Pirates in the Indian Ocean off Somalia and the militias operating across states in the deserts of the western Sahel share two characteristics: hostage-taking provides their primary income stream, and they have successfully sustained and extended their business and political models over many years. Selective violence and guile have combined to create lucrative markets in which legal international actors – representatives of states and multinational companies – have been obliged to negotiate.

In terms of Indian Ocean piracy, October saw the publication of the first detailed economic analysis of the seizure of ships, cargoes and their crews off the Somali coast over the past decade. Pirate Trails is a 130 page report by a group of researchers from the World Bank, UN and Interpol, subtitled Tracking the Illicit Financial Flows from Pirate Activities off the Horn of Africa”. Interviews with pirates, their brokers and bankers detail the venture capital required to successfully seize ships. The report then analyses how ransom monies – estimated to total around $400m over the past eight years – are then reinvested or laundered, both within Somalia and via networks in Kenya, Djibouti, Dubai and Europe.

The report focuses exclusively on the Somali pirates and ransom finances. As such, it illuminates only one of side of what in effect has become a triangular international industry.

Somali piracy has spawned a vast ‘legitimate’ counterpart industry to negotiate the release of ships and their crews.  This is the second side of the ‘piracy industry triangle’. Those working in the ‘negotiation industry’ are private companies. Their costs and profits come from the insurance industry, most ransoms being ultimately paid out via the maritime insurance policies of shipowners. Legal actors involved in negotiations include international law firms, communication and logistics specialists as well as Somali negotiators. The latter are often drawn from communities in OECD states; hence the publicity over both US-based and British Somalis recently involved in high-profile hostage cases.

While the operational hub for many such agents is Kenya, London is central to the industry. Across the Thames from the Houses of Parliament sits the HQ of the International Maritime Organisation . London is still a global hub for shipping and maritime insurance. Many of the insurers and lawyers actively engaged in pirate negotiation and the payment of ransoms are based here.

The politics department hosted one such lawyer two years ago; at the launch of Brian Mabee and Alex Colas’ edited book Mercenaries, pirates, bandits and empires. This provides a unique overview of historical and theoretical approaches to how piracy has figured in international relations.

What of the third side of the ‘piracy industry triangle’? Not only have the pirates prompted the creation of a well-paid cadre of specialised lawyers and negotiators, they have also spawned a vast anti-piracy operation. Many of the world’s navies participate in such operations, as I related in a recent study of Djibouti, the principal hub for vessels involved in anti-piracy patrols in the Indian Ocean and Gulf of Aden. The Chinese navy’s participation in, and cooperation with, such patrols currently represents China’s most significant deployment as a global multilateral military actor.  Multilateral anti-piracy missions also include the European Union’s EUNAFOR mission, headquartered in Northwood, Hertfordshire. A fictionalised version of the US Navy’s role in anti-piracy can be currently seen at a cinema near you in the movie Captain Phillips.  (Sadly you have missed the surreal experience of viewing the film aboard an anti-piracy ship).

In Somalia since 2005 there have been around 160 hijackings and hostage transactions, with the report estimating the average ransom payments rose from $1.2m in 2007 to a peak of $5m each in 2011.  Transactions in West Africa’s territorially vast hostage market are less frequent but far more lucrative, as underscored by the Euro20m paid by France to secure the release of four hostages in November.

David Styan is a lecturer in Politics