Port Security: A Rush to Judgment over Dubai Ports World?

A look at the current federal port security initiatives governing the proposed acquisition

Scott R. Gane, CPP, is the Regional Vice President of Initial Security's East Central Region, where he has worked on a number of port security programs.

Last week it was announced that Dubai Ports World of the United Arab Emirates would be acquiring and managing a total of six U.S. ports located in New Jersey, Pennsylvania, Maryland, Florida, Texas & Louisiana. Is Dubai World Ports' takeover of some terminal operations within six U.S. ports -- where they are mandated to comply with Maritime Transportation Security Act (MARSEC), the Container Security Initiative (CSI) as well as other U.S. Customs and Coast Guard programs -- a national security concern?

When the $6.8 billion deal was announced, it appeared anyone with the power to speak and access to a media outlet proclaimed that our national security was breached. The general presumption was that since they didn't know about the deal, and because the research and due diligence was conducted by the Cabinet Committee, we were all at risk.

With over 9 million containers shipped to the U.S. annually and less than 10 percent completely inspected, there are definitely security concerns. However, by knowing more about the programs in place, it is possible to add thoughtful, balanced exchange to this heated and emotional dialogue.

As a private security contractor, I consult, develop and implement government initiatives and laws regarding the security in the several ports across the U.S. Based on my experiences and knowledge of port security, the following are the government port security initiatives in place and the facts of the sale that have to be considered before anyone rushes to judgment:

First, Dubai Ports World is acquiring the operating and management rights of individual terminals within these ports and will not be running the entire port. Secondly, the government uses a layered approach to securing the ports. Many of these programs are still considered to be in their infancy and are a "work in progress." Security professionals need to consider this fact and use a level headed common sense approach to addressing the requirements of these programs knowing that as refinements occur the security program you designed to address these programs will have to be modified.

Some of the programs or laws that are currently used to protect our ports, that oversee Dubai Ports Worlds, include:

- Maritime Transportation Security Act of 2002 (MARSEC) Developed as a result of 9/11, this law requires that every regulated U.S. port facility establish and implement a comprehensive security plan that outlines procedures for controlling access to the facility, verifying credentials of port workers, inspecting cargo for tampering, designating security responsibilities, training and reporting of all breaches of security or suspicious activity. The plan also requires that as the national threat level is increased, so do the security measures for the port facility. The U.S. Coast Guard inspects and verifies compliance with this law. This federally regulated program is still in its developing and refining stages. Inspection techniques used by the U.S.C.G. vary from port to port. Those variations in inspection techniques are making it difficult for companies who are in multiple ports and who are trying to provide consistency to their MARSEC security plans and programs.

- Container Security Initiative (CSI) U.S. Customs and Border Protection personnel work with customs services from other countries to examine high-risk maritime containerized cargo at foreign seaports before they are loaded on board vessels destined for the U.S. This is a good program - in theory - but as with C-TPAT (below) it appears to be somewhat under funded and understaffed to adequately implement the program. Inspections are being conducted, but not at the optimal frequency projected.

- Customs - Trade Partnership Against Terrorism (C-TPAT) C-TPAT is a U.S. Customs-sponsored initiative that partners with companies to improve baseline security standards for supply chain and container security. This program not only checks the company shipping the goods, but also the companies that provided them with any services. While this good program it is not without its problems. There is a rather exhaustive submission process that could take months to complete.

Once submitted/applied, U.S. Customs must verify the accuracy of the submission before the company can become a partner. U.S. Customs, by their own admission is very far behind in verifications (of over 5,500 submissions, only around 1100 verifications have been completed to date). Companies are frustrated with the delays but wait patiently because the U.S. Customs verification of their program ensures their company is placed in a "reduced" (container) inspection frequency, allowing them to get merchandise into production or on the shelves faster than the competition.

Nobody disputes that port security has improved since 2001. Importers are required to provide information on incoming shipments at least 24 hours before arrival; international agreements have been secured to increase inspection of US-bound goods on foreign soil and radiation detectors and X-ray machines have been introduced to most of our large ports.

Despite the improvement, only a small fraction of the 9 million containers that arrive in the U.S. each year are inspected. There are problems also with false alarms triggered by naturally occurring radiation, while more sinister material sheathed in lead could go unnoticed. By expediting and strengthening the administrative and management process with the programs we have in place, and encouraging the Department of Homeland Security to make port security a top priority, we will be thinking reasonably and strategically while acting globally.

