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Ships should not be attacked on the basis of an owner’s passport

Otherwise identical vessels are paying higher war risk premiums for Red Sea trips if they have even tenuous links to some countries

The Houthis have no business launching missiles at ships at all, let alone singling out Mediterranean Shipping Co because one of its shareholders is an Israeli national

THE Eurovision Song Contest has never been an entirely innocent exercise. This annual celebration of affectedly kitsch pop music has always concealed an element of barely sublimated nationalist animosity just below the surface. But recent years have increasingly seen it take on overtly political inflections.

This week saw thousands of protestors take to the streets of 2024 host city Malmö, objecting to an Israeli participant in the event at a time when the conflict in Gaza has already seen the loss of tens of thousands of lives.

For most of the demonstrators, this will have been motivated by sympathy for the plight of Palestinians rather than an objection to the fact that chanteuse Eden Golan is an Israeli national.

But 3,600 miles south of Sweden, Israeli nationality is excuse enough. As Lloyd’s List reported this week, Yemen’s Houthi faction argues that the presence of an Israeli as a shareholder in Mediterranean Shipping Co justifies launching regular drone and missile strikes onslaughts against the world’s biggest shipowner.

There have now been at least 11 Houthi attacks on MSC vessels since the Yemeni insurgents commenced their campaign against merchant ships last November. That includes three in the past week alone.

That was statistically unlikely to be coincidence, and Lloyd’s List now has evidence that MSC is being picked on as a matter of deliberate policy.

Confirmation is contained in an email from none other than the armed faction’s comms team, whose readiness to respond to queries from journalists would be an object lesson for their counterparts at some shipping companies.

“The vessels were targeted because of [MSC’s] ownership, as one of the company’s owners holds Israeli citizenship,” spokesman Yahya Sare’e openly admitted.

The shareholder being referenced holds Swiss and Italian passports too. Somehow only the Israeli passport counts against them.

That is blatant antisemitism, of course. But few would expect anything else from an organisation whose official slogan includes the words “Death to Israel, Curse on the Jews”.

In addition to their apparent determination to take out ships with even such tangential Israeli associations, the Houthis are selecting vessels they believe to have US or UK links for their malign attentions.

The stance predates Joe Biden’s decision, supported by Rishi Sunak, to launch retaliatory air strikes aimed at degrading Houthi infrastructure. The military action has done little to reduce the problem, but much to reinforce Houthi acrimony.

Some of the ships that the Houthis have hit on these grounds have “links” to the US and Britain that struggle to meet the definition of tenuous. As case in point is the total loss of Belize-flagged bulk carrier Rubymar (IMO: 9138898), which apparently met its fate because its Lebanese owner had some time ago owned apartment in Southampton.

But if the threat is taken literally, the ubiquity of dollar finance and London marine insurance — especially in P&I — means that probably most of the world fleet can be deemed to meet the somewhat lax criterion of ties with either the Great Satan or the Little Satan.

Just to make matters more vexed, you can throw in an element of randomness too. According the Joint Maritime Information Center, which analyses attacks in the region, only two-thirds of them appear to be based on perceived affiliations to the US, UK or Israel. The remainder are victims of dumb luck.

That could eventually extent to Russian and Chinese vessels that are getting an easy ride, also on ground of nationality. This reflects the international alignments of Iran, the Houthis’ primary sponsors.

But the politics of all this will be above the heads of the Filipinos, Indians and Indonesians who crew the ships that actually in harm’s way.

War risk underwriters have reacted to these developments in pretty much the way they always have, writing the business at premiums commensurate with risk.

Most shipowners will find themselves paying additional premiums of 0.7% for a Red Sea trip, while Chinese owners may get away with just a third of that. But some insurers explicitly say privately that Israeli owners are just too much of a risk.

Shipping was the world’s first globalised industry, and the very idea of charging otherwise identical tonnage widely differentiated premiums solely based on the passport their owner holds is regrettable. But when they are being targeted on that basis too, there is probably no other way.

All attacks on merchant vessels engaged in innocent passage in international waters are in contravention of international law and the Houthis should not be engaged in them in the first place.

But choosing victims on the grounds of a shareholder’s passport just makes a morally bad act even more egregious.

 

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