to think 
about the difficult and complex issues of protecting vessel, cargo, and 
crew in crime-ridden waters. So instead of a recount of the Maersk 
Alabama incident, the focus of my comments will be my beliefs, based on 
my years of experience at sea, as to what can or should be done to 
respond to piracy and to protect American vessels and crews.
    I should also say at the outset that I realize that my opinions may 
differ in some ways from other recommendations you have heard before 
and may hear today from others on the panel. Nevertheless, I do believe 
that all of us in the maritime industry understand that it is 
imperative that we work together to address this complex problem, and I 
believe we are in general agreement on the main principles of keeping 
crew, cargo, and vessel safe.
    First, I believe it is the responsibility of our Government to 
protect the United States, including U.S.-flag vessels that are by 
definition an extension of the United States, their U.S. citizen crews, 
and our Nation's worldwide commercial assets. So, it follows then that 
the most desirable and appropriate solution to piracy is for the United 
States Government to provide protection, through military escorts and/
or military detachments aboard U.S. vessels. That said, I am well aware 
that some will argue that there is a limit to any government's 
resources--even America's. In fact, due to the vastness of the area to 
be covered--and the areas of threat are continually growing larger--our 
Navy and the coalition of other navies currently positioned in the Gulf 
of Aden region may simply not have the resources to provide all the 
protection necessary to prevent and stop the attacks.
    So what other things can be done?
    In my opinion, the targets--the vessels--can be ``hardened'' even 
beyond what's being done today and made even more structurally 
resistant to pirates. In addition, more can be done in terms of 
developing specific antipiracy procedures, tools, and training for 
American crews. I do however want to emphasize that contrary to some 
reports that I've heard recently, American mariners are highly trained 
and do receive up-to-date training and upgrading at the private 
educational training facilities jointly run by the maritime unions and 
their contracted shipping companies. I believe that discussions are 
underway now between the industry and government on the details of 
specific proposals to harden the vessels (the specifics of which should 
remain secret) and I am confident that we will soon have additional 
methods for protecting vessel and crew. And while they will be an 
improvement, there is no way they can be foolproof.
    I've also heard the suggestion that all we have to do to counter 
piracy is ``just arm the crews.'' In my opinion, arming the crew cannot 
and should not be viewed as the best or ultimate solution to the 
problem. At most, arming the crew should be only one component of a 
comprehensive plan and approach to combat piracy. To the extent we go 
forward in this direction, it would be my personal preference that only 
the four most senior ranking officers aboard the vessel have access to 
effective weaponry and that these individuals receive special training 
on a regular basis. I realize that even this limited approach to arming 
the crew opens up a very thorny set of issues. I'll let others sort out 
the legal and liability issues but we all must understand that having 
weapons on board merchant ships fundamentally changes the model of 
commercial shipping and we must be very cautious about how it is done. 
Nevertheless, I do believe that arming the crew, as part of an overall 
strategy, could provide an effective deterrent under certain 
circumstances and I believe that a measured capability in this respect 
should be part of the overall debate about how to defend ourselves 
against criminals on the sea.
    As for armed security details put aboard vessels, I believe, as I 
indicated earlier, that this idea could certainly be developed into an 
effective deterrent. My preference would be government protection 
forces. However, as long as they are adequately trained I would not be 
opposed to private security on board. Of course, I realize that very 
clear protocols would have to be established and followed. For example, 
as a captain, I am responsible for the vessel, cargo, and crew at all 
times. And I am not comfortable giving up command authority to others--
including the commander of a protection force. In the heat of an 
attack, there can be only one final decisionmaker. So command is only 
one of many issues that would have to be worked out for security forces 
to operate effectively.
    While there are many new ideas and much discussion going on about 
how to deal with piracy, I would respectfully ask the committee to be 
mindful that the seafarers I've met and worked with over my career are 
resourceful, hardworking, adventurous, courageous, patriotic, and 
independent. They want whatever help you can offer to make the sea-
lanes more secure and their work environment safer. But we realize that 
while preparation is absolutely critical, not every situation can be 
anticipated. And we accept that as a part of the seafarer's life. So, I 
will just close with a request for you to please proceed carefully and 
to please continue to include us in your discussions and debates.

    The Chairman. Thank you, Captain. We look forward to having 
that exchange.
    Mr. Clancey.

 STATEMENT OF JOHN CLANCEY, CHAIRMAN, MAERSK, INC., CHARLOTTE, 
                               NC

    Mr. Clancey. Thank you, Mr. Chairman, and members of the 
committee. I am John Clancey, chairman of Maersk, Inc., the 
parent of Maersk Client, Limited, whose ship, the Maersk 
Alabama, was attacked in the Indian Ocean on April 8. And I 
thank you for this opportunity to address this increasing 
problem of maritime policy.
    And on behalf of our entire company, I would like to add my 
sincere appreciation to the Defense Department, the Navy, and 
the SEALs, and the entire team of people that brought Captain 
Phillips and his crew home safely. I also congratulate Captain 
Phillips and the crew of the Maersk Alabama for their courage 
and their resolve. They, like all seafarers that serve on our 
vessels, are highly valued members of our team. We are 
dedicated to making their jobs as safe as possible.
    Today's focus is on the waters of the Horn of Africa and 
the Gulf of Aden and Indian Ocean, a size of geography 
equivalent to the Mediterranean. Piracy has been with us for 
many years--the Malacca Strait, for example. And our Nation and 
the U.S. Navy has learned over 200 years that piracy is not 
easily eliminated.
    Our industry is currently working diligently in conjunction 
with the Defense Department, though, in particular, regarding 
security of the high-risk areas for a U.S.-flag fleet.
    In general, though, piracy is an issue that our country and 
our entire industry takes very seriously. As attacks in the 
Gulf of Aden have increased in the last few years in both 
numbers and level of sophistication, we have changed our 
response, as well, and it is continuing to evolve.
    And we have been working within the industry and with 
effective governments to develop a more effective response. But 
an effective response to piracy must, as you said, Mr. 
Chairman, and as President Obama has said, has to be an 
international one.
    Most of the vessels that face this threat do not fly the 
U.S. flag, and most of the naval vessels assigned to counter 
piracy off the Horn of Africa and the Gulf of Aden are those of 
other nations. The National Laws of Ports, at which vessels and 
international commerce call, control all of ours and our 
competitors' incoming ships, and most, if not all, prevent the 
introduction of arms and arm mariners in their territory.
    The structure of maritime insurance is also an issue that 
has to be dealt with, because it also has concerns regarding 
this issue. Vested cooperation of all maritime nations and the 
international community is critical to any effective response. 
The limited number of vessels now deployed off the Horn of 
Africa and the Indian Ocean make it impossible to adequately 
protect the transportation in this area.
    In our view, and that of many other shipping companies or 
seafarers and the maritime security experts, we believe that 
piracy not only threatens the lives of mariners, but the safety 
of major international shipping lanes and the national 
interests of the countries involved. It's important to note 
that 90 percent of the world's commerce is carried by water.
    Let's begin what we believe is not helpful, an approach 
that applies only to the United States. Piracy is an 
international problem and requires an international response. 
The efforts of the United States must strengthen these 
international efforts on both legal and law enforcement fronts. 
There should be an international legal framework for the 
prosecution of captured pirates. Ships carry U.S. military and 
government--cargos may require unique protection, but cargo in 
general requires an international solution.
    Arming the crews of merchant vessels, I know that captain 
and crew members may prefer an arm-capability for the crew on 
board, and I respectfully understand their perspective. But the 
IMO has pointed out, and we agree, that firearms are only 
useful in the hands of those who are properly trained, who 
practice regularly, and understand when and how to use the 
moment at that point of intersection.
    Our belief is that arming merchant sailors may result in 
the acquisition of even more lethal weapons and tactics by the 
pirates, and a race that merchant sailors cannot win. In 
addition, most ports of call will not permit the introduction 
of firearms into the national waters.
    Now I'd make a separate point. As I mentioned earlier, we 
are currently in discussion with the Department of Defense as 
it applies to U.S.-flag vessels, and those discussions are 
ongoing, and hopefully we'll have a solution in the near term.
    What would be helpful, on the other hand, is prompt and 
accurate reporting. This sounds very simplistic, but what is 
necessary is a single 911-like number so that our military and 
other militaries and governments currently examining the system 
today would work together to address this in full cooperation 
with these international navy forces charged with international 
shipping. There's many navies out there today, and I think it's 
critical to all of the maritime interests to ensure that they 
have a process to work together, to communicate together, so 
that when one navy spots a pirate or comes across an incident, 
everyone knows simultaneously.
    In addition, there are emerging techniques to harden the 
vessels. These are evolving measures that may buy additional 
time for the Navy forces to respond while protecting ships' 
crews. These include certain additional protective measures on 
each vessel and give them an opportunity to resist the pirates 
while help is coming. These techniques will be developed and 
evaluated and approved, and we will work in concert with the 
Navy, the Coast Guard, and other experts and share with the 
industry.
    Last, remaining flexible and alert. This is evolving. 
Things are happening on a regular basis, and who knows what 
will happen today or tomorrow in the Gulf of Aden.
    Mr. Chairman, all of us take a great deal of pride in our 
Navy's rescue of Captain Phillips, the safe return of the 
Maersk Alabama, and in the bravery of the crew. What we need to 
do now is to improve our antipiracy efforts, find solutions 
that work for maritime shipping on a global basis, and move 
forward. I thank you for your time, and I look forward to your 
questions.
    [The prepared statement of Mr. Clancey follows:]

    Prepared Statement of John P. Clancey, Chairman of Maersk Inc., 
                             Charlotte, NC

    Mr. Chairman and members of the committee, I am John Clancey, 
chairman of Maersk Inc, the parent company of Maersk Line, Ltd., whose 
ship--the Maersk Alabama was attacked in the Indian Ocean on April 8. I 
thank you for this opportunity to address the increasing problem of 
maritime piracy. On behalf of our entire company, I would also like to 
add my sincere appreciation to the Department of Defense, the Navy, the 
SEALS and the entire team of people that brought Captain Phillips and 
his crew home safely. I also congratulate Captain Phillips and the crew 
of the Maersk Alabama for their courage and resolve. They--like all 
seafarers that serve on our vessels--are highly valued members of our 
team and we are dedicated to making their jobs as safe as possible.
    Today's focus is the waters off the Horn of Africa, in the Gulf of 
Aden and in the Indian Ocean, but piracy has been a serious threat in 
the Strait of Malacca and around the world for many years. Our Nation, 
and the U.S. Navy, learned over 200 years ago that piracy is not easily 
eliminated. And our industry is currently working diligently in 
conjunction with the Department of Defense regarding immediate security 
in the high-risk areas and we are not at liberty today to discuss those 
potential strategies.
    But the piracy problem is multifaceted and requires 
multidimensional solutions. At a minimum, any solution must deny 
pirates their safe haven and promises consequences. In my remarks today 
I would like to present a few overarching principles that are necessary 
to effectively deal with modern piracy.
    Piracy is an issue that our company--and our entire industry--takes 
very seriously, I can assure you. As the attacks in the Gulf of Aden 
have increased over the last couple of years in both numbers and level 
of sophistication, we have changed our response as well. And we have 
been working within the industry and with affected governments to 
develop a more effective response. An effective response to piracy must 
[as President Obama has said], be an international one. Most of the 
vessels that face this threat do not fly the U.S. flag, and most of the 
naval vessels assigned to counter piracy off the Horn of Africa and in 
the Gulf of Aden are those of other nations. The national laws of ports 
at which vessels in international commerce call control all incoming 
ships and most prevent the introduction of arms or armed mariners into 
their territory. The strictures of maritime insurance contracts also 
have global effect. Thus, the cooperation of all maritime nations and 
of the international community, is critical to any effective response. 
The limited number of naval vessels now deployed off the Horn of 
Africa, the Indian Ocean and the Gulf of Aden make it impossible to 
adequately protect maritime transportation in this area.
    In our view, and that of many other shipping companies, our 
shipboard labor unions, and many maritime security experts, piracy 
threatens the lives of our mariners, the safety of major international 
shipping lanes, and the national interest of every country that relies 
on maritime transportation of goods. Antipiracy measures, to be viable, 
must address each of these concerns. The International Maritime 
Organization, the U.N. body that monitors pirate attacks and recommends 
policies to combat it, has identified measures--in place for 15 years--
that are helpful as well as others that are not.
    Let me begin with what is not helpful:

   An approach that applies only to the United States. Piracy 
        is an international problem and requires an international 
        response. The efforts of the United States must strengthen 
        international efforts on both the legal and law enforcement 
        fronts. There should be an international legal framework for 
        prosecution of captured pirates. Ships carrying U.S. military 
        and government-impelled cargoes may require unique protections, 
        but piracy affects the global community and requires solutions 
        that work for all stakeholders. And, of course, pirates 
        generally don't check the flag and origin of a ship before 
        attacking.
   Arming the crews of merchant vessels. I know Captain 
        Phillips prefers an armed capability for the crew onboard and I 
        respectfully understand his perspective. And Captain Phillips 
        is in agreement with vessel operators, his labor union, and the 
        IMO which points out that firearms are useful only in the hands 
        of those who are properly trained, who regularly practice in 
        their use, and who are fully capable of using them as required. 
        Our belief is that arming merchant sailors may result in the 
        acquisition of ever more lethal weapons and tactics by the 
        pirates, a race that merchant sailors cannot win. In addition, 
        most ports of call will not permit the introduction of firearms 
        into their national waters. And I suspect others that you will 
        hear from this afternoon will address this issue in more 
        detail.

