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Hearing of the Senate Foreign Relations Committee - Confronting Piracy Off the Coast of Somalia

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Location: Washington, DC

HEARING OF THE SENATE FOREIGN RELATIONS COMMITTEE
SUBJECT: CONFRONTING PIRACY OFF THE COAST OF SOMALIA

CHAIRED BY: SENATOR JOHN KERRY (D-MA)

WITNESSES: JOHN CLANCEY, CHAIRMAN, MAERSK, INC.; CAPTAIN RICHARD PHILLIPS, MASTER OF THE MV MAERSK ALABAMA; STEPHEN D. MULL, ACTING ASSISTANT SECRETARY OF STATE FOR POLITICAL- MILITARY AFFAIRS, DEPARTMENT OF STATE

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SEN. JOHN F. KERRY (D-MA): 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 procedure, which is the Senate is going to have a vote at 2:45. What I'm going to do is make my opening statement, and Senator Lugar will make his, and then we will recess for about ten 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 would like to hold off on your testimony until we're able to get back here, if we can.

You know just a few years ago most Americans viewed piracy as a scourge of centuries past or as the focus of a movie or Hollywood or some other introduction. Many people were not even aware of modern piracy and largely thought of it as 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 policy makers 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 America, to foreign governments, and to shippers in order to confront this growing challenge. These attacks have claimed innocent lives and they have 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 have 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 use 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 to overtake larger vessels. They also use 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 non-state 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 -- it's a micro effort, 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 rule or law or a functioning government in Somalia. As Chair of the Subcommittee on Africa, Senator Feingold is going to be holding a hearing shortly that explores these critical questions in the broader context of American policy towards that country. And like so many of today's challenges, the renewed threat of piracy demands a multi-faceted, multi-national 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, and this is an opportunity for all nations to come together and work in order to effectively respond. In fact, we have made significant progress 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 anti- piracy operations to strengthen judicial frameworks for arrest and prosecution of pirates and to track financial activities related to piracy. I am very confident that today's hearing will provide insight into some of the policy options available for addressing this immediate challenge and for laying 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, but 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 are 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 life 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 Chief Executive Officer of Maersk, Incorporated.

And on our second panel we will have Ambassador Stephen Mull, the Acting Undersecretary of State for International Security and Arms Control, 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 number two officer on board. And from the moment that Captain Phillips was literally a prisoner, a hostage, Shane took over and also operated, I might add, in a most heroic manner. We're delighted to welcome you here, Shane, today, and we thank you for the way in which you did act, in the highest 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.

SEN. RICHARD G. LUGAR (R-IN): Thank you, Mr. Chairman. I join you in welcoming our first panel to the committee, and Captain Phillips' leadership, his bravery during and after the pirate assault on his ship was 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, in 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.

Piracy is not a new issue for our country. Article 1, Section 8 of the Constitution gives Congress the power to, and I quote, "define and punish pirates and felonies committed on the high seas," end of quote, one of the few crimes named specifically in that document. What is new and vexing is the rapid increase in piracy and extortion targeted at shipping off the coast of Somalia.

I look forward to the insights of our second panel, which will address our government's inter-agency anti-piracy strategy. These pirates, like all others before them, are motivated by profit, and their targets, in one of the most heavily trafficked seas of the world, are plentiful and soft. The payoffs are huge, running, as you pointed out, to the millions of dollars in a region where the average per capita income is less than two dollars a day.

So far, piracy in the Gulf of Aden and off the coast of Somalia have been largely non-lethal activity. Ashore, in lawless Somalia and its disputed territories of Somaliland and Puntland, the 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 multi-lateral cooperation. This cooperation must include 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's 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 the shore with impunity.

This underscores a point that I and other members of this committee have long made: The existence of failed states directly threatens the national security interests 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.

SEN. KERRY: Thank you very much, Senator Lugar. Let me note that the vote has started, so Captain we invite you and Mr. Clancey, any chance you want to come back here and just wait in back as you were before, and we will recess for about 10 minutes.

(Recess.)

I was going to wait for Senator Lugar, but I thought if I waited any longer you might be further under assault here, so I rescue you. So, Captain, who is leading off, you or Mr. Clancey? You are going to lead off?

Well again, we are delighted to welcome you here, and we look forward to hearing what you have to say.

CAPTAIN RICHARD PHILLIPS: Mr. Chairman and members of the committee, I am Captain Richard Phillips. I am a graduate of the Massachusetts Maritime Academy. I have been a member of the international organization of Master, 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 8th. We 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 Corporation 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 Master, 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 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, at 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 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 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 out 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'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 anti- piracy 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 have also heard as a suggestion that all we have to do to counter piracy is just to 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 a limited number of individuals 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 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 marine ship 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 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 of a protection force. In the heat of an attack there can only be one final decision maker. 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 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. We accept that as part of a seafarer's life.

So I would 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.

SEN. KERRY: Thank you, Captain. We look forward to having that exchange.

Mr. Clancey.

MR. JOHN CLANCEY: Thank you , Mr. Chairman and members of the committee. I am John Clancey, chairman of Maersk Inc., the parent of Maersk Line 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, and 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 in the Indian Ocean, a size of geography equivalent to the Mediterranean. Piracy has been with us for many years, the Malacca Straits 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, in particular, regarding security of the high risk areas for a U.S. flag fleet.

In general, piracy is an issue that our country and our entire industry take very seriously. As attacks in the Gulf of Aden have increased in the last few years in both numbers and the 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 respective 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 armed 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.

