[Senate Hearing 107-785]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-785

 PASSAGE AND IMPLEMENTATION OF S. 1214, THE PORT AND MARITIME SECURITY 
                                  ACT

=======================================================================

                             FIELD HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 19, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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                            WASHINGTON : 2003
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 19, 2002................................     1
Statement of Senator Breaux......................................     4
    Prepared statement...........................................     5
Statement of Senator Hollings....................................     1
    Prepared statement...........................................     2

                               Witnesses

Bonner, Hon. Robert C., Commissioner, United States Customs 
  Service........................................................    13
    Prepared statement...........................................    19
Brown, Douglas R., Ph.D., Vice President for Business Development 
  and Programs, Ancore Corporation...............................    50
    Prepared statement...........................................    52
Burdette, Robert M., Town Administrator, Town of Mount Pleasant, 
  South Carolina.................................................    37
Flynn, Stephen E., Ph.D., Senior Fellow, National Security 
  Studies, Council on Foreign Relations..........................    57
Groseclose, Jr., Bernard S., President and CEO, South Carolina 
  State Port Authority...........................................    34
Koch, Christopher L., President and CEO, World Shipping Council..    61
    Prepared statement...........................................    65
Loy, Hon. Admiral James M., Commandant, United States Coast Guard     7
    Prepared statement...........................................    11
Riley, Jr., Hon. Joseph P., Mayor, City of Charleston, South 
  Carolina.......................................................    29
    Prepared statement...........................................    31
Summey, Hon. R. Keith, Mayor, City of North Charleston, South 
  Carolina.......................................................    32
Taylor, Major Alvin A., South Carolina Department of Natural 
  Resources......................................................    39
    Prepared statement...........................................    42

                                Appendix

Lynch, Robin, President, Sea Containers America Inc., prepared 
  statement......................................................    75
Cannon, Jr. Esq., J. Al, Sheriff, Charleston County, SC, letter 
  dated February 6, 2002, to Hon. Ernest F. Hollings.............    78

 
 PASSAGE AND IMPLEMENTATION OF S. 1214, THE PORT AND MARITIME SECURITY 
                                  ACT

                              ----------                              


                       TUESDAY, FEBRUARY 19, 2002

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Charleston, SC.
    The Committee met, pursuant to notice, at 1:30 p.m. at the 
Charleston Maritime Center, 10 Wharfside Street, Charleston, 
South Carolina, Hon. Ernest F. Hollings, Chairman of the 
Committee, presiding.

         OPENING STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    The Chairman. This afternoon, my first urge in calling the 
Committee to order is to thank a lot of folks. First, I want to 
thank our distinguished colleague, the Senator from Louisiana, 
John Breaux. He's the Chairman of our Maritime Subcommittee and 
this is his fourth hearing in the field and following this 
problem right along and possibly more knowledgeable than most 
in the U.S. Senate. And we really are honored to have him with 
us.
    Let me thank Mr. Henry Brown. We invited our distinguished 
Congressman Henry Brown of this district to sit with us. Maybe 
he'll be along momentarily. I am particularly pleased that 
we've got the Commandant of the Coast Guard with us, Admiral 
Loy, and the Commissioner of Customs, Mr. Bonner. They are very 
busy there in Washington, but to grace us with their presence 
has been already a tremendous help this morning.
    I thought this morning was frankly going to be a sort of 
idle tourism to point out this and point that out. And on the 
contrary, it was an eye opener for me to find out how well the 
Coast Guard is coordinated, how sophisticated Customs is. I 
think to this day, that is the best briefing that this 
particular Senator and Committee has had in quite some time.
    Our Secretary of Transportation was to be with us, but he 
is just recovering from a hip operation and thought it best he 
stay back in Washington. But right to the point, Secretary 
Norman Mineta has already approved our Senate-passed home 
security bill which is now over in the House side. And they 
hope that they will deal with it as expeditiously as they can.
    Let me thank--I will emphasize that again, Commandant 
Merit, the Captain of the port, he is the No. 1 man in charge 
of security and I am glad of it because I can tell from his 
briefing this morning that he really is in charge. I have got 
to recognize Major General Seifert. He has been nominated by 
Governor Hodges in charge of homeland security and I want to 
thank him for attending this hearing.
    We want to acknowledge Mr. Robin Lynch, the President of 
Sea Containers America, Inc. I recognize Al Cannon, our 
Sheriff, who has been giving us security along with Reuben 
Greenberg, the Chief of the city police here. And I will 
include Mr. Lynch's and Sheriff Cannon's statements in the 
record [refer to Appendix] and also my own statement in the 
record.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina

    Today, we are gathered to take testimony on the challenges that we 
face as a nation in securing our seaports and maritime boundaries. In 
the aftermath of September 11th, this is a daunting and difficult 
challenge. The protection of our maritime boundaries poses unique 
challenges because of the breadth of our coastline, the proximity of 
the public to maritime businesses and endeavors, and the sheer volume 
of container cargo and shipments of bulk petroleum products and 
hazardous materials. Literally, we have thousands of tons of hazardous 
cargoes, originating from foreign nations being transported by foreign 
vessels right through the heart of many U.S. cities. Additionally, the 
maritime trade is very open, and we do not have the best or most 
reliable information about shipments, vessels, or the crew members who 
man those vessels. It is, indeed, a difficult issue to address.
    Lloyd's List International reported that a NATO country's 
intelligence service has identified 20 merchant vessels believed to be 
linked to Osama bin Laden. Those vessels are now subject to seizure in 
ports all over the world. Some of the vessels are thought to be owned 
outright by bin Laden's business interests, while others are on long-
term charter. The Times of London reported that bin Laden used his 
ships to import into Kenya the explosives used to destroy the U.S. 
embassies in Kenya and Tanzania.
    Several weeks ago, a suspected member of the Al Qaeda terrorist 
network was arrested in Italy after he tried to stow-away in a shipping 
container heading to Toronto. The container was furnished with a bed, a 
toilet, and its own power source to operate the heater and recharge 
batteries. According to the Toronto Sun, the man also had a global 
satellite telephone, a laptop computer, an airline mechanics 
certificate, and security passes for airports in Canada, Thailand and 
Egypt.
    These two stories really bring home this issue of seaport security. 
Except for those of us who live in port cities like Charleston, people 
often do not think about the nation's ports--these critical entry 
points where industrial and consumer goods are loaded onto trucks and 
railroad cars heading directly to their hometowns. But making these 
ports more secure is vital to protecting our national security. The 
destruction that can be accomplished through security holes at our 
seaports potentially exceed any other mode of transportation. And yet 
we have failed to make seaport security a priority.
    I would like to take this opportunity to thank all of the people 
who have worked to help us, not only schedule this hearing, but, in the 
morning we toured the entire harbor to investigate the challenges 
facing us in this area, and to witness Customs at work clearing cargo. 
The Port and the City have been a gracious hosts to our visitors from 
Washington, and the Coast Guard and Customs have contributed to make 
this a real learning experience.
    We have here today, one of the most knowledgeable Senators in the 
U.S. Senate on maritime issues, Senator John Breaux. Senator Breaux is 
the Subcommittee Chairman of the Surface Transportation and Merchant 
Marine Subcommittee, and he really knows the maritime issues. Senator 
Breaux recently got back from chairing a series of hearings on the 
South Atlantic and Gulf Coasts, and I understand that it was a little 
bit of an eye-opening experience, and he might be working on additional 
legislation to enhance seaport security, and I look forward to working 
with him on that. I welcome him to Charleston.
    Last year, the U.S. Senate passed S. 1214, the Port and Maritime 
Security Act, a bill that I had originally introduced in the 106th 
Congress. Actually, because of the deficiencies in seaport security, we 
have been working on legislation in this area for over two years--not 
just since the attacks of September 11th. However, since those attacks, 
the issue of seaport security has become critical. We have a long way 
to go in this area, and I am hopeful that we can get to Conference with 
the House on this issue as soon as possible.
    The Port and Maritime Security Act would, for the first time ever, 
require federal approval of port security programs. These plans will 
have to meet rigorous standards for security infrastructure, screening 
equipment, evacuation plans, access controls, and background checks for 
workers in security-sensitive areas. The Coast Guard will be designated 
as the lead agency in evaluating and approving security plans, and in 
helping coordinate law enforcement and antiterrorism policies. The 
Coast Guard is the Captain of the Port, and the lead agency in helping 
to protect our maritime borders and coastal areas.
    We also will require more information about the cargo and 
passengers arriving at our ports. Right now, we do not know enough 
about the ships and the cargo that call 24 hours a day. We need to 
change that immediately. We will require that ships electronically 
transmit their cargo manifests--and if the manifest does not match the 
cargo, it will not be unloaded. We also will check crew and passenger 
manifest information to identify people who could pose a security 
threat. We need to know who is on these ships, and, eventually, be able 
to quickly check the names with a computer database of known terrorists 
or other associates of international criminal organizations. I am very 
concerned about the lack of credible information that we have on 
maritime trade. Security experts attempting to trace the shipping 
assets of Osama bin Ladin had immense difficulties tracing his fleet of 
over twenty vessels, and are quoted as saying that it was more 
secretive than tracing banking assets.
    The bill will help federal, state and local law enforcement 
officials to better coordinate the sharing of critical information. If 
a local police officer arrests someone for breaking into a secure area 
of the port, timely sharing of that information with state and federal 
officials might help identify the person as part of a larger 
international network. It is critical that Customs agents work with the 
local police, that the state police work with Immigration officials, 
and that The FBI work with local port authorities. That type of 
cooperation will dramatically improve port security. Much of what we 
will achieve in seaport security will be advanced here in Charleston at 
the local level.
    The businesses that operate in seaports also play a crucial 
security role. They must be brought into a cooperative environment in 
which a port's law enforcement information is communicated and shared 
confidentially with privately-hired security officers. In return, 
private security officers must have a direct line to share information 
with federal, state, and local authorities.
    To verify that the cargo loads match the manifests, we will need 
more Customs officials to check that cargo. Incredibly, only 2 percent 
of the cargo containers arriving at our ports are ever checked by 
Customs officials. While Customs does attempt to profile cargo coming 
in to identify risky cargoes--two percent is totally insufficient. Let 
me be clear. This is a huge hole in our national security system that 
must be fixed. We need to have the best technology employed here--and 
we might have to address it in more than one way. Our legislation would 
seek to close this security hole by directly granting and authorizing 
more than $168 million for the purchase of non-intrusive screening and 
detection equipment to be used by U.S. Customs officers. These Customs 
officers are on the front lines of protecting our country from the 
importation of illegal and dangerous goods. We must give them the 
latest technology and the most modern cargo screening equipment 
available.
    We also must help the private sector and the port authorities meet 
these national security challenges. This problem would be much more 
simple to solve if the United States had national seaports under the 
control of the federal government--or if the federal government 
directly funded seaport infrastructure. However, that is not the case. 
Maritime infrastructure is owned by states and by the private sector. 
But the federal government has a role to play here for homeland 
security. We cannot force states and the private sector to comply with 
security mandates, yet not provide funding. The legislation will 
directly fund and authorize $390 million in grants to local port 
security projects. The bill also will fund loan guarantees that could 
cover as much as $3.3 billion in long term loans to port authorities 
acting to improve their security infrastructure. Upgrading that 
infrastructure means installing modern gates and fencing, security-
related lighting systems, remote surveillance systems, concealed video 
systems, and other security equipment that contributes to the overall 
level of security at our ports and waterfront facilities. I was very 
pleased to see that the President's budget request had more funds for 
both the Coast Guard and for Customs, but concerned that the budget 
request provided no funds for grants and loans for port security. Port 
security will occur in the port itself, and we must deliver the 
resources to the ports and to the states to help them address what is a 
federal responsibility: border protection and control.
    I look forward to hearing this afternoon's testimony we truly have 
a distinguished group of panelists. In particular, I would like to 
recognize the Commandant of the Coast Guard, Admiral James Loy. Admiral 
Loy is going to be moving on, and I wanted to express to him, my 
appreciation of his service to the nation. He has been a credit to our 
nation and to the Coast Guard organization. I thank him for his 
service.
    I would also like to recognize Mr. Robin Lynch, President of Sea 
Containers, America. Sea Containers builds marine shipping containers 
here in Charleston, and I asked them to prepare testimony on how marine 
containers could be used or modified to help enhance the overall 
security of the container system. I will be including their testimony 
in the record.

    The Chairman. Finally, let me thank the State Port 
Authority's Ann Moise and Chris Koch of the World Shipping 
Council, who have both been highly instrumental in helping this 
hearing along. Let me yield now to my colleague, Senator 
Breaux.

               STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. Thank you very much, Mr. Chairman, and 
thank you for your courtesies and thanks to all the people of 
Charleston, South Carolina, for the courtesies that they have 
shown to the Committee and our staff.
    It has been a wonderful and a delightful visit and I am 
here because Senator Hollings told me to come here.
    [Laughter.]
    I will tell you how much I have enjoyed the trip and the 
leadership of the distinguished Chairman. He did not clarify 
the fact that the only legislation that is now passed in the 
U.S. Senate dealing with maritime security and port security is 
the legislation that he got through the Senate Commerce 
Committee and through the U.S. Senate by a unanimous vote 
addressing the great concerns that we have as a nation and we 
have as a Congress about the very legitimate concerns about 
maritime and port security.
    Things have changed. The world is different since 9/11, and 
it is clear that all of the ports of the United States are 
potential targets for terrorist threats. We used to base most 
of our security at ports for incoming drug trafficking coming 
into our ports and that is obviously a continuing, very 
important task. But there is an additional task and that is the 
potential terrorism that could be perpetrated on all of the 
ports of the United States.
    Senator Hollings' legislation goes a very long way to try 
to bring in all of the competing factors, if you will, in 
coming up with a comprehensive management plan. And it is very 
clear that when everybody is in charge, nobody is in charge. 
And when we have local government, state government and federal 
officials, Coast Guard, and Customs and all of our federal 
agencies that are trying to do their jobs, there has to be a 
degree of coordination if it is going to be done properly and 
the way we want it to be done. So that legislation goes a long 
ways toward doing that.
    As Senator Hollings, the Chairman, has indicated, this is 
my fourth hearing. We had started off with hearings in Port 
Everglades in Florida and moved on to my home State of 
Louisiana where we had hearings at the Port of New Orleans and 
followed that up with hearings at the Port of Houston.
    The hearing today will mark the fourth port that we've 
toured or looked at. We'll be going to the West Coast later on 
during the spring time. It is really interesting, all the ports 
are different. All the ports are unique. And the good thing 
about Senator Hollings' legislation is that it recognizes that. 
This is not a one size fits all solution. The Port of 
Charleston is different from the Port of New Orleans. It is 
different from the Port of Houston.
    It is different from the Port of Long Beach in Los Angeles. 
And every port has their own difficulties and also have their 
own vulnerabilities. So one size doesn't fit all. And what the 
legislation truly calls for is a comprehensive plan developed 
at the local level with the Coast Guard and with the Customs 
and other officials involved with the state and local officials 
to come up with something that needs to be done.
    I won't belabor our comments, but I will tell you that I 
was most impressed with what we saw here in Charleston. Of the 
four ports, including my own in New Orleans, I think that you 
are far ahead of all of the ports that I have seen so far in 
coming up with a comprehensive plan about how this security 
question needs to be addressed. You have local support. You 
have volunteers. You have a coordinated effort. And it was a 
pleasure to see the good work that is being done.
    This is serious business. The risks are astronomical. One 
container can carry 60,000 pounds. One ship can carry 3,000 
containers. If you remember, Timothy McVeigh, Mr. Chairman, 
when he blew up the courthouse in Oklahoma City did it with 
15,000 pounds of explosives. One container can carry 60,000 
pounds and one ship can carry 3,000 containers. So the risks 
are really quite serious.
    It is really interesting to see what you're doing. We'll 
hear about that more and I just want to congratulate all the 
officials for an outstanding job that I think you have done so 
far and we'll have some questions from the testimony, Mr. 
Chairman. But before I forget, thank you for inviting me. I ask 
that my full statement be included in the record at this time.
    [The prepared statement of Senator Breaux follows:]

              Prepared Statement of Hon. John B. Breaux, 
                      U.S. Senator from Louisiana