    What would be helpful is:

   Prompt and accurate reporting. This sounds simplistic but in 
        international waters, the ability to dial one 911-like number 
        is critical and so far nonexistent. Our military and other 
        governments are sorting out what is currently an incident-
        reporting scheme that is way too complex and uncertain. We look 
        forward to progress on this front very soon.
   Full cooperation with those international naval forces 
        charged with protecting international shipping--e.g. the 
        provision of accurate positioning information and course plots 
        to international naval forces, the use of designated sea-lanes 
        patrolled by international forces, the rapid reporting of 
        attacks by merchant vessels, the availability of failsafe 
        emergency communications protocols, expanded naval intelligence 
        collection, and other cooperative measures.
   Emerging techniques to ``harden'' the vessels. There are 
        evolving measures that may buy additional time for naval forces 
        to get into place to assist while protecting ships' crews. 
        These include certain additional protective measures that each 
        vessel can employ both to evade and to resist pirate attacks. 
        In our view, the less said about this in public, the more 
        effective they are likely to be. But over the past several 
        years the industry has added procedures and tactics to make our 
        crew and vessels less vulnerable. And more techniques are on 
        the horizon. These techniques are generally developed, 
        evaluated, and improved in concert with the Navy, the Coast 
        Guard and other experts--and then shared within the industry.
   Last, remaining flexible and alert. We at Maersk do not 
        claim to know all the answers, but we do feel that the lessons 
        of modern day antipiracy efforts are valuable and should be 
        followed in ways that work for U.S. and foreign mariners 
        equally.

    Mr. Chairman, all of us take a great deal of pride in our Navy's 
rescue of Captain Phillips, in the safe return of the Maersk Alabama, 
and in the bravery of its crew. This is the right time to reexamine 
antipiracy policy, because we know that we may not always be as 
spectacularly successful next time. We have short-term tactical needs 
and, of course, the longer term policy and strategy requirement to 
deter piracy completely. What we need to do to improve antipiracy 
efforts is find solutions that work for maritime shipping across the 
board, that can be put into place now, that are sustainable, and, most 
critically, that will increase the safety and security of mariners and 
the ships they sail. If we stick to those criteria, we will have 
learned, not merely adapted to, the hard lessons of piracy.

