Blog Article

Financing Terror, Part III: Kidnapping for ransom in the Philippines

By Samuel A. Smith:

Abu Sayyaf gunmen displaying their weapons in the jungles of the Philippines in 2000. Photo: AFP

Abu Sayyaf gunmen displaying their weapons in the jungles of the Philippines in 2000. Photo: AFP

Abstract: The international community has been relatively successful in restricting terrorist financing, so terrorist organisations have turned to alternative means to fund their organisations. The Abu Sayyaf Group (ASG) is currently one of the most prominent terrorist organisations in the Philippines and Southeast Asia and is but one example of a terrorist organisation that engages in kidnapping-for-ransom (KFR) activity. The ASG’s KFR activity is believed to stem from past organisational devolution and finance restrictions. The ASG’s penchant for KFR suggest that the group is more interested in personal wealth and material gain than political ends.

***

Terrorist groups, like any other type of organisation, require funding to maintain their operations. There are numerous methods that allow terrorist groups to generate cash flow. One such method is kidnapping-for-ransom (KFR), which has become increasingly popular amongst terrorist groups around the world.[1] In a speech made at Chatham House in London, David Cohen, Secretary of the U.S. Treasury Department, described KFR as a ‘serious threat’ and estimated that terrorist organisations have earned approximately $120 million in ransom payments between 2004 and 2012.[2] KFR is becoming more transnational in character, with one study estimating that there has been a 275% increase in kidnappings of foreign nationals in the decade preceding 2008.[3]

Kidnapping activity, whether used as a political tool or for economic extortion, is useful in understanding a terrorist organisation’s ideology and modus operandi. The KFR activity by the ASG suggests that economic goals are the preference of its members. This inclination leaves the group bereft of any real drive towards the goal of liberating the Moro Muslim people.

It is necessary to first discuss the nature of KFR and the issues aligned with the statistics documenting its activities. The criminological concept of the ‘dark figure of crime’ refers to criminal offences that are unobserved and/or unreported, consequently leaving the true figure of crime unknown.[4] KFR does not escape the ‘dark figure of crime’. One study estimates 12,500 to 25,000 incidents occur globally each year, and only 10% of these kidnappings are actually reported.[5]

Explanations for this vary. Sometimes victims and their families are coerced into silence. Sometimes the payment of the ransom is usually seen as a better option. Some reports approximate that only 11% of kidnapping victims are released without payment. However, when payments are made, around 40% are released unscathed.[6] KFR is double pronged: terror is instilled during the kidnapping and subsequent negotiations, and any monetary gain made from the hostage taking may be put to further terror-related activities. KFR is also understood to be cyclical, as successful ransom payments create a stronger incentive to conduct further operations.[7]

There have been a substantial number of reported kidnappings conducted by the Abu Sayyaf Group (ASG) in the Philippines which indicate the behavioural trends of the group, such as the tendency to drift between terrorist and criminal activity.[8] When the group formed in the early 1990s, it was ideologically driven and sought to liberate the Moro Muslim population in the southern Philippines and ultimately in Southeast Asia.[9] The ASG initially degenerated into bandit factions after suffering leadership decapitation through the killing of its spiritual leader Abdurajak Abubakar Janjalani in 1998.[10] Janjalani’s younger brother unsuccessfully attempted to reunite the fragmented organisation from 2002 until his death in 2006.[11] The ASG lost its ideological drive, and any radical Islamic elements are arguably only at a superficial level and are a legacy of ASG’s previous Islamic nationalist and separatist views.[12] It is debated whether the ASG still actively seeks to achieve its former ideological goals today – experts claim that there are only a few individuals who are pushing for Islamist goals, and these individuals lack any sort of power or leadership within the organisation.[13]

After the Philippine government cut off external funding to the group through counterterrorism measures beginning in 2006, the group reoriented themselves toward the pursuit of criminal activity for financing.[14] The ASG has grown particularly fond of using KFR as their primary source of income, alongside other illegal activities such as the selling of counterfeit goods, narcotics, and serving as bodyguards for local politicians.[15] The ASG is believed to have earned $35 million in a 16-year period between 1992 and 2008 from kidnapping activity.[16] In 2010, the ASG received around $704,000 in ransom payments from a mere 11 kidnappings.[17] During these kidnappings, the ASG did not apply any serious pressure on the Philippine government.[18] Zac Fellman, a researcher for the Center for Strategic and International Studies, suggests that the execution of hostages appears to only occur when the ASG fails to receive payment in exchange for hostages.[19]

The ASG has conducted kidnappings since its formation in the early 1990s; however, the frequency of kidnappings grew dramatically after Janjalani’s death in 1998, when a power vacuum saw bandit leaders rise to power.[20] While there was only one recorded incident of kidnapping for ransom in 1997, [21] this number later jumped to 140 people being ransomed in 2000 and 2001.[22] This dramatic spike can be attributed to the lack of a strong ideological leader to steer efforts towards political and religious objectives.