    Senator Hollings, I wanted to thank you for scheduling this 
hearing, and also want to commend the people of Charleston and the port 
for helping facilitate our visit and our hearing.
    On any given day on Capitol Hill, as many as 20 congressional 
hearings can take place at one time. At these hearings, we call upon 
policy experts to enlighten us with new ideas for improving the safety, 
security and prosperity of our country.
    But it is good to get outside of Washington. We need to hear new 
voices with fresh ideas. Conducting these field hearings helps us learn 
more about the challenges facing local citizens, local governments, and 
local businesses as they try to improve the quality of life in their 
communities.
    And touring the places and facilities directly impacted by our 
public policies and new laws helps us learn more about what is 
happening on the ground--where the rubber meets the road--or, in the 
case of the Port of Charleston, where the hull meets the waves.
    I also wanted to add my condolences, congratulations and 
appreciation to Admiral Loy. I add my condolences, because Admiral Loy 
will be sorely missed; I add my congratulations and appreciation 
because he should be congratulated for his fine work in leading one of 
the premier maritime units in the world, and also know that he was 
appreciated for his efforts.
    As you mentioned, I recently took my Subcommittee on a road trip, 
or maybe more accurately road, plane, and boat trip. We visited 
seaports at Port Everglades, Florida, Port of New Orleans, and the Port 
of Houston. It really was an eye-opening experience. For instance, in 
my home state of Louisiana, we will have a huge challenge with port 
security. The Mississippi River bisects my state, and up and down the 
river for two hundred miles are a continuous string of ports, docks and 
waterfront facilities, many of them filled with explosive materials, 
hazmat, and petrochemicals.
    The size of these ships can hardly be imagined. While in New 
Orleans, I had occasion to board a freighter with Sea Marshal's 
boarding party coming into the City of New Orleans, and when on the 
bridge, we were looking down at most of the City of New Orleans, with 
two thirds of a mile of steel in front of us. These ships, while 
currently being the lifeblood to my state's trade and industry, could 
also pose to be a huge threat to my state, and ultimately to the health 
of this nation. When, we were forced to close down the airport system, 
we were able to regain complete control. Could you imagine what would 
happen if we were to be forced to exert the level of control over our 
maritime trade on the Mississippi River, that we did with our airports. 
It would take months, potentially wrecking thousands of industries.
    The Port of Houston was even more amazing. Our entire maritime 
system transports 25 percent of all hazardous materials and 75 percent 
of all petroleum used in the United States--and much of that cargo 
travels right through this area. Along the 52-mile Houston Ship 
Channel, there are 150 chemical plants, storage facilities and oil 
refineries. When we powered by down the Channel, I witnessed two 800 or 
900 foot propane tankers moored side by side, attached to a pipeline 
system that stretched back to a field of propane tanks, as far as the 
eye could see.
    When I asked what sort of security was in place, the Coast Guard 
responded that a security zone had been established, when I asked what 
that constituted, the response was that it was a notice to mariners 
that it was off limits. Well in essence, this sort of security is no 
more than a ``no trespass'' sign--obviously, this is not adequate given 
the risks. However, I also do not think that the entire blame rests 
with the Coast Guard, they do not have the assets to protect our 
maritime environment 24 hours a day seven days a week. This has to be a 
cooperative effort. The private sector has a role in securing their 
ships and terminals.
    We really need to get going on this issue, for instance, your 
average marine container can carry 60,000 lbs., and I would note, that 
Timothy McVeigh used only 15,000 lbs. of ammonium nitrate to blow up 
the Oklahoma City Federal Building. The Port of Charleston handled more 
than 1.5 million of these containers last year from all over the world, 
and yet Customs inspects less than 2% of these.
    S. 1214, the Port and Maritime Security Act is a necessary first 
step to start coordinating a system of security at our ports, but 
ultimately, it is going to require a lot of hard work here on the local 
level in places like Charleston.
    Mr. Chairman, I am currently in the process of working on a bi-
partisan bill of additional measures that I think will strengthen in 
further, the provisions of S. 1214. I was concerned after visiting in 
New Orleans, that the U.S. government is only tracking the progress of 
vessels in a very few places in the United States, despite the fact 
that technology is readily available to require GPS transponders to be 
carried, and vessels to be tracked once entering into U.S. waters. The 
technology is inexpensive, and not to allow the Coast Guard to keep 
track of shipping should not be an option.
    I am also concerned about the quality of information that is 
available to identify and verify both foreign vessels and foreign 
seamen, to ensure that they are who they say they are. We need some 
sort of international system to verify the status of the maritime 
industry, if we are to avoid leaving the door wide open to potential 
threats--again this is not that onerous a requirement. At a hearing I 
chaired last year, it was revealed that the Coast Guard alone, had 
identified over 1,000 seamen operating on board Panamanian vessels with 
fraudulent licenses. Close to two-thirds of the world's fleet operates 
under flags-of-convenience. Places such as Liberia, Panama, the 
Marshall Islands. These nations will have to take steps to ensure that 
vessels operating under their registries are not security risks to our 
nation.
    I also want to work with the Coast Guard to ensure that we can 
better protect security zones, and protect vessels who pose higher 
risks to the environment or to our security, or to the health and 
welfare of the public.
    We have too much at risk here not to move, and not to move fast, on 
policies that for the first time will coordinate protection and 
strengthen our maritime borders.
    Mr. Chairman, once again, I would like to thank you for scheduling 
this hearing, and I look forward to the testimony.

    The Chairman. Thank you. And it is not just the Oklahoma 
City, but we are all reminded of the fact that it was bin Laden 
who docked his ship in Mombasa, the Port of Kenya in Africa, 
where he offloaded explosives and blew up the Embassy in 
Nairobi, Kenya and the one in Dar Es Salaam in Tanzania where 
our constituent Bob Royal is now the Ambassador. I just checked 
and his new embassy will be ready in June. So we've got him all 
fixed up.
    One matter of point, with respect to port security, it was 
at our initiative, that of Senator Graham of Florida and 
myself, 2 years ago, that then President Clinton instituted a 
Port Security Commission study and brought together some 
seventeen federal agencies. They issued their report and we had 
hearings. Then the Congress changed to the new Congress. And 
again last year, we had hearings during the year and in 
August--August 2nd. That is prior, of course, to September the 
11th. We reported on a port security bill. Come 9/11 we had 2 
more hearings, then subsequently, in October reported our bill 
unanimously from the Committee and it passed the U.S. Senate 
unanimously, and as I have just noted, with the approval and 
endorsement of the Bush Administration.
    Having said that, let me recognize our first panel, the 
Admiral James M. Loy, the Commandant of the United States Coast 
Guard and the Honorable Robert C. Bonner, Commissioner of the 
United States Customs Service.
    Admiral Loy and Commissioner Bonner, we have your prepared 
statements. They will be included in their entirety in the 
record. You can sum them up or deliver them as you wish. 
Admiral Loy.

  STATEMENT OF HON. ADMIRAL JAMES M. LOY, COMMANDANT, UNITED 
                       STATES COAST GUARD

    Admiral Loy. Thank you, Mr. Chairman. Good afternoon, 
Senator Breaux. I am certainly honored to be with you today and 
to experience the morning's tour of the port. And I, too, was 
impressed with the coordinated efforts being undertaken here in 
the Port of Charleston and would offer that our national 
challenge is to find the best practices like we found this 
morning in Charleston and make them standard nationwide, and we 
will be about the business of trying to do that.
    With your permission, Mr. Chairman, I will offer my written 
statement for the record and focus just on a few points that I 
think is probably important----
    The Chairman. They will be included.
    Admiral Loy.--and press on. First, the notion of value and 
vulnerability as it relates to our ports, a couple of simple 
facts. The maritime industries of our nation contribute over a 
trillion dollars to the GNP of our country on an annual basis. 
Ninety-five percent of the non-NAFTA commerce that is carried 
to and from America come and go by ship. We have about 95,000 
miles of coastline to worry about in our country, three and a 
half million square miles of exclusive economic zone. Seventy-
five hundred ships, mostly foreign flagged, make about 51,000 
port calls in this country on an annual basis.
    Over 200,000 sailors find their way toward the United 
States on an annual basis. Six and a half million passengers, a 
billion tons of petroleum, 6 million containers per year in the 
seaways system, 16,000 a day finding their way to and from our 
country.
    Those simple facts, of which there are many others, lend 
this notion of both value and vulnerability to the seaport 
structure. 9/11 was all about an aviation issue and we have 
watched the Congress and the nation at large focus on the 
security implications to the aviation world since then.
    But as Senator Breaux mentioned and as Senator Hollings' 
bill is all about, the maritime end of our national system has 
perhaps greater value and clearly greater vulnerability and we 
must be about the business of dealing with that.
    Most of those numbers I think that I mentioned can be 
posted under both the value and the vulnerability column. Our 
challenge is to raise the collective security profile of our 
ports and waterways so the terrorist goes elsewhere for his 
target. How do we do that? I think it is about making very real 
investments. I think it is about making the kind of judgments 
that are already present in the Senate bill.
    I think it is about prioritizing very difficult lists and 
developing risk-based decision-making tools that allow us to 
deal as constructively as we can with this security challenge.
    Second, the dichotomy between balancing, continuing our 
commerce on the one hand and raising security profile on the 
other, the second issue that I think is enormously important. 
Much has been written about the issue of homeland security over 
the past few years, but much of it was very narrow in scope. 
Focusing on homeland defense as a function of the military, 
missile defense shields, for example, or from the narrow 
functional perspective such as the work of the Seaport Crime 
Commission which tried to look through just the crime prism at 
the seaports of our nation.
    The main exception to this narrow view is the U.S. 
Commission on National Security Strategy/21st Century, also 
known as the Hart-Rudman Commission. Their work, especially 
their work published in phase one of their report, presents 
this dichotomy between projecting a doubling or tripling of 
international commerce on one hand and the attendant sort of 
inference that we need to loosen our port structures to enable 
that to happen, and on the other hand, raising the security 
profile against what they called in their January 2001 report 
an asymmetric array of threats facing this country which in 
their minds require us to pay attention security-wise to 
actually tightening down our ports.
    So loosening them to generate commerce, tightening them 
down to generate security. That is the dichotomy that I think 
we have to be conscious about because anything that we do in a 
security profile business we must be conscious of the effort at 
the same time to identify the good guys and actually facilitate 
them through the system that we might build for greater 
security.
    The third point of four that I would make, sir, is about 
conceptualizing the border of the future. We should not be 
restrictive in our minds to what's going to help us today or 
tomorrow. Rather, we should try to literally think our way 
toward 10 or 15 years down the road, imagine what the border 
parameters, what the attributes of that kind of border system 
of the future should be and then build bridges in order to get 
there constructively. We've been working hard since 9/11 to 
understand what that border of the future might be. That is a 
border concept, what is it that we think would be necessary to 
balance that dichotomy of commerce on one hand and security on 
the other.
    Let me offer just a sort of short list of ideas that we 
might even develop in Q and A. First, I think the border of the 
future must be pushed outward, Mr. Chairman, such that we are 
not dealing with a linear border like is often that case 
between Canada over there and United States here. Rather, we 
need to press our borders out all the way to the points of 
origin of people and cargo and vessels or other vehicles that 
are coming toward the United States.
    I think a layered strategy of activity is ordered. We need 
to be aggressive at points of origin overseas. We need to be 
aggressive in terms of understanding what's happening in the 
maritime domain as they approach our country. We need to be 
concerned with our own seas, our own territorial sea and, of 
course, we still need to be very much concerned with the port 
of entries that actually cross our linear borders into the 
maritime sector that is in the ports of America, all 361 of 
them.
    There are notions about how we can do that, that I think, 
in fact, can be and have already been internalized in not only 
the Senate bill, but as you anticipate going to Congress, 
finding other good ideas that might find their way into the 
House bill and nurture them in Congress such that we get the 
very best initial step that we can take.
    We need to be very conscious of intelligence and 
information in the future, Mr. Chairman, as it relates to that 
border of the future and we need to find ways to fuse classic 
intelligence and commercial information in such a fashion that 
we have a much better picture of what is coming toward our 
country.
    Ideas such as international standards, biometric 
credentialing of people that are on our waterfronts and faring 
in our seaways, totally coordinated law enforcement efforts 
like you have applauded Charleston for this morning and the 
notion of visibility, vigilance and enforcement along our 
borders. Mostly on the land borders, of course, challenges for 
the Customs Service and the INS.
    And last, Mr. Chairman, what is the Coast Guard's role in 
all of this because I think I owe you that as part of an 
opening comment in the hearing. Since 9/11, we have been 
attempting to design a maritime security plan for the United 
States. There are five crucial points that I think are part of 
that. The first is about Maritime Domain Awareness, clearly and 
literally being infinitely more aware of what's happening in 
the waterways around us than we were on the 10th of September.
    The second notion is to control the movement of high-
interest vessels in our ports and waterways. And that varies 
from simply putting a pilot on board to adding sea marshals as 
necessary to escorting them literally from the seaboard all the 
way to their pier and back out.
    The third point is about critical infrastructure 
identification and protection and making absolutely certain 
that we have gone through that process of identifying critical 
infrastructure in our ports and determining who is responsible 
for their protection.
    Fourth, simple presence, an increased presence on our 
waterways. I think it has an enormous deterrence value on one 
hand and certainly a response capability value on the other.
    And last, outreach. We have made a concerted effort to 
portray our efforts of the future as an all-hands evolution. It 
should be about the kind of things that you witnessed in the 
Port of Charleston this morning. It should be about volunteer 
efforts. It should be about private sector efforts. It should 
be about federal agency efforts. It should be about state and 
local as appropriate.
    All of those have to be married together in a comprehensive 
port security plan for each port. I think we can nationalize a 
standard plan with attributes from a model port kind of effort 
that we are undertaking at the moment. Once that template is 
developed, then to run port vulnerability assessments on all 
the critical ports of our nation, develop an action plan from 
that and make that happen.
    There have been wonderful ideas emerge, Mr. Chairman, from 
our time already spent in the last 5 months. Whether it is 
about sea marshal, whether it is about marine safety and 
security teams, whether it is about how to go about the 
generation of comprehensive port security plans, those things 
are very much all in order and we're working very hard to 
finish them off.
    From the Coast Guard's perspective, as a military service 
and as a federal law enforcement agency, we are the right 
people for the law to hold accountable with respect to the port 
security of our nation. On the land side, the Customs Service, 
of course, has the lead with respect to cargo and with INS 
shares the responsibility for the people that are actually 
entering the system.
    But on the waterside facilities and on the waters of our 
ports and waterways, there is no doubt who the responsible 
agency ought to be. For over 211 years, we have been engaged in 
that kind of business for our nation, hopefully with the 
flexibility that can shift to the right emphasis as the right 
point in our nation's history. Today's emphasis is on an anti-
terrorism division.
    We are the ones who are very good at separating the guilty 
from the merely suspicious and we are the ones who size up each 
case and dispose of it based on a very complex array of things 
that might come to play on any given one of those 
responsibilities. We offer very scalable command and control 
cells and frameworks in our ports. Our captains of the port 
have very large and strong and legal authorities to deal with 
what is necessary for them to deal with. And our port security 
units and our marine safety and security teams will add teeth 
to that.
    We're the bridge to the Department of Defense, when 
necessary, if and when, God forbid, challenges in our ports 
call for us to pull from the Department of Defense the assets 
necessary to make that happen.
    Last, and perhaps the single most important issue, I 
believe the key to our future is how well we collect, analyze, 
and disseminate information in the future, Mr. Chairman. I term 
the challenge in the maritime sector Maritime Domain Awareness. 
We simply must make quantum improvements in our capability and 
willingness to collect and share information to a central 
fusion entity and then draw and act on the products that can be 
produced thereby. I make no pretenses to this challenge. 
Information is power. Mixing classic military intelligence on 
one hand and very private commercial information on the other 
will not be easy. But we must be about that chore to design 
what is necessary to do that well. It is the key, after all, to 
our national security in the future.
    We have led an effort at our intelligence coordination 
center in Suitland, Maryland, since January of 2001. I can tell 
you, Mr. Chairman, it got an awful lot busier right on 9/11 and 
thereafter. We have pushed a notice of arrival requirement for 
incoming commercial traffic to 96 hours. We have built a 
national vessel movement center. We produce tactical products 
daily for our field commanders and for our Navy brethren. If 
MDA, Maritime Domain Awareness, is about vehicles, in our case, 
ships, people and cargo, then information about those three 
elements will be the key to our future success. And by we, I 
mean America, not just the Coast Guard.
    Thank you, Mr. Chairman. I am enormously appreciative of 
these hearings, so that we can keep this challenge on the front 
burner and in the face of America's attention. Thank you for 
including me in our port tour this morning and I look forward 
to answering your questions.
    [The prepared statement of Admiral Loy follows:]

     Prepared Statement of Hon. Admiral James M. Loy, Commandant, 
                       United States Coast Guard