    The Chairman. Well, we thank you very much, Mr. Clancey. 
Captain Phillips, I want to just remark, I so noted a very 
pleasant mixture of Massachusetts, Maine, and New Hampshire in 
your accent, which may be why you live in Vermont, but----
    Captain Phillips. Mainly Massachusetts.
    The Chairman. Mainly Massachusetts. Mr. Clancey, I'm having 
trouble with this arming issue a little bit, and I want you to 
help me as a layperson, just in terms of common sense, I guess.
    On a lot of vessels, we put young men and women with less 
than a year's training, and sometimes very little time at sea, 
and they become the armed personnel on a particular vessel with 
responsibilities for protecting it. We arm guards who pick up 
money in an armored car. We have any number of different kinds 
of armed people in the course of our civil society who get the 
training, whether it's border guards or people involved in 
other professions.
    I'm having trouble understanding why qualified seafarers, 
with all of the training they get and discipline they get, at 
the Merchant Marine Academy or elsewhere, who can perform as 
Shane Murphy did under great duress and risk of life, who feels 
that he might have been better off if he'd been able to take a 
shot at these guys, because they are not particularly well-
trained or capable in many regards, are not given weapons 
training.
    Why is that training not worthwhile? It seems to me that if 
the pirates upgrade their weapons to a level above 50-caliber 
and start destroying ships, they haven't got anything 
ransomable. So they've got to take the ship without destroying 
it or harming the hostages or taking the goods they want to 
hold for ransom. Therefore, they have some limitations. And it 
would seem to me you'd be significantly more advantaged if you 
were able to defend yourself.
    Mr. Clancey. You make some very good points, Mr. Chairman. 
We have, international and United States, hundreds and hundreds 
of ships. Our crews on U.S.-flags rotate every 3 or 4 months 
with a different crew. It is true that usually the masters and 
maybe the first mate return to the same ship, but the balance 
of the crew might rotate out.
    Training all of these people and ensuring that they're 
qualified, that they have the time to practice, which would be 
on land, which right now, no one has facilities to do so, and 
to ensure that they have the training necessary to know when 
and how to use the weapon, we think is a very difficult task. 
It's really complicated by the fact that most ports, if not 95, 
80 percent of them, you can't bring weapons into the port. 
You've got export licenses and requirements on weapons that 
just simply don't allow it.
    We are also not a sovereign, and if something should 
happen, I mean, we put the company at risk. But I think that 
you focused on the training issue. We think the training is a 
very tall order. It's not something that we discount out of 
hand----
    The Chairman. May I ask you--if I can interrupt you for a 
minute--how many ships do you have out at sea?
    Mr. Clancey. At any given time, it could be 5 or 600.
    The Chairman. Five or six hundred----
    Mr. Clancey. U.S.-flags, it's far less. It's in the 30s, 
and one or two of them or three of them may be in port at any 
given time. But the issue on an international basis is we're 
not allowed to have the weapons on the ships.
    The Chairman. Well, maybe that's something we have to think 
about in terms of international convention. That's why we have 
treaties and multilateral agreements. It seems to me if piracy 
is an increasing problem, the alternative is, as you've said, a 
far more expensive form of protection, which is to have the 
military diverted from other activities.
    Mr. Clancey. And as we're doing today--4 years ago, we were 
100 miles off the coast. Two months ago, we were 200 miles off 
the coast. Now we're 600 miles off the coast on a round trip, 
doubling the time and doubling the expense.
    The Chairman. I understand. But that's what I'm getting at. 
Historically, we have deputized citizens to engage in certain 
law enforcement activities going way back to the time of 
posses.
    Mr. Clancey. Correct.
    The Chairman. Again, I get back to the training issue here. 
It costs somebody something for this protection, correct?
    Mr. Clancey. Correct. Yes.
    The Chairman. So the taxpayer is going to pay for it 
through tax dollars to the U.S. Government, and the taxpayer 
pays for it in the cost of the goods that are sold to them. One 
way or the other, the question is, What's the most feasible way 
to provide the protection?
    The Chairman. Captain Phillips, what do you think? Let me 
ask you as a skipper. And I don't want to get you in trouble 
with the company, but what's your feeling about it?
    Captain Phillips. As I said, I believe there is not one 
silver bullet here. One solution is not going to solve this 
problem. But as part of a coordinated approach, I believe that 
there should be some arming of the crews. Training would have 
to go on. It's being done today. The training could be there. 
It is a cost increase.
    I have been on ships in the last 18\1/2\ years as a captain 
where we did carry guns, and it's just another you have to 
declare when you go into a lot of these countries, bonded seal 
type thing. And some of the crew is capable and can be trained, 
but to just expect arming the crew to be the final solution 
is----
    The Chairman. No, no, no, I'm not suggesting that.
    Captain Phillips. OK.
    The Chairman. This is a conglomeration of things, and I 
want to get----
    Captain Phillips. A limited number of crew, I believe, 
could be trained. As I said, basically what I call the top 
four: Chief mate, chief engineer----
    The Chairman. What are the other steps to harden a ship 
that you think might have an impact?
    Captain Phillips. Anything--basically what we've done in 
the past is fire hoses, but I think we can evolve beyond these 
items, and develop additional nonlethal items.
    The Chairman. Some people have talked about concertina 
wire, razor wire on the rails, and/or electrified rails.
    Captain Phillips. I think that is impractical. I believe 
concertina wire or barbed wire is not going to stop them, 
because you can't put it around the whole ship. On my incident, 
we had fire hoses. The pirates just went to where the fire 
hoses weren't, and that's what they would do if there were 
concertina wire. Concertina wire is not going to stop someone 
climbing up with a ladder.
    The Chairman. Now, again, speak--so for the average person 
sitting around, saying, ``What do you mean, an American ship 
was taken by a bunch of guys in a little''----
    Captain Phillips. Well, if I could interrupt you, Senator.
    The Chairman. Yes.
    Captain Phillips. The ship was never taken. Never taken.
    The Chairman. Fair enough. I agree with that. I completely 
agree. Let me rephrase that. What do you mean by these guys got 
on the ship? How did they get on it? What happened? When people 
hear that, they're sort of saying, ``Where's the shield? 
Where's the force of our overflight? Where's the early 
detection, and therefore, the summoning of somebody to check it 
out? Where's the protection, the joint effort of 22 countries 
that have joined together in a task force?
    It's difficult, and maybe you can explain so that people 
have a better understanding of that. Why is it so difficult for 
those response factors to cut in quicker and to have an impact?
    Captain Phillips. One thing we do, as I've instructed my 
crew all along, our biggest asset is what we do anyway, and 
that is to maintain a lookout navigation capability. And as 
this incident here, we first noticed them 3\1/2\ miles from our 
vessel. You do have visibility restrictions. You do have 
limitations on radar. So keeping an eye out the window is the 
No. 1 precursor to stopping these incidents.
    But piracy is evolving, and I think what we're going to see 
next is a stealth type invasion, which would be the next step 
up. So that's why I say just arming the crews is not a final 
solution or silver bullet. We have to have a cohesive approach 
that will take into account the evolution of piracy.
    Three months ago, we said that if a vessel had a speed of 
more than 15 knots and more than 12-foot freeboard that would 
keep you from being taken over. Yet the Maersk Alabama was 
doing 18.3 knots and had approximately 26 feet freeboard. So we 
can throw those parameters out the window. The pirates and 
their tactics are evolving--and we must stay with the curve and 
evolve with them to stop these incidents from happening.
    The Chairman. Fair enough. Freeboard, for all the land 
lubbers, is the distance between the water and the rail, 
correct?
    Captain Phillips. Correct.
    The Chairman. Can I ask one other question just before we 
do that? What did you wish you'd had, or what is the most 
significant intervention that you think could be the most 
effective at this point that you would recommend?
    Captain Phillips. Again, I just want to stress, there is no 
silver bullet. There's no one step. But I would say a force 
protection. And I don't mean a security guard. I don't mean a 
mall cop. I would--I mean, someone who's specifically trained, 
maybe retired Special Forces, GERKAS, SSA retired.
    And I understand that this can cost a lot of money. But we 
don't need 8 or 10 or 12 individuals. We need perhaps two, 
maybe three, so they can be in a watch situation. If you had 
those type of caliber people, I would say that would be the 
most important aspect of a deterrent, but not the complete 
solution.
    The Chairman. Well, I must say, that's one thing that 
struck me as being perhaps particularly potentially available. 
We have a lot of near-retired, newly retired ex-military folks, 
people who are well-trained and disciplined, some of whom want 
to work, and they're unemployed and might, in fact, be 
available for something like that.
    Captain Phillips. And again, I just want to stress, it's 
not a mall cop that I'm looking for. I don't want to denigrate 
anybody, but a little higher trained personnel is what we need, 
because these are high-caliber people. And with my experience, 
someone like the SEALs or Special Forces is what you're talking 
about, and you would not need 10, 12, 18 people. Three would be 
plenty. Plus, we also have limitations on the number of rooms 
on the ship and the capability of the ship to carry extra 
people.
    The Chairman. Sure.
    Captain Phillips. So I just don't want it to be a Band-Aid. 
Specifically trained people would have to be vetted in the 
event they are hired from a private firm.
    The Chairman. Fair enough.
    Senator Lugar. Thank you, sir.
    Senator Lugar. Well, just following through on Senator 
Kerry's questioning and your responses, Captain Phillips, 
obviously, there are private security firms now offering 
security in Iraq, for example, and through other phases of 
foreign policy. Some of these firms presumably are available, 
although maybe being on shipboard is so vastly different that 
they wouldn't qualify. But I gather you're not rejecting the 
idea of a private security firm. You're saying, however, that 
the costs of having more personnel, first of all, just to 
accommodate them aboard ship, but then beyond that, are the 
costs of these security people so great a percentage of 
whatever the commerce is worth that it is prohibitive? In other 
words, help me with the economics, either one of you, of why 
there has not been a thought of hiring a private security firm 
with people aboard each of your ships. Please.
    Captain Phillips. I would want to defer to Mr. Clancey 
there. I am only concerned with my ship, my crew, and my cargo.
    Senator Lugar. Very well.
    Captain Phillips. So I defer to Mr. Clancey.
    Senator Lugar. Mr. Clancey.
    Mr. Clancey. As a percentage of the cost of operation, it 
would be small. As a percentage of revenues collected, it would 
be very small. I would only refer back to my earlier comments. 
If that was the course the United States wanted to take, we 
would need to ensure that our allies were in sync with us and 
the international community was in sync with us----
    Senator Lugar. Now, why would they need to be----
    Mr. Clancey. [continuing]. Accept the practice.
    Senator Lugar. Why would they need to be in sync with that?
    Mr. Clancey. Well, the IMO, which is a branch of the United 
Nations, strongly recommends against the arming of crews or 
providing security forces. They don't say ``no,'' but they--all 
of their literature and their conferences, they keep on hinting 
on this theme.
    And this is an evolving situation. The world is changing. 
It's becoming more dangerous. They would have to reconsider 
their stance so that the governments and the ports and the 
customs officials around the world who are in and out thousands 
of times a week understand that it is the position of the 
larger maritime nations of the world that this is necessary.
    Senator Lugar. Why wouldn't it be a good idea, perhaps, for 
our Nation, maybe our Secretary of State the next time she 
meets with the Russian Foreign Minister, suggest that the two 
of us, maybe as a starter, plus others that have large oil 
vessels, get together and establish a new understanding on 
this? Piracy off Somalia is a new challenge. It's a common 
threat to all of us. And whatever may have been the 
premonitions of disaster before in the literature, as a 
practical matter, we've all had ships that have been meeting 
pirates out there.
    Mr. Clancey. I mean, I would leave that to the experts in 
international relations. But we do need an international 
solution. There may be a concern that this would take too long. 
If that's the belief of this committee and of the Senate, they 
may prescribe a different alternative, and we're open to any 
solution.
    Senator Lugar. Following through on the cost situation, try 
to describe what the insurance business is in relationship to 
your shipping. What kind of insurance do you buy? How is that 
affected by the piracy business?
    Mr. Clancey. The premiums have gone up a percentage. Let's 
say it's between 10 and 25 percent. And that's just our case. I 
don't know what the situation with other companies are. And 
costs like that over the course of the year annualized are 
eventually passed through to the end user, which is the 
customer.
    Senator Lugar. Well, this--it gets back to--I posed the 
point that there are costs involved here, and it is important 
where they finally are paid. I assume that could be the case 
with the private security forces if they were aboard the ship. 
Your point with that was that other nations haven't either 
adopted such a principal or would reject it unless we all got 
together and indicated this is different.
    And I think it's not unreasonable to think that there would 
be such successful negotiations, because rural shipping is 
being vilely affected by this.
    Mr. Clancey. Right.
    Senator Lugar. And it's not going to go away. And 
unfortunately in this region, as I mentioned in my opening 
remarks, you have failed states, and other states are perhaps 
on the verge of failing. So this may be something that prompts 
an international situation that will not be interminable 
because of the interests of each of the countries involved.
    Now, without trying to engage whether losses to United 
States shipping have been greater than that of the Russians or 
anybody else conveying oil shipments or other cargo, but my 
guess is that, as you say, our U.S. flags are a small portion 
of the international fleet that is affected that is now 
diverting course and being hit 200 miles out, 400, now 600, 
increasing costs for everybody, for, that is, the constituents 
of countries in the region, likewise.
    Mr. Clancey. Correct. I mean, Senator, I don't understand 
why any country would be opposed to a solution that addressed 
the piracy issue. I don't.
    Senator Lugar. I think it's important, though--and this 
hearing is able to sort of pin down that there are costs to 
this.
    Mr. Clancey. Yes, there are.
    Senator Lugar. And we're trying to define those, and then 
for the more diplomatic problems, in terms of international 
law, of which we need to be cognizant. Now, what about the 
ports that say, ``Well, we don't want ships, whether they're 
yours or the Russians' or anybody else, coming into port if you 
have armed guards, whether they're a private security team or 