Kidnapping activity quietened down after 2002, when the younger Janjalani attempted to control the fragmented group.[23] Since another loss of leadership in 2006, there have been two dramatic increases in KFR activities by the ASG: one increase took place in 2008 and another 2013.[24] During KFR hostage situations, the ASG failed to apply pressure on the government to change policies or release fellow terrorists from prison, focusing instead on the demand for funds.[25]

The ASG’s main recruiting pool is from disadvantaged and marginalised youth from impoverished areas of the southern Philippines.[26] There are some instances of Muslim parents volunteering their sons to fight with the ASG for a monthly payment of rice worth around $200.[27] This reinforces the theory that ASG membership is determined by economic needs rather than political radicalisation. If material and financial incentives are the main motivator for the ASG to continue functioning, increasing legitimate economic opportunities for the population in the Philippines and Southeast Asia would greatly shrink ASG’s recruitment pool.

The organisational fragmentation and lack of a strong religious leader to provide direction for ASG’s Islamist agenda have led to ASG’s descent into a financially motivated criminal organisation without political goals. This, in combination with further restrictions on other traditional terrorist financing institutions and the informal money transfer system known as hawala coming under inquiry, has led to the surge of KFR activity, which is likely to continue as long as drivers for ASG recruitment continue.


Samuel graduated with a Masters of Government and a specialisation in Counterterrorism and Homeland Security from the Lauder School of Government, Diplomacy and Strategy at the Interdisciplinary Center in Herzliya, Israel. He holds a Bachelor of Social Science with a double major in Criminology and Peace and Development Studies from the University of Western Sydney in Australia.

This article is the penultimate part of a four-part Strife series on terrorist financing. Next Monday Drew Alyeshmerni will end the series by shedding light on the use of charities as a cover for terrorist financing and the implication that defining certain organisations as ‘terror groups’ may have upon the eradication of this source of financing.

NOTES: 

[1] M. O’Brien, ‘Fluctuations between crime and terror: the case of Abu Sayyaf’s kidnapping activities’, in Terrorism and Political Violence. Vol 24, issue 2, 2010, p. 320.

[2] D. Cohen, ‘Remarks by Treasury Under Secretary Cohen: “Kidnapping for ransom: the growing terrorist financing challenge”’, in Primary Sources, Council of Foreign Relations, Oct. 2012.

[3] M.K.N. Mohamed, ‘Kidnap for ransom in South East Asia: the case for a regional recording standard’, in Asian Criminology, vol. 3. 2008, p. 62.

[4] P. White & S. Perrone, Crime, criminality and criminal justice, Oxford University Press, 2010, p. 27.

[5] F. Zuccarello, ‘Kidnapping for ransom: a fateful international growth industry’, in Insurance Journal West. June, 2011.

[6] Ibid.

[7] Cohen.

[8] O’Brien, p. 327-329.

[9] O’Brien, p. 322.

[10]Ibid, p. 328.

[11] Ibid, p. 329.

[12] R.C. Banlaoi, ‘The sources of the Abu Sayyaf’s resilience in the Southern Philippines’, in CTC Sentinel, vol. 3, issue 5, 2010, p. 17-19.

[13] Ibid, p. 19

[14] Z. Fellman, ‘Abu Sayyaf Group’, in Homeland Security & counterterrorism program transnational threats project, case study number 5, Center for Strategic & International Studies, 2011, p. 2.

[15] Banlaoi, p. 19.

[16] O’Brien, p. 321.

[17i] Fellman, p. 6.

[18] Ibid, p. 6.

[19] Fellman, p. 6.

[20] O’Brien, p. 321, p. 328.

[21] Ibid, p.321.

[22] Fellman, p. 3.

[23] Obrien, p. 328.

[24] National Consortium for the Study of Terrorism and Responses to Terrorism, START, Global Terrorism Database, 2014, accessed 13/12/14 <http://www.start.umd.edu/gtd&gt;

[25] O’Brien, p. 321.

[26i] O’Brien, p.330.

[27] Ibid, p. 330.

[28] START

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