    Good afternoon Mr. Chairman and distinguished members of the 
Committee. As Commandant of the Coast Guard, I want to thank you for 
the opportunity to appear before you today to discuss the Coast Guard's 
maritime security strategy following the attacks of September 11th.
    It has been said that the future has a way of arriving unannounced. 
The future arrived suddenly, violently and without warning on a clear 
day in September. In past years our view of national security was 
projected mainly abroad, rather than within our own borders. Today, we 
suffer under the constant threat of terrorism as a means of coercion or 
retaliation, as much as the world already has, a reality that will no 
doubt continue well into the future.
    Prior to September 11th, the Coast Guard's efforts were directed 
toward executing and enhancing maritime safety and security, 
environmental protection, and homeland defense in addition to our other 
normal peacetime missions. However, September 11th marked a change in 
the comfort and confidence our American citizens had in their security 
and safety. Yet despite the obvious presence of the unseen enemy, the 
Coast Guard engaged in a massive response effort to protect our ports 
and marine transportation system (MTS). We also immediately escalated 
our force protection condition to protect our own people and 
facilities. The unique nature of the Coast Guard, as an agile emergency 
response-oriented organization, allowed us to immediately increase our 
security posture, using existing active duty, reserve, civilian, and 
auxiliary personnel; and existing shore units, ships, boats and 
aircraft. One of the biggest lessons learned from September 11th is 
that the nature of the threat facing all nations has changed 
dramatically. What we saw on September 11th was hijackers taking over 
commercial flights for the sole purpose of turning them into human 
guided weapons of mass destruction. We must translate that thought 
pattern and recognize the vulnerability of our maritime environment. We 
must change our assumptions underlying maritime security.
    As a nation that depends so heavily on the oceans and sea lanes as 
avenues of prosperity, we know that whatever action we take against 
further acts of terrorism must protect our ports and waterways and the 
ships that use them. The MTS of the United States handles more than 2 
billion tons of freight, 3 billion tons of oil, transports more than 
134 million passengers by ferry, and entertains more than 7 million 
cruise ship passengers each year. The vast majority of the cargo 
handled by this system is immediately loaded onto or has just been 
unloaded from railcars and truckbeds, making the borders of the U.S. 
seaport network especially vulnerable.
    Preventing another attack requires an understanding of the maritime 
dimension of Homeland Security and constant vigilance across every mode 
of transportation: air, land, and sea. The agencies within the 
Department of Transportation, including the U.S. Coast Guard, Federal 
Aviation Administration, Federal Highway Administration, Federal 
Railroad Administration, Federal Transit Administration, the Saint 
Lawrence Seaway Development Corporation, and the Maritime 
Administration (MARAD), touch all three modes of transportation and are 
cooperatively linked. This is especially true of the maritime mode. 
Ensuring robust port and maritime security is a national priority and 
an intermodal challenge, with impacts in America's heartland 
communities just as directly as the U.S. seaport cities where cargo and 
passenger vessels arrive and depart daily. The United States has more 
than 1,000 harbor channels, 25,000 miles of inland, intracoastal and 
coastal waterways, serving 361 ports containing more than 3,700 
passenger and cargo terminals.
    Simply stated, MTS is a complex transportation network, as is 
clearly evident with the activity right here in the Port of Charleston. 
Individually, the Port of Charleston ranks as the 4th largest container 
cargo port in the United States moving over 1.5 million twenty-foot 
equivalent units (TEU) annually. Approximately, 1.9 million tons of 
break-bulk cargo is handled in Charleston with an estimated annual 
cargo movement valued at over 33 billion dollars. The port complex 
continues to grow at an amazing rate. Current growth predictions 
indicate that container cargo will double in the next 20 years. The 
biggest challenge facing our MTS is how to ensure that legitimate cargo 
is not unnecessarily delayed as we and other nations introduce enhanced 
security measures against some very real and potent threats. The 
importance of the U.S. MTS and the priority placed upon it by the 
Department of Transportation cannot be overstated.
    I am very proud of the job our Coast Guard men and woman have been 
doing to deter potential future terrorist attacks in the maritime 
arena. Our people are working long hours, other important missions are 
being curtailed, and 25 percent of our total Reserve population has 
been placed on active duty. In the Charleston area alone, 44 reserve 
members have been recalled to assist in myriad port security missions 
such as the boarding and escorting of high interest vessels. However, 
this posture is not sustainable . . . nor is it an efficient or 
effective use of resources. Our challenge for the future is to 
determine what the new normalcy represents in terms of mission 
requirements and associated operational activity, while also ensuring 
that the Coast Guard is able to provide forces to meet its military 
service responsibilities. While the most pressing security challenges 
have been met with existing authorities, we now must work to build a 
network of protections--one that transforms what has been a rapid 
response into a sustained effort that recognizes heightened homeland 
security as a part of normal operations. In addition, marine security 
depends on the users of the system, shippers and operators, and affects 
the trade corridors they use.
    The intermodal aspect of the MTS requires the Department and its 
agencies with a stake in MTS to take a unified approach in addressing 
the expansive security requirements nation-wide. Through interagency 
collaboration and extensive partnering with public, private, domestic 
and international entities, tremendous steps have been taken to address 
the strategic gaps between the current and desired level of protection 
for our nation's ports and waterways. A key in this local outreach 
effort has been the continued engagement by the Captains of the Port 
with the private sector through such forums as the Port Readiness and 
Harbor Safety Committees, similar to the efforts ongoing here in 
Charleston. Since the attacks of September 11th, the Charleston 
maritime community has worked together to implement a Port Intelligence 
Team to assist in intelligence information sharing between local, State 
and Federal Law Enforcement agencies, in addition to scheduling and 
preparing for a massive port security exercise, Exercise Harbor Shield, 
in April, to evaluate the ports ability to respond to a terrorist 
threat. The teamwork and desire of the community to significantly 
enhance maritime security here in Charleston is exemplary. Equally 
important are partnering efforts with the international community. 
Recognizing that the maritime sector of the world's economy is the most 
valuable and the most vulnerable, at a recent International Maritime 
Organization meeting in December, the Coast Guard proposed the 
development of concrete actions that will enhance maritime security 
worldwide. These proposed international recommendations are key in 
intercepting threats before they reach our borders, thus extending the 
borders of our domain awareness, an awareness that was lost leading up 
to the attacks of September 11th.
    While effective homeland security is built upon the principles of 
awareness, prevention, response, and consequence management, the 
primary objectives are awareness and prevention, since we hope to avoid 
any need for future consequence management. Awareness helps focus 
resources and provides efficiency to prevention. Prevention places a 
premium on awareness, detecting, identifying, and tracking threats to 
our homeland security. However, once terrorists or the means of 
terrorism are on the move towards or within the United States, the 
nation must have the means to detect and intercept them before they 
reach our borders and our transportation system. While there are no 
guarantees, there is good reason to believe that we can improve our 
national ability to detect potential threats through effective use of 
information that is, to a great extent, already available. Exploiting 
available information to separate the good from the bad, and then stop 
the bad, is the heart of the Coast Guard developed Maritime Domain 
Awareness concept and overall Maritime Homeland Security Strategy. This 
strategy must facilitate legitimate maritime commerce, which is 
supposed to double in the next 20 years, while filtering threats by 
using real time intelligence.
    The goals of the Coast Guard's Maritime Homeland Security Strategy 
will be to:

   Build Maritime Domain Awareness.

   Control movement of High-Interest Vessels.

   Enhance presence and response capabilities.

   Protect critical infrastructure and enhance USCG force 
        protection.

   Conduct Domestic and International Outreach.

    In summary, the Department of Transportation mounted a significant 
and rapid response to this severe and unexpected threat. Notably, 
maritime trade, which is critical to this country's economic strength, 
continues to move through ports with minimal interruption. It is no 
surprise that sustaining mobility will come at a higher cost to all of 
us. But the reality is that we live in a country that prides itself on 
the openness of its democracy, so we remain at risk to attacks of 
terrorism. It is incumbent upon our government to minimize this risk. 
With your support, the Coast Guard shall meet this challenge and ensure 
that our nation's Marine Transportation System remains the very best in 
the world.

    The Chairman. Thank you, sir. Commissioner Bonner.

STATEMENT OF HON. ROBERT C. BONNER, COMMISSIONER, UNITED STATES 
                        CUSTOMS SERVICE

    Commissioner Bonner. Chairman Hollings and Senator Breaux. 
First of all, Chairman Hollings, I want to thank you for 
inviting me to testify here in Charleston today. And 
Charleston, as we saw this morning, is one of the premier 
seaports of our country. In fact, it is the--it is on an annual 
basis that--or something in the order of over 400,000 cargo 
containers are offloaded every year in the Port of Charleston. 
It is close to--well, it is well over a thousand a day 
containers that are unloaded at this seaport and it makes it 
the fourth largest--in terms of commerce in Charleston, it is 
the fourth largest seaport in the country.
    By the way, I am very delighted to be here too today with 
my partner in homeland security, and that is Admiral Loy of the 
Coast Guard. Let me say, Senator Hollings, that you have called 
our nation's seaports, and I am quoting you here, ``a gaping 
hole in our national security.'' And I couldn't agree more with 
that statement. And I want to thank you for having this hearing 
and for focusing our attention on the profoundly important and 
urgent issue of security of our nation's seaports.
    And it also focuses our attention, if I might say so, on an 
issue of what we must do to protect our country's seaports and 
our country from the introduction of terrorist weapons, 
including eventually weapons of mass destruction into or 
through our seaports. And also this hearing, it seems to me, 
focuses appropriate attention on a related issue, and that is 
what we must do with other nations to protect our global 
transportation system from exploitation and use by terrorist 
organizations, and to do all this, by the way, without choking 
off international trade that is so important to our country's 
economy, in fact, to the world's economy.
    I think we should recall that one of the expressed goals of 
the terrorist organization has been to target not only American 
lives, but American livelihoods, to target literally the 
American economy.
    Osama bin Laden stated as just that notion in his last 
diatribe or one of his diatribes from his cave in Afghanistan. 
And a terrorist attack at one of our seaports by concealing a 
terrorist weapon in a container would, of course, have far-
reaching consequences to the port and the surrounding 
community. And ultimately, it would disrupt, in my estimate, 
the global trade system that depends upon containerized 
shipping.
    And that, if that happened, of course, that would have a 
significant adverse impact on our economy as well as the 
world's economy. So I want to thank you, Mr. Chairman, for 
offering and passing through the Senate, along with Senator 
Breaux's help, S. 1214, the Port and Maritime Security Act.
    That bill, when enacted, will vastly improve seaport 
security in any number of ways. But among other things, S. 
1214, Mr. Chairman, will be a giant step in equipping the 
United States Customs Service with the tools and the technology 
and the information it needs to bolster our nation's defenses 
against international terrorism.
    It will greatly aid Customs' mission to protect and 
facilitate in our international commerce, but at the same time, 
ensure that cargo that is en route to the United States from 
foreign destinations does not pose a threat to our country. And 
that bill also will help Customs target and inspect high-risk 
cargo or goods, that is, cargo or cargo containers that pose a 
potential threat to our country.
    Since September the 11th, Mr. Chairman, the top priority of 
the U.S. Customs Service has been responding to the continuing 
terrorist threat at our land borders and at our seaports. Our 
highest priority, clearly, bar none, is to do everything we 
reasonably and responsibly can to prevent terrorists and 
terrorists weapons from entering our country through our 
customs inspectors and our canine enforcement officers who are 
doing just that, protecting and defending our country against 
terrorists and terrorist threats at all our ports of entry 
along the land border, as well as at our seaports.
    In addition to using, by the way--in addition, we're using 
the Customs Service's broad investigating jurisdiction to go on 
the offensive, and that is, to go after--go on the attack 
against terrorism by disrupting terrorist financing to limit 
them from doing it to Customs Service. And we're also using our 
customs special agents to investigate and deny international 
terrorist organizations the weapons, the tools and the 
equipment to be able to carry out and commit terrorist acts.
    At about 10 a.m. on September the 11th, the Customs Service 
went to what was called a level one alert across the country at 
all our border entry points. And because there is a continued, 
a real and continued threat that the international terrorists 
will strike again at our country, we remain at level one alert 
to this day and we're likely to remain at level one alert at 
the U.S. Customs Service at all the border entry points for the 
foreseeable future.
    Senator Breaux. Mr. Bonner, just to clarify that, I mean, 
some of the ports are level three--tell me they are at a level 
three. Which one is which?
    Commissioner Bonner. Well, the Customs Service has four 
threat levels, Senator, and so it doesn't necessarily 
correspond to the port threat level. But a threat level one is 
the highest level of security alert at the U.S. Customs 
Service. And that means that we scrutinize more people, more 
vehicles and more cargo coming in than at any other level. And 
it--one way I guess I would describe it, the ordinary level, by 
the way, before September 11th, was a level four, so we've 
moved up to our highest level of security alert at the Customs 
Service. And that is the highest level we can be at without 
actually shutting the borders down, which is the last thing we 
want to do.
    Admiral Loy. If I may, Senator Breaux, the cruise ship 
industries' levels are inverted in their numeric----
    Senator Breaux. I think we've got to use the same 
numbering.
    Commissioner Bonner. Exactly.
    Senator Breaux. In one area, a three is the highest and in 
the other one, number one is the highest.
    Commissioner Bonner. That, by the way, is an issue that is 
being looked at through the----
    Senator Breaux. That is a start.
    Commissioner Bonner.--Homeland Security Act. In any event, 
Mr. Chairman, in approaching the priority mission to prevent 
terrorists and terrorist weapons from entering our country, I 
couldn't agree more with Admiral Loy that U.S. Customs Service 
and the U.S. Government must do everything possible to push the 
border outwards. We need to expand our perimeter of security 
away from the national boundaries and toward foreign points of 
departure. This effort to push the border outward must include 
the involvement of the trade community. And, in November, I 
proposed a new Customs trade partnership against terrorism that 
will vastly improve the security along the entire supply chain 
from the foreign loading dock where those containers are 
stuffed and loaded by foreign vendors to our land borders or to 
our seaports.
    We're also working on the international front with our good 
friend Canada, for example, as illustrated by the 30-point 
smart border declaration and was signed by Governor Ridge and 
Minister Manley, Deputy Prime Minister Manley. As part of that 
plan, U.S. Customs and Canadian Customs are placing personnel 
at each other's ports in a hope in targeting and pre-screening 
cargo that arrives at one country that is headed for the other.
    For example, we're going to be in very short order, in a 
matter of weeks, appointing U.S. Customs personnel to Vancouver 
and to Halifax to work with Canadian Customs to target and pre-
screen containers that are being off-loaded there that are in 
transit to the United States. And last month, as another 
important step to push the border outward, I proposed a 
container security strategy to substantially reduce the 
vulnerability of cargo containers to the concealment or 
smuggling of terrorist weapons.
    I'd like to just take a couple of moments if I could and 
say a few words about this container security strategy or 
initiative. And first of all, as Admiral Loy mentioned, the 
vast majority of the world's trade moves in containers. Much of 
it is carried by ocean-going container ships such as you saw at 
the Wando Terminal here in Charleston.
    Nearly half of all the incoming freight to the United 
States by night, about 46 percent, comes in to the United 
States via ship, via vessel, most of that by containerized 
ships. So about almost half. The rest of it by about a little 
over 30 percent is coming in, moving across the United States 
either from Canada or from Mexico by commercial truck. And then 
you have about 20 percent that is arriving by air cargo or air 
shipment.
    But a lot of it is coming in by cargo vessel. And 
unfortunately, as Senator Breaux, you observed, the ocean-going 
cargo containers are susceptible to the terrorist threat. I 
think it was Senator Hollings who pointed out that it was last 
October that Italian authorities arrested a suspected Al Qaeda 
operative who was an Egyptian national who was literally living 
inside a sea container that was moving from Egypt through Italy 
to Halifax, Canada. That individual who was headed for Canada 
had airport pass security badges. And ominously, he also had an 
airport mechanic's credentials.
    The consequences, of course, would be far worse if 
terrorists were to succeed in concealing conventional 
explosives such as they use, or God forbid, concealing a weapon 
of mass destruction, even a crude nuclear device among the 
approximately 15,000 or 16,000 cargo containers that are off-
loaded in the United States every day. There are about 5.7 
million a year containers, sea-going cargo containers that come 
into the U.S. That is about 15,000 to 16,000 a day.
    The devastation if one of those containers did contain a 
weapon of mass destruction would be horrifying and the impact 
on our global economy would be severe. Much of the world trade, 
if that happened, much of the world trade, which as Admiral Loy 
pointed out, goes by ocean-going cargo vessel, by containerized 
ship, would stop. It would stop at least until we got a 
security system in place in which we had a reasonable assurance 
that containers being shipped to our country could not do harm, 
do not carry weapons of mass destruction.
    You know, it is very simple, I think, to state--it is 
harder to do--but we ought not to wait until that happens. As 
the primary agency for cargo security, U.S. Customs Service 
should know everything there is to know about containers that 
is headed to the Port of Charleston or other ports in this 
country before it leaves the Port of Rotterdam, before it 
leaves the Port of Singapore or Los Angeles or Newark or here 
in Charleston. I'd like to see the container pre-screened, 
targeted and pre-screened there; not here.
    There are just ten--if you just take the ten largest 
seaports outside the United States, the top ten mega-ports for 
containerized shipping, they account for nearly half, 49 
percent, of all the sea-going containers that are bound for and 
arrive in this country. These ten mega-ports include, for 
example, Hong Kong, Singapore, Rotterdam, Tokyo, Bremerhaven 
and some others. So if we started with those mega-ports and 
started with them, we should establish a new international 
security standard for containers in order to protect this vital 
system of global trading.
    The core elements of the container security strategy are 
first that we must establish international security criteria 
for identifying high-risk cargo containers that pose a 
potential risk, either containing terrorist weapons or 
terrorists themselves. And second, we must pre-screen the high-
risk containers at the ports of shipment, the ports of origin. 
In other words, before it is shipped to the United States.
    That simple concept, by the way, represents a revolutionary 
change in how countries operate and how Customs Services 
operate because currently, Customs Services around the world, 
including the U.S. Customs, target and inspect high-risk 
containers at the port of arrival, when they arrive here. And 
so what we're talking about is this situation where that is 
plainly not sufficient to protect against the terrorist threat 
and we need to develop a system that changes our focus and pre-
screens cargo containers before they head to the United States; 
in other words, before they leave those ports.
    The third element, by the way, of a container security 
strategy is that we must maximize the use of detection 
technology to pre-screen the high-risk containers. And you saw 
some of that inspection technology. You saw the gamma ray VACIS 
machine which takes an image inside a container. We must use 
that technology that already exists to pre-screen goods before 
they're shipped to the U.S.
    I wanted to just take a moment, if I could, and show you a 
couple of images that were taken by the VACIS machine. And I 
know both you, Mr. Chairman and Senator Breaux were able to 
take a look and see what a VACIS machine does. I am going to 
speak without the microphone.
    This is just to illustrate that--this, by the way, was a 
cab of a truck that was coming across the Mexican border. It 
was coming across the Mexican border. This is the cab of the 
container--of a truck. It is coming across the Mexican border, 
actually at Alta Mesa, California, and it went through the 
VACIS machine and it was one of the ones that we--it was based 
upon targeting. It wasn't based upon any specific intelligence.
    And the U.S. Customs Service operator of the VACIS machine 
noted two anomalies in the sleeping cab of this truck. Those 
two anomalies, one was under the mattress and one was in the 
ceiling of the sleeper part of the cab. And inside there was 
about 250 pounds of illegal drugs.
    Now, one of the reasons I wanted to show you this one was 
that the traffickers thought they were going to be very clever 
because with respect to this shipment, they actually shielded 
in lead to defeat the VACIS machine. The reality is the lead, 
like the drugs themselves, showed up like a sore thumb.
    This shows you--this photo shows you the--some of the lead 
shielding around the illegal drugs has been stripped away. In 
fact, I have a piece of this lead shielding here that they 
shielded this in. The reason I wanted to show you this--show 
you this photo is it relates to drugs.
    But we have inspection technology that if you had, for 
example, any kind of nuclear material, weapons-grade material, 
radioactive material that you were trying to bring in through a 
cargo container, that machine that you saw, that x-ray gamma 
ray machine that you saw will detect that as an anomaly, will 
show up and will give us a basis for going in and inspecting 
that particular shipment.
    By the way, if it weren't lead shielded, as you know, we 
have the--those personal radiation detector devices that will 
sound the alarm for any kind of radioactive material. The other 
thing, I think it might have been you, Mr. Chairman, you asked 
with respect to--with respect to a--one of these machines, 
would they show terrorists that might be hidden inside a 
container. And here--this is a shot, by the way--this was taken 
at Laredo, Texas, and this is a rail VACIS. We also have--we 
have a VACIS machine at the rail crossing down in Laredo, 
Texas. But it just shows you that this kind of x-ray and gamma 
ray technology, if you take it, I mean, it will show clear 
images if you have anybody inside one of these steel 
containers.
    So there is some important technology. What we want to do 
is to take that technology that the U.S. Customs Service is 
currently using to screen based upon a targeted risk those 
containers coming in to the U.S. and we would like to see the 
targeting and pre-screening take place at the foreign port 
before those containers are shipped here.
    Just one other thing, and that is part of the strategy 
would also include developing and using what I would call a 
smart container. Right now, these containers--these shipping 
containers, they're as dumb as a post. What we want to do is to 
make sure they have electronic seals on them and that they have 
sensoring devices so the importer and the U.S. Customs Service 
will know if anybody has tampered with that container, 
particularly after it has gone through the pre-screening 
process.
    Just one other thing. Let me say that effective use of this 
technology, Mr. Chairman, also depends on good targeting 
information. And that is accurate, advanced information about 
what is supposedly inside that container, who it is being 
shipped from, the country of origin, the consignee and other 
data. And your bill, Senator Hollings, S. 1214, will go a long 
way, first of all, in making it mandatory for the first time 
rather than voluntary that this advanced manifest information, 
the advanced information of what's in those containers will be 
supplied to the U.S. Customs Service and the U.S. Government. 
And it is going to take us a major step closer to where we 
ultimately need to be, and that is to have complete and 
accurate information on all incoming containers before they 
leave the foreign port and are headed to the United States.
    So let me just conclude by saying, because I know the 
Committee will have questions and I will be happy to answer any 
questions you have, Mr. Chairman and Senator Breaux, just let 
me conclude by saying that if we've learned anything from 
September the 11th, it is that we must be prepared for 
anything. And the Al Qaeda and other terrorist organizations, 
they used one component of our transportation system, 
commercial aviation, on September the 11th. It is not at all 
unimaginable that they will, or associated terrorist 
organizations, will attempt to use another, and that is our 
global trading system, using cargo containers.
    And we need to, in my judgment, enact S. 1214, Mr. 
Chairman. We need to act expeditiously to address this threat. 
I want to thank you for giving me the opportunity to speak.
    [The prepared statement of Commissioner Bonner follows:]

