A Malaysian port operator has downplayed the prospect of rising insurance costs for ships using the Malacca Strait after it was declared a high-risk area by an international insurance body.
"I don't think that is going to happen to ships plying the Malacca Strait," Westport Malaysia executive chairman G. Gnanalingam told reporters on the weekend.
"Piracy has been there for the past 20 years," he said in reaction to a media report that insurance costs for ships sailing through the strait may increase due to security concerns. Gnanalingam said he was confident that coordinated patrols by the three littoral states -- Malaysia, Indonesia and Singapore -- would be enough to ensure the security of the Malacca Strait.
The waterway has reportedly been added to 20 other areas, including Iraq, Lebanon and Nigeria, deemed a security threat to shipping, in a June 20 list from Lloyd's Market Association's Joint War Committee.
Lloyd's Market Association's London-based marine manager Neil Smith said that premiums, which vary according to underwriters, ship type and other factors, may rise as a result, according to a report in the Star newspaper.
Lloyd's Market Association is an insurance body that advises members of Lloyd's of London.
The strait, 960km long and 1.2km wide at its narrowest point, is one of the world's most important waterways, with 50,000 ships carrying about one-third of world trade passing through it each year.
However it is notoriously vulnerable to pirate attacks and some governments in the region also believe it could be a target for armed extremist groups. The Malacca Strait was the second most dangerous area for pirate attacks on ships last year, after Indonesia.
But Noel Choong, head of the Piracy Reporting Center of the International Maritime Bureau (IMB) said there was no evidence to suggest that pirates in the Malacca Strait and extremist groups were linked.
"We do not have evidence to suggest pirates and terrorists are linked or terrorists are planning to launch attacks using ships," he told reports.
With the recent increase in attacks, Malaysia has announced it will also station armed and uniformed police officers on board tugboats and barges plying the waterway.