About the Author: Scott R. Gane, CPP, is the Regional Vice President of Initial Security's East Central Region. Initial Security, www.initialsecurity.com, a leader in the North American physical security sector, provides security services through its network of over 60 U.S. and Canadian branch offices. At Initial Security, Gane has worked on a number of port security programs, and prior to his work with Initial Security, he held top-level security positions in the manufacturing and nuclear energy sectors. He can be reached at sgane@initialsecurity.com.

Every newspaper article which actually covers the facts of the deal, or interviews port workers about security, concludes that there is no security issue involved in this deal.

Sunday's Post had a wonderful article about how the entire issue is political, not at all about national security (right next to an article about how politically bad Bush played this).

Even the Coast Guard story, when you actually READ it, was pro-ports-deal. For two weeks opponents claimed that the Bush administration hadn't considered the security issues, that they therefore needed to re-review.

Then the Coast Guard information comes out, which shows that the Coast Guard RAISED the very questions that were supposedly ignored. Of course, opponents turned on a dime and said -- "Look, the Coast Guard had the same concerns we do". Then the rest of the story appeared, explaining that the Coast Guard went through the questions, and answered each one, and concluded there was no security issue. Oops....

The opponents also claimed that nobody would ever even THINK the deal was OK (Like Hannity). Now Hannity is grumbling about how he's not that concerned anymore since "all he ever wanted was another 45-day review".

Opponents argued that we just went along with this deal without even ASKING for anything from DP World -- another sign we didn't really consider it.

But the Sunday Washington Post article tells us that the review process included asking for, and receiving, a number of written agreements from DP World for this sale -- agreements that put legal binding on "understandings" we had with the previous company, and therefore make us MORE secure, not less.

Hannity was the perfect case study for how the opponents handled the case. Each day he had some NEW objection to the deal which he hadn't even KNOWN about the previous day, but which now was the explanation for why he had opposed the deal.

For example, yesterday it was how some holding company owned by the people who own DP World enforces the anti-Israel boycott in their "free ship zone" port in the Middle East. Hey, this is a real issue, and we should object to it -- but it has NOTHING to do with DP World, or any ports operated by DP World. Nor was it why he originally said he opposed the deal.

But when you come out so strongly against something, you have to find an excuse later.

Every newspaper article which actually covers the facts of the deal, or interviews port workers about security, concludes that there is no security issue involved in this deal.

At least the security issue is being discussed and assessed. There is another and perhaps in the long run more important issue about this business deal that is being totally ignored. This is the fact that the UAE company is "state owned." This fact by itself should disqualify this company from doing business in our country. We are supposed to have free competition in our system, something that cannot exist when governments own businesses. The merging of the roles of government and business is illegitimate in our political and economic system. Free enterprise and competition are seen as necessary to maintain not only our economic freedoms but our political and civil liberties as well. We have absolutely no interest as a free and self-governing people in rewarding and encouraging the business model of this UAE "firm" -- government ownership -- that has more in common with mercantilism than with free market principles.

It seems to me that the lack of discussion of this subject indicates that either our elected officials and media elites do not understand the requirements for maintaining a free and competitive economy as well as our individual freedoms or they have already given up on it. Perhaps they never believed in it to begin with. For them the free market jargon is only rhetoric they roll out to squash some political opponent or issue. I am beginning to wonder if the brave new globalist world we are being marched toward by our elites will consist of ceding our rights to self-government and our economic freedoms to autocratic government/corporations and international mega-businesses around the world whose purposes extend only to gaining and maintaining power and to profit and who are not accountable to anyone.

This debate involves an argument over what business model will prevail in our brave new globalist world: a mercantilist merging of business and government or a free market, competitive system that the is the basis of our society's freedoms. We should at least demand observance of our free market economic principles here in our own country and should be advocating these principles to the rest of the world. I don't think that taking this position in defense of our American way of life is too much to ask of our President and Congress.

Until someone proves to me that a motivated Islamofascist working for Dubai Ports would have no possible way of breaching security to allow bombs or other dangerous terrorist tools into the U.S.

They'd have nothing to do with it.