Thus, the 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. And it is 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 the legal and law enforcement fronts. There should be an international legal framework for the prosecution of captured pirates. Ships carrying U.S. military and government-impelled cargoes 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 armed 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, 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, we'll 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 will have a solution in this 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 to work together to address this, and 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 shared with the industry.

Lastly, 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 on our Navy's rescue of Captain Phillips, the safe return of the Maersk Alabama, and the bravery of the crew. What we need to do now is to improve our anti-piracy 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.

SEN. KERRY: Well we thank you very much, Mr. Clancey. Captain Phillips I want to just remark, I sort of noted a very pleasant mixture of Massachusetts, Maine, and New Hampshire in your accent, which may be why you live in Vermont, but --

(Laughter.)

CAPTAIN PHILLIPS: Mainly Massachusetts.

(Laughter.)

SEN. KERRY: -- Mainly Massachusetts.

Mr. Clancey, I'm having trouble with this arming issue a little bit, and I want you to help me so that as a lay person here, 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, you know, 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 other kinds of armored folks in the course of our civil society who get the training, whether its border guards or, you know, run the list.

I'm having trouble understanding why qualified seafarers, with all of the training they get and discipline they get, at a merchant marine academy or elsewhere, who can perform as Shane Murphy did, under great duress and risk of life, who feels, I might add -- I don't want to speak for him, but he might have been better off if he'd been able to take a shot at these guys, because they, you know, tend to think that they are not particularly well trained and that capable in many regards.

So why, why is that training not worthwhile? It seems to me, rather than paying millions of dollars in the aggregate, as an industry, you know, they can't, if they upgrade their weapons to the level above 50 caliber or whatever it's going to be, and start destroying the ship, they haven't got anything ransomable. So they've got to take the ship without destroying the hostages they want to take, or the goods they want to hold for ransom. Therefore, they have some limitations, and it would seem to me, you would be significantly more advantaged if you are able to defend yourself.

MR. CLANCEY: You make some very good points, Mr. Chairman. We have, international and the U.S., hundreds and hundreds of ships. Our crews, our U.S. flags, rotate every three or four 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 are qualified, that they have a time to practice, which would be on land, which right now, no one has the 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 is really complicated by the fact that most ports, if not 95 to 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, you know, not a sovereign. And if something should happen, I mean, we put, you know, 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 --

SEN. KERRY: Can 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 five or six hundred.

SEN. KERRY: Five or six hundred.

MR. CLANCEY: U.S. flags, you know, it's far less. It's in the thirties and one or two of them or three of them, maybe, 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.

SEN. KERRY: Well, maybe that's something we have to think about in terms of international convention. I mean, that's why we have treaties and lateral agreements. It seems to me if piracy is an increasing problem, I mean, the alternative is, as you said, call on what may be a far more expensive form of protection, which is to have the military diverted from a lot of other activities.

MR. CLANCEY: And as we're doing today, four 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.

SEN. KERRY: I understand. That's what I'm getting at. I mean, historically, we have deputized citizens to engage in certain law enforcement activities, going way back to the posses.

MR. CLANCEY: Correct.

SEN. KERRY: And, again, I sort of get to the training issue here. I mean, it costs somebody to do this protection, correct?

MR. CLANCEY: Correct. Yes.

SEN. KERRY: And so the taxpayer is going to pay for it through the tax dollar to the U.S. government and the U.S. government provides protection along with other -- or the taxpayer pays for it in 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? 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 and all that, but, you know, what's your feeling about it?

MR. PHILLIPS: As I said, I believe there is not one silver bullet here. One solution is not going to solve this problem, but as a cohesive procedure I believe that there should be some manning of the ships. 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 thing you have to declare when you go into a lot of these countries, bonded, (sealed ?) type things. And some of the crew is capable and can be trained, but to just expect arming the crew to be a final solution is the wrong—

SEN. KERRY: No, no, no, I'm not suggesting that. There's a conglomerate of things and I want to get --

MR. PHILLIPS: Okay, a limited number of crew, I believe, could be trained as he said, basically what I call the top four: Chief mate, chief engineer --

SEN. KERRY: What are the other hardening of the ship steps that you think might have an impact?

MR. PHILLIPS: Anything. Basically what we've done in the past is fire hoses, but I think we can get into the evolving of these items non-lethal items.

SEN. KERRY: Some people have talked about concertina wire, razor wire on the rails and/or electrified rails and things.

MR. PHILLIPS: Oh, I think that is imaginative. I believe concertina wire or barbed wire is not going to stop them because you can't put it around the whole ship and they're -- on my incident, we had fire hoses. They just went to where the fire hoses were and they would do that -- concertina wire's not going to stop someone climbing up at a ladder.

SEN. KERRY: Now, again, speak, you know, for the average person sitting around saying, "What do you mean, an American ship got taken by a bunch of guys in a little—"

MR. PHILLIPS: If I could interrupt you, Senator, the ship was never taken. Never taken.

SEN. KERRY: Fair enough. I agree with that, but I totally 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 out there, they're sort of saying, "Where's the shield? Where's, you know, the force of our over flight? Where's the early detection and, therefore, the summoning of somebody to check it out and the protection, the joint effort of what, 22 countries have joined together in the 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?

MR. PHILLIPS: One thing, as I've instructed my crew all along, our biggest asset is what we do anyway, lookout navigation capability, and as to this incident here, we first noticed them three and a half miles. You do have visibility restrictions, you do have limitations on radar, so keeping an eye out the window is the number one precursor to stopping these incidences. But it's an evolving situation, and I think what we're going to be seeing next is a stealth type of invasion, which would be the next step up, so that's why I say just arming the crews is not a final solution, a silver bullet.