whoever they are.'' How do we deal with that?
    Mr. Clancey. Well, I think if it was the position of all 
the major shipping nations, which relates to the companies, 
took a position, we are the customers of the ports. I think the 
ports would be willing to evaluate different alternatives. We 
pay their fees.
    Senator Lugar. I appreciate that, because you're in the 
business, and this is going to have to be a very technical 
matter, but one that's not beyond the principles of governance. 
And so we appreciate your testimony.
    Mr. Clancey. Thank you.
    Senator Lugar. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Lugar.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman. Again, I'd like to 
express my appreciation to you for holding this hearing. I 
think it's a very important issue for us to look at. I'm also 
in the Armed Services Committee. I think there's going to be a 
more militarily oriented hearing next week on this as well.
    Mr. Clancey, in following the line of questioning, I 
clearly get the notion of liability issues with respect to 
arming crew members or putting weapons on board a ship and 
having some sort of incident that might not even be related to 
the defense of the ship and those sorts of things.
    But at the same time, this is so clear, I think to 
everyone, that we all have an inherent right to self-defense in 
international waters, and the idea that there wouldn't be 
protection on board these vessels with these hugely expensive 
cargos and all the rest of it just doesn't seem to make a lot 
of sense.
    I got in only when the questions began, but was there any 
discussion about this cruise ship that has Israeli security on 
it? Are you familiar with that incident?
    Mr. Clancey. Correct.
    Senator Webb. What would be your observation of that?
    Mr. Clancey. I'm familiar with the incident. I'm familiar 
with the company, and they chose to have an armed force 
protection on the cruise ship, which prevented the hijacking of 
the ship.
    Senator Webb. And they were not perceived as being in 
violation of any of these international agreements that you 
were talking about?
    Mr. Clancey. Well, it wasn't in the water and it wasn't--
they didn't injure anybody that has been reported or 
acknowledged. And I don't think they did. The pirates left. So 
there wasn't a reaction to that.
    Senator Webb. But the international agreement that you're 
talking about is essentially that those sorts of people 
shouldn't be on these kinds of ships?
    Mr. Clancey. Well, I'm saying that if the international 
community could agree that the arming of commercial ships, 
whether it's by the crew, but more preferably, with armed 
guards, security firms, and it was an accepted practice that 
would change the set of circumstances. This is a situation 
that's evolving very quickly. I mean, this is not that old when 
Captain Phillips saved the Alabama. Six months ago, we weren't 
thinking or talking like this.
    Senator Webb. So you don't see any strong reaction in your 
business community to the notion that that cruise liner had 
armed security on board?
    Mr. Clancey. No.
    Senator Webb. And I would----
    Mr. Clancey. Because it wasn't an incident, nothing 
happened. But there has been----
    Senator Webb. But the capability--I mean, they are for the 
purpose of defending people on the ship.
    Mr. Clancey. Exactly.
    Senator Webb. And whether the pirates got smart and left, 
you know, is not the relevant point in terms of whether these 
people were being employed. And to me, it makes a tremendous 
amount of sense to get small groups of highly trained people to 
work in a synergistic fashion with the military.
    I take your point in your testimony when you were talking 
about full cooperation, sharing information so that if there 
are going to be periods, obviously, where you're going to be on 
more heightened alert with respect to these activities, and you 
can be coordinating in two different ways, really, with when 
you would be putting private security people on board a ship, 
but also, how you'd be coordinating with military forces.
    Mr. Clancey. Correct. There have been incidences, though, 
where innocent bystanders were injured or killed, and they're 
the subject of fairly extensive legal cases today. So there is 
exposure, and maybe--again, I think the solution is one that I 
would hope that the international community could address. I 
mean, it's--everyone's at risk.
    Senator Webb. Right. Well, we're obviously concerned about 
that, but principally concerned about American shipping. And 
there may be a model, I would suggest, with respect to how 
independent contractors have been used in some of these combat 
theaters. I'm speaking contractually and in terms of liability, 
as well as to quality of people.
    Mr. Clancey. Yes. Before you arrived, I did mention that we 
are in discussions with the Department of Defense about our 
U.S.-flag shipping operations. And hopefully, we'll come to a 
conclusion on that sometime in the next 10 days.
    Senator Webb. Good. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. Thank you, Senator Webb.
    Senator Corker.
    Senator Corker. Thank you both for coming, and Captain 
Phillips, it's great to be in someone's presence who's so 
highly esteemed. All of us in the public sphere can use that 
from time to time. So thank you very much for being here and 
bringing so many colleagues with you.
    Mr. Clancey, you mentioned that your company, which is a 
Danish company, I think--is that correct?
    Mr. Clancey. Correct.
    Senator Corker. Has about 600 ships?
    Mr. Clancey. Well, more than that, yes. But owned and 
chartered, order of 8 or 900.
    Senator Corker. So, just so that we're all educated as to 
how do you decide--you've got 30 or so that have a U.S. flag, I 
think you've said. Two or three might be in port right now. How 
is it that one decides, for those of us who don't do this on a 
daily basis, whether it's flagged U.S.-flag or some other 
country?
    Mr. Clancey. We have contracts with the U.S. Government 
that require capacity and frequency in the oceans of the world. 
So we build a network around those requirements, the customer's 
requirements, the Department of Defense's requirements, food 
aid, et cetera. And those ships are purchased by our affiliate, 
Maersk Line, Limited, which is an independent subsidiary. And 
they fly the American flag and they serve, for the most part, 
the military.
    But they're in commercial loops, so that--it's economically 
viable to combine the commercial cargo and the military cargo, 
run a system that supports both customers' needs, and that it 
is economically viable. That's how the decision is made.
    Senator Corker. So you would, from time to time, be 
carrying cargo that's of benefit to the U.S. military?
    Mr. Clancey. Correct.
    Senator Corker. OK. But not all the time?
    Mr. Clancey. Correct. For example, if we go to Asia with 
military cargo, we're not coming back with military cargo. 
We're coming back with what you find in Wal-Mart and Penney's.
    Senator Corker. But you still have a U.S. flag on the----
    Mr. Clancey. Correct.
    Senator Corker. Yes. OK. And so you're a company that deals 
with, obviously, flags throughout the world or different 
countries, and you're carrying military cargo for Russia and 
for China and other places, too; would that be correct?
    Mr. Clancey. Very, very small.
    Senator Corker. But you would have the Chinese flag----
    Mr. Clancey. 99 percent of our cargo would be U.S. military 
cargo, for the use of our military forces on a----
    Senator Corker. Well, then, how do you determine only 30 of 
your ships, if the majority of it is U.S. military cargo, only 
30 of your ships are flagged with U.S. flags. How do you 
determine the flags for the other ships?
    Mr. Clancey. In some cases, where they're built. In some 
cases, where they're operated. And in many cases, they fly the 
Danish flag and the U.K. flag and Singapore. It's historical. A 
company goes--and it goes back to 1907. And once the vessel is 
flagged in the country, it's expensive to reverse it. So they 
left that.
    Senator Corker. Is there anything about that whole process 
that you think would be informative for us to know?
    Mr. Clancey. No; and you don't have the time for me to 
explain it to you.
    Senator Corker. OK. So let me move on to the next issue.
    Mr. Clancey. It's long and complex.
    Senator Corker. So for each of those different flags, it's 
my understanding that you would buy insurance from different 
companies. It's my understanding that----
    Mr. Clancey. Right.
    Senator Corker. [continuing]. For instance, if you're 
buying insurance for a U.S.-flagged ship, then there's no 
proceeds for hostage-taking or anything like that. But if you 
were doing it with a London-based entity, they would maybe 
supply up to $20 million or some amount of money to actually 
pay those who take hostages, pirates; is that correct?
    Mr. Clancey. The insurance premium structure is based on 
your activity and your history and your experience, your loss 
experience.
    Senator Corker. But I'm not talking about the premium. I'm 
talking about the----
    Mr. Clancey. Policy?
    Senator Corker. [continuing]. The actual payments. It would 
be my understanding, if you have 600 ships with 30 in the 
United States, that you'd probably have some that actually have 
policies that pay when pirates demand money for the hostages; 
is that correct?
    Mr. Clancey. I don't have the insurance policies in front 
of me. I would think most of them, the only way they pay is 
through negotiations, and hard-pressed negotiations. They would 
say that was a decision you made. But it's not something that 
we have learned to deal with. This is a brand new world.
    Senator Corker. Well, maybe I'm--well, let me ask you this. 
Is it a fact that in the industry, that there are many 
companies who do buy that kind of coverage, and that, in some 
ways, encourages some of the activity we saw off of the 
Somalian coast?
    Mr. Clancey. I couldn't answer that question and give you a 
factual answer. I'm not sure what other companies negotiate 
with their insurance companies and whether they are able to buy 
a surcharge for hostages. I just don't know.
    Senator Corker. Would that be interesting for you to know 
after what just happened?
    Mr. Clancey. Well, our insurance people are working on that 
and they were briefing me this morning. So yes, it--they're 
looking at it right now. They're--it's--the insurance companies 
are thinking about it.
    Senator Corker. Would you mind sharing that with us once 
they have----
    Mr. Clancey. Not at all, sir. We'll provide that.
    Senator Corker. So if I heard the line of thinking, 
questioning from Senator Lugar and Senator Webb and beginning 
with Senator Kerry, it seems to me that actually, there is no 
law whatsoever that would prevent--and it sounds like it's a 
very minimal expense based on what you said, based on the 
overall cost of a shipment.
    It doesn't sound like to me there is actually any 
international law that would keep you from having the kinds of 
folks on board that Captain Phillips alluded to. It sounded 
like, to me, it's a--you're free to do that, and there isn't 
anything that actually keeps you from being able to do that.
    Mr. Clancey. It's the entry and departure from certain 
ports, where if you have weapons, the Captain alludes that if 
you put them in bond, which they come and take them or hold 
them or you lock them up. But there are countries that I have 
been told and briefed upon that they say you will not bring--
you will not have armed mariners on your ship.
    Senator Corker. Well, let me ask you this. On this last 
trip, are those that typically originate on the other side of 
Somalia and end up here in the United States, are those two 
ports--are they ports that allow you, in those specific cases, 
to have people--or Captain Phillips may want to jump in here--
that would be trained to the extent we're talking about, that 
would be able to protect their crew?
    Mr. Clancey. That's a new world. We've just been dealing 
with this now for a very short period of time, but that issue 
has been raised by numerous people in numerous areas. But we 
don't have a definitive answer today as to what countries 
around the world would say to our request to have an armed 
security unit on the vessel.
    I think at some geographies, we would meet resistance, from 
my experience living and working overseas. If it was something 
that our Department of State could find a way to convince 
others, they may open the door. Right now, I think that it's 
subject to questioning.
    Senator Corker. Well, listen, we thank you for coming to 
testify today. My guess is that Captain Phillips and some of 
the folks like him that serve within your company might ask 
those questions before the next particular trip again.
    Mr. Clancey. They're asking those questions right now.
    Senator Corker. OK.
    Captain Phillips. Yes, and I'd like to add that I have been 
sailing for 18\1/2\ years as captain and I've been to those two 
ports. I have had an asset there. I don't want to say what I 
have. It wouldn't have helped, I don't believe, in the 
situation I was just in on the Maersk Alabama, but in all the 
countries I've been, it's just another formality that you have 
to go through, but that being a smaller asset than what I think 
is needed on----
    Senator Corker. Which is two or three.
    Captain Phillips. And Mr. Clancey may be right that a 
larger asset may be a problem.
    Mr. Clancey. An automatic weapon.
    Senator Corker. Yes. Well, listen, thank you both for 
educating us. Again, Captain Phillips and all those who have 
served with you, thanks for your extreme professionalism and 
the way all of you conducted yourself. It's been an 
inspiration. Thank you.
    The Chairman. Thank you very much, Senator.
    Senator Risch.
    Senator Risch. Mr. Clancey, if there's an issue as far as 
armed people in the ports, as I look at this, it would seem to 
me that we have a fair number of warships there that they could 
put a few U.S. marines on each ship as it--American flagships 
as it entered the area, and have another ship take them off at 
the other end. That way, you wouldn't have armed people going 
into the ports. Has there been any discussion given to that?
    Mr. Clancey. Yes, there are, and those discussions are 
taking place today in this town.
    Senator Risch. OK, good. Because it seems to me--I agree 
with you. With three people, and you're up 30 feet, from a 
small boat attacking it, it would seem to me three of our 
marines could probably do the job from the fantail or from any 
other place that they----
    Mr. Clancey. I think they could do the job from 200 yards 
away, yes.
    Senator Risch. Yes. The other question I had was--is I 
heard the description of the difficulty because there's so many 
square miles to patrol. Has any thought been given to creating 
a lane using a GPS-type system, and then having them--have 
everybody stay in the lane so that the military could patrol 
that lane, and they wouldn't have all the square mileage to 
patrol?
    Mr. Clancey. At this time, there is the GOA lane, the Gulf 
of Aden, that has been established, and there are military 
ships there. That's the Gulf of Aden on that chart there. 
They're still being attacked, and that's with the military 
there.
    I think one situation we're seeing--we talk about 
evolution. Originally, it was down south where I was, a little 
closer to land, where the problem started. Then the pirates 
evolved and the target-rich environment are all the ships 
coming from the Suez Canal out the Red Sea. It's a target-rich 
environment. There are less miles to get back to Puntland and 
Somalia, where they do have havens. So you saw them go up there 
and actually, the activity slowed down back where I was and 
where I was taking.
    Now you see--and the policeman is in town, and now the 
bullies are going back down 600 miles off Somalia, which is the 
Satchells, and they are actually out there. So you're seeing 
the deterrent that started in the Gulf of Aden, I think, has 
sent a lot of the business back down to where it started 
because the policeman is in town.
    Senator Risch. I think that if these talks are successful 
and they can put a few people on each of those ships, and they 
took aggressive action in the case of an attack, I would 