DPW or any other terminal management company isn't responsible for packing and shipping this stuff. It's packed into ships overseas, comes into the port, and is unloaded at the terminal. Sometimes, a container isn't even opened at the terminal. Or, a container may contain just another sealed container that isn't opened by the shipping company. Whether its a Brit or UAE company managing the routing of those containers is irrelevant because any terrorist seeking to ship something illegal would have no reason to tell either. What they'd worry about are Customs, etc., which are completely separate.

If you're talking not about the shipping aspect, but just about some employees coming into the country, that's not a big deal. The numbers under our immigration laws would be very small -- dwarfed by the number of moslems who come in under other visas. And if you're talking about illegal immigration, that really has nothing to do with DPW either because if its illegal, the people certainly aren't going to waltz in openly via DPW personnnel augmentation.

"But the Sunday Washington Post article tells us that the review process included asking for, and receiving, a number of written agreements from DP World for this sale -- agreements that put legal binding on "understandings" we had with the previous company, and therefore make us MORE secure, not less.

That's odd. We now have directly contradictory reports about what the argreements were between the administration and DP World. I haven't seen the Washington Post article you reference (perhaps you could post its content), but a previous article stated:

"Under a secretive agreement with the administration, a company in the United Arab Emirates promised to cooperate with U.S. investigations as a condition of its takeover of operations at six major American ports . . .
The U.S. government chose not to impose other, routine restrictions.
Under the deal, the government asked Dubai Ports to operate American seaports with existing U.S. managers "to the extent possible." The company promised to take "all reasonable steps" to assist the Homeland Security Department.
The administration required Dubai Ports to designate an executive to handle requests from the U.S. government, but it did not specify this person's citizenship.
It said Dubai Ports must retain paperwork "in the normal course of business" but did not specify a time period or require corporate records to be housed in the United States. Outside experts said stricter provisions are routine in other industries.
Foreign communications companies with American customers are commonly required to store business records in the United States. A senior U.S. official said the Bush administration considers shipping manifests less sensitive. The official spoke on condition of anonymity because of the confidential nature of the agreement."

Some immediate questions pop up:

Retention of paperwork relating to "the normal course of business" will be retained in Dubai. Why? This paperwork after all pertains to container contract payments and container content, shipper, and receiver information; to financial interests in DP World; to general cargo, container, and passenger manifests and bills of lading; etc. And these have no security ramifications? Since when?

Shipping manifests are said to be "less sensitive". Less sensitive than what? And if they have suddenly become "less sensitive," what's the point of the customs CIS program and the proposed CVSR program?

"Other routine restrictions" are not being imposed. What other routine restrictions, and why?

I fail to see the logic behind lowering the security bar for DP World, rather than heightening it.

"They'd have nothing to do with it."

Oh honestly. While the representation that DP World will be 100% in control of security is nonsense, the representation that they will have no responsibility for security is equal nonsense.

The issue is the role that DP World will in fact play in security, which cannot be dismissed as either non-existent or negligible.

Terminal operator cooperation is integral to effective port security. While US Customs clearly has primary responsibility for container and general cargo inspection, that responsibility can realistically be carried out only on a spot-check basis (at present, physical inspections cover about 10% of total cargo). Compliance by trustworthy operators with container content, verification, seal, and re-seal reporting is crucial, and constitutes a kind of "first-line" defense that customs must necessarily rely upon.

This is the point behind the Canadian PIP program (don't forget, DP World will have terminal operations in Vancouver as well), the US Customs CIS program, the proposed Container Seal Verification Regime (CSVR), and the Transportation Worker Identification Credential (TWIC), which are just a few of the security regimes that require operator initiative, cooperation, and reporting.

Heck, even DP World stated explicitly that "We intend to maintain and, where appropriate, enhance current security arrangements," (very reassuring, eh?) making the general claim that DP World will have no responsibility for security a truly odd little piece of spin.

And as stated in a recent article:

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If the deal between DP World and P&O sticks, five key U.S. container ports will be operated by a United Arab Emirates-controlled company. This may or may not be a good investment decision, but that's not the real issue. The bigger question is how secure the ports really are and whether the U.S. government funding for this security is adequate.

The answer: Not by a long shot.