We have to have cohesive steps that will take the evolution of what these pirates are doing. Three months ago we said less than 450 knots, less than 12-foot freeboard would keep you from being taken over. I was doing 18-1/2 knots. We had 26, approximately freeboard, so we can throw those parameters out the window. These pirates are evolving and we must stay with the curve and evolve with them to stop these incidents from happening.

SEN. KERRY: Fair enough. Freeboard, for all the landlubbers, is the distance between the water and the rail, correct?

MR. PHILLIPS: Correct.

SEN. KERRY: Can I ask one other question 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?

MR. PHILLIPS: Again, I just want to stress that 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 mean someone who's specifically trained, maybe retired special forces, Gurkhas, SSA retired, and I understand that is a lot of money and we don't need eight or ten or 12. We would need minimum 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.

SEN. KERRY: Well, I must say that's one thing that struck me as being perhaps potentially available. We have a lot of near retired, newly retired ex-military folks, people pretty well trained and disciplined, some of whom want to work and they're unemployed and might, in fact, be available for something like that.

MR. 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 is what we need because these are high caliber people, and with my experience with someone like the SEALS or with that regard, special forces, is what you're talking about and you would not need ten, 12, 18 people. Three would be plenty. We also have limitations on the ships -- rooms, capability to carry, so I just don't want it to be a Band-Aid. Specifically trained people would have to be vetted in the event of a private firm.

SEN. KERRY: Fair enough. Sen. Lugar.

SEN. LUGAR: Thank you, sir. 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 to other phases of foreign policy, and some of these firms presumably are available, although maybe being on shipboard is so vastly different they wouldn't qualify, but I gather you're not rejecting the idea of a private security firm. You're saying, however, that the cost of having more personnel, first of all, just to accommodate them aboard ship, but then beyond that, are the costs of these security people that much of a percentage of whatever the commerce is worth? In other words, help me with the economics, either one of you, of why there has not been the thought of having a private security firm with people aboard each of our ships.

MR. PHILLIPS: I would want to defer to Mr. Clancey there. I am only concerned with my ship, my crew, and my cargo and I defer to Mr. Clancey.

SEN. LUGAR: Very well. Mr. Clancey.

MR. CLANCEY: As a percentage of the cost of operation, it would be small and 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, the accepted practice.

SEN. LUGAR: Well, why would they need to be? Why would they need to be in sync with us?

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 all of their literature and in their conferences they keep on hitting on this theme and, you know, this is an evolving situation. You know, the world is changing. It's becoming more dangerous. They would have to reconsider their stance so that the governments in the ports and the customs officials around the world who are in and out, you know, thousands of times a week, understand that it is the position of the larger maritime nations of the world that this is necessary.

SEN. LUGAR: Why wouldn't it be a good idea perhaps for our nation, maybe our Secretary of State, the next tine she meets with the Russian foreign minister, suggest that the two of us maybe as a starter, plus others that have large oil vessels, might get together and that Somalia is new. It's a common threat to all of us and whatever may have been the premonitions of disaster before, 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. You know, there may be a concern that this would take too long. If that's the belief of this committee and, you know, of the senate, they may prescribe a different alternative, and we're open to any solution.

SEN. 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 and how is that affected by the piracy business?

MR. CLANCEY: The premiums have gone up a percentage. Let's say it's between ten 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 a year annualized are eventually passed through to the end user, which is the customer.

SEN. LUGAR: It gets back to, I suppose, the point that there are costs involved here and it is important where they finally are paid. That, I presume, to be the case of the private security forces if they were aboard the ship. Your point with that was that other nations haven't either adopted such a principle 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 world shipping is being violently affected by this.

MR. CLANCEY: Right.

SEN. LUGAR: And it's not going to go away and, unfortunately, failed states are there and some more may occur. And so this may be something that prompts an international situation. It will not be interminable because of the interests of each of the countries involved.

Now, without trying to gauge whether our losses in the United States shipping have been greater than that of the Russians or anybody else conveying oil shipments, my guess is, as you say, our U.S. flags are a small portion of the international fleet that is affected, that is now going 200 miles out, 400 miles, now 600, doubling costs for everybody. That is, for constituents of each of those countries, likewise.

MR. CLANCEY: Correct. Senator, I don't understand why any country would be opposed to a solution that addressed the piracy. I don't.

SEN. LUGAR: I think it's important, though, that this hearing is able to sort of pin down that there are costs to this.

MR. CLANCEY: Yes, there are.

SEN. LUGAR: And we're trying to define those and, furthermore, 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 of, you know, we are the customers of the ports, I think that the ports would be willing to evaluate different alternatives. We pay their fees.

SEN. LUGAR: Well, 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. Thank you, Mr. Chairman.

SEN. KERRY: Thank you very much, Senator Lugar. Senator Webb.

SEN. WEBB: Thank you, Mr. Chairman, and 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. And I take it -- I'm also in Armed Services. I think there's going to be a more militarily- oriented hearing next week on this as well.

Mr. Clancey, following the line of questioning, it's not going to get much different during the hearing here. I clearly get the notion of liability issues with respect to arming crew members or putting weapons on board a ship and having, you know, 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, you know, 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 their hugely expensive cargoes 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 had Israeli security on it? Are you familiar with that incident?

MR. CLANCEY: Correct.

SEN. WEBB: What would be your observation of that?

MR. CLANCEY: I'm familiar with the incident, familiar with the company and, you know, they chose to have an armed force protection on the cruise ship, which prevented the hijacking of the ship.