         Prepared Statement of Robert C. Bonner, Commissioner, 
                          U.S. Customs Service

    Chairman Hollings, Senator Breaux, thank you for your invitation to 
Charleston to testify on issues relating to the security of America's 
seaports. This is not only a city of great beauty, it is a place of 
great historical significance for U.S. Customs. Our presence here dates 
back to the very founding of the Customs Service, in 1789. The Bay 
Street Customs House, which the agency occupied in 1879 after nearly 
one hundred years in the Old Exchange Building, is one of the crown 
jewels of Customs buildings. It is matched only by our Customs House in 
New Orleans, and shares the distinction of having been completed by the 
same federal architect--Alfred B. Mullett, of the Department of the 
Treasury.
    The preservation of these historic landmarks and Customs' continued 
presence in them attests both to Customs' ties to the past and our 
commitment to the future of America's great seaports. And we have 
reason to be concerned that this future is in jeopardy, unless we take 
decisive action now to protect our nation's seaports, and the global 
transportation system upon which they depend, from the threat posed by 
international terrorist organizations.
    Let us recall that one of the express goals of the terrorists has 
been not only to target American lives, but to target the American 
economy. Osama Bin Laden stated as much in one of his last diatribes 
from his cave in Afghanistan. An attack on one of our seaports by 
terrorists would potentially have far-reaching consequences, not just 
for the port itself and surrounding communities, but for our principal 
system of global trade and the economy of our nation.
    For that reason, I want to thank you, Chairman Hollings and Senator 
Breaux, for authoring and passing S. 1214, the Port and Maritime 
Security Act of 2001. This bill represents a giant stride toward 
enactment of legislation that will equip the Customs Service with the 
tools, the technology and the information it needs to bolster our 
nation's defenses against international terrorism.
    I am confident that U.S. Customs will benefit greatly from this 
legislation, as will our partner in homeland security, the U.S. Coast 
Guard. Indeed, I am very pleased to be here with Admiral Loy to discuss 
a topic that is of such great importance to both our organizations.
    Since September 11th the top priority of the U.S. Customs Service 
has been responding to the continuing threat at our land borders, 
seaports and airports. Our highest priority is doing everything we 
reasonably and responsibly can to keep terrorists and terrorist weapons 
from entering the United States.
    Through our Customs inspectors and Canine Enforcement Officers, we 
are doing just that: protecting and defending our country against the 
terrorist threat at all our ports of entry, including our seaports. In 
addition, using our broad investigative jurisdiction, our Customs 
special agents are going on the offensive against the terrorists by 
attacking and disrupting their financing and denying them the weapons 
and equipment they need to commit terrorist acts.
    Since September 11th, Customs has been at a Level One alert across 
the country--at all border entry points. Level 1 requires sustained, 
intensive antiterrorist questioning, and includes increased inspections 
of travelers and goods at every port of entry. Because there is a 
continued threat that international terrorists will attack again, we 
remain at Level 1 alert to this day and will be at Level 1 for the 
foreseeable future.
    As part of our response, we also implemented round-the-clock 
coverage by at least two armed Customs officers at every Customs 
location, even at low volume crossings along our northern border. To 
this day, Customs inspectors are, in many places, working 12 to 16 
hours a day, six and seven days a week.
    To help ensure that Customs forms a coordinated, integrated 
counterterrorism strategy for border security, I established a new 
Office of Anti-Terrorism within the agency. I appointed an experienced 
security expert and senior military leader to head that office, who 
reports directly to me.
    Customs continues to lead the fight against terrorist financing, 
and against those who aid and abet terrorist organizations through 
financial support of their murderous activities. Last October we formed 
Operation Green Quest, a joint investigative team led by Customs and 
supported by the IRS, Secret Service and other Treasury Department 
bureaus, as well as the FBI and the Department of Justice. I am pleased 
to report that so far, Operation Green Quest has led to the seizure of 
approximately $13 million in suspected terrorist assets, 11 arrests, 
and the dismantling of a major middle-eastern money transfer network.
    Customs agents are also working diligently under Operation Shield 
America to monitor exports of strategic weapons and materials from the 
U.S. They are seeking to prevent international terrorist groups from 
obtaining sensitive U.S. technology, weapons and equipment that could 
be used in a terrorist attack on our nation. Since the inception of 
Operation Shield America, Customs agents assisted by the Department of 
Commerce have visited approximately 1,000 companies in the United 
States--companies that manufacture or sell items that may be sought by 
terrorists or state sponsors of terrorism. During these visits, our 
agents have consulted with these firms about what products of theirs 
may be of interest to terrorist groups, and how they can keep them out 
of the wrong hands.
    To help Customs officers in the field, I have also established the 
Office of Border Security. The mission of that office is to develop 
more sophisticated antiterrorism targeting techniques for passengers 
and cargo in each border environment.
    In approaching our primary mission to prevent terrorists and 
terrorist weapons from transiting our borders, I believe that Customs 
must also do everything possible to ``push the border outwards.'' We 
must expand our perimeter of security away from our national boundaries 
and towards foreign points of departure. We can no longer afford to 
think of ``the border'' merely as a physical line separating one nation 
from another. We must also now think of it in terms of the actions we 
can undertake with private industry and with our foreign partners to 
pre-screen people and goods before they reach the U.S. The ultimate 
aims of ``pushing the border outward'' are to allow U.S. Customs more 
time to react to potential threats--to stop threats before they reach 
us--and to expedite the flow of low-risk commerce across our borders.
    Any effort to ``push the border outwards'' must include the direct 
involvement of the trade community. In November, I proposed a new 
Customs-Trade Partnership Against Terrorism. I am pleased to tell you 
that we are entering into partnership with some of the biggest U.S. 
importers. This Customs-Trade partnership will vastly improve security 
along the entire supply chain, from the loading docks of foreign 
vendors to our land borders and seaports.
    The Customs-Trade Partnership Against Terrorism, or ``C-TPAT,'' 
builds on past, successful security models between Customs and the 
trade that were designed to prevent legitimate commercial shipments 
from being used to smuggle illegal drugs. The good news is that we 
already have much of the security template in place to protect trade 
from being exploited by terrorists. Our challenge now is to apply that 
to as broad a range of the trade community as possible.
    We are also working with our good friend Canada to harmonize 
security and commercial processing between our two countries--as 
illustrated by the 30-point ``Smart Border Declaration,'' signed by 
Homeland Security Director Tom Ridge and Canadian Deputy Prime Minister 
John Manley. Part of that plan includes placing U.S. Customs and 
Canadian Customs personnel in each other's ports to help in the 
targeting and pre-screening of cargo that arrives in one country and is 
headed to the other. To implement this initiative, I have directed that 
U.S. Customs inspectors be stationed in the ports of Vancouver, 
Halifax, and Montreal to assist in the targeting and pre-screening of 
cargo that arrives there and is destined for the U.S. In fact, that is 
happening as we speak. Likewise, Canada Customs will soon be stationing 
inspectors at U.S. ports such as Seattle and Newark.
    In addition to meeting part of the goals of the Ridge/Manley 
declaration, the placement of Customs inspectors in Canada is a first 
step in another core area of our efforts to ``push the border 
outwards,'' and that is implementation of the Container Security 
Initiative, or CSI. I proposed the CSI last month to address the 
vulnerability of cargo containers to the smuggling of terrorists and 
terrorist weapons.
    The vast majority of world trade--about 90%--moves in containers, 
much of it carried on oceangoing container ships. Nearly half of all 
incoming trade to the United States by value--about 46%--arrives by 
ship, and most of that is in containers.
    As significant as cargo container traffic is in the U.S., we are 
less dependent on it than many other nations--say, Japan, South Korea, 
Singapore, and the Netherlands.
    Unfortunately, oceangoing cargo containers are susceptible to the 
terrorist threat. You may recall the discovery by Italian authorities 
last October of a suspected Al Qaeda operative, an Egyptian national, 
living inside a sea container. He was headed for the Canadian port of 
Halifax, with airport maps, security badges, and an airport mechanic's 
credentials.
    The consequences would be far worse were terrorists to succeed in 
concealing a weapon of mass destruction, even a crude nuclear device, 
among the tens of thousands of containers that enter U.S. ports every 
day. The physical devastation and mass murder that would be caused by 
such an attack are horrible to contemplate. And the impact on our 
global economy would be severe. Much of world trade would simply grind 
to a halt as we struggled to develop and implement a security system 
that would provide assurance against another such attack.
    We should not wait for such a scenario to occur. As the primary 
agency for cargo security, I believe U.S. Customs should know 
everything there is to know about a container headed for this country 
before it leaves Rotterdam or Singapore for the Port of Newark, the 
Port of Los Angeles or the Port of Charleston. I want that container 
pre-screened there, not here.
    Just ten of the world's largest seaports are responsible for nearly 
half of all seagoing containers bound for the United States (49%). 
These ``mega-ports'' include Hong Kong, Singapore, and Rotterdam.
    Beginning with the mega-ports that export to the U.S., we should 
establish a new international security standard for containers in order 
to protect this vital system of global trade. The core elements of the 
CSI are the following:

   First, we must establish international security criteria for 
        identifying high-risk cargo containers that potentially pose a 
        risk of containing terrorists or terrorist weapons.

   Second, we must pre-screen the high-risk containers at their 
        port of shipment--in other words, before they are shipped to 
        the U.S.
      Let us consider this for a moment, and recognize that this simple 
        concept represents a major revolution in standard practice. 
        Currently, most customs services around the world--including 
        the U.S. Customs Service--target and inspect high-risk 
        containers at their port of entry, before they are introduced 
        into a country. This is a system that has worked for hundreds 
        of years, and is adequate to meet the ordinary threats 
        presented to customs services--such as the smuggling of 
        narcotics or the evasion of customs duties.
      But this system is not sufficient to meet the threat presented by 
        international terrorist organizations. This is for one simple, 
        yet sobering, reason--the threat presented by weapons of mass 
        destruction. Certainly, if a drug trafficking organization 
        wants to use a cargo container to smuggle cocaine or heroin, we 
        are content to seize those drugs here--at the Port of 
        Charleston, or at any other U.S. port. But if a cargo container 
        has been used to smuggle a weapon of mass destruction set to go 
        off upon arrival in the U.S., it may be too late to save 
        American lives and the infrastructure of a great seaport such 
        as Charleston.
      Accordingly, we must change our focus and alter our practice to 
        the new reality. Customs services around the world--including 
        the U.S. Customs Service--must screen high-risk cargo 
        containers before they leave their ports of shipment, and catch 
        weapons of mass destruction or other terrorist weapons before 
        they do their murderous damage to lives and to the global 
        economy.

   Third, we must maximize the use of detection technology to 
        pre-screen high-risk containers.
      Much of this technology already exists and is currently being 
        used by the U.S. Customs Service and other customs services 
        around the world to inspect cargo containers for weapons of 
        mass destruction. We have 4000 sensitive radiation detection 
        pagers and dozens of large-scale non-intrusive inspection 
        devices in use at ports across the country, including here in 
        Charleston. But we need more of this equipment, in more 
        locations around the country. The funds provided in the FY02 
        budget, and the FY02 Supplemental go a long way toward meeting 
        that need. This funding will permit Customs to purchase 16 more 
        Mobile VACIS systems, one of which will be added to Charleston, 
        along with a tool truck. Still more is needed, however. And for 
        this we look to the FY03 budget, and to the enactment into law 
        of a robust version of S. 1214, which also provides funding for 
        this equipment, among other things.
      But the use of such detection technology at our seaports is not 
        enough. The great international seaports--Rotterdam, Singapore, 
        Hong Kong, among other places--must also use this equipment to 
        screen for weapons of mass destruction before they leave those 
        ports. The very survival of the global shipping economy depends 
        upon this.

   Fourth, we must develop and broadly deploy ``smart'' boxes--
        smart and secure containers with electronic seals and sensors 
        that will indicate to Customs and to the private importers or 
        carriers if particular containers have been tampered with, 
        particularly after they have been pre-screened.