Security at U.S. ports is a shared responsibility. The port operator has, in the past, hired all the security and longshore personnel on its docks. Washington, through the U.S. Coast Guard and, more recently, the Department of Homeland Security, is seeking a greater role in the security of people and goods, both at the ports, and on the water. But the Bush administration hasn't coughed up the dough, even though it made port security a priority after the terrorist attacks of Sept. 11, 2001. And container traffic at U.S. ports has only expanded since then.

Take the U.S. container ports now operated by Peninsula & Oriental Steam Navigation: Miami, Philadelphia, New York/New Jersey, New Orleans and Baltimore. (P&O also operates the cruise port of New York.) As of 2004, these ports processed nearly 6.5 million containers, and their volume has been growing by at least 10% annually since then. The Port of Los Angeles, America's largest, handled 7.3 million containers in 2004, while Long Beach, Calif. saw nearly 5.8 million. More than $1.3 billion worth of goods come into U.S. ports each day, or 2 billion tons of goods. That latter figure is expected to double by 2020.

Ports In A Storm
Containers processed by P&O ports in the U.S.

Port Containers Processed

New York/New Jersey 4,478,480
Miami 1,009,500
Baltimore 557,858
New Orleans 258,468
Philadelphia 178,046
Total 6,481,352

Source: American Association of Port Authorities, 2004

How short is Washington's funding? According to the ports industry, federal budget funding since 9/11 has amounted to only one-sixth of what seaports identified as being needed.

"The federal share of the seaport facility security funding needs to be increased, not reprogrammed and diluted," says Kurt Nagle, president and chief executive of the American Association of Port Authorities.

According to the AAPA, the U.S. needs to spend $400 million yearly to come close to the $5.4 billion suggested by the U.S. Coast Guard, and spend it for the next ten years. The normal allocations have ranged from $93 million to $175 million. There is no way that full container security can be reached with the present level of investment.

Part of the problem, according to Aaron E. Ellis, the communications director for AAPA, is that there is a struggle between where money should be spent given the greatly increased trade that the ports are now experiencing and will continue to experience. Where, he asks, do you use your money to prevent U.S. ports processing from eroding? Is security to be played against infrastructure or cargo handling? And at which port?

That last question has been raised by wise folks such as Robert F. Sappio, the senior vice president of transpacific trade for APL, the U.S.-based container shipping company of Singapore's Neptune Orient Lines. Sappio suggests that the real security problem is at the outbound port. The security of U.S. ports is at best barely adequate but the security at ports in Asia and elsewhere where the goods are loaded for the U.S. is just not there.

The majority of the containers coming into the U.S. at the five ports in question (and generally with all U.S. ports) are not fully monitored and very few are checked to any depth by human operators (it costs too much). The opportunity for disaster even without further risk in port operation is already too wide open. If the U.S. secures with one hand and unlocks with the other it will only have itself to thank in the event of a problem.

http://www.forbes.com/home_europe/logistics/2006/02/22/dubai-port-merger-cx_rm_0222dubai.html
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Punching more holes in a leaky boat is generally not considered the height of prudence.

Terminal operator cooperation is integral to effective port security.

Granted, but they really don't have any choice about cooperating. It's not like they can refuse Customs access to containers.

While US Customs clearly has primary responsibility for container and general cargo inspection, that responsibility can realistically be carried out only on a spot-check basis (at present, physical inspections cover about 10% of total cargo).

Okay....that's an argument to increase the number of inspections, but has nothing to do with a terminal operator.

Compliance by trustworthy operators with container content, verification, seal, and re-seal reporting is crucial, and constitutes a kind of "first-line" defense that customs must necessarily rely upon.

Wait a minute. Are you saying that terminal operators at the receiving terminal open all containers, verify the contents, and then re-seal them after they've been received?

I have a hard time believing that a container of hazardous materials could not be smuggled into the US through one of the DPW ports by a high-placed Muslim who was aware of the contents from the start. People who have power and control are capable of greasing the skids to allow things that violate all the rules, but happen regardless.

I was in a bar with an off-duty NYC detective when he pulled out a big, fat Cohiba (Cuban) cigar and lit it up. When I asked if this wasn't contraband he replied that it was, so he had to burn it. Somebody brought those cigars into the country.

You will never convince me that those at the top of DPW won't be able to slip various items into the US because of their positions.

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