SEN. WEBB: 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 they didn't injure anybody that has been reported or acknowledged, and I don't think they did. The pirates left. There wasn't a reaction to that.

SEN. 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 or, more preferably, with armed guards, security firms, and it was an accepted practice, that would change the set of circumstances, and this is a situation that's evolving very quickly. This is not that old that Captain Phillips, you know, saved the Alabama. You know, six months ago we weren't thinking or talking like this.

SEN. 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.

SEN. WEBB: And I would—

MR. CLANCEY: Because, you know, it was an incident; nothing happened, but there has been—

SEN. WEBB: But the capability, they were there for the purpose of defending people on the ship.

MR. CLANCEY: Exactly.

SEN. 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 just 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 where you're talking about full cooperation, sharing information so that if, you know, 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 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, everyone's at risk.

SEN. 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 reliability, as well as the quality of people.

MR. CLANCEY: Before you arrived I did mention that we are in discussions with the Department of Defense about our U.S. flag shipping operations and, you know, hopefully, we'll come to a conclusion on that sometime in the next ten days.

SEN. WEBB: Good. Thank you very much. Thank you, Mr. Chairman.

SEN. KERRY: Thank you, Senator Webb. Senator Corker.

SEN. 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.

SEN. CORKER: (It) has about 600 ships.

MR. CLANCEY: Well, more than that, yes, but owned and chartered, it borders 800 or 900.

SEN. CORKER: So that, just so that we're all educated, how do you decide, you've got 30 or so that have a U.S. flag. I think you 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, you know, 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 is economically viable. That's how the decision is made.

SEN. CORKER: So you would from time to time be carrying cargo that's of benefit to the U.S. military?

MR. CLANCEY: Correct.

SEN. CORKER: But not all of 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.

SEN. CORKER: But you'd still have a U.S. flag on that?

MR. CLANCEY: Correct.

SEN. CORKER: Okay, and so you're a company that deals with, obviously, flags throughout the world with different companies and you're carrying military cargo for Russia and for China and other places, too, would that be correct?

MR. CLANCEY: Very, very small.

SEN. CORKER: But you would have Chinese flag.

MR. CLANCEY: The majority would be U.S. military cargo, for the use of our military forces on a global—

SEN. 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, you know, they fly the Danish flag and the U.K. flag, and Singapore's. It's historical. A company goes, and it goes back to 1907, and once a vessel is flagged in a country, it's expensive to reverse it, so they're left there.

SEN. 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. (laughter)

SEN. CORKER: Okay, so let me move on to the next issue.

MR. CLANCEY: It's long and it's complex.

SEN. CORKER: So for each of those different flags, it's my understanding that you would buy insurance from different companies.

MR. CLANCEY: Correct.

SEN. CORKER: It's my understanding that, 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 the $20 million or some amount of money to actually pay those who take hostages, to pirates. Is that correct?

MR. CLANCEY: The insurance premium structure is based on your activity and your history, the loss experience.

SEN. CORKER: But I'm not talking about the premium; I'm talking about the—

MR. CLANCEY: The policy?

SEN. CORKER: The actual payment. It would be my understanding if you have 600 ships with 30 in the U.S. that you probably have some that actually have policies that pay when pirates demand, you know, 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, in hard-pressed negotiations. They would say that was a decision you made, but you know, it's not something that, you know, we have learned to deal with. This is a brand new world.

SEN. 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 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, you know, a surcharge for hostages. I just don't know.

SEN. 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, they're looking at it right now. The insurance companies are thinking about it.

SEN. CORKER: Would you mind sharing that with us --

MR. CLANCEY: We'll provide that.

SEN. 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 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 to, 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, you know, I have been told and briefed upon, that, you know, they have said, "You will not have armed mariners on your ships."

SEN. CORKER: Well, let me ask you this. On this last trip or those that typically originate on the other side of Somalia and end up here in the U.S., 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 that we're talking about, that would be able to protect the crew?

MR. CLANCEY: That's a new world and 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 in some geographies we would meet resistance, from my experience living and working overseas. If it was something that, you know, our Department of State could find a way to convince others, it may open the door; right now, I think that it's subject to question.

SEN. 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 begins.

MR. CLANCEY: They're asking those questions right now.

MR. PHILLIPS: I'd like to add that I have been sailing for 18- 1/2 years as captain. I've been to those two ports. I have had (an asset ?) there. I don't want to say what I had. 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 the -- (crosstalk) -- Mr. Clancey may be right a larger asset may be a problem.

MR. CLANCEY: An automatic weapon.

SEN. CORKER: 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.

SEN. KERRY: Thank you very much, Senator. Senator Risch.

SEN. RISCH: Mr. Clancey, if there's an issue as far as the armed people in the ports, as I look at this, it would seem to me that we have a fair number of war ships there, that they could put a few U.S. Marines on each ship as American flagged ships 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.

SEN. RISCH: Okay, 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 would seem to me that three of our Marines could probably do the job from the fantail or from any other place that they—

MR. PHILLIPS: I think they could do the job from 200 yards away. Yes.

SEN. RISCH: Yeah. The other question I had was: I heard the description of the difficulty because there's so many square miles to patrol, has there been any thought been given to creating a lane using a GPS type system and then 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. PHILLIPS: 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 problems started. Then the pirates evolved and the target rich environment of all the ships coming from the Suez Canal out the Red Sea, it's a target rich environment and 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 taken.

Now you see a policeman is in town and now the bullies are going back down 600 miles off Somalia, which is the Seychelles, and they are actually out there, so you're seeing the deterrent that we 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.