    As you can glean from this list, technology and information are 
essential to a successful container security strategy, and to our 
counter-terrorist mission in general. And to put it simply, the more 
technology and information we have, and the earlier in the supply chain 
we have them, the better.
    The effective use of technology depends largely on good targeting, 
for which we require advance information. Prior to September 11th, the 
Customs Service examined about 2% of incoming cargo to the U.S. That 
percentage is significantly higher now. However, to some the overall 
number of examinations may still seem surprisingly low in proportion to 
the vast amount of trade we process. Yet it is important to note that 
the cargo Customs selects for intensive inspection is not chosen 
randomly. In fact, it is the result of a careful screening process, a 
process that uses information culled from a vast database on shipping 
and trading activities known as the Automated Manifest System, or AMS. 
Using targeting systems that operate within AMS, we are able to sort 
through the cargo manifests provided to Customs by shippers and 
carriers, and pick out those that appear unusual, suspect, or high-
risk. It is a system that has served us well, but one that can and must 
serve us much better in light of September 11th.
    Without the enactment of S. 1214, the submission of advance 
shipping manifests will continue to be strictly voluntary. In some 
ports, notably this one, Customs obtains advance information on about 
97% of incoming cargo--one of the best rates in the country. We cannot 
rest our Nation's homeland security, however, on the vagaries of 
haphazard advance information that is often incomplete and sometimes 
inaccurate: Timely, accurate, and complete information is vital to 
homeland security, and we should mandate that the appropriate parties 
in the transportation chain provide it in advance, so as to permit 
Customs to determine whether a particular shipment warrants closer 
scrutiny. S. 1214 goes a long way toward accomplishing this. As such, 
S. 1214 takes us a major step closer to where we ultimately need to be, 
particularly for the CSI--and that is to have full information on 
incoming cargo before it even leaves the foreign port.
    In fact, by mandating advance information for outbound as well as 
inbound passengers and cargo, S. 1214 would expand on our successful 
efforts to require airlines to submit passenger manifests to our 
Advance Passenger Information System, or APIS, prior to departure. As 
part of our immediate response to September 11th, we promptly sought, 
and the Congress promptly enacted, legislation that made the submission 
of data on incoming passengers to Customs' Advanced Passenger 
Information System, or ``APIS,'' mandatory for all airlines. That law 
was passed last November as part of the Aviation Security Bill. 
Initially, I ordered all international airlines flying into the U.S. 
from abroad to submit advance passenger information to Customs, or face 
100% inspection of people and goods departing their flights. That way 
we were able to better secure advance passenger information on all 
incoming international flights before the new law took effect. And I 
want to add that Customs is prepared to deny landing rights to any 
airlines that seek to defy the new law.
    I also look forward to the completion of the Automated Commercial 
Environment, or ACE, which as you know is an extremely important 
project for the Customs Service. ACE, our new system of trade 
automation, offers major advances in both the collection and sorting of 
trade data. With ACE, we will not only be able to expedite trade across 
our borders, we will greatly enhance our targeting abilities. The 
system's advanced features will help our officers to pinpoint risk 
faster and more accurately, by allowing them to manipulate data in ways 
they simply cannot now.
    I believe ACE is so important to our efforts to defend against 
terrorists that I have proposed a four-year goal to finish the system. 
I realize the funding implications this may have on the present 
schedule for ACE, but I believe they are fully warranted to protect our 
country.
    We are also working with the Canadian and Mexican governments to 
improve information exchange and adopt benchmarked security measures 
that will expand our mutual border and reduce the terrorist threat to 
most of the North American continent. I mentioned the Ridge/Manley plan 
earlier in my statement and some of what it will do for Customs. We are 
working right now on an eight-point declaration with Mexico that would 
commence unprecedented cooperation and information sharing regarding 
incoming goods and passengers along our southern border.
    While these initiatives will bolster our defenses against 
terrorists, there are still many weaknesses. The events of September 
11th demonstrated that we must be prepared for anything. The terrorists 
have already exploited one key component of our transportation system: 
commercial aviation. It is not at all unthinkable that they will seek 
to target others, including maritime trade. I believe our seaports and 
the system of global trade they support are vulnerable, and I believe 
we must act now to address this threat. Thank you.

    The Chairman. Thank you. And thank you both. Admiral Loy, 
when an airliner operates--we track it constantly. 
Specifically, no airline or plane approaches the continental 
limits of this nation and is not picked up by radar and 
everything else at that time and constantly tracked through its 
journey, but we get good information from the pilots and we get 
good information from the shippers themselves, sometimes 
customs and otherwise, but there is no constant check of the 
movement of vessels. Or is there?
    In other words, in the dark of night, a vessel could come 
into the Port of Charleston, couldn't it, and not be concerned 
at all or--I know that is not likely, but it could happen. In 
other words, we do not have transponders. We have got them on 
planes, but we do not have them on ships I guess is a short 
question and answer. Should we have them?
    Admiral Loy. Sure, I believe we should. There is an 
international effort at the moment to make a carriage 
requirement for all shipping internationally that would 
conclude that process by 2008. I do not believe that is soon 
enough. We have just this past week been working over in London 
with the International Maritime Organization to accelerate that 
effort toward 2004 as the end date in which all international 
shipping would be required to carry that automatic 
identification system, that transponder you're describing. So 
that would allow us to--just to literally see, once we have the 
shore infrastructure in place to read the signal that would be 
emitted by that transponder. And that is an important part of 
making it happen over that timeframe.
    But your notion is right on track, sir, and we're trying to 
do that both as a national carriage requirement and more 
importantly if we can make that happen internationally in the 
timeframe that we would like to see it happen, that would be a 
good thing.
    The Chairman. I know we have got about 703 million to local 
ports to beef up security and we have got 3.3 billion in loan 
guarantees and everything else. But how about the Coast Guard? 
I know we're sort of behind the curve in the sense that 20 
years ago Senator Breaux extended the limits of the United 
States which extended the size of the United States by about 
\1/3\, but did not expand the Coast Guard by \1/3\.
    On the contrary, 20 years ago, we had the same personnel. 
Then I remember when I first got there 35 years ago, you didn't 
have any drugs. But now, superimposed not only on the standard 
200-mile limit, but we have got the expanded role of drugs 
checking and apprehension.
    So--well, put it this way. I would say--I have always 
learned that prior to 9/11, \2/3\, 65 percent of your time was 
spent on drugs. Now how much time are you spending on drugs and 
how much time are you spending on terrorism or are you going to 
get enough money to do what you're supposed to do and enough 
personnel?
    Admiral Loy. Sir, again, as you have heard me speak over 
the course of the last 4 years, I can look you in the eye this 
time and tell you that the 2003 President's request is a solid 
one. We have designed a 3-year process by which the eventual 
requirements that I think are appropriate for the Coast Guard 
to make our contribution to this all-hands evolution known as 
port security for our nation, we will grow to the point that we 
will be able to do that in 3 1-year segments.
    In 2003, we will grow by about 2,200 people. I think that 
is a good number in terms of executability. That is recruiting 
them, training them and bringing them in and making them a 
solid productive set of Coast Guardsmen. And over the course of 
the 3-year bill program, we will get to where we need to get. 
The notion of additional missions over time without an intended 
resource and head count and boat count as part of that is very, 
very true.
    Without attribution to our Senator Breaux and the guy 
responsible for it, who has well been a terrific supporter of 
our organization, let me just say that, yes, sir, coming up to 
2000, 2001, 2002, I was quite concerned as to whether or not 
the Coast Guard had the wherewithal to do all America expected 
of it. But the supplemental, the Fall supplemental that 
produced the $209 million supplement for us, the expected 
Spring supplemental added to the 2003 request will put us where 
we need to be by the end of 2003, sir, on this growth curve, if 
you will, that will get us over the course of that 3-year 
growth system to where we can make our contribution.
    The Chairman. Commissioner Bonner, you emphasized 
particularly with the experience and briefing we had this 
morning that intelligence is a sort of front line or the cellar 
door attack or defense against terrorism. We politicians, we 
say, well, wait a minute; we do not want to terrorize the 
people. So we say only 2 percent of all of these containers, 98 
percent chance of a terrorist coming through. Intervening, of 
course, is that we're going to check every one of the hundreds 
of thousands of millions of containers. That is never going to 
happen. I know that and you know that. So it is kind of like 
they say, it is the economy, stupid; now it is the 
intelligence, stupid. In other words, we're going to have to 
get the best of intelligence for the mission.
    I was impressed this morning with the intelligence and the 
use of technology and the coordination of effort and everything 
else that you have in the Customs Service. And frankly, I 
didn't know you were that sophisticated. Of course, you have 
kept us in the dark in Charleston and we had to borrow dogs 
from down in Camden. You say you were given two of those teams, 
now, of dogs?
    Commissioner Bonner. Well, I know that, but we will not 
only be getting a couple of our canine officers that are good 
detection dogs here in Charleston to assist in the Customs 
effort, but we anticipate that we--we should be able to nearly 
double the number of inspectors we have at the Port of 
Charleston. And based upon the--the terrorist 2002 supplemental 
as well as the President's 2003 budget if it is enacted, we 
expect to be able to put in something in the order of 30 
additional Customs inspectors here in Charleston, 30--15 this 
year, and another 15 next year.
    So, again, that is still contingent upon the 2003 budget 
being enacted and getting the funding. But you're right, 
Senator, in terms of the 2 percent. If I could comment on that 
for a moment. I have been hearing that quite a bit in the media 
that--with some alarm, that the U.S. Customs Service is only 
inspecting 2 percent of the cargo containers that are coming in 
to the country. And that is--that is somewhat misleading 
because it seems to assume that customs is just sort of 
randomly selecting out one out of every 50 containers to take a 
look at.
    The reality is that it is not just intelligence. We get a 
lot of information and have a tremendous amount of information, 
trade information, commercial information and mass information 
about the cargo containers that are coming in so that we can 
make a risk assessment so that we can target based upon risk. 
The containers we want to look at, the 2 percent, or actually 
it is more than 2 percent, but the ones that we want to look at 
are the ones that pose a potential risk, particularly security 
risk, that is for terrorist or terrorist weapons in particular. 
We are also all for looking at containers to make sure they do 
not contain any illegal drugs and the like. But we're taking a 
look and we're looking at inspecting containers based upon the 
risk and risk assessment.
    The second thing that we're doing is we're smarter about 
what we're looking at in terms of those containers. The second 
thing is as the result of some technology that Customs put in 
place that goes back now to 1995 that was principally designed 
and developed to give us better inspection capability of a 
container against illegal drugs. But we're using that same 
technology as is as effective to detect weapons of mass 
destruction and other kinds of explosive devices, chemical 
weapons, and the like that could be smuggled into the United 
States. We're using that technology. And that technology 
includes the VACIS machine which is a--actually, that is a 
gamma ray machine, but it basically give us an image of the 
inside of the container.
    And using those machines, we can inspect 20, 30, or maybe 
even up to 40 containers an hour as opposed to the old system 
that Customs had to go through which was actually to open the 
doors of the container, to physically search, which actually 
can take several hours per container. So we have got some more 
sophisticated equipment. And as you know, we're also using some 
radiation detector devices, as well.
    So we're being smarter about what we're looking at. And the 
important thing is that the U.S. Customs Service has enough 
personnel and it has enough technology and it has enough 
information and it has the technology to manage and manipulate 
that information so that we are looking at every container that 
poses a risk, particularly a security risk. That is what we 
need to do. And I think that we're a long way toward doing 
that.
    The Chairman. Well, both of the gentlemen here emphasize 
pre-clearance, pre-clearance. That is a sort of a two-way 
street. I can see Bernard Groseclose--I am going to get him 
here in just a little bit, but if they're pre-clearing 
everything in Rotterdam and then we can speed it up as it comes 
into Charleston, but what if Rotterdam says, wait a minute, 
pre-clear everything in Charleston going to Rotterdam? And that 
could sort of slow down and cost a heck of a lot more money. 
Has that been considered?
    Commissioner Bonner. Yes.
    The Chairman. That is a two-way street.
    Commissioner Bonner. And I think it is a two-way street. I 
think it has to be a reciprocal system. If you're developing a 
system that is secure, you need to make sure that all the 
countries with the ports and as many ports as possible you want 
in the system are doing outbound. And that would include the 
U.S., so we would be doing--screening outbound for cargo, cargo 
containers that are moving to Europe or to Asia and the like.
    So it will be--it is a revolutionary thinking in terms of 
how we would approach our business in a way. We would want to 
make sure that Rotterdam and Singapore and these other ports 
are targeting and pre-screening. We want to make sure that it 
is effective and to our satisfaction so that we do not have 
to--once that container has been pre-screened at Rotterdam, 
that we--it can speed right through when it hits the Port of 
Charleston. But by the same token, I think we have to be 
prepared to pre-screen outbound, as well.
    By the way, it is not a well known fact, but U.S. Customs 
Service actually does screen or pre-screen some outbound 
containers. It is a very, very small--it is under 1 percent, 
but we do screen outbounds right now. We screen outbound for 
what? Drug money that is leaving the United States, stolen 
vehicles.
    And, so, it is not totally unknown. But I think we need to 
be prepared to do it ourselves because that would be part of 
the system that would protect the--the global trading system 
which is the movement of almost all commerce between the 
trading nations by ocean-going container or container vessels.
    The Chairman. Well, it is premised on the port of export 
knowing the shipment, having to it the intelligence and that 
information and everything else regarding the shipment in this 
country. And in Rotterdam, having the knowledge of all the 
shipments there and Holland or wherever it is coming from. That 
is good.
    Excuse me. Senator Breaux.
    Senator Breaux. Thank you, Mr. Chairman. Thank you to the 
witnesses for their testimony. If I have learned nothing else 
today, I have learned that I will never use the phrase that we 
only inspect 2 percent of the containers or less coming in to 
this country because that is something that has been improperly 
characterized in the media and also by those of us who are 
outside of the government. And what we have learned today is 
nothing further could be from the truth than the 2 percent 
figure.
    If the terrorists and the smugglers are banking on the fact 
that we are ignoring 98 percent of the containers coming into 
this country, they're in serious trouble. And many of the 
things that you're doing, we cannot talk about publicly. I am 
very, very confident that the net effect of what we're doing 
gives you a much, much greater surveillance of the cargo coming 
in than 2 percent. That is a real misleading figure and I think 
the Chairman bore that out.
    Admiral Loy, you had said that the--the budget for this 
coming year, 2003, is a solid budget for the Coast Guard. I 
think that is correct. But the comprehensive plan that our 
Committee has adopted in the Senate and the House hopefully 
eventually will adopt is going to call for not just the Coast 
Guard doing some things, but it is going to call for port 
authority, local government, state officials to also be 
involved. The Coast Guard cannot do it by yourselves. And we 
have to have a comprehensive effort in port security.
    And I hope that the President's budget calls for more money 
for local governments, state governments, and port authorities 
to help be part of this comprehensive plan. And Senator 
Hollings and I developed, as the Senator said, $3.3 billion for 
loan guarantees and for additional allotments for grant money. 
How much?
    The Chairman. $703 million.
    Senator Breaux. $703 million for direct grants to the local 
ports and port authority. But do you think there's going to be 
potential to get some money to help the local folks in this 
area or not?
    Admiral Loy. Senator, obviously the purse strings are on 
Capitol Hill in respect to the distribution of those kind of 
moneys in reference to the first responders, if you will, in 
terms of funds capability or as part of the security profile up 
front.
    My notion as the fifth element in that five-notion plan is 
about outreach. We have to sit down with probably 40 or 50 
trade associations at the national level and we have 
encouraged, as you found a bit this morning, each of our 
Captains of the Port and their respective ports of the country 
to use their leadership on the harbor seating committees or the 
port readiness committees to reach out and help everyone 
understand that this, in fact, is all-hands evolution.
    Let me give you a couple of quick examples of what I mean. 
On 9/11, we sort of as an organization surged like our search 
and rescue instincts usually have us do. And we went from about 
2 percent of our budgeting capability, looking at port security 
on a daily basis on the 10th of September and before, to over 
50 percent of our budgeted capability as an organization.
    And where did we get that extra effort? We drew down our 
drug enforcement effort, fisheries enforcement effort and lots 
of other mission-related activity around the world and around 
our nation because the nation needed us to focus on port 
security on 9/11 and immediately thereafter. So we surged to 
infinite places like nuclear power plants. And for the first 
several weeks, it was the Coast Guard often providing waterside 
security to nuclear power plants while we systematically went 
about the business of seeing with the Nuclear Regulatory 
Commission that it was the lessee of those nuclear power 
plants, that was responsible not only for landside, but 
waterside security, as well.
    So we were able to remind them of that, to allow them to 
stand up that security profile and then we could back away from 
nuclear power plants and sort of go elsewhere. I would think, 
sir, that the most important all-hands evolution piece of 
information to get across at the hearing this morning would be 
that if you are a private sector owner of a container terminal 
or of a petroleum distillery or of a fill-in-the-blank, you are 
responsible for the security of that particular facility.
    The Coast Guard will, in fact, as you described, gain 
capability through the 2003 budget and hopefully the 2004 and 
2005 budget, as well. But as Senator Hollings mentioned, there 
is no way that Congress would ever be able to legislate enough 
resources to us to do the whole job.
    Senator Breaux. Nor should it. But the point is that the 
comprehensive plan for most ports in the United States are 
going to call for the local port authorities, state and local 
government combined to do more than they are doing now.
    Admiral Loy. And the private sector, as well.
    Senator Breaux. And the private sector, as well.
    Admiral Loy. Absolutely.
    Senator Breaux. And our bill has room for local force and 
local organizations to help them do that.
    Admiral Loy. Yes, sir.
    Senator Breaux. Are they going to have to pay for it by 
themselves or are they going to pay for it in conjunction with 
the federal government helping them?
    Admiral Loy. Yes, sir.
    Senator Breaux. And the concern I have, is the budget going 
to request any money for that at all? I mean, I hope they 
apparently will.
    Admiral Loy. There's nothing in our bill that offers a pass 
through in the way of grants or anything else in the 
President's budget that goes up. I could check and I would be 
happy to check with Governor Ridge for you, sir, and see how he 
is playing that very real requirement elsewhere in this----
    Senator Breaux. We're spending money like it was going out 
of style in Washington right now.
    Admiral Loy. Right.
    Senator Breaux. We are sending money to places that need 
it. I mean, New York City obviously----
    Admiral Loy. Sure.
    Senator Breaux.--is in great demand and justifiably so. And 
doing things with the railroad and bridges and everything else. 
And, of course, we are going to have to do something too. They 
are not going to be able to do it all by themselves.
    Admiral Loy. Yes, sir. One of the things I will point out 
that is in the bill very strongly is this notion of pulling 
together a comprehensive port security plan made up of a number 
of different pieces. The bill calls for vessel security plans 
or port facility security plans. And when the Captain of the 
Port gathers all the players around that harbor safety 
committee table to forge the comprehensive plan that we speak 
of, it will be quite clear from those two plan sets and the 
port vulnerability assessments that will be made as a result of 
our legislation that will give us the action plan necessary to 
press forward. How each and every item on that list is there--
is funded thereafter is the challenge you're describing, sir. 
And we'll have to get our arms around that.
    Senator Breaux. My final point is when you go to your 
International Maritime Organization, IMO, meeting in London--
when does it come up? Next week or so?
    Admiral Loy. The working session was last week, sir. The 
next scheduled discussion is in early May.
    Senator Breaux. I urge you to deliver them a very clear 
message that the United States, I think, is not going to accept 
the year 2008 for the requirement for ships calling on U.S. 
ports to have transponders. That is far too long.
    Admiral Loy. Certainly. That is exactly----
    Senator Breaux. Send a message from--I think from this 
Committee, I think he would agree, from the Chairman and I have 
the minutes available to do that, but we are not going to wait 
until 2008 to put a transponder--a transponder is a simple 
piece of equipment. So anybody who has a single engine airplane 
landing in Charleston has to have a transponder on their 
airplane.
    Admiral Loy. Yes, sir.
    Senator Breaux. And yet you've got a super tanker that is 
coming into ports all over this country with no transponder on 
them. You cannot track them. That is not acceptable anymore. 
Tell all your friends over there that.
    Admiral Loy. I thank you for the reinforcement on that, 
sir. You're absolutely right and our challenge is to also deal 
with the--there are several technical issues of making it 
happen well. There are frequency negotiations underway that we 
would appreciate any congressional support on to make sure 
those negotiations come out right. And, as I indicated earlier, 
the shoreside infrastructure to read those signals as they are 
being emitted is the other part we have to get done, as well.
    The Chairman. One point of clarification. That solid 
request of 2003, does that include still the moneys that we 
have to fence from 050, the defense budget, back over to the--
--
    Admiral Loy. The President's request assumes that there 
will still be about a $340 million task fund from DOD, yes, 
sir.
    The Chairman. Well, since I studied my humility, I am going 
to mend the rivers. When Commandant Merit is promoted to 
captain, which should be rather shortly, you're going to leave 
him here. He is doing an outstanding job. Isn't that right, 
Commissioner Bonner? Weren't you impressed?
    Commissioner Bonner. I was greatly impressed.
    The Chairman. And, I was greatly impressed with your 
Customs folks, but you had to bring them from all around. Just 
let them stay here, OK? You two gentlemen have really made the 
hearing for us at the Committee level. We thank you very much. 
We want to move on here with the next panel, if you don't mind. 
We will leave the record open for further questions.
    We next call on our two distinguished Mayors, Joe Riley of 
the City of Charleston and Keith Summey of the City of North 
Charleston, Mr. Bernard S. Groseclose, the President of our 
State Port Authority, Mr. Robert M. Burdette, Administrator of 
the Town of Mount Pleasant, and Major Alvin A. Taylor of the 
South Carolina Department of Natural Resources.
    You're not going to find any better Mayors than Joe Riley 
and Keith Summey. Mayor Riley, we have, as with all of these 
gentlemen, the statements. You may deliver them fully prepared 
if you wish or file them with the Committee and summarize them. 
Mayor Riley.