suspect that's going to slow them down, particularly if they 
see a ship with an American flag on it and they know we've 
got--that there is a substantial possibility that they're going 
to be looking at three marines on the deck of that, it would 
seem to me that that's going to give them pause as to whether 
or not they're going to want to do this anymore.
    Captain Phillips. I don't want to disagree with you, but 
the pirates have attacked the grey ships, what I call the grey 
ships, or U.S. Navy ships, the--I'm not going to mention the 
name. They were attacked by pirates. The pirates will evolve 
and learn to recognize that the grey ships are the ones they 
want to stay away from. And the pirates do not read the stern, 
and we don't fly a flag at sea. So as far as the flag the ship 
sails under, it is irrelevant because piracy is just a crime of 
opportunity, and that is what's going on here.
    Senator Risch. Thank you very much.
    The Chairman. Thank you very much, Senator Risch.
    Senator Wicker.
    Senator Wicker. Captain, I didn't understand what you meant 
about the grey ships.
    Captain Phillips. The grey ships are the U.S. Navy ships, I 
mean, I think most of us here would recognize a Navy ship, and 
if we were pirates, we would stay away from them. But the 
pirates have actually attacked, not just U.S. Navy, but other 
countries' navy ships. But the pirates and their tactics are 
evolving and they are learning not to do that.
    Senator Wicker. I see.
    Captain Phillips. My point was, they aren't picking out a 
flag. It's a crime of opportunity, and that's what they're 
going for.
    Senator Wicker. OK. Did I just understand you to say that 
you don't fly a flag?
    Captain Phillips. At sea, we do not fly a flag. In port, 
we're required to fly a flag of the port we're in and the flag 
we have. But at sea, no, we do not fly a flag. You would end up 
spending thousands of dollars on flags if we did that.
    Senator Wicker. Well, it might be worth it.
    Captain Phillips. That may be part of the comprehensive 
plan, but a very small part of it.
    Senator Wicker. So when Mr. Clancey says of course pirates 
generally don't check the flag and origin of a ship before 
attacking, there's a reason for that because you can't tell 
the----
    Captain Phillips. I don't want to discount the evolution of 
piracy. We talk about evolving. I think there is going to be 
inside information made available to pirates from various 
people in ports, and certain ships could be targeted. I believe 
that will be the evolution of these pirates as they increase 
their abilities and intelligence.
    Senator Wicker. Well, do you think they're less likely--if 
they could figure out which one is the American ship--do you 
think they're now less likely to attack that American ship?
    Captain Phillips. I think that the only thing that will 
stop them from attacking a ship is showing them that the ship 
is a hard target, and that's it.
    Senator Wicker. Did the pirates speak English?
    Captain Phillips. They spoke a manner of English, yes.
    Senator Wicker. Were you able to have a conversation with 
them about what their goals were?
    Captain Phillips. This is a pending investigation, so I 
can't divulge, but we had many conversations, yes.
    Senator Wicker. I see. Well, would I be fair in making the 
assumption that they were hoping somebody would come along and 
pay them a bunch of money to release you?
    Captain Phillips. Yes; you would be. Yes. It's a business 
plan for them. It's a crime of opportunity. As the gentleman 
spoke up here--I think it was Senator Lugar--they can support 
towns. If you can feed people in that area of the world, you 
have an army.
    Senator Wicker. So let me ask both of you--no, I think I'll 
ask Mr. Clancey.
    Maersk has a bunch of ships?
    Mr. Clancey. Yes, sir.
    Senator Wicker. What percentage of the traffic does your 
company control worldwide?
    Mr. Clancey. It's actually by segment. In the container 
shipping business, which is the largest part, we have about 13, 
14 percent.
    Senator Wicker. I see. How many companies, including major 
companies, are there like Maersk?
    Mr. Clancey. Ten.
    Senator Wicker. Ten? OK. I've had to come in and out, so 
I'm not sure that this has been addressed, but I don't think it 
has. Has anyone asked you your opinion yet today about the 
payment of ransoms and what effect that might have had over 
time in encouraging this practice?
    Mr. Clancey. I think that the payment of ransoms has led to 
the sophistication of the pirates, probably increased the 
number of the pirates and their willingness to take larger 
risks.
    Senator Wicker. What is the policy of Maersk in that 
regard?
    Mr. Clancey. There was one instance with a tugboat where 
they captured a crew and guests, and they had it in Somalia. 
And we couldn't get it by land, and the only way to get the 
people back was to pay a ransom, and they did.
    Senator Wicker. So one instance is the only one that you're 
aware of?
    Mr. Clancey. Right.
    Senator Wicker. Do other companies have a more liberal 
policy, or other countries have a more liberal policy?
    Mr. Clancey. I don't think it's that specific. I think it's 
a case-by-case basis, and it's been all over the globe, in 
terms of who's paying and who's not. A lot of times, it's the 
case of the owner. Is the owner willing?
    Senator Wicker. Is the owner of the cargo, or the owner of 
the shipping company?
    Mr. Clancey. Owner of the ship.
    Senator Wicker. Of the ship.
    Mr. Clancey. That's who they negotiate with.
    Senator Wicker. I see. So in your case, that would be your 
corporation.
    Mr. Clancey. Correct.
    Senator Wicker. So have there been--so there's only this 
one instance----
    Mr. Clancey. A small, small boat.
    Senator Wicker. [continuing]. In which Maersk has paid. And 
so in other instances where--I would have to assume this is not 
the first instance of piracy involving Maersk--what happened in 
those other instances?
    Mr. Clancey. We evaded the pirates. There's only three 
other incidents.
    Senator Wicker. I see. OK. And--and so really, you've only 
had to face that decision the one time?
    Mr. Clancey. Once, and it was in the very beginning of 
this. It was, bingo, the ship was in port.
    Senator Wicker. Yes. Well, I think you--I think, Mr. 
Chairman, the questions today sort of reflect a view on both 
sides of this table, on both sides of the aisle. There's got to 
be a solution out there, and the status quo is unacceptable to 
this panel. So to the extent that you've enlightened us with 
some information that might get us going in the right direction 
and show us some of the pitfalls in trying to address it, 
you've been very helpful to us. I, too, want to join the other 
Senators in thanking both of you, and also thanking the 
chairman for calling the hearing.
    The Chairman. Thank you very much, Senator. Let me follow 
up with a few questions if I can.
    The Chairman. On the issue of flying the flag, this area is 
apparently the single biggest pirating area on the planet; is 
that correct?
    Mr. Clancey. Correct.
    The Chairman. And while it covers a million square miles, 
it's really in the area here as you're approaching the Gulf of 
Aden, correct?
    Mr. Clancey. Correct.
    The Chairman. There are only three approaches to that 
fundamentally. You come up from Madagascar, the southern part 
of Africa, or you come up from Australia, straight over like 
that, or you come in out of the Mumbai/Karachi area, or around 
the cape here, the Persian Gulf, and come around, go up into 
the canal, ultimately.
    Let me come back to the sea-lanes issue for a minute here. 
Isn't it possible to have a rendezvous spot outside of the 
reach of those small skiffs where you could come up with 
military cover, perhaps even in convoy? Has that been 
considered?
    Mr. Clancey. There is a great deal of discussion about a 
corridor, like they have now, coming out of the Red Sea into 
the Gulf of Aden. And I think that there's a lot of promise in 
the idea of a corridor.
    The Chairman. And it seems that we could cover that pretty 
effectively.
    Mr. Clancey. Yes. And I think that our other maritime 
nations' navies would be willing to respond, but that's just my 
personal opinion. I have not certainly spoken to them.
    The Chairman. Well, I think there ought to be some urgency 
to the effort internationally to pull people together. I know 
there's the task force, but, Captain, I know you're a brave 
soul, and maybe you're willing just to go at it again the same 
way, but are you going to be comfortable going out there again? 
Is this your wife here that I see behind you?
    Captain Phillips. This is my wife, Andrea.
    The Chairman. She wants you to go out there again, exactly 
the way things were before?
    Captain Phillips. She's a good wife. She supports whatever 
my decision is.
    The Chairman. And what's your decision?
    Captain Phillips. What's that?
    The Chairman. You didn't even turn to consult with her. I 
couldn't get away with that.
    Captain Phillips. I will be going back to sea, yes. That's 
what I do.
    The Chairman. OK. And with or without some changes that you 
want put in place?
    Captain Phillips. I expect and anticipate changes will be 
in place. I've received some information that they are working 
on it, as Mr. Clancey has talked about. And it behooves them 
and us to take the measures.
    As I said, there's not one single aspect of this. It's got 
to be a cohesive, comprehensive plan with multiple facets. And 
to develop that plan, I think your job, and the job of the 
gentlemen here today, is to hear from other people, and not 
just myself.
    As I've mentioned to a few committee aides, I have some 
names of much more articulate people than me that have more 
ideas. I've also received many ideas from other people in my 
mail and by telephone in the last few weeks, and although many 
of them have to be thrown out, we have to do things that are 
practical, capable, and truly efficient. But it can't be one 
solution. There's going to be a comprehensive--a multiple-
faceted plan.
    The Chairman. Well, I respect that enormously, and I 
couldn't agree with you more. And we welcome that input and 
those ideas, and we will follow up on it, because we want to 
exhaust the remedies here.
    But it seems to me that if this is a concentrated area and 
you were coming through some shipping lanes, how many nights 
and how many days are we talking about once you enter the 
danger zone until you're through?
    Captain Phillips. Pretty much in the Maersk Alabama, we 
were in the zone the whole time of our transit. But as I said 
earlier, even in the GOA, the Gulf of Aden transit zone, which 
is already in place, and a convoy type situation is set up, 
they are still being attacked. Just not as much as before they 
set up the lanes. Because, again, the Suez Canal is at the end 
of the Red Sea.
    The Chairman. I understand. But as of this moment----
    Captain Phillips. Yes.
    The Chairman. [continuing]. They believe they can attack 
with relative impunity, if they get onto the ship or get in 
there.
    Captain Phillips. I think part of their business plan 
assumes that once they get on a ship, nobody's going to do 
anything.
    The Chairman. Correct. And I think personally, that has to 
change. And my judgment is that for the period of time you're 
in that zone, it seems to me flying a flag, you're not going to 
go through all that many flags that it's so prohibitive that it 
isn't of value, particularly if they know that that particular 
flag carries with it a certain risk if they attempt to board.
    It seems to me that we have it within our power and within 
our faculties of reasoning to be able to fairly rapidly come up 
with a means of safeguarding the ship's interests with respect 
to weapons at the same time that we safeguard these ships and 
their cargos and the vast expenditures of the military. That's 
a big expense too and it also carries risks.
    With respect to the weapons, it seems to me that you are, 
as a captain, entrusted with a vessel's worth? How much is a 
vessel worth?
    Mr. Clancey. Oh, anywhere from $20 to $60 million.
    The Chairman. That's what I thought; $20 to $60 million, 
and how many members of the crew are there?
    Captain Phillips. On the Maersk Alabama, 20, and it varies 
on different ships.
    The Chairman. Twenty members of the crew, and you're 
carrying how many millions of dollars of cargo on a particular 
vessel worth $20 to $60 million? In the multimillions?
    Captain Phillips. Yes.
    The Chairman. So it seems to me that if you have one person 
as a skipper in charge of that ship, that value and the value 
of those lives, you can trust that captain with a key and a 
lock and an armory, which is what ships have. They have an 
armory. We keep weapons under lock and key, and it's the 
captain's order that breaks those weapons out when they are 
under attack or at risk.
    It seems to me that that ought to be possible. A certain 
level of training ought to be possible. Obviously maybe your 
preference to have it be military people loaded on to an 
American-flag vessel before they go into the zone and they're 
taken off when they get out of it. That's one way to handle it. 
Another is you have a crew that goes through the whole way. But 
I certainly hope you will take our thoughts to that discussion 
that you're going to have, and we will weigh in with 
appropriate people accordingly.
    But besides that particular issue, did your insurance 
company pay the ransom?
    Captain Phillips. I'm not familiar with it, because it was 
an affiliate. It was a tug-assist vessel that was helping in 
the oil fields. But I would take a guess that no, the insurance 
company did not.
    The Chairman. OK. Is there anything else, Mr. Clancey, that 
you need from the government that would make a difference in 
this, in your judgment?
    Mr. Clancey. I do think, because of the scope of the 
geography and just deterioration of certain economies around 
the world, that we do need an international resolution or an 
international agreement that deals with piracy. The 
prosecution, the penalties, the crime, what you can do and what 
you can't do. And I would think with the threat level 
increasing, that hopefully, that is doable. And that would be 
of great benefit to all the shipping----
    The Chairman. Well, one of the things we're going to be 
considering here at some point in time is the Law of the Sea 
Convention, and the Law of the Sea Convention states that all 
states shall cooperate to the fullest possible extent in the 
repression of piracy on the High Seas or any other place 
outside the jurisdiction of any state.
    It's my understanding that the U.S. Navy is currently 
operating in a manner consistent with the Law of the Sea 
Convention, even though we are not a party to it. Is that 
accurate, do you know?
    Mr. Clancey. Yes, that is accurate, and we think that it 
would be a great benefit if we were a party to it.
    The Chairman. Well, the two of us sitting here both believe 
that, and we hope before long that the Senate will deal with 
that issue.
    Captain Phillips, again, you have our admiration and 
respect. We're, needless to say, thrilled that you're in good 
health, as is your crew, and your ship was protected, and we 
admire so much the way in which you conducted yourself. We hope 
you never have to go through that again, and we hope we can get 
some policies in place that ensure that.
    Captain Phillips. Well, I hope that's what this day 
started, and we'll soon end up with comprehensive and 
coordinated policies. And I just want to mention again, it 
wasn't just me on my ship. It was my crew, my chief mate, my 
chief engineer, first engineer, who were integral in the 
outcome of this.
    And again, I can't say enough about the military. We need 
to support them. And they are at the point of the spear. We 
need to support them.
    The Chairman. We all respect what they did enormously. And 
Shane Murphy, thank you again for being with us. Everything I 
said about the captain goes to you too. And we thank you for 
the way you conducted yourself.
    So we're going to recess for 2 minutes while we switch the 
panel. And again, thank you very much, Captain, and Mr. 
Clancey. Thank you. It's very helpful.
    Captain Phillips. Thank you.
    The Chairman. If we could bring in the next panel, that'd 
be terrific.

