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How Pirates Get Paid


With East African piracy at the top of recent headlines, the BBC looks into how the bad guys collect their booty. Aside from the spy-movie intrigue, two thoughts come to mind.

1) Piracy is a textbook example of order without law. In the absence of government, people need not devolve into chaos:

"No matter what process is taken, they always go through a middleman," advises BBC Somali service analyst Said Musa. "And trust is at the heart of everything."

Fahid Hassan, who has experience of the negotiations, says that after boarding the ship, the first step for the pirates is to make contact with its owners.

"All the important documents are there on the ship, so the pirates can know easily all the information they need," he says.

"The talks are by telephone, mostly satellite phone but sometimes even SMS/text messages are sent. The pirates do not negotiate themselves. They hire someone and often this person is a relative; someone they can trust."

Although they are thieves and murders, pirates establish large and reliable networks of trust. Profits are distributed by a clear and equitable system—each pirate gets an equal share. None are exploited, and the key personnel are usually awarded only a small bonus, historically along the line of two extra shares for the pirate Captain and one for his Mate.

2) No matter the turmoil in US and global financial markets, the greenback dollar remains the world’s reserve currency:

The pirates ask that the ransom is all in used dollar bills - normally $50 or $100 notes - according to those with experience of such negotiations.

Kenyan sailor Athman Said Mangore, who was held captive for more than 120 days by Somali pirates, says they are known to make many demands and put in place a number of restrictions.

"They sometimes say they want $208,000 exactly in $100 bills only," he says.

"I don't know why they make those demands. They usually also don't like dollar bills that were printed in 2000 or the years before. If it was printed in 1999, they say: 'This is not fit to be used in our shop'," he adds.