Malacca Strait not high-risk: Shipowners

Malacca Strait not high-risk: Shipowners

Saijel Kishan, Bloomberg/London

The Federation of Asean Shipowners disputed an assessment by
an insurance body that the Malacca Strait, the world's busiest
waterway, is a high-risk area for war and terrorism.

The strait, between Malaysia and Indonesia, was added to 20
other areas, including Iraq and Israel, deemed a security threat
to shipping, according to a June 20 list produced by the Lloyd's
Market Association's Joint War Committee. The association advises
members of Lloyd's of London, the world's biggest insurance
market.

"The report is misguided," the federation said in an Aug. 12
statement posted on its Web site. "The Executive Committee is
very concerned of the adverse impact it would have on
international shipping and trade."

Shipowners have to inform underwriters that they plan to
navigate in the countries' waters and additional insurance costs
may be levied for seven days' coverage. The Malacca Strait was
the second-most dangerous area for pirate attacks on ships last
year, according to the International Maritime Bureau.

Member countries of the Association of South East Asian
Nations are Indonesia, Thailand, Malaysia, Singapore, Brunei, the
Philippines, Cambodia, Laos, Myanmar and Vietnam.

"With all due respect, for someone who is based in London, the
threat assessment in the ASEAN area or the Malacca Strait from
such a distance can be wrongly perceived," the federation said.