[Whereupon a recess was taken from 4:12 p.m. to 4:14 p.m.]

    The Chairman. The hearing will come to order. Ambassador 
Mull, thank you very much for being here with us. We appreciate 
it. If you could summarize your testimony, then we'll follow 
up. Thanks.

STATEMENT OF HON. STEPHEN D. MULL, SENIOR ADVISER TO THE UNDER 
    SECRETARY OF STATE FOR POLITICAL AFFAIRS WITH OVERSIGHT 
 RESPONSIBILITY FOR THE OFFICE OF THE UNDER SECRETARY OF STATE 
  FOR ARMS CONTROL AND INTERNATIONAL SECURITY AFFAIRS AND ITS 
                RELATED STATE DEPARTMENT BUREAUS

    Mr. Mull. Absolutely. Thank you very much, Mr. Chairman and 
Senator Lugar. It's a pleasure to be here today to talk about 
this very urgent issue of national security.
    It's an interesting thing about the problem of piracy. It's 
really linked to the preeminent and really the oldest 
interests, foreign interest that the United States has, that of 
freedom of the seas, and converges with the very real 21st 
century threat of--a very typical, asymmetric threat to our 
national security that the pirates pose.
    Our goal on behalf of the government in approaching this 
problem is to reclaim the freedom of the seas from the pirates 
and to build on that what we hope will be a permanent maritime 
security arrangement in the region so that this problem will be 
permanently dealt with. And we've adopted a number of tactics 
over the course of the past 6 months in pursuit of that goal.
    We've worked very closely within the United Nations to pass 
a number of new U.N. Security Council resolutions with 
authorities, giving national states the right to take military 
action on the seas and on smaller territory, if necessary.
    We've worked with our partners to substantially increase 
the number of ships that are deployed to the region, and we've 
worked with those ships to establish a maritime safety 
protective area, the so-called corridor that the last panel 
discussed. We've also simultaneously engaged with the problem 
of what do you do when you catch the pirates? And here, we've 
run into a problem of a patchwork of various national legal 
authorities and intents and policies on what to do with these 
pirates once you catch them.
    Very early on in January, we signed an agreement with the 
Government of Kenya, at which they agreed to take pirates that 
we apprehend. They signed a similar agreement with the British 
Government and with the European Union. So now there are 52 
pirates that are apprehended awaiting trial. They're in Kenya. 
We're in various stages of negotiation with other countries in 
the region, as well, to play a similar role.
    We've also worked to engage with the industry, working 
through the Coast Guard and the Maritime Administration, to get 
more adherence to best practices that we've learned in these 
lessons that we've had over the past few months about some of 
the measures, both passive and active, that they can take for 
self-defense.
    And, of course, this is all part of the much broader issue 
of Somalia. This is a symptom of the problem in Somalia that 
really requires urgent attention to be fixed. Now, in pursuing 
these tactics, we've achieved a number of successes. The number 
of interdictions--successful interdictions of pirates since 
January 1 of this year has been 15. In all of 2008, there were 
only eight, so we've almost doubled the number of successful 
interdictions.
    There's also been--although there's been an increase in the 
number of attempted attacks, the number of successful attacks 
has actually dropped by nearly half in contrast to last year.
    But we have to do more. The inflow of ransom very quickly 
translates into more sophisticated weapons, larger numbers of 
pirates who then only increase their attack. And in response to 
this growth in the threat, Secretary Clinton's identified a few 
more measures that we're taking in the process very urgently 
right now.
    One, you may be familiar with the International Contact 
Group that we formed in January. The U.S. Government took the 
lead in forming that group. It's grown to now 28 governments 
and 6 international organizations that break into subgroups to 
look at all these different facets: The legal facet, the 
military coordination facet, the--and we hope soon the whole 
aspect of financial transfers of pirates.
    We're going to be convening an emergency session of the 
contact group within a few weeks' time at New York. At that 
meeting, we're going to press for additional donations of 
military forces to the territory. We're going to work at 
redoubling our efforts right now. Next week, there's going to 
be an effort--one of the subgroups that focuses on legal 
authorities is going to be meeting. We hope to build on that. 
Then at the contact group meeting later this month----
    The Chairman. What's missing in the legal authorities?
    Mr. Mull. Well, each country has--as you, Senator, pointed 
out earlier, the law of the sea, in fact, calls on all states 
to take action. But each state takes different policy decisions 
on how they're going to apply that. For example, let's say--
there was one recent case in which one European Navy ship 
apprehended some pirates in the process of attacking a ship 
that was not flagged of that country and which had no nationals 
of that country on the ship.
    The prosecutors in that country said, ``Well, this wasn't 
in our waters. This isn't our nationals. This isn't our ship. 
Let's just let the pirates go.'' So we need to work with our 
partners to just convey just what you have said in your opening 
statements, that this is a problem requiring all of us to work 
together so that we aren't catching and releasing pirates, that 
we're delivering them either to Kenya or other countries, or to 
the victim states themselves. They have an obligation and a 
responsibility to take that----
    The Chairman. Did that occur in international waters?
    Mr. Mull. Pardon me?
    The Chairman. Was that in international waters?
    Mr. Mull. Yes, it was, sir.
    The Chairman. Under international law, isn't an attack on a 
ship in international waters a crime?
    Mr. Mull. Yes, it is. According to the Conventions, it is. 
But the decision to prosecute, to apprehend, is a national 
policy decision, much as the process we went through with the 
pirates that attacked the Maersk Alabama.
    The Chairman. I interrupted you. I'm sorry.
    Mr. Mull. Oh, no, sir. That leads me, actually, to my next 
point, that one of the challenges we face with the other 
members of this contact group is in convincing them that victim 
states really do have an important responsibility to carry out 
in bringing these pirates to justice.
    Secretary Clinton also mentioned that we need to work 
harder to track the flow of assets that pirates get. There was 
more than $30 million in ransoms paid to these pirates last 
year, and they're off to a mark--to exceed that mark this year 
if current trends continue. Of course, this is a hard thing to 
do. Most pirate assets are delivered in suitcases stuffed full 
of pounds or euros or dollars flung onto the decks of ships 
from helicopters, and then they go into the hawala system, and 
it gets very difficult to track.
    But nevertheless, there are a number of measures that we're 
considering with the Treasury Department. I can't go into some 
of them in open session, but we're looking at it very 
carefully. And I think we'll have some practical measures that 
we can take with our partners.
    And then finally, you discussed in the last session the 
whole problem--one of the root problems of this is the payment 
of ransoms. And we have to find a way to discourage the payment 
of ransoms. This isn't an easy question. When we first stood at 
the contact group and the diplomacy we were conducting in 
Europe, this was very much at the top of our list with our 
European friends. The Europeans responded, ``Look, for many of 
our businesses, this has become an acceptable business 
expense.'' And we're talking about human lives, and so none of 
the hostages had been executed by any pirates so far, and 
they're worried that by cutting off ransom, the pirates will 
respond by then taking action to kill hostages, which has not 
happened up until now.
    Nevertheless, in the emergency contact group meeting, we're 
going to continue to press to see if we could at least put 
limits that all could voluntarily adhere to.
    The Chairman. Mr. Mull, let me just give you a heads-up. 
We've got a vote that's begun, so we've got about 10 minutes.
    Mr. Mull. All right. Why don't I just stop? That's really 
the end, the summary of my testimony.
    [The prepared statement of Mr. Mull follows:]

  Prepared Statement of Ambassador Stephen D. Mull, Senior Adviser to 
 Under Secretary of State for Political Affairs, Department of State, 
                             Washington, DC

    Chairman Kerry, Ranking Member Senator Lugar, and members of the 
committee, thank you for inviting me today to provide an overview of 
our initiative to suppress piracy off the coast of Somalia.
    Over the past year, concern has grown over the threat that piracy 
poses to international security, to the global economy, and as we have 
seen recently, to U.S. citizens and commercial interests. In addition 
to the Maersk Alabama incident, attacks on ships in this region have 
disrupted both U.S., and U.S.-supported United Nations World Food 
Programme, transports delivering aid to some of the world's most 
vulnerable populations; placed innocent mariners from countries across 
the globe in immediate danger; posed environmental threats as pirated 
ships may be damaged or run aground; and jeopardized commercial 
shipping interests. The vast majority of Somali pirates are motivated 
by money, not ideology, and the continued payment of ransoms fuels this 
affront to human security and dignity.
    Fighting piracy is an important element of our strategic objectives 
in Somalia, which focus on helping Somalia regain political and 
economic stability, eliminating the threat of terrorism, and responding 
to the humanitarian needs of the Somali people. American leadership in 
efforts to combat piracy off the coast of Somalia is entirely 
consistent with our traditional interest in ensuring freedom of 
navigation and safety of the seas, which have long been cornerstones of 
U.S. foreign policy and which is now an urgent priority for Secretary 
of State Clinton. Furthermore, beyond protecting our citizens and 
ensuring the security of maritime trade and access to the critical 
energy resources upon which our national and the global economies 
depend, collaboration with both traditional and nontraditional partners 
on counter-piracy efforts in this region offers strategic opportunities 
to strengthen existing alliances and coalitions and to create new ones. 
We hope to be able to leverage our collaborative counterpiracy efforts 
into increased security cooperation in the maritime domain with 
nontraditional partners such as China, India, and Russia, and bring 
added focus to regional capacity-building programs.
    The United States has a multifaceted strategy to suppress piracy 
that many Departments and agencies are working hard to implement, and 
the Department of State is working with interagency partners to 
integrate our maritime and land-based efforts in Somalia into a 
comprehensive strategy. Our strategic goals are to protect shipping, 
particularly American's and U.S.-linked ships; capitalize on 
international awareness and mobilize cooperation to address the 
problem; and create a more permanent maritime security arrangement in 
the region. Significant factors affect our pursuit of these goals, 
including the enormous difficulties inherent in patrolling, or even 
monitoring through technical means, such a huge expanse of open sea; 
and, of course, the broader problem of Somalia itself. Legal challenges 
also exist, including inadequate domestic legal authorities in some 
states as well as a lack of willingness on the part of some to 
prosecute suspected pirates.
    In light of these complexities, we seek to use every means at our 
disposal to pursue our goals. We have worked effectively with the 
United Nations to obtain Security Council resolutions that maximize our 
ability to take appropriate action. We created and will continue to 
work through the Contact Group for Piracy off the coast of Somalia 
(Contact Group) to internationalize the problem and its solutions. We 
actively support the NATO and European Union counterpiracy missions, 
and the U.S. Navy created Combined Task Force 151 to focus U.S. naval 
forces on counterpiracy efforts. We secured a formal arrangement with 
Kenya to accept pirates for prosecution, and our Department of Justice 
has demonstrated America's willingness to prosecute when our people and 
interests have been attacked. We continue to work with and through our 
interagency partners to improve U.S. and international commercial 
shipping self-protection capability. And we are working with United 
Nations agencies like the International Maritime Organization and the 
U.N. Office on Drugs and Crime, as well as partners in the region, to 
support the capacity development of their coastal security forces.
    Concerned by the recent upsurge in pirate activity, Secretary 
Clinton has directed us to do more. We are seeking emergency 
consultations with Contact Group partners and are finding notable 
receptivity to our outreach. Through this venue, we will intensify our 
efforts to persuade victim states to prosecute pirates. We are working 
both internally and with other countries to develop the ability to deny 
pirates the benefits of concessions, including tracking and freezing of 
their ill-gotten gains. We are working to expand the regional capacity 
to prosecute and incarcerate pirates, both by helping to fund 
multilateral programs to build judicial capacity and by direct 
unilateral assistance to countries who have expressed a willingness to 
adapt their laws and processes to accommodate prosecution and 
detention. We will continue to press the importance of a No Concessions 
policy when dealing with pirates. We are working in political-military 
channels to ensure that military counterpiracy operations are as robust 
and well-coordinated as possible, and we are intensifying our efforts 
to support Somali assistance processes. We are also exploring 
strategies to actively seek the release of captive ships and hostages, 
some of whom have been held for months.
    We've had some success. Naval patrol interventions are increasingly 
active; international naval forces have intervened to stop dozens of 
attempted piratical attacks in the past 9 months, and we're seeing a 
significant upswing in the number of countries willing to commit assets 
to the effort. On the other hand, we face political and legal obstacles 
to a shared understanding of the imperative for prosecution in and by 
victim states, and significant logistical issues in prosecution by 
countries who actually have the will to prosecute pirates. Regional 
states face challenges with regard to detention and prosecution. 
Tracking and freezing pirate ransoms is even harder than tracking 
terrorist finances, given that pirates are most often paid off in the 
form of air-dropped bags of cash. And the shipping industry--as well as 
some of our partners--has vigorous objections to, and few incentives 
for, arming their ships and crews. We need to make progress in these 
areas.
    Fortunately, we sense a growing international consensus to do more, 
and we'll keep working at it. Ultimately, we hope these cooperative 
efforts will result in a new maritime security regime that will feature 
enhanced regional capacity and cooperation. We are considering now what 
such a regime would include, but anticipate that it would entail 
voluntary multilateral cooperation and collaboration. For instance, we 
envision a maritime security sector assistance framework building on 
programs already in place to provide, among other capacity-building 
efforts, training and equipment to regional coast guards, supported by 
a consortium of donor and regional states; international coastal and 
naval exercises to improve interoperability; and pooling of 
surveillance assets and information-sharing to develop a shared 
maritime security picture. The regional approach was highly successful 
in combating piracy in the Strait of Malacca, and although the 
situation off the coast of Somalia is quite different because of the 
incapacity of the Somali Government, the need for a coordinated 
regional approach is apparent. In fact, it is urgent, and we would like 
to see such an approach applied to other maritime security challenges, 
including smuggling, trafficking in persons, and disaster response.
    As Secretary Clinton emphasized in her recent public statement, we 
recognize that there will be no long-term solution to piracy in the 
region unless progress is made in addressing the larger political, 
security, and governance challenges facing Somalia, its government and 
its people. We also recognize that sustainable change in Somalia 
requires a political solution that is authored and implemented by 
Somalis themselves and not by outsiders. In this regard, the United 
States continues to support the U.N.-led Djibouti peace process, which 
has facilitated important progress on the political and security fronts 
in recent months, and to work with a broad international group of 
donors. The United States also remains committed to supporting the 
Somali security sector and the African Union Mission in Somalia 
(AMISOM). Secretary Clinton dispatched a high-level envoy, Acting 
Assistant Secretary Phillip Carter, to the Donors' Conference on 
Somalia in Support to the Somali Security Institutions and AMISOM, 
where we will reaffirm our commitment to building security and 
governance in Somalia.
    We are also working directly with the Transitional Federal 
Government of Somalia and regional authorities to develop both 
incentives to actively suppress pirate activities and disincentives to 
support for this malignant enterprise that threatens Somali and 
regional security and sustainable development. We are exploring the 
feasibility of tracking and freezing pirates' assets, and encouraging 
implementation of the U.N. sanctions already in place. None of this is 
easy, but it is all worth doing for the sake of the security and 
prosperity of Americans and the international community.
    Mr. Chairman, Ranking Member Senator Lugar, and members of the 
committee, I want to thank you for this opportunity to provide an 
overview of our efforts. I am happy to answer any questions you may 
have.

