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Shippers weigh armed response to Somali piracy

* Shipowners ponder private guards against pirates

* Concerns at possible arms race with Somali gangs

LONDON, June 3 (Reuters) - A growing number of shipping companies are examining whether to put private armed security guards on their vessels travelling off Somalia's coast to combat rising attacks from pirates, industry officials say.

Piracy has flourished in recent months off the busy Gulf of Aden and Indian Ocean shipping lanes and seaborne gangs have seized several cargo ships and collected tens of millions of dollars in ransom for the safe release of crews and cargoes.

Maritime organisations have urged shippers to leave any armed role to foreign navies, but some frustrated companies are already using private contractors as a solution as has been seen in other areas of conflict such as Iraq and Afghanistan.

While foreign navies have been deployed off Somalia since the turn of the year to try to prevent attacks, those forces have found themselves stretched given the vast expanses of water involved.

While U.S. sharpshooters killed three pirates who seized a ship's captain in April, and other naval forces have arrested pirates, hijackings often occur with no intervention from naval patrols because they are simply too far away.

Danish group Shipcraft said putting armed guards on its vessels travelling through the Gulf of Aden was a deterrent and also a means of protecting its crews despite the risks involved.

"They (pirates) do not like to be there when the guards are there," said Shipcraft's chief executive Per Nykjaer Jensen.

"As long as the politicians don't make up their minds, then we have to act ourselves," he told Reuters.

The debate over whether to allow armed guards on vessels has gathered momentum and the U.N.'s shipping agency, the International Maritime Organization (IMO), has taken it up.

Peter Hinchliffe, marine director with industry association the International Chamber of Shipping, told an IMO meeting on piracy last week there were concerns over the "proliferating private armies of security guards", who were also unregulated.

"These relate to issues of legality and liability for the use of lethal force, collateral damage and shipboard safety," he said.

"There is a danger that the carriage of armed guards in merchant ships may lead to an arms race with criminal pirate gangs who may be able to obtain ever more potent fire power."

NON-LETHAL MEANS

Steven Neely, director of international operations with Hamburg-based Bastion Services, said it was providing armed guards to a European shipping company in the Gulf of Aden.

"Lethal force will always be the last resort," he said. "We will use all means possible before that."

"I think you are going to see more private security getting involved: the ones who have a good reputation and who have a responsible approach."

John Dalby, chief executive of Spanish based MRM, which provides armed and unarmed personnel to merchant vessels, said he had concerns about the type of security companies now approaching shippers. "Some have been kicked out (of Iraq and Afghanistan) for bad practice and being too ready to use the gun," he said.

"They are punting for work out there (Somalia) and some are getting it and making grave errors. There have been unnecessary shootings and instances spiralling out of control when firearms were not necessary," he said.

While there have been some calls for a Somali coast guard force or even a United Nations peace keeping mission, most accept that piracy will grow in the meantime.

"The rewards last year were roughly $1 million a vessel. This year the going rate is roughly $2 million. So more and more pirates are getting in on the action," said J. Peter Pham, an African security advisor to governments and private companies.

Pham, also a professor at James Madison University in Virginia, said security companies could play a role via "non-lethal means".

"Private security firms with tactical expertise can provide merchant marine crews with professional training in any of a number of measures which commercial vessels can take to make themselves less vulnerable to pirate attacks," he said.

Additional reporting by Pete Harrison in Brussels; Editing by Giles Elgood

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