Negotiation Case Studies April 15, 2009

Can You Negotiate With Pirates?

Blackbeard may long be dead but piracy is alive and well (and on the upswing) in the seas off Somalia. And why not? Somalian pirates are able to take over unarmed ships and hold expensive cargo and crew hostage in return for ransom. Easy money for the pirates since most commercial ships carry hijacking/piracy insurance and are able to pay out high sums. Until last week, the pirates were winning. The shipping companies were forced to negotiate with the pirates in order to return their crew and vessels.

Last week, pirates attempted to hijack the Maersk Alabama, and were able to take its captain, Richard Phillips, hostage. The pirates demanded more than a million dollars in ransom money for his return. In Captain Phillips’ case, negotiations seemed to break down and finally, the Navy SEALS were deployed to save him. Why did this situation have to be resolved by force? Why did the negotiations fail?

• No common ethical background A common ethical background is essential in conducting negotiations. In a typical business negotiation, for instance one involving a sales contract, both parties share an understanding of contract law and moreover, have a shared sense of consequences if said law is broken. Pirates, on the other hand, are not known for their ethical behavior. By engaging in piracy and hijacking, pirates have already shown a disregard for laws and ethics, and prove that they have no fear of consequences.
• No room for compromise When pirates "negotiate" there is no room for compromise because it becomes a zero-sum game. Either money exchanges hands or someone gets killed. When there is no middle ground, no amount of negotiating skill will help.
• Unequal footing Negotiations often seek to find a mutually acceptable price for a transaction. How can you put a price on a life? How much is too much or too little? For the family of a hostage, there can be no price that is too high--a life is always more precious than money. And the pirates know this.