            STATEMENT OF HON. JOSEPH P. RILEY, JR., 
           MAYOR, CITY OF CHARLESTON, SOUTH CAROLINA

    Mayor Riley. Thank you very much, Senator. I have given a 
copy of my prepared statement, and I will be happy to briefly 
summarize them.
    The Chairman. Good. It will be a part of the record.
    Mayor Riley. Thank you, Senator Hollings for having us here 
in Charleston and thank you very much Senator Breaux for 
honoring us with your presence again. The Port and Maritime 
Security Act is a very typical Senator Ernest F. Hollings' 
action. It is a leadership, no nonsense, pragmatic, proactive 
response to the challenge.
    We saw Senator Hollings when we had Hurricane Hugo here in 
1989, the way he responded from Washington, understanding 
exactly on the ground, behind-the-scenes response that is 
necessary. And that is what this bill before Congress does for 
our maritime community.
    We all understand that 9/11 created a new world and that we 
have still got enemies. The fact is our enemies now realize 
that our battlefields are not going to be 4,000 miles away. 
Rather, the battlefields are now--they want them to be in our 
cities and in our harbors and in our communities. They want to 
kill our civilians, disrupt our freedoms, destroy our economy 
and our way of life.
    Just as they found--I believe this was said here today in 
this audience, that our aircraft port system was weak in terms 
of surveillance, they understand--could understand the same 
about our port and maritime system. We cannot let them do it. 
The Port Maritime Security Act gives us that protection. Every 
American citizen is owed the right that our ports and our 
places of entry are secure.
    Just a few thoughts from our local perspective. First of 
all, the local police, fire and emergency management systems 
must be seen as they are--America's front line troops. If a 
terrorist attack, an explosion, biological or chemical event 
happens in one of our ports, the first response will not be 
from the Army Special Forces. The first response will be from 
the police officers, firefighters, and emergency personnel in 
the local community.
    We must have the training. We must have the equipment. We 
must have resources for the additional manpower that recognize 
their federal growth. What the terrorists would wish for is 
that if the event occurs, that we haven't a capacity to 
respond, do not have the energy, do not have the manpower, do 
not have the training to respond so that their action creates 
the havoc and the destruction that they desire. It has to be a 
recognition that in terms of homeland security that our ports 
and port communities have substantial additional needs and they 
are serving substantial, additional national roles other than 
those in other communities that do not have ports and water 
entry within it.
    Some examples, our police, as you perhaps found out today, 
operate a water patrol. Our small city has 14 vessels of one 
size or form and we work very closely with Captain Merit I, 
too, hope, Senator Hollings, and the fabulous Coast Guard. Our 
dive team assists.
    When they have to inspect the ship and were concerned that 
there might be explosives underneath, it was the City of 
Charleston police officers, our trained dive team, our dogs, 
our bomb squads that respond. It would be wise to embrace that 
fact that those resources if available to the local level that 
are working in partnerships now need to be recognized and 
enhanced and supported so they have more equipment, that we 
have additional training, that we--that our role, our federal 
role and responsibility is recognized.
    Another point, the chief--our fire chief, Chief Thomas, 
which Senator Hollings knows very well, informed us that every 
hospital in a port community should have a decontamination tent 
or process. That is, it is obviously equipment that would be 
set up overnight, but if we have one of these events that we do 
not want to have, but if one happens, then the civilian 
population should have the ability to quickly decontaminate it 
and treat it at the available hospitals. That should be there 
and should be pro forma. And there should be additional 
training in the equipment. And one of our people, again, Chief 
Thomas said that the more flexibility and the more equipped, 
sometimes the guidelines that might be--that might fit the 
national standpoint do not fit the local medium flexibility.
    We also believe that there should be in every port a full-
time special response unit for that port with the manpower, 
equipment and training that is there 24 hours a day, 7 days a 
week so that that--immediately, that seconds after the event 
happens, that there is that unit facility that is available.
    Perhaps--this is nationally, not just locally, and I am 
sure this is being discussed, but our people feel that there 
needs to be a national terrorism phone number. There's got to 
be a number that the people call, not just law enforcement, but 
the average citizen. You know, it might even be more important 
in a rural community where you see the crop duster and some 
unusual looking person hanging around. People do not--do not 
know how to handle that kind of information. Our people do not 
have it.
    And in closing, Senator Hollings and Senator Breaux, 
unrelated to this, I guess, but Chief Greenberg asked that I 
please formalize our request that this area be recognized as a 
high intensity drug trafficking area. This is a designation 
that borders and ports can be given and because of the huge 
amount of cargo that comes through here, our community is 
subject to a much higher than normal threat of illegal drugs 
being imported and we ask for that consideration.
    We thank you so much for being here. We thank you for the 
wonderful leadership that you are giving our country.
    [The prepared statement of Mayor Riley follows:]

           Prepared Statement of Hon. Joseph P. Riley, Jr., 
               Mayor, City of Charleston, South Carolina
    One of the lessons we learned from September 11th is that we are 
vulnerable. Never before have we had to examine our resources in such a 
way to determine where terrorism can find a weakness. Prior to 
September 11th, we assumed that our airlines had everything under 
control, that our skies were safe and that we could respond to any 
event. Our assumptions have been wrong because we are dealing with an 
enemy who is cunning, organized, well funded and willing to die in 
order to destroy us. We must now appraise our resources and consider 
the risks around us.
    One of the vulnerabilities in Charleston is our State Ports 
Authority. A substantial contributor to our economy and a valuable 
state and national resource, it is imperative that we take steps to 
protect this agency and our citizens who rely on this facility and 
those who live in our area.
    The first 6-8 hours following a terrorist incident anywhere in our 
country are the most critical for the safety of our citizens. This is 
the very critical period before the arrival of any state or federal 
resources, so the initial emergency response depends on our local 
personnel and equipment. Certainly, The City of Charleston stands ready 
to assist the State Ports Authority with any incident that may happen 
by making all our resources available to respond for any request for 
assistance from the SPA, including our HAZ MAT Team headed by Chief 
Rusty Thomas of the Charleston Fire Department. In addition our Police 
Department under Chief Greenberg will make available any of their 
resources including the Maritime Patrol and Swat Team. Local EMS, Fire 
and/or Police will usually be the first to arrive upon the scene of an 
incident. It is very important that the spirit of cooperation between 
local agencies exists in order to bridge the time between the incident 
and the arrival of federal assistance. It is important to remember that 
an incident and the response necessary will be overwhelming. The State 
Ports Authority should keep the City informed of all potential or 
actual problems.
Important Issues to Consider
1. Initial Detection--The initial detection of an incident will occur 
at the local level by either EMS, Fire, Police or Port Officials. 
Consequently these first responders need to be trained to identify 
hazardous agents and take appropriate action. Funding for training of 
first responders would help to insure identification of a hazard, 
assessment of the situation and containment of the hazard. We are 
dealing with new threats and new hazards and the training must be 
adequate for all possible occurrences.

2. Security Assessment--An assessment of the security of potential 
targets is of the utmost importance in planning for a response to an 
incident. A review of Port to include the docks, and cargo loading/
unloading facilities is key in the preparation of a security plan. The 
identification of foreign vessels and their cargo should be included in 
this review.

3. Public Information--Information passed on to the general public in 
the event of an incident is crucial. Our citizens have proven that they 
will respond appropriately when they have timely, clear and decisive 
direction. Providing information about the incident along with 
instructions on evacuation, traffic restrictions, mass care, sheltering 
and self-aid will give our residents the information they need to 
respond and will have a positive effect on the public's perception of 
the incident and its handling by officials.

4. Shared Information--Information on potential threats and suspected 
activities must be shared by organizations involved. While it may not 
be possible to prevent all incidents the sharing of information can 
insure that organizations are at their highest state of readiness if 
necessary. As we have seen, the sharing helps put together the puzzle. 
One agency may have a piece of information that allows other 
information to make sense and possibly prevent a tragedy.

5. Mutual Aid--Where at all possible organizations should enter into 
formal Mutual Aid agreements. This will insure that the local resources 
that will be stretched from the immediate response during an incident 
can be supplemented as quickly as possible.

    Thank you for the opportunity to express the concerns that we have 
on the local level. It is important for us all to understand the 
challenges we have as a result of September 11, 2001.

    The Chairman. Thank you. Mayor Summey.

              STATEMENT OF HON. R. KEITH SUMMEY, 
        MAYOR, CITY OF NORTH CHARLESTON, SOUTH CAROLINA

    Mayor Summey. Thank you, Senator Hollings and Senator 
Breaux. It is a great pleasure that my community, North 
Charleston, South Carolina accepts the invitation to provide 
comments concerning Senate bill--S. 1214 and other general 
issues surrounding seaport security.
    Security features. The proposed legislation will provide 
much needed improvements for the security of the U.S. borders. 
Many of our concerns will be answered in the legislation. And 
these include security features. Providing appropriate 
guidelines for fencing and surveillance will assist the 
adjacent communities as well as the ports.
    Inspection of cargo. Adding Customs inspectors and agents 
will increase the inspection sequence of materials. And with 
only 3 percent of containers being inspected, additional agents 
are very essential to this transpiring.
    On-board ship personnel. We are pleased to see that the 
legislation addresses information and background requirements. 
Traditionally, once Customs clears the vessel, these 
individuals move about our community without restriction, and 
the legislation places some guidelines on this.
    Security at private terminals. The South Carolina Port 
Authority maintains an active police force. Its ranks may have 
been reduced over time, but at least it is responsible for on-
shore incidents. Some of the private terminals have inadequate 
or do not have any onshore security and the legislation begins 
to address this, as well.
    Background checks of on-shore personnel. It is encouraging 
to see background checks with restrictions for new or 
continuing employment. This piece of S. 1214 will aid the 
community in many other ways regarding those folks while they 
are within our communities.
    Coordination among various agencies dealing with ports. We 
are pleased to witness a requirement for improved coordination. 
Customs, Coast Guard, United States Department of Agriculture, 
and the local State Ports Authority Police provide services to 
the port, and appropriate coordination can only strengthen our 
local security. There is no place for turf wars on this issue. 
It has to be completely coordinated.
    Coordinated access to the waterfront. This will also assist 
in controlling security. Many individuals have direct access to 
the waterfront activities without any security checkpoints.
    Manifest of cargo. We agree with the requirement to provide 
information on the products entering our communities. If an 
incident arises with cargo, the local authorities are usually 
called to assist. A few years ago, our municipality was called 
in to the local port to handle a chemical spill. This chemical 
agent became unstable with humidity and water. Our police and 
fire departments were involved with this effort and our fire 
department maintained a command post in the site for 3 months. 
We would ask that some provisions be made to include 
notification of cargo, especially chemicals, and be made in 
advance to the local authorities. Even correct placards on the 
containers would be helpful. Chemical issues, such as this, 
could be organized by groups unfriendly to our country.
    This legislation is a great step forward for improving 
security at the ports in the U.S. It will have some secondary 
effects. Our area has been designated as a HIDA area, High 
Intensity Drug Area. Improved security at the ports will assist 
also ancillary with the war on drugs.
    We work well with both the Coast Guard and Customs locally. 
With increased efforts for security, local governments would be 
called upon taxing our resources. Federal grants and other 
financial assistance, such as reimbursement for expenses, 
should be considered in the bill.
    Another item for consideration is the efficiency of the 
ports versus security. Each port must buy into the improved 
security measures with enthusiasm. All of the ports in this 
country compete against each other for cargo. They must not 
allow the need for efficiency to take precedence over security.
    Will we be able to have some influence in foreign ports to 
improve their security measures? Certainly we must take care of 
our ports first. However, improved security in all ports is 
essential.
    We appreciate the opportunity to provide input into this 
very important piece of our homeland security. Thank you for 
your consideration and we look forward to working with you.
    The Chairman. Thank you very much.
    Mr. Groseclose is the President and CEO of our South 
Carolina State Port Authority. You and your organization have 
already made this hearing successful, and we really are 
indebted to you. I recognize Mr. Groseclose.