    The Chairman. Let me ask you this quickly, because I think 
we can get to the heart of this fairly quickly. First of all, 
when do we expect the impact of the changes that are currently 
being considered by the contact group? When would we expect 
those to take effect off the coast of Somalia?
    Mr. Mull. Well, I think there's already been--and, in fact, 
in terms of reducing the number of successful attacks, in terms 
of the gross number of attacks, we hope--well, depending on how 
successful we are in getting more ships to agree to take these 
self-defense measures.
    The Chairman. What about the recommendations you've heard 
us talking about? What's your reaction to the notion of either 
the sea-lanes or the convoys or the arming of the crews, the 
flying of the flag? What do you think about those?
    Mr. Mull. Well, we believe the principle under girding all 
of that is this isn't just a problem for national or 
international militaries to solve. Individual shipping 
companies also have a responsibility for their own self-
defense. That self-defense can consist of many different 
things. Passive sonic measures. It can consist of armed guards.
    We're very persuaded by the arguments that many members of 
this committee have made, but there's a lot of opposition to 
it, as well, in the shipping industry. What we're in the 
process of doing right now between the Defense Department, the 
Transportation Department, and shipping industry is trying to 
forge a united U.S. position that we will then take to the 
contact group and try to get others to agree on the 
circumstances under which armed guards----
    The Chairman. What's the most significant legal challenge 
that the United States and the international community face in 
terms of combating piracy?
    Mr. Mull. The most significant legal challenge is 
convincing other countries to take the policy decision--the 
governments of victim states to take the policy decision to 
prosecute and if convicted, incarcerate pirates.
    The Chairman. And are there particular countries that are 
more problematical than others on that list?
    Mr. Mull. Yes. There are many countries in the region, for 
example--and Kenya, I mentioned, is a very positive example. 
They're willing to take all pirates that the world is willing 
to offer them. There are other countries in the region, 
however, who believe that this is a problem for the Western 
shipping industries, and they don't want to take responsibility 
for the expense of trying and prosecuting pirates. We're 
working through our assistance programs with our partners----
    The Chairman. How long do you think it'll take you to get 
something in place? The captain says he's going back to sea. 
You've got a lot of ships out there right now. What's the level 
of urgency that's being applied to this?
    Mr. Mull. Well, it's very, very urgent, given the threat 
that this poses to all of us. So we did manage to conclude this 
agreement with Kenya within about 2 weeks. There are two other 
governments that we're in the process of negotiating with. I 
hope that we will have those concluded within the nearest 
future, but I can't predict when we'll succeed.
    The Chairman. Senator Lugar.
    Senator Lugar. You mentioned a moment ago that you believe 
that shipping companies have a responsibility, and we've 
discussed that with our first witness, of what kind of costs 
might be involved. And I gathered part of the reticence to 
adopt this still was the feeling that other countries would 
look amiss at this, ports of entry that know that there are 
armed persons on ships, or other countries that haven't adopted 
this.
    But at the same time, is there a dialogue--I wouldn't say 
an argument--between owners of shipping companies and say the 
U.S. Government in terms of who is responsible and how the 
responsibility should be shared?
    In other words, you've mentioned that they ought to take up 
certain responsibilities or costs, but at the same time, 
they're pushing back and indicating reticence to do this. Now, 
how do you perceive some resolution of this as a commonsense 
matter, to get back to the chairman's thought that we have 
ships at sea, the captain's about to go out again, and so 
forth?
    Mr. Mull. Well, we are in the process, and this is being 
managed at a relatively senior level within the interagency of 
the government. We very firmly believe that we first and 
foremost must represent not only the U.S. Government's 
particular views, but U.S. industry, as well. And so we are in 
very intense consultations with industry. I believe those will 
be concluded within about a week. And then following that, we 
will take the united position. The government will decide the 
position based on the input and consultation, and we will take 
that to the contact group later in May and use that as a basis 
for persuading the other countries to agree.
    Senator Lugar. Well, that's a fairly tight timeframe that 
you point out.
    Mr. Mull. Yes, sir.
    Senator Lugar. That's helpful to know. Now, the chairman 
also asked with regard to the Law of the Sea Treaty, is that 
helpful in terms of arriving at some type of international 
agreement or in any other definitions of the problem?
    Mr. Mull. You mean U.S. ratification of it?
    Senator Lugar. Yes.
    Mr. Mull. The Law of the Sea--in practice, we are--on these 
issues, we're already abiding by the Law of the Sea. And while 
the administration very supports as quick as possible 
ratification, whether it is ratified or not will probably not 
have an effect. The biggest challenge for us is getting other 
victim states to shoulder their burden of prosecution.
    Senator Lugar. I see. Thank you, Mr. Chairman.
    The Chairman. But we can't assert the Law of the Sea in any 
regard with respect to any country because we're not a party to 
it. So that is some handicap, is it not?
    Mr. Mull. Yes, I would agree with that.
    The Chairman. Even though we live by it. We live by it, but 
we can't assert it.
    Mr. Mull. That's right. But we find that in our dealings 
with other governments, I mean, even though we have not 
ratified it, we all start from that operating assumption that 
it is in effect. But you're absolutely right. We cannot assert 
it from a legal point of view.
    The Chairman. There is an Islamist group called al-Shabaab 
that is trying to exert control over Somalia and has been 
designated by the State Department as a terrorist group.
    Mr. Mull. Yes.
    The Chairman. Are there any signs of that group cooperating 
with al-Qaeda?
    Mr. Mull. This is a question of vital interest to us that 
we monitor very closely with all of the available resources 
that we have. There have been some troubling rhetorical 
indications of possible elements within al-Shabaab trying to 
exploit pirate disaffection with the United States, in 
particular, since the rescue of Captain Phillips. However, we 
have not seen any information thus far indicating any 
operational coordination or any financial support between the 
two.
    The Chairman. Do we know of any money from the ransoms 
going to al-Shabaab?
    Mr. Mull. We have not seen any evidence of that. Many
al-Shabaab leaders have, in fact, publicly criticized pirates 
as being un-Islamic.
    The Chairman. OK. Well, we're not only going to leave the 
record open, we're going to let this hearing stay open for 
another 5, 10 minutes. I think Senator Feingold, who is the 
chairman of the subcommittee with jurisdiction in that area, is 
going to be here. So we're going to leave the hearing. If you 
don't mind sitting here, we'll just recess until Senator 
Feingold gets here. And if he doesn't get here, then we'll 
adjourn and close out in his absence. You could be here at 7 
o'clock, right?
    Mr. Mull. I'm at your disposal.
    The Chairman. Say, ``Well, I'm waiting for Senator 
Feingold.'' So if we could just recess momentarily. And I'll 
check when I go over the floor to vote. Thanks. I sure 
appreciate it. We stand in recess.

[Whereupon a recess was taken from 4:30 p.m. to 4:41 p.m.]