SEN. JAMES RISCH (R-ID): Thank you. I think that if these talks are successful then 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 that's going to slow them down particularly if they see a ship with an American flag on it and they knew we've got, but there is the substantial possibility that they are 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.

CAPT. PHILLIPS: I don't want to disagree with you, but the pirates have attacked the grey ships. What I call the grey ships are the USNS ships, I won't, not going to mention the name, they were attacked by pilots, pirates. They will evolve to recognize the grey ships are the ones you want to stay away. So, and the pirates do not read the stern and we don't fly a flag at sea. So, as far as the flag, it's just a crime of opportunity is what's going on here.

SEN. RISCH: Thank you. Thank you very much.

SEN. JOHN KERRY (D-MA): Thank you very much Senator Risch. Senator Wicker.

SEN. ROGER WICKER (R-MS): Captain, I didn't understand what you meant about the grey ships.

CAPT. PHILLIPS: The grey ships are the US navy ships. Actual, 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 they have actually attacked, not just U.S. but other grey Navy, country Navy ships. And they're evolving. They're learning not to do that.

SEN. WICKER: I see.

CAPT. PHILLIPS: So, my point was they aren't picking out a flag. It's a crime of opportunity and, and that's what they're going for.

SEN. WICKER: Okay, did I just understand you to say that you don't fly a flag?

CAPT. 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, 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.

SEN. WICKER: Well, it might be worth it. (Laughter.)

CAPT. PHILLIPS: That may be part of the comprehensive plan, but a very small part of it.

SEN. WICKER: So, when Mister 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 origin.

(Cross talk.)

CAPT. PHILLIPS: I don't want to discount the evolution, we talk about evolving, I think there is going to be inside information, various people in port, and they will be targeted. Certain ships could be targeted. I believe that that will be the evolution of these pirates as they increase their abilities and intelligence.

SEN. WICKER: Well, do you think they're less likely, if they can figure out which one is the American ship, do you think they're now less likely to attack that American ship?

CAPT. PHILLIPS: I think that the only thing that'll stop them from attacking a ship is showing them that you're a hard target and that's it.

SEN. WICKER: What do the, the, do the pirates speak English?

CAPT. PHILLIPS: They, they spoke a manner of English, yes.

SEN. WICKER: And were you able to have a conversation with them about what their goals were?

CAPT. PHILLIPS: This is a pending investigation so I can't divulge, but we had many conversations, yes.

SEN. WICKER: I see. Well, would I be, 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?

CAPT. 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.

SEN. WICKER: So, so let me ask both of you, and, no, I think I'll ask Mister Clancey. Maersk has a bunch of ships.

MR. JOHN CLANCEY: Yes, sir.

SEN. WICKER: What percentage of the, of the traffic does your company control worldwide?

MR. CLANCEY: Well, it's actually by segment. In the container shipping business, which is the larger part, we have about 13-14 percent.

SEN. WICKER: I see. And so how many companies, how many major companies are there like Maersk?

MR. CLANCEY: Ten.

SEN. WICKER: Ten, okay. And, and I've had to come in and out, so I'm not sure if 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, I think that, you know, the payment of ransoms is, has led to the sophistication of the pirates, probably increased the number of the pirates and their willingness to take larger risks.

SEN. WICKER: What is the policy of Maersk in that regard?

MR. CLANCEY: There was one incident with a tug boat where they captured crew and guests and in order, and they had it in, in Somalia, and we couldn't get in by land, and the only way to get the people back was to pay the ransom and they did.

SEN. WICKER: So, one instance is, is the only one that you're aware of. Do other companies have a more liberal policy? Or countries have a more liberal policy?

MR. CLANCEY: I don't, I don't think it's that specific. I think it's a case by case basis and it's still all over the board 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?

SEN. WICKER: Is the owner of the cargo? Or the, or the owner of the shipping company?

MR. CLANCEY: The owner of the ship.

SEN. WICKER: Of the ship.

MR. CLANCEY: That's who they negotiate with.

SEN. WICKER: I see, so in your case that would be your corporation.

MR. CLANCEY: Correct.

SEN. WICKER: So, have there been, so there, so only this one instance in which -- (cross talk) -- Maersk has paid it and so in other instances, where I would have to assume this is not the first incident of piracy involving Maersk. What happened in those other instances?

MR. CLANCEY: We abated the pirates. There's only three other instances.

SEN. WICKER: I see. Okay. And, and so really you've only had to face that decision the one time.

MR. CLANCEY: Once. It was in the very beginning of this and it was in a bingo, the ship was in port.

SEN. WICKER: Yeah. Well, I think you, I think, Mister Chairman, the questions today sort of reflect a view on both sides of this table, on both sides of the aisle that there's got to be a solution out there and, and the status quo is just unacceptable to this panel. So, to the extent that you've enlightened us with some information, that, that might get us going in the right direction and then show us some of the pitfalls in trying to address it. You've been very helpful to us and I, too, want to join the other senators in thanking both of you and also thanking the Chairman for calling the hearing.

SEN. KERRY: Thank you very much, senator. Let me follow up with a few questions if I can. On the issue of, of flying the flag, this, this area is apparently the single biggest pirating area on the planet, is that correct?

CAPT. PHILLIPS: Correct.

SEN. KERRY: And it is, while it covers a quarter of a million square miles, it's really in the area, it's sort of up in here as you're approaching the Gulf of Aden, correct?

CAPT. PHILLIPS: Correct.