  STATEMENT OF BERNARD S. GROSECLOSE, JR., PRESIDENT AND CEO, 
              SOUTH CAROLINA STATE PORT AUTHORITY

    Mr. Groseclose. Thank you, Chairman Hollings and Senator 
Breaux. We have more pleasure in having you up here today to 
see the Port and what's going on in Charleston. It is my 
privilege to be here today in my role as President and CEO of 
the South Carolina State Port Authority. The Authority, as you 
may know, is an enterprise agency of the state and operates, of 
course, not only here in Charleston, but also in Georgetown and 
Port Royal. We are the fourth largest container port in the 
United States, as has been mentioned earlier, and also a port 
of strategic significance to our country. Therefore, most of my 
comments will reflect that particular conduct. I assure you 
that security at all of our terminals and communities that 
surround them remain foremost in all of our planning.
    In today's security-conscious time, the Port of Charleston 
benefits from years of security awareness. This awareness led 
the authorities to invest millions of dollars in high-mass 
lighting and customs-approved fencing, and most importantly, in 
a well-trained and professional certified police force. These 
are the basics, and many ports do not have these things to 
build on, as you have seen, as you've moved around the country. 
The theft prevention and drug smuggling efforts of yesterday 
are the first steps toward more in-depth anti-terrorist 
measures that are needed today.
    In 1998, Senator Hollings and Senator Graham began to push 
for more awareness of drug smuggling through our nation's 
ports. The U.S. Interagency Commission on Crime and Seaport 
Security visited the Port of Charleston, and both listened to 
waterfront leaders and shared their thoughts on these issues. 
The Model Port Concept is evolved from that Commission, and the 
South Carolina State Ports Authority Police began reviewing the 
same situation in light of that Model. We developed a 3-year 
plan designed to meet or exceed those standards where gaps 
existed. These plans included enhanced access control, off-
terminal parking for those who did not require a vehicle 
onsite, vehicle decals, a color-coded visitor pass system and 
an ID system for Port Authority employees. The new Ports 
Authority computer-based ID system has the capability of 
controlling access to specific areas of our facility for each 
individual once it is fully implemented. That system can also 
be applied to non-Ports Authority employees by category.
    It was about this same time that Senator Hollings also 
worked with the Port to provide some shipboard firefighting 
training for our local fire departments. And our local law 
enforcement, HAZMAT and fire departments are excellent and have 
always worked very closely with the Ports Authority to fill any 
special needs that we have. I would like to take this 
opportunity to publicly thank them and our community leadership 
for their continuing effort and cooperation which will be ever 
more important as we move forward for security enhancement.
    Being alert to theft and drug practices cannot fully 
prepare a facility for terrorism issues. Not only did the 
actions of 9/11 change the priority, but they also created the 
need for instant action. They added pressure for three key port 
security elements. The first, Senator, long-term solution is 
identification of persons with access to port terminals, either 
from land or water. Two, a means to restrict those persons to 
their appropriate area. And three, better intelligence 
concerning the cargo entering or leaving a port by truck, train 
or vessel. Port personnel have the main responsibility for 
controlling access of individuals from the land side and work 
very closely with Customs, the Coast Guard, INS, and USDA to 
properly handle port interfaces with cargo, crew, and 
passengers from the water or from the land.
    Charleston is fortunate the ships that call are from the 
world class liner companies who have entered the world net and 
whose ships and crews are frequent repeat visitors to our port. 
I compliment Customs for being as up to date on shippers and 
receivers of the cargo as their limited resources and systems 
will allow.
    The current concept of extending our U.S. boundaries or 
pushing back our borders as has been mentioned so that Customs 
and the Coast Guard are involved in receiving the cargo before 
it goes on board a ship is very positive. This could be a very 
strong method for knowing what is coming into our country in 
time to do something about it. Ports, in general, around this 
country, I believe, will applaud this forward-thinking idea.
    At the State Ports Authority here, the Port Police have 
been on high alert since September 11. They check the photo ID 
of every person coming in the gates. New decals and visitor 
passes have been put into effect. We have color-coded the 
passes and decals coordinated with the terminal and the site 
that is being visited. All Ports Authority employees currently 
wear their new ID badges. Advance notification of visitors is 
required and the police follow up to ensure the person is 
expected. Although every vehicle entering the gate cannot be 
physically searched without disruption of commerce, an 
increased number of random physical searches are being 
conducted of cars and trucks at port security gates.
    The ID card system with computer-controlled access is in 
place for Ports Authority employees. However, rolling it out, 
the remainder of the waterfront community must await standards 
and guidance as to background checks. It is currently illegal 
for Ports Authority Police to run a routine background check on 
those other than its employees. It also is counter-productive 
to start a process without knowing the types and requirements 
of background checks. The system can be extended to those 
waterfront workers who require regular terminal access once we 
have a firm understanding that the rules governing ID cards and 
the physical and legal capability to conduct background checks 
is required. A federal standard needs to be in place to avoid 
states moving to resolve this issue individually. I feel it is 
vital that Congress act on port security to avoid duplicative 
or conflicting planning. Therefore, I applaud the Senate's 
action, and join the many who urge rapid consideration of this 
legislation in the House.
    The major issue which would benefit from national control 
is that of proper IDs. Currently, the traffic control terminal 
could be from many states and they call a few times a year or a 
number of times a day. As mentioned today, we have over 100 
different trucking companies on a given day who are sending 
drivers in and out of our ports facilities there. Since there 
is a national standard for a commercial driver's license, it 
would be reasonable to extend that national standard to create 
a more improved type of ID card. This card could be read by 
port computer ID system and is designed to show the type of 
background information the federal government prefers. To have 
a trucker stop at each port to get a port ID is too time 
consuming and to have to undergo a background check at each 
port would clog the police systems and be unfair and expensive 
to the driver or his company. A busy port like Charleston has 
thousands of trucks a day at each of its four terminals, and 
the gridlocks of a port-by-port or even state-by-state system 
the truckers would cause would be overwhelming.
    On the other hand, we would not advocate a nationwide ID 
system for all port workers because a worker at one port does 
not automatically have a reason to visit or enter another port. 
The shipping and port business is highly competitive and no 
port would allow any individual to enter its facility without 
proof that there was a business reason to do so.
    The Port of Charleston has undergone external and internal 
security vulnerability assessments and depending on the final 
federal guidelines, it is comfortable that it knows what it 
needs to do to enhance its security. The Ports Authority is 
proactively working with the Coast Guard to participate in 
training exercises and tests. We are researching the most 
advanced security resources and technology that will help us in 
the fight against terrorism. The issue is certainly not 
willingness to change, but the ability to pay for that change 
and the need for firm direction as to the type of change that 
is required.
    We need one reasonable and proper standard with flexibility 
to address different needs at different ports. We need funding 
assistance to do what we know we have to do. And certainly your 
bill, S. 1214 meets these needs both in direction and funding 
and we strongly support that. It gives the ports the ability to 
develop a plan that fits their needs and serves the security 
priorities of their communities and their nations.
    Here in Charleston we know our weaknesses and we want to 
correct them. We know we need better perimeter control and 
radiation detectors. We need more cameras and intrusion devices 
and we need more staff, to give a few concrete examples. We 
also need the direction and ability to proceed with appropriate 
ID systems for all persons requiring regular access to our 
facilities. We appreciate that S. 1214 helps to provide the 
funding to make these changes quickly. Although they speak for 
themselves very clearly, I add my support to those federal 
agencies such as the Coast Guard and Customs who must have the 
funds and the resources to expand their visibility capabilities 
and their intelligence-gathering capabilities. This is 
certainly a key to our mutual success. They are doing an 
excellent job now given their resources, but as we all know, 
they are stretched to the maximum. In addition, I strongly 
support funding for our local port groups, the area's fire, 
police and HAZMAT units. They will also need extra help. We 
have an excellent and cooperative relationship with local and 
federal agencies here in Charleston and admire the work that 
they have been doing.
    On a final note, I am a member of the MTS National Advisory 
Council, which was sworn to provide advice to Secretary Mineta, 
and we are sorry that he could not be here today. But I want 
you to know that port security has been a major issue for 
discussion in the National Advisory Council and something that 
will continue to be of greater importance than before. We 
certainly encourage in your future hearings as you discuss the 
replacement of TEA-21 and the idea of a SEA-21 and so forth 
that we would certainly be supportive of those efforts.
    Chairman Hollings and Senator Breaux, we at the South 
Carolina State Ports Authority applaud your effort. We will 
work with you fully to accomplish these vital issues. We urge 
the House, also, to follow through on this bill with all 
possible speed. We thank this Committee and especially you, Mr. 
Chairman, for working to provide us the tools both in 
legislation and in funding which we need to do the job. We must 
strive to provide proper port security and we want to make the 
Port of Charleston a flagship for those others.
    Thank you for your attention and I welcome any questions at 
this time.
    The Chairman. Very good. Thank you. Mr. Burdette.

 STATEMENT OF ROBERT M. BURDETTE, TOWN ADMINISTRATOR, TOWN OF 
                 MOUNT PLEASANT, SOUTH CAROLINA

    Mr. Burdette. Good afternoon, Mr. Chairman and Senator 
Breaux. My name is Robert McPherson Burdette. I am the Town 
Administrator for Mount Pleasant, South Carolina, and I am 
appearing on behalf of Mayor Harry M. Hallman, Jr. and the 
Mount Pleasant Town Council. Mayor Hallman sends his warmest 
regards. I think he is back at his office plotting against 
Mayors Riley and Summey to try and get the HL Hunley there. 
Senator Breaux, Mount Pleasant is pretty much everything you 
see on that side of the water. I lead somewhat of a double life 
in that when I am not just the Town Administrator for Mount 
Pleasant, I am also a Colonel in the U.S. Army Reserve, 
assigned to First U.S. Army as the Emergency Preparedness 
Liaison Officer to the State of South Carolina. My testimony 
will draw from both my civilian and military careers as well as 
from interviews with the chiefs of our police and fire 
departments.
    First, Mount Pleasant is a bedroom community of 50,000. The 
Wando Welch Port Terminal, located on the Wando River, is 
bordered on three sides by the Town of Mount Pleasant, even 
though the port itself is not in the corporate limits. 
Interstate 526 serves the Welch terminal. There is one two-lane 
road leading to and from the port from I-526. A residential 
community of over 5,000 is located within one-third of a mile 
of the Welch Terminal gate, with the closest neighborhood being 
literally a stone's throw from a large container yard.
    S. 1214 is a major step in the right direction in 
addressing port security issues, particularly in regard to 
incident prevention and incident response. The emphasis on 
planning and preparation is noteworthy. The Town of Mount 
Pleasant has an outstanding working relationship with the U.S. 
Coast Guard. The Port Captain and his staff communicate well 
with our police and fire department commands. Moreover, by 
virtue of my position as Emergency Preparedness Liaison Officer 
for First U.S. Army, I am an ex officio member of the local 
Port Readiness Committee, and attend those meetings, which also 
address security, on a regular basis.
    While S. 1214 provides a sound foundation for developing a 
better port security approach, it may not go far enough in 
certain areas. First, the Act, as well as the objectives of its 
operating elements, does not seem to recognize that most of our 
ports are surrounded by dense to moderately dense urban and 
suburban populations. These residents and businesses are 
generally ignorant of port operations and are, for the most 
part, not aware of the potential threat posed by incidents, 
accidental or intentional, that may occur on or around these 
facilities.
    For instance, I am told that the Wando Welch Terminal is 
one of the few ports on the East Coast certified to receive and 
ship explosives. An assessment of this threat to surrounding 
areas, to my knowledge, has never been completed. I would 
suggest that security assessments include threat assessments to 
surrounding populations due to the types of shipments that are 
authorized at U.S. ports.
    Second, the Act refers to the need to involve local 
government agencies in port security planning. This cannot be 
emphasized enough. One of the most significant problems to date 
is that local law enforcement agencies only receive 
unclassified information from federal agencies regarding 
terrorist threats. We realize that sensitive information in the 
wrong hands can create huge problems and pose great risk to law 
enforcement agents. Nevertheless, with over 300,000 local law 
enforcement officers in the United States, local government law 
enforcement constitutes a major effort in preventing incidents 
by good solid police work, but we do need the information in 
advance. At some point, federal law enforcement is going to 
have to trust local chiefs of police and sheriffs if we are to 
eradicate the terrorist element in our midst. We have a need to 
know, if necessary, establish a process where directors of 
local law enforcement can receive security clearances, and then 
hold them responsible for this classified information just as 
you would an officer in the U.S. military. Moreover, all of our 
law enforcement agencies in the vicinity of the port need to be 
able to communicate. To this end, resources are needed to equip 
the agencies with compatible communications equipment. 
Currently, all law enforcement agencies cannot talk with one 
another effectively during an emergency.
    Third, while it may be implied, I saw no mention of the 
Army National Guard in the Act's provisions. This must be 
included specifically. The National Guard departments of our 
states have certainly proven valuable in enhancing our airport 
security, and I would suggest they have a major role to play at 
our ports and harbors. They must, however, receive additional 
appropriation to make the kind of contribution that is needed.
    Next, I wish to turn my attention to incident response and 
consequence management. Through the direction of the Department 
of Defense, the South Carolina Army National Guard has 
established the 43rd Weapons of Mass Destruction Civil Support 
Team near Fort Jackson, South Carolina. This team, commanded by 
LTC Randy Clayton, is one of the 22 like units throughout the 
United States established to detect chemical and biological 
agents and to assess overall threat to any incident. The South 
Carolina unit was recently certified by the Department of the 
Army to carry out its mission. I respectfully submit that the 
greatest threat for chemical, nuclear, and biological attacks 
may be through our ports and that augmentation of this unit 
near our ports and harbors perhaps should be considered. 
Currently, it would take 3 to 4 hours for the 43rd Civil 
Support Team to arrive in Charleston and be prepared for 
testing and analysis. While local governments have some 
detection and analysis capability, none have the capability of 
the Weapons of Mass Destruction Civil Support Teams.
    Last, I will speak specifically about the Port of 
Charleston. When the U.S. Navy abandoned the Charleston Navy 
Base and Shipyard, it took with it most of the portside and 
waterside firefighting capability that was available to 
Charleston harbor. At one time, we had over 1,000 trained 
shipboard firefighters in the Charleston area. Today, the local 
governments of Charleston have 96 trained shipboard 
firefighters. Moreover, the Navy took most of the equipment 
that is necessary to attack ship and portside fires. We must 
now rely on commercial tugboat companies and limited U.S. Coast 
Guard support for response. We have little or no foam 
firefighting capability. I would suggest that assessments of 
port security include local firefighting capability and 
hazardous material response capability, and that the Congress 
should address equipment, manpower, and training through an 
appropriation.
    We are also concerned about cutbacks to our Customs agents 
in Charleston, who in the past, have had as their primary 
responsibility, the Charleston Port. We understand that as many 
as five Customs agents in Charleston have been temporarily 
reassigned to other missions as a result of the 9/11 tragedy. 
Talking about security will simply not be enough. It must be 
resourced and, of course, that costs money.
    If we are to have secure ports, an investment must be made 
at the local, state, and federal levels. I hope that the 
assistance will not be in the form of mandates that are 
unresourced. Any bill that requires a commitment of manpower 
and equipment to achieve security of our ports must be 
accompanied by a funding package.
    Senator Hollings, Senator Breaux, I wish to thank you for 
allowing me the honor of presenting this testimony today and I 
will be glad to answer your questions.
    The Chairman. Very good. Major Taylor.

              STATEMENT OF MAJOR ALVIN A. TAYLOR, 
         SOUTH CAROLINA DEPARTMENT OF NATURAL RESOURCES

    Major Taylor. Senator Hollings and Senator Breaux, I too 
would like to thank you for giving us the opportunity to come 
and speak here today. I do not think there's a person in this 
room whose life wasn't changed after the events of September 
11. And I know it changed mine. It made me look on my own 
border, look at the security of ports and maritime security, to 
look at things in an entirely different way than I did before 
that time. And what I am going to do today is maybe give a 
little different look at my idea of maritime security.
    We have heard a lot today about the Port of Charleston. We 
must realize we have three ports in South Carolina. The Port of 
Charleston has one-fourth the most assets with the major base 
located right here at the Coast Guard. But we also have Port 
Royal in Beaufort County and Georgetown Port in Georgetown 
County, two ports also high on the list for security needs.
    When you look at maritime security, you have to remember 
that South Carolina is a floating state. We are fourth in the 
country in registered motor boats, and we have a lot of people 
who spend a lot of time on the water. We have 20 access points 
where someone could gain access to our state from offshore. 
Nineteen of those have immediate access to the intracoastal 
waterway. At any point in time someone can come in, not 
necessarily to the Port of Charleston, may come in at North 
Edisto River with the intention of ending up in the Port of 
Charleston or they may even be going to Savannah.
    So, in thinking about maritime security, we have got to 
take a little bit outside the globe that we have been talking 
about and expand it. What we have looked at today is a small 
portion of what we need to be looking at when we talk about 
maritime security.
    It is my hope, and I know it will be, that S. 1214 will be 
another good partnership bill that we had parts in before. Two 
prime examples, one just recent JEA agreements that were made 
possible through gentlemen from the Commerce Committee where we 
were able to have funding that would help us in the protection 
of our federal fisheries.
    When that passed, we had no idea how important it would be 
to master security. Because we have been able to have funding 
through a state and federal partnership for fisheries 
enforcement, now we are offshore, where we weren't before. And 
it couldn't have happened at a better time.
    We heard Admiral Loy speak of how they changed some of 
their missions; their missions have been redefined. Now, their 
No. 1 priority is national security and immediate search and 
rescue, emergency search and rescue. So someone had to backfill 
the mission that was traditionally theirs. And now, because of 
a joint enterprise agreement or state and federal partnership, 
we have been able to backfill for the Coast Guard and the 
states have been able to move in and do fisheries enforcement 
so the Coast Guard could spend more time on national security.
    And that in itself is a security mission. I will give you 
an example. Just a few weeks ago, my officers were monitoring 
an offload of a longline vessel. They were in the hull of the 
boat measuring fish. About 3,000 pounds of fish came off the 
boat and they were down in the bottom watching every fish, 
making sure everything was OK. When the boat had been offloaded 
and they started looking around a little bit, they found a 
secret compartment in the hull of the boat and in that 
compartment were about 300 pounds of fish filets. OK, they were 
fish filets. Good federal fisheries case. My point is, it could 
have been something else. It could have been explosives. It 
could have been biological. It could have been a number of 
things that would affect our national security and it was being 
brought in by a boat that was traveling just a few hours, a few 
days earlier was 80 to 100 miles offshore.
    Last year, our commercial fishing vessels made over 10,000 
trips offshore. That is out of our rivers, bays, sounds, 
harbors, ports offshore for up to 100 miles, 200 miles offshore 
and then back in.
    We talked this morning about HIV vessels, High Interest 
Vessels. And what is a High Interest Vessel? Is it just a cargo 
ship that may have a particular cargo on it or is it possibly 
some other vessels that are traveling offshore and then are 
coming back in? I think those are things we have got to expand 
and look at.
    It could be fishing vessels. It could be recreational 
vessels. It could be--25,000 recreational trips last year out 
of the rivers and sounds of South Carolina. We have 142 public 
landings just in our six coastal counties. At any point in 
time, someone could put a boat in the water and they could be 
right in the Port of Charleston, the Port of Georgetown or the 
Port of Port Royal, just by trailing the boat and putting them 
in in a public-access area.
    Over 100 marinas have overnight sleeping capabilities, 
plenty of places for people who want to have access to our 
state. And that is true of all states. It is not just South 
Carolina. Lighthouse Bridge, just south of Charleston, opened 
5,000 times last year to large vessel traffic coming in and out 
of the Charleston area. So those are vessels that are 
traversing the state every day. Again, that is true of all 
states, especially along the Atlantic seaboard.
    So what I would propose is that yes, maritime security and 
port security are extremely important, but it is a bigger 
picture than just some of the things we have talked about. We 
have got to think about security on a big picture, not just on 
the ports themselves.
    Another example of a state and federal partnership that has 
just been an excellent partnership has been that of our use 
for--that we have had in Breaux-Hallman, maybe just Breaux-
Hollings.
    Senator Breaux. No, in that case, it is Hollings-Breaux.
    Major Taylor. Hollings-Breaux. And, you know, it has been 
very helpful. And again, when all this was put on paper and put 
down, we never thought the effect it would have for us here in 
South Carolina as it deals with security. Simply, now we can 
use these funds to help the Coast Guard in search and rescue 
missions. Put people in boats, put them on the water, just 
through having both that funding available to us.
    Now, I use those two examples of federal and state 
partnerships to show how I feel that S. 1214 I think should 
work. And I think it should be a way to fund funds to state and 
local agencies so that they can step up to the plate and be a 
player, which is what we want to be.
    Last year, our officers had 17,000 boating hours just in 
our coastal area. That is a lot of time on boats. Shortly after 
9/11, the Coast Guard had the security zone from the Naval 
Weapons Station. It didn't take them but a day or so to realize 
that this was a big deal because it was taking a lot of time 
and a lot of manpower and a lot of hours to get the job done. 
That is why we have this partnership.
    I cannot say enough for the local Coast Guard men and 
women. We have the best working relationship I think we have 
ever had since I have been here. I, like you, Senator Hollings, 
would like to see them stay. And that, in itself, is a problem 
that maybe Admiral Loy and some of his people could look at in 
the future, because just as people begin to get to know an 
area, you get good working relationships and then in another 
day or so, they are gone, and there's a new crew coming in who 
have to learn each other, we have to learn the area all over 
again.
    Thank you for your time. Thank you for having given us the 
opportunity to speak and we strongly support S. 1214 and urge 
that it move forward as soon as possible.
    [The prepared statement of Major Taylor follows:]

