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.