SEN. KERRY: There're only three approaches to that fundamentally, come up from Madagascar, the southern part of Africa, or you come up Australia, straight over like that or you come in out of the Mumbai slash Karachi, etcetera, or around the Cape here, the Persian Gulf, and come around and go up into the, into the canal ultimately. Let me come back to the sea lanes issue for a minute here, I mean, isn't it possible to have a rendezvous spot outside of the reach of those small skiffs, etcetera, even if they're operating out of Seychelles, come up with military cover, come up in a sense even in convoy. Has that been considered?

CAPT. PHILLIPS: There's a great deal of discussion about a corridor, like they have now coming out of the Red Sea to the Gulf of Aden. And I think that there's a lot of promise in the idea of, of a corridor.

SEN. KERRY: It seems that we could cover that pretty effectively.

CAPT. PHILLIPS: Yes. And I think that our other maritime basins navies would be willing to respond. That's just my personal opinion. I've not certainly spoken to them.

SEN. KERRY: 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, I mean, God, would you, I mean, I know you're a brave soul and maybe you're willing to just go at it again the same way, but you're going to be comfortable going out? Is this your wife here that I see behind you?

CAPT. PHILLIPS: This is my wife, Andrea.

SEN. KERRY: And she wants you to go out there again exactly the way things were before?

CAPT. PHILLIPS: She's a good wife. She supports whatever my decision is.

(Laughter.)

SEN. KERRY: And what's your decision?

CAPT. PHILLIPS: What's that?

SEN. KERRY: I know, you didn't even turn to consult with her. (Laughter.) I couldn't get away with that.

CAPT. PHILLIPS: I will be going back to sea. That's what I do.

SEN. KERRY: And with or without some changes that you want put in place?

CAPT. PHILLIPS: I expect and anticipate changes will be in place. I've received some information that they're working on them as Mr. Clancey has talked about. And it behooves them and us to take the measures and I said there's not one single aspect of this it's going to be a cohesive, comprehensive plan with multiple facets. And among that, I think, your job and the gentlemen here today is to hear from other people and not just myself as I've talked to a few aides.

I have some names of much more articulate people than me that have more, more ideas and I've received many ideas in my mail and my telephone calls in the last few weeks and 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, one solution. It's going to be a comprehensive, multiple faceted plan.

SEN. KERRY: Yeah. Well, I, I respect that enormously and I couldn't agree with you more. And we welcome though, that input and those ideas and we will follow up on it because we want to sort of exhaust the remedies here so to speak.

But, it seems to me that if you're, I mean, if this is the concentrated area, and you are coming through some lanes, how many nights and how many days of transit are we talking about once you sort of enter the danger zone till you're through here?

CAPT. PHILLIPS: Pretty much on the Maersk Alabama we were in the zone the whole time of our transit, but then, as I said earlier, the (Goa ?) in the Gulf of Aden transit zone, which is already in place, already set up, a convoy type situation or lane setup, they are still being attacked. Not as much as before they set up the lanes, because, again, the Suez Canal's at the end of the Red Sea.

SEN. KERRY: I understand, but, as of this moment --

CAPT. PHILLIPS: Yeah.

SEN. KERRY: -- they believe they can attack with relative impunity. They get on to the ship or get in there --

CAPT. PHILLIPS: I think part of their business plan is once they get on, nobody's going to do anything.

SEN. KERRY: Correct. And I think personally that has to change. And, and my judgment is that, that for the, 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, particular if they know that that particular flag carries with it a certain risk if they attempt to board. And 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 interest with respect to the weapons at the same time as we safeguard the ships and their cargoes.

And the vast expenditure on the military having to go out there, I mean, that's a big expense, too, and also carries its risks. With respect to the weapons thing, it seems to me, I mean, you are, as a captain entrusted, how much is one of those vessels worth?

CAPT. PHILLIPS: Oh, anywhere from 20 (million dollars) to $60 million.

SEN. KERRY: That's what I thought. Twenty (million dollars) to $60 million and it's in, how many members of the crew are there?

CAPT. PHILLIPS: On the Maersk Alabama, 20, and it varies on different ships.

SEN. KERRY: Twenty members of the crew and you're carrying how many millions of dollars of cargo on a particular vessel worth 20 (million dollars) to $60 million?

CAPT. PHILLIPS: Um --

SEN. KERRY: In the multi millions.

CAPT. PHILLIPS: Yes.

SEN. KERRY: So, it seems to me that if you're putting 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 key and it's a captain's order that breaks those weapons out when they are under attack or at risk. And it seems to me that, you know, that ought to be doable, a level of training ought to be doable.

Obviously, there may be a preference to having it be some military folks loaded on to an American flag vessel before they go into the zone and get taken out 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, I certainly hope you will take our thoughts to that discussion that you're going to have and we will weigh in with appropriate folks accordingly. Besides that particular issue, is there any other, on the issues, did you have, did your insurance company pay for the ransom that was paid?

MR. CLANCEY: 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.

SEN. KERRY: Okay. Is there anything else, Mister Clancey, that you need from us, 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, and the 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.

SEN. KERRY: Well, one of the things we're going to be concerned 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. We are currently, it's my understanding the Navy, the United States 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 of great benefit if we were party to it.

SEN. KERRY: Well, we do, the two of us sitting here both believe that and we hope, before long, that the Senate will hopefully deal with that issue. Captain Phillips, again, you have our admiration and respect. We're, we're, needless to say thrilled that you're in good health and your crew is and your ship was protected. We admire so much the way in which you conducted yourself and we hope you never have to go through that again and we hope we can get some policies in place that ensure that.

CAPT. PHILLIPS: I hope that's what this day started off and we'll soon end up with that and I just want to mention again that it wasn't just me on that 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, and they are at the point of the spear. We need to support them.