    Senator Feingold [presiding]. Thank you, Mr. Mull, for 
being here. Sorry about the delay, but we did have a vote 
suddenly come up. And I just want to take an opportunity, 
obviously, to participate in this important hearing. Let me 
begin by saying how pleased I am that we're gathered here to 
discuss this important issue, and I want to thank our chairman 
for organizing the hearing.
    For years, I've been expressing my concern about the 
growing problem of lawlessness in and around Somalia, and this 
problem finally hit home for all of us earlier this month with 
the attack of the Maersk Alabama and the capture of Capt. 
Richard Phillips after his courageous actions to ensure the 
safety of his crew.
    I am grateful that our armed services, particularly members 
of the Navy and Navy SEAL teams, were able to rescue Captain 
Phillips, and that he came before the committee today to share 
his thoughts on how to make the ships on the high seas safer.
    While the episode involving the Maersk Alabama was 
resolved, we're likely to see many more such episodes if we do 
not take immediate measures to address not only piracy, but the 
conditions on land that have made the waters off Somalia a 
haven for pirates.
    A recent spike in piracy off the coast of Somalia is an 
outgrowth of the state collapse, lawlessness, and humanitarian 
crisis that have plagued the country for over a decade. Until 
we address those conditions, we will be relying on stopgap 
measures at best to stamp out piracy or stop the growing 
violent extremism in Somalia, which poses a direct threat to 
our own national security.
    As Senator Kerry mentioned earlier, I plan to hold a 
hearing soon of the Africa Subcommittee that will look at the 
problem of piracy in the context of the broader challenges that 
we face in Somalia, such as the growth of al-Shabaab, a 
terrorist group, some of whose leaders have links to al-Qaeda.
    In the long term, the best way to eliminate piracy and 
extremism in and around Somalia is to help establish stability, 
the rule of law, and functional inclusive governance there.
    Nonetheless, there are intelligence capabilities, 
diplomatic measures, and security enhancements that can help us 
to combat piracy and protect maritime traffic and trade in the 
short term. And I'm glad that we have this opportunity to 
examine this today.
    Ambassador, in Secretary Clinton's statement about steps 
that the State Department is taking to combat piracy off 
Somalia's coast, she mentioned exploring ways to track and 
freeze piracy assets. I want to ask how we might do this, but 
before I do so, I'd like to look at the larger question of 
whether we know who is behind the spike in piracy, who is 
benefiting, who is getting payoffs, and how hostage ransoms are 
transferred.
    Ambassador, obviously, we are in an unclassified setting. 
But in your assessment, do we have that intelligence? How 
critical is this type of information to enabling effective 
actions, whether sanctions or others, to combat piracy in the 
near term?
    Mr. Mull. Thank you, Senator. In this setting, I can only 
go so far as to say that the picture is very murky indeed. The 
ransoms, which amounted to more than $30 million in 2008 and if 
current trends continue this year, we're well on track to 
exceed that this year, and this, of course, is recycled back 
into the purchase of more sophisticated weaponry, building the 
pirate organizations to even more sophisticated organizations.
    And part of the problem of tracking it is it's all paid in 
cash, in suitcases of euros and pounds and dollars dropped onto 
the decks of ships held hostage, and then very quickly are 
filtered through the cash handling systems, the hawala system 
that's popular in that part of the world, and it very quickly 
becomes difficult to track where it goes. However, you can see 
the impact of it in the dramatic spike in attempted piracy 
attacks.
    There are a number of measures that we can take. Again, I'm 
sorry, I can't go into it in this setting, but we'll be happy 
to work with our Treasury colleagues to brief you in another 
setting, on some of the measures that we think we will be able 
to take in terms of working with other financial centers in the 
region.
    Senator Feingold. I look forward to getting that 
opportunity. To determine which measures can be most effective 
in combating piracy, it's helpful to look at other regions 
where there has been success. As you know, just a few years 
ago, the combined forces of Malaysia and Indonesia and 
Singapore worked together to end a spike in piracy in the 
Malacca Strait. And when I was on a trip to Indonesia in 2006, 
I had a very good opportunity to discuss this issue in some 
detail with Admiral Fallon, who was then the Commander of 
Pacific Command.
    While there are many differences between that case and the 
current situation in the Gulf of Aden, namely, stronger 
governments and a narrower waterway, in your view, what lessons 
can be drawn from successful efforts in the past to combat 
piracy, and is the ongoing interagency working group on piracy 
going to review those lessons?
    Mr. Mull. The principal lesson is that as we experience 
every day in our diplomatic work on this, is that there is very 
broad consensus that this is a problem that challenges the 
whole world's security, and that on the basis of that 
consensus, we're able to accomplish a lot in terms of coming up 
with coordinated action.
    The problem, however, is in capacity. And as you may have 
been briefed on your visits to Southeast Asia, those countries, 
especially Indonesia, which has come a long way in developing 
as a modern democracy in the past 10 years, has made important 
strides over the course of this decade in terms of developing 
the capacity to get the intelligence and surveillance assets in 
the region to work with Singapore and Malaysia and Brunei in 
monitoring the Malacca Strait.
    Somalia, of course, fits the definition of most people as a 
failed state, does not have the capacity, and there it is, 
right at the crossroads of the whole problem. However, our 
long-term strategic goal--the contact group that we've pulled 
together to monitor this problem has 28 countries in it. It's 
probably going to grow to more than 30. There are six 
international organizations.
    That's a lot of potential that we can work with with the 
countries in the region, as well as donor states. We have some 
unlikely partners, military partners, in this effort. China, 
very much interested in playing a broader role. And the 
interest of all of these normally competing states really 
offers a great opportunity to build a consortium that could 
systemize security assistance, capacity-building, and improving 
the capabilities of the coast guards of these states, and, of 
course, addressing the broader problem of Somalia that you 
mentioned yourself.
    Senator Feingold. In that spirit, from these past cases, it 
seems very clear that it was imperative to work with 
governments in the region to enhance their law enforcement and 
judicial capabilities. In our current efforts to combat piracy 
off Somalia's coast, in your view, what opportunities exist for 
the building of Somalia's transitional government and regional 
Puntland government, and also, to what extent are we engaging 
with other governments in the region, including countries like 
Yemen and Djibouti?
    Mr. Mull. Our engagement ranges across the whole number of 
spheres. First, in the legal area, one of the challenges that 
we were discussing earlier in the hearing is figuring out what 
to do with pirates when we catch them. With this growing naval 
force in the region, what to do with them? We've signed an 
agreement with Kenya. The European Union has, as well, and the 
European Union in particular is providing a lot of capacity-
building to the Kenyan judicial sector so that they can play 
more and more of an active role in doing these prosecutions.
    We are, of course, in discussions with other countries in 
the region to work out similar arrangements. I hope that we'll 
succeed on those very soon. In Yemen and in Djibouti, we 
believe that Yemen in particular has shown a real interest in 
playing a role. In fact, their coast guard was involved just in 
the past week in terms of stopping an attempt at piracy 
hijacking close to its territorial waters. But it needs a lot 
more assistance. And we're studying right now with the Defense 
Department ways that we can build the capacity of the Yemeni 
Coast Guard to make it a more effective partner.
    Djibouti, of course, is the home of the Combined Joint Task 
Force, and we, I think, have made great progress with them, but 
it's a much smaller country with fewer forces to work with.
    Senator Feingold. And given the administration's stated 
commitment to combat piracy and the recent statements by 
national security leaders expressing concern that al-Qaeda is 
trying to gain new footholds in Somalia, don't we need a more 
serious and sustained diplomatic effort in the region? And to 
that end, do you think it makes sense to appoint a senior envoy 
for the Horn of Africa with full-time staff and adequate 
resources?
    Mr. Mull. Well, I don't know what my personal view on that 
is. My competency isn't in African politics. I'll be happy to 
take that question back, and look forward to having the 
appropriate officials address that in your hearing on----
    Senator Feingold. Yes, sir. Thank you very much for your 
help, and thank all the panelists today. That concludes the 
hearing.
    Mr. Mull. Thank you, sir.
    [Whereupon, at 4:49 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


  Responses of Ambassador Stephen Mull to Questions Submitted for the 
                    Record by Senator Richard Lugar

    Question. I understand the Horn of Africa strategy is under review. 
When will it be completed? Does it promote new solutions to the 
challenges ashore in Somalia, including the regions of Puntland and 
Somaliland?

    Answer. The Horn of Africa faces numerous and complex challenges, 
and the situation in the region is a significant priority for our 
national security. To achieve our foreign policy goals in the region, 
the Department believes that the United States must implement a 
comprehensive strategy that involves all elements of the United States 
Government. The National Security Council has brought together the 
Department of State, the Department of Defense, USAID, the intelligence 
community, and a variety of other agencies to work to develop a Somalia 
strategy that is both comprehensive and sustainable, and this strategy 
review is being conducted within a regional framework, as Somalia's 
challenges are intertwined with other conflicts and issues throughout 
the Horn of Africa. This process is underway, and the Department will 
brief and consult with Congress as it unfolds.
    In taking a comprehensive approach, we will ensure we work with 
governments in the region and the international community to address 
instability, terrorism, humanitarian, and governance challenges. In 
particular, we recognize that terror threats to U.S. interests are 
exacerbated by insecure, poorly governed areas. All of these goals are 
mutually reinforcing, and all must be simultaneously addressed. We will 
also look at how we can strengthen our engagement with those seeking to 
improve security and stability in Somalia, including regional 
authorities in Somaliland and Puntland.

    Question. What international efforts ashore can we support that may 
help reduce the sanctuary ashore, establish viable livelihoods and 
establish the rule of law? What are the roadblocks? Are nations backing 
fully relevant UNSCRs? Are additional resolutions necessary?

    Answer. The key to long-term peace and stability in Somalia lies in 
the establishment of effective governance based on a process of 
inclusive political dialogue and reconciliation between the 
Transitional Federal Government (TFG) and other moderates, and on 
achieving a successful conclusion to the transitional process through 
the drafting of a constitution and fair and transparent elections by 
the end of 2011. The United States is supporting these efforts through 
the Djibouti peace process and the provision of significant political, 
economic, development, and humanitarian assistance to Somalia. Security 
must improve in order for political stability to take hold, for large-
scale economic development to become possible, and for the dire 
humanitarian situation to turn the corner to recovery. To this end, the 
United States is supporting the deployment of the African Union Mission 
in Somalia (AMISOM) and the development of the TFG's security 
institutions, including the National Security Force, Somalia Police 
Force and National Security Committee.
    The international community is fully behind the relevant UNSCRs, as 
demonstrated by the unanimous adoption of four counterpiracy 
resolutions in the last year. At present, we believe we have all the 
authorities required to take the actions we deem necessary and prudent. 
However, in the future if we believe additional legal authorities are 
necessary or there is a need to renew existing authorities, we will not 
hesitate to seek new resolutions from the Security Council.

    Question. Anyone familiar with Navy history has heard of the daring 
exploits of young Navy lieutenant, Stephen Decatur, in Tripoli Harbor 
in 1804. His bold mission, the Mediterranean squadron's vigorous 
prosecution of hostilities, and a shore invasion led to victory, 
restoration of peace and brought an end to tribute payments by the 
United States to the Barbary states. I bring this up because some may 
have suggested land attack at private sanctuaries ashore is needed to 
bring these activities under control. What is the administration's view 
of this suggestion?

    Answer. While combating piracy on the Barbary Coast focused on the 
use of military force ashore and at sea, ending piracy off Somalia 
requires addressing stability issues ashore, including ensuring the 
establishment of state authority in Somalia. We sought and won in UNSCR 
1851 the authority to take action in Somali territory, but given the 
political and military risks of such operations, we believe the current 
approach of enhanced and coordinated international military presence on 
the sea, along with improved self-defense measures by shipping, is our 
preferred method of dealing with the problem at present. If that 
changes in the future, we will have the authority to act as necessary. 
We are discussing piracy with national and regional leaders in Somalia 
and working with them to combat pirates operating from within their 
territory. We strongly believe that improving the security situation on 
land is the key to resolving piracy in this region.

    Question. As the administration's spokesman here, what new 
consensus is being drawn on counterpiracy? Has the administration 
determined that halting piracy in this region is a national security 
priority? What cost-benefit analysis have you conducted on this problem 
set?

    Answer. There is strong international consensus that piracy off the 
coast of Somalia is a shared threat that demands concerted and 
coordinated action. This administration strongly believes that halting 
piracy in this region is a priority and is seeking ways to apply 
attention and resources to the problem without detracting from equally 
urgent efforts in the region. From a political perspective, we are 
firmly committed to containing and eventually defeating piracy in this 
region. We will continue to encourage political support for a continued 
multinational naval presence in areas off the coast of Somalia. The 
areas in which we most urgently require action are improving merchant 
ship self-protection, national policies that support pirate detention 
and prosecution, willingness of affected states to accept 
responsibility to prosecute piracy in their domestic courts, and the 
adoption of No Concessions policies. We are also pursing the use of 
financial levers against the financiers of pirate operations and pirate 
leaders.
    With respect to cost/benefit analysis, while we defer to DOD on 
accounting for costs of U.S. military operations in the region, it is 
probably not possible to calculate the costs of American inaction on 
this issue. The rising tide of ransoms will encourage even more piracy; 
shipping costs will rise as shipping moves to other less efficient 
routes; and insurance costs will continue to increase as shipping 
security is seen to diminish. The human costs of hostage taking will 
continue to mount. We risk the development of connections forming 
between pirates and terrorists. And not least, we risk damage to our 
standing as the world's leading maritime power, and therefore to other 
broader U.S. interests, if we do not assume a strong leadership role in 
combating piracy and lawlessness on the high seas.

    Question. Are counterpiracy EXORDs up to date and sufficient for 
the current situation? What is the total cost of our participation in 
the Maritime operations in the Somalia region?

    Answer. State will defer to DOD to respond to these questions.

    Question. How are the trials in Kenya progressing? What would you 
estimate is the monetary cost of that evolution to the U.S. taxpayer 
(capture, transport, care, support, etc.)?

    Answer. We understand that the trial of seven suspected pirates 
delivered by U.S. naval forces to Kenya on March 5 is scheduled to 
begin in July. However, with a total of seven cases and more than 60 
suspected pirates in custody, including an appeal of a 2006 case, the 
Kenyan system is nearing its limits in prosecutorial capacity and 
infrastructure. It is critical that more affected states begin to step 
up and take responsibility to prosecute suspected pirates. The 
Government of Kenya is currently bearing the costs of detaining and 
caring for these suspects. We defer to DOD for estimates of the costs 
associated with capturing and transporting suspected pirates.

                                  
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