I've run across a few of you guys so far & I'll give y'all this, the IC interactions are solid.
Two things I'd recommend: The piracy demands need to be reduced. 2-3 mil per round tends to be the universally acceptable cost of doing business.
& about the piracy. I'd also recommend changing the faction diplomacy to match its actions, 'cause the basic NPC diplomacy is just a starting point to tweaked...alot
If the shoe were on the other foot, I'd set any faction I plan to pirate to hostile, so that at least the NPC faction responds appropriately to the hostile act of pirating an allied PC.
I can't help but view IFF straddling as surfing a loophole in game mechanics, so I'd take steps to try & balance reaction with action.