SEN. KERRY: Well, we all respect what they did, just enormously. And Shane Murphy, thank you again for being with us. Everything I said about the captain goes for you, too, and we thank you for the way you conducted yourself. So, we're going to just recess for two minutes while we do the switch of the panel here and, again, thank you very much captain and Mister Clancey. Thanks. It's very helpful.

MR. CLANCEY: Thank you.

SEN. KERRY: If we could bring the other panel out there, that'd be terrific. Hearing will come back 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.

SEC. MULL: Absolutely, thank you very much Mister Chairman and Senator Lugar. It's a pleasure to be here today to talk about this very urgent issue of national security. As you think about the problem of piracy, it's really linked to the preeminent and really the oldest interest, foreign interest that the United States has, that of freedom of the seas. And it converges with a very real 21st century threat of 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. We've adopted a number of tactics over the course of the past six months in pursuit of that goal. We worked very closely within the U.N. to pass a number of new U.N. Security Council resolutions with authorities giving national states the right to take military action on the sea and on Somali territory if necessary.

We've worked with our partners to substantially increase the number of ships that are deployed for the region and we've worked with those ships to establish a maritime safety protective area, some call it 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 run into a problem of a patchwork of various national legal authorities and (tents ?) 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 which they agreed to take pirates that we apprehend, besides similar agreement with the British government and with the European Union, so now there are 52 pirates that are apprehended awaiting trial that are in Kenya. We're in various stages of negotiation with other countries in the region as well to play a similar, to play a similar role. We've also worked to engage with the industry, working through the Coast Guard and 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 measure, both passive and active that they can take for self, self defense.

And, of course, this is all part of a much broader issue of Somalia. This is a symptom of the problem in Somalia that really requires urgent attention to be fixed. Now, pursuing these tactics we've achieved a number of successes. The number of interdictions, successful interdictions of pirates, since January first 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 and, it 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 couple of, a few more measure 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 United States government took the lead in forming that group.

It's grown to now 28 government and six international organizations that break into subgroups to look at all these different facets, the legal facet, the military coordination facet, and we hope soon the, 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 in New York. At that meeting we're going to press for additional donations of military forces to, to the, to the territory. We're going to work, we're 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 --

SEN. KERRY: What, what is missing in the legal authorities?

SEC. MULL: Well, each country has, as you, senator, pointed out earlier, the law of the sea. In fact, the law calls on all states to take action and, but each state takes different policy decisions on how they're going to apply that. For example, let's say, there's 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, you know, 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've said in your opening statements that this is a problem requiring all of us to work together so that we don't, we aren't touching and releasing pirates. That, 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, to take that --

(Cross talk.)

SEN. KERRY: Was that in international waters?

SEC. MULL: Pardon me?

SEN. KERRY: Was that in international --

SEC. MULL: Yes, it was, sir.

SEN. KERRY: Isn't it, under international laws, an attack on a ship in international waters a crime?

SEC. MULL: Yes, it is, according to the conventions, it is, but the decision to prosecute, to apprehend is a national policy decision, versus the process we went through with the pirates that attacked the Maersk Alabama.

SEN. KERRY: I interrupted you. I'm sorry.

SEC. MULL: Oh, no, sure, the, the, leads me actually to my next point, that the more the challenges we face with the other members of this contact group, isn't convincing them that victim states really do have a 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're about, there's more than $30 million in ransoms paid to these pirates last year, and they're off to a mark, to exceed that mark this, 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 on to 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 finally, you discussed, in the, in the last session, the whole problem that, 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 up 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 is 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 ransoms, the pirates will respond by then taking action to kill hostages which had not happened up until now.

Nevertheless, in the emergency contact group meeting, we're going to continue to press to see if we can at least put limits that all could voluntarily adhere to.

SEN. KERRY: Well, let me just give you a heads up. We've got a vote that's gone off so we've got about 10 minutes -- (Cross talk.)

SEC. MULL: Alright. But, why don't I just stop. That's really the end of the summary of my testimony.

SEN. KERRY: 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 changes, the impact of the changes that are currently being considered by the contact group, when will we expect those to take effect off the coast of Somalia?

SEC. MULL: Well, I think there's already been an effect in terms of reducing the number of successful attacks. In terms of the gross number of attacks, we hope, and it will depend on how successful we are in getting more ships to agree to take these self defense measures --

SEN. KERRY: What about the recommendations you've heard us talking. A number of senators sort of beat the same horse, here. What's your reaction to the notion of either the sea lanes or the convoys or the arming, the flying of the flag? What do you, what do you believe about those?

SEC. MULL: Well, we believe that the principle undergirding 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 argument 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 the 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 under the, on the circumstances under which armed guards --

(Cross talk.)

SEN. KERRY: -- the most significant legal challenge that the United States and the international community face in terms of combating piracy?

SEC. MULL: The most significant legal challenge is convincing other countries to take the policy decision, the government of victim states to take the policy decision to prosecute and, if convicted, incarcerate the pirates.

SEN. KERRY: Mm-hmm (In acknowledgment.) And are there particular countries more problematic than others in that list?

SEC. 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 symptom of, 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 --

SEN. KERRY: 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?

SEC. MULL: Well, it's, it's, 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 two 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.

SEN. KERRY: Senator Lugar.

SEN. RICHARD LUGAR: (R-IN): You've mentioned a moment ago that you believe the shipping companies have a responsibility and we've discussed that with our first witness of what kind of cost might be involved and I gathered that part of the reticence to adopt this (till ?) was the feeling that other countries would look amiss at this, ports of entry, that know that are armed persons on ships or other countries that haven't adopted this, but, at the same time, is there dialogue, I wouldn't say an argument, between owners and shipping companies and, say, the United States government in terms of who is responsible and how responsibility should be shared?

In other words, you've mentioned that they ought to take certain responsibilities or costs, but, at the same time, their pushing back and indicating reticence to do this. And I'll, how do you perceive some resolution of this, as a common sense 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?

SEC. 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 that input and consultation and we will take that to the contact group later in May and use that as a basis for persuading other countries --

SEN. LUGAR: That's a very tight time frame --

SEC. MULL: Yes.

SEN. LUGAR: -- I should point out.

SEC. MULL: Yes, sir.

SEN. 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 definition to the problem?

SEC. MULL: You mean U.S. ratification of it?

SEN. LUGAR: Yeah.

SEC. MULL: The Law of the Sea, in practice, we are on these issues, we are already abiding by the Law of the Sea, and, while the administration very strongly 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.

SEN. LUGAR: I see. Thank you, Mister Chairman.

SEN. KERRY: But you can't apply the law, 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 that's in that.

SEC. MULL: Yes. I would --

SEN. KERRY: Even though we live by it, we live by it, but we can't assert it.

SEC. MULL: That's right. But we find that in our dealings with other governments, even though we have not ratified it, they, we all start from the operating assumption that it is, in fact, but you're absolutely right, we cannot assert it from a legal point of view.

SEN. KERRY: The, there is an Islamist group called Al-Shabaab --

SEC. MULL: Yes.

SEN. KERRY: -- that is trying to exert control over Somalia and it's been designated by your folks as a terrorist group.

SEC. MULL: Yes.

SEN. KERRY: Are there any signs of that group cooperating with Al-Qaeda?

SEC. 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 there, we have not seen any information thus far indicating any operational coordination or any financial support between the two.

SEN. KERRY: Do we know of any money from the ransom going to Al- Shabaab?

SEC. MULL: We have not seen any evidence of that and many Al- Shabaab leaders have, in fact, publicly criticized pirates as being un-Islamic.

SEN. KERRY: Well, we're going to leave the, we're not only going to leave the record open, we're going to let this hearing stay open for another five, 10 minutes. Is Senator Feingold coming? (Off mike.) I think Senator Feingold, who is the Chairman of the subcommittee of 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 the hearing will just, it will adjourn -- (inaudible).

SEN. : You could be here at 7:00. (Laughter.)

SEN. KERRY: I'm at your disposal.

SEN. : Say, well, I'm waiting for Senator Feingold. (Laughter.)

SEN. KERRY: So, if we could just recess momentarily and I'll check when I go over to the floor to vote. Thanks, sure appreciate it. We stand in recess.

SEN. FEINGOLD (D-WI): Call the committee back to order and thank you, Mister Mull, for being here and, sorry about the delay but we did have a vote suddenly come up and I just want to take the 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 this 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 on the Maersk Alabama and the capture of Captain 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.

The 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 stop gap 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 the hearing soon of the Africa subcommittee. We'll 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 and 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 for the State Department to take 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 benefitting? 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 other, to combat piracy in the near term?

SEC. 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 the, part of the problem of tracking it is it's all paid in cash in suitcases of Euros and pounds and dollars that are dropped on to the decks of the ships held hostage.

And then very quickly are filtered through the cash handling system, the Hawala system that is 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 number of measures that we can take. Again, I'm going to say 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.

SEN. 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, and, 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 Straits. 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 has been the commander of the Pacific Command.

While there are many differences between that case and the current situation in the Gulf of Aden, mainly, stronger governments and narrower waterway, in your view, what lessons can be drawn from successful efforts in the past to combat piracy and what is the ongoing interagency working group on piracy, or, and are they going to review those lessons?

SEC. MULL: The, 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, that challenges the whole world's security and that, on 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, there, those countries, especially Indonesia, which has come a long way in developing as a, 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 Straits.

Somalia, of course, fits the definition of most people as a, as a failed state, does not have the capacity, and there it is, right at the crossroads of the whole, of the whole problem. However, the long term strategic goal, and the contact group that we've pulled together to monitor this problem has 28 countries and then it's probably going to grow to more than 30. There're 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.

There's some unlikely partners, military partners in this effort. China, very much interested in playing a broader role, and, and the interest of all of these normally competing states, really offers a great opportunity to build a consortium that could systematize security assistance, capacity building, and improving the capabilities of the Coast Guards of these states, and, of course, addressing the broader problem in Somalia that you've, that you've mentioned yourself.

SEN. FEINGOLD: In that spirit of these past cases, it seems very clear that it was imperative working with governments in the region to enhance their law enforcement and judicial capabilities. In our current efforts to combat piracy off Somalia's, 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, other governments in the region, including countries like Yemen and Djibouti?

SEC. MULL: Our engagement is, ranges across a 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, in the region, what to do with them? We signed an agreement with Kenya. The European Union has, as well, and they are, 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 in the course of 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 Djibouti, we believe that, 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 attempted 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 in a smaller country with fewer forces to work with.

SEN. FEINGOLD: Again 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?

SEC. MULL: Well -- (laughter) -- I don't know what my personal view on that is. I'm not, my competency isn't in African politics and I'll be happy to take that question back and look forward to having the appropriate officials address that in your hearing.

SEN. FEINGOLD: Ambassador, thank you very much for you help, and, thank all the panelists today and it concludes the hearing.

SEC. MULL: Thank you, sir.

END.


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