             Prepared Statement of Major Alvin A. Taylor, 
             South Carolina Department of Natural Resources

    Since the tragic events of September 11, all law enforcement groups 
have redefined the mission priorities within their respective agencies. 
The South Carolina Department of Natural Resources, Law Enforcement 
Division is no exception. We have modified our efforts and priorities 
making the security of our state and nation a priority goal. We must 
send a strong message that our ports, harbors, waterways, power plants, 
bridges, coastline, and water intake facilities are protected and safe.
    Traditionally, our officers have been responsible for the 
enforcement of our state fish, game, and boating laws. In 2001, our 
coastal marine patrol officers were involved with:

    1) 9,000 cases
    2) 17,000 boating hours
    3) 500 search and rescue hours

A FULL TIME JOB!
    The United States Coast Guard (USCG) has also redefined its 
mission, with Homeland/Port Security now being their number one 
priority. Fisheries and recreational boating enforcement are still 
important missions for the Coast Guard, but are second in importance to 
their security mission. These enforcement activities must now be 
shouldered by the State. We anticipate that these changes within the 
Coast Guard will be long term, and at some level permanent.
    In 1999, the South Carolina Department of Natural Resources (SCDNR) 
entered into a Joint Enforcement Agreement with the National Oceanic 
and Atmospheric Administration (NOAA) to expand SCDNR's enforcement 
authority into federal waters off the coast of South Carolina. Officers 
of the Marine Patrol district were certified as deputy National Marine 
Fisheries Service (NMFS) agents that were empowered to enforce federal 
fisheries laws off the coast of South Carolina.
    With this agreement in place with NMFS, the Coast Guard can now 
take their near shore assets, and shift them from fisheries to security 
in the ports, while SCDNR assists with fisheries enforcement. This 
enforcement activity by the state also serves as a deterrence to 
terrorist activity by providing a law enforcement presence on the 
waters adjacent to the state.
    In January 2002, DNR Marine Patrol officers monitored the 
offloading of a long line fishing vessel that had returned from fishing 
eighty to one hundred miles offshore. At the conclusion of the offload, 
a secret compartment was discovered in the vessel. This compartment was 
filled with illegal fish fillets. This secret compartment could have 
contained explosives or other items that could have been used by 
terrorists.
    In addition, these fishermen could be approached to smuggle in 
various items. An increased law enforcement presence would deter this 
kind of activity. The commercial fisheries industry in South Carolina 
landed 2.4 million pounds of fish in 2000. There were two hundred 
eighty-eight charter and head boat permits issued, which resulted in 
over ten thousand trips offshore. Total recreational offshore trips 
were estimated at twenty five thousand one hundred twenty-one. All of 
these fishing trips leave our harbors, bays, sounds, and rivers, go 
offshore and then return. Any of these could be a security concern.
    Along the coast of South Carolina, there are many bays, sounds, and 
navigable rivers from which one can gain access to South Carolina. 
There are twenty navigable entrance points where boaters can gain 
access to South Carolina and then on to the Intercoastal Waterway 
(ICW), which transverses the entire coast of the state. There are one 
hundred twenty-two public launching sites and one hundred marinas 
located in the six coastal counties. There are one hundred commercial 
fishing docks from Little River to Hilton Head, South Carolina. These 
areas are patrolled by SCDNR Law Enforcement officers. Many of these 
coastal rivers extend inland and so do our enforcement needs. There are 
many launching sites on these inland rivers where a boat can be 
launched and then travel downstream into the port. We also need to be 
aware of inland dams, i.e. Santee Cooper, that could create major 
problems down stream, and into the port if broken.
    South Carolina is the home of three commercial ports, Beaufort, 
Charleston, and Georgetown. The United States Coast Guard relies 
heavily on enforcement officers from SCDNR to assist in security in and 
around these port sites. However, commercial shipping in our ports is 
not the only maritime threat to South Carolina. The waterways and ports 
of South Carolina provide unlimited opportunities for access. The 
Limehouse Drawbridge located on the Stono River (ICW), south of 
Charleston opened five thousand, eighty-eight times in 2001 for large 
vessel traffic.
    Maritime security is a greater issue then just security in the 
port. As you have seen, there are many opportunities for one to gain 
access into the state through the marine environment. These areas need 
a law enforcement presence, which in turn will act as a deterrence.
    Since September 11, SCDNR coastal officers have participated in the 
following activities:

    1)  In the Beaufort areas we have increased water patrols around 
the Marine Corp Air Station, Parris Island Marine Corp Training Center, 
Harbor Town Marina, and access areas to the Savannah ports. We have 
also provided security escorts for vessels using the port. This amounts 
to over eight hundred additional hours of patrol time during this 
period.

    2)  In Charleston, officers are regularly patrolling train 
trusses, bridges, and marina areas, as well as assisting the Coast 
Guard with marine escorts of passenger vessels in and out of the 
harbor. DNR officers have also completed approximately one hundred 
thirty-five hours of USCG training on boat tactics and security 
escorts. This amounts to over six hundred hours of training and patrol 
time during this period.

    3)  In Georgetown, SCDNR officers have performed water patrols 
adjacent to 3-V Chemical Plant, Winyah Generating Power Station, major 
bridges, and two major water intake systems. Officers have also 
assisted in the escort of vessels in and out of Georgetown Harbor. This 
amounts to over four hundred hours of patrol time during this period.

    This work has been completed while these officers continue with 
their traditional responsibilities. These activities performed by state 
officers allow the Coast Guard to focus their efforts on security 
issues. Any enforcement by state officers enhances national security 
because of their law enforcement presence on state waters. To fulfill 
our obligations to both port/maritime security, and boating/fisheries 
enforcement, additional assets will be needed in the areas of 
personnel, equipment, and operating revenue. S. 1214 will go a long way 
towards insuring that Federal, State, and local enforcement agencies 
will be able to have proper personnel, train and equip those officers, 
and have sufficient funds and authority to support this mission. 
Without this support we may literally run out of gas. Everyone is 
stretched thin and doing all they can possibly do, both inland and 
along the coast. Support of this nature is desperately needed!

    The Chairman. Thank you very, very much, Major Taylor, for 
the valuable contribution. We have got to think, as you say, 
broadly.
    Mayor Riley, I just learn more every day. But you asked for 
a number, a national number on counter-terrorism should we have 
any idea or suspicion of it. And we were given this by the 
Coast Guard this morning. Homeland security, if a terrorist 
event has occurred or is imminent, call the National Response 
Center, 1-800-424-8802. So that, you've already got that, I 
think. I think that is the number that the FBI is using, the 
Coast Guard, Immigration Service, and everyone else.
    Specifically, Mayor Riley and Mayor Summey, do you think 
law enforcement, local law enforcement ought to be put under 
FEMA?
    Mayor Riley. No, sir.
    The Chairman. Mayor Summey, do you think those people, 
local law enforcement, ought to be put under FEMA?
    Mayor Summey. Senator, in my recollection, you're the 
expert on FEMA.
    The Chairman. Well, you know, that fellow James Lee Whitt, 
he cleaned it up. It is an outstanding service now.
    Mayor Summey. I think the major issue is that most issues 
involving local law enforcement are local issues.
    The Chairman. Right.
    Mayor Summey. And so the majority of the time, I think we 
need to be trained to react to the events that are happening in 
our country today so that they can be the backup and the 
assistant responders in cases of an emergency like this. And 
you know, some of the issues that we deal with on a daily 
basis--you know, I talked about the containers being properly 
marked as to the type of chemicals and what have you. The 
majority of the containers coming into the Port of Charleston, 
whether it be at Wando, whether it be at downtown Charleston, 
or whether it be in North Charleston, leave the area by rail or 
truck through North Charleston.
    And we did a study last year. In a 1-year period of time on 
I-526 between Plymouth Ferry exit and I-26 exit off of I-526, 
there were 108 accidents in that year involving commercial 
vehicles. And you know, within 100 yards of the two-mile 
stretch of that section in North Charleston is residential and 
commercial property with people. And when we respond to these 
accidents involving these commercial vehicles and a lot of 
times they do involve a truck containing chemicals, we need to 
be able to know exactly how to respond, whether we need to 
evacuate people if it is a spill or what have you.
    And so, there's a lot of challenge that we must cross-train 
with the Port Authority and the Customs folks so that we are 
trained in how to deal with these things as they come more and 
more through our community.
    The Chairman. Yeah, and there would be a rare occasion for 
those 108 accidents along that highway for Federal Emergency 
Management Administration to be called. It would be the local 
police. And there was a method in my madness to that question 
because what we have confronting us right now in the Congress 
is a recommendation by Governor Ridge and the President to the 
effect that the law enforcement folks be put under FEMA. 
There's a fancy twist to this thing. It is called the First 
Response Team, and the first responder goes under FEMA.
    Now, the truth of the matter is that over the last several 
years, we have had down, down, down, the lowering of the 
incidents of crime. The crime rate has been down, down with 
community policing, and it has worked. And I had that 
particular budget, my little Appropriation Subcommittee, and we 
have got trained--we have got five, six schools now for that 
local law enforcement training and everything else there in 
addition to the FBI Academy, a cultures development--when Bob 
Mueller came on as the new head of the FBI, I said for goodness 
sakes, get your act together and get with local law--he talked 
to local law enforcement chiefs and he said just that. We cut 
out all of this arrogance and nonsense now and we are going to 
have in close proximity the law enforcement--close coordination 
with local law enforcement officers.
    And that was met with tremendous approval and I have 
watched that develop. And all of a sudden get under FEMA, while 
I have the highest regard now for FEMA, because as I say, Mr. 
Whitt straightened it out, and as far as I know, Mr. Albough 
has done a good job up there in New York particularly and 
everything of that kind, but that is not the first response.
    The first fellow we wanted at Oklahoma was the FBI to try 
to--and we did it--as a result trace down the culprit and 
convict him. And I just do not want to see with the good 
programs that we have got and the coordination and the culture 
and all development of the Department of Justice, the FBI, 
local law enforcement, all of a sudden put those programs under 
the Federal Emergency Management Administration. Do you have a 
comment, Mayor?
    Mayor Riley. Well, Senator, that would be a terrible 
mistake. The ability, the leadership, the Chiefs of Police in 
working with the community, the people that they have, that is 
a fabulous resource community connected that in a time of great 
tragedy, opposite--that would be the opposite thing to do, to 
divorce that from the connection of their responsibility for 
the community or for the preparation of it.
    What we do need is to recognize the role that we have for 
our communities and for our country and make sure that it is--
your question was to the director of Customs and to the head of 
the Coast Guard, to make sure that the resources are available 
for these groups and for the community as far as the additional 
manpower. But the last thing you want to do is short circuit a 
community, a built-in ready community response.
    The Chairman. Well, I have been in the forefront with 
respect to our firefighters.
    Mayor Riley. Yes, sir.
    The Chairman. Together, we put in the firefighting academy 
insurance department. When I got to Washington, we changed over 
and put in the federal firefighting entity there. And, in fact, 
that was in the 1960's and they'd pull the box, the firemen 
would come and they would shoot the fireman, but he would get 
nothing. If you shot an FBI man, he got a $50,000 death 
benefit. So I changed that. So I have been on the firefighters' 
side and more recently a cosponsor, as we know now, we have got 
local assistance, particularly for the volunteer fire 
departments as well as the established departments. And the 
Governor Ridge recommendation is for the first response, namely 
law enforcement and firefighters would be put under FEMA.
    Mayor Riley. That wouldn't work. That just wouldn't work.
    The Chairman. You do not think so either?
    Mayor Summey. No, sir, I definitely do not.
    The Chairman. Yes.
    Mayor Summey. You know, in a first response scenario, we 
still cannot abandon the responsibility of these police 
departments or fire departments still goes on with the rest of 
the city as well.
    The Chairman. Right. Mr. Groseclose, with respect to the 
pre-screening, the name of the game in operating a port, and 
you're No. 1, is to move it, move it. And you've done it more 
efficiently in a productive way than any port in the world. 
Now, having said that, if we had the pre-screening at all of 
the export ports into the import Port of Charleston, then they 
say, wait a minute, you've got to reciprocate and you've got to 
pre-screen. What's your comment about that suggestion of pre-
screening?
    Mr. Groseclose. Well, I think I would agree with Mr. 
Bonner's statements. I think that certainly there would be some 
benefits to pushing back borders on both sides to get better 
information on the contents of containers before they leave 
foreign ports, before they leave the United States ports. And, 
I think, that can certainly be improved upon.
    The Chairman. You get good information about the shipments, 
do you? I mean, they--I guess 60-70 percent are just normal 
shippers regularly using the port. And so you know about them 
and their credibility and trust. With respect to any new ones, 
you would be looking into it and wanting to know about it. So 
maybe that wouldn't hold you up there at the state ports. On 
the contrary, you could facilitate it, and if they facilitated 
yours, then you could move it. Both sides could move even 
faster.
    Mr. Groseclose. Exactly. I think there should be some time 
spent in getting up to speed on both sides of the ocean, but I 
think that it would be beneficial to all parties. I think it 
was said by Commissioner Bonner, the Customs Service today does 
a lot more inspection in terms of paying attention to who the 
shippers are, what the commodities are, where they are moving, 
and how they are moving and so forth. And, if changes are made 
in the system, they are alerted to that and look into it, so I 
think that would be beneficial.
    The Chairman. I want to yield to Senator Breaux. Let me ask 
about that background check, security clearance. Now, as I 
understand, everybody that works at a state port facility has 
that background check?
    Mr. Groseclose. Yes, sir, for our own employees, yes.
    The Chairman. How about the truck drivers? You said that 
you wanted an identification for them, suggested ID, but they 
are not checked right now?
    Mr. Groseclose. No, sir. No one beyond Port Authority 
employees are checked for background at this time.
    The Chairman. The longshoremen offloading that ship, they 
have background checks?
    Mr. Groseclose. No, sir.
    The Chairman. They do not? It seems like that crowd would 
have the background--who are you checking, the secretaries or--
the Port Authority officials? I mean, when you say background 
checks, who are you checking?
    Mr. Groseclose. Every employee of the South Carolina State 
Port Authority, and that is all of the authority we have at 
this time.
    The Chairman. Let me get right to the longshoreman, because 
that could be the holdup on the House side of that bill. I know 
we had some difficulty with it. We couldn't have security 
installed without some kind of background check, just like you 
check all your employees. They got to have a background of all 
those longshoreman. Do you agree or disagree?
    Mr. Groseclose. I would agree. I think there are hundreds 
of employees and people representing different companies who 
come on our facilities every day. We have about 600 employees, 
but there are a couple of thousand people in the Port of 
Charleston area who have access to our facility. We do ID 
checks. We, you know, look into their reason for being there. 
But today, there is no background check beyond those 600 
employees that we have.
    And, I think that that is a wise move. I think that some of 
the concern is, that you will hear, is that doing a background 
check, what do you do with that information? What kind of 
restrictions do you put on and how do you deal with the people 
who have a past record or something. And I think it would be 
unfair to, you know, those people to never have access to a 
terminal ever again.
    The Chairman. Senator Breaux.
    Senator Breaux. Thank you, Mr. Chairman. That is the first 
time I have ever heard of a Subcommittee that you've chaired, 
Commerce, State or Justice on the Appropriations Committee as 
being just that little old Committee I chair.
    The Chairman. We got the money. We have been doing a good 
job with it. We got the crime rate down.
    Senator Breaux. And those Committees are very big 
Committees. Mayor Riley, Mayor Summey, and Mr. Burdette, I 
think that local governments are forever changed as of 9/11. 
For the first time, we are going to be involved in doing things 
that local government has never had to do before and that is 
security against international terrorism and threats from 
foreign countries. Local mayors have never had to do that.
    And, if you're going to be involved in a comprehensive plan 
providing the systems to protect Mount Pleasant, Charleston, 
and North Charleston from terrorist attacks from foreign 
countries, that is above and beyond your budget. And that is a 
national responsibility and that is why I think that the bill 
we have is very important, trying to help you to do things that 
the national government normally does. You're not going to be 
able to do them without some kind of assistance financially to 
get it to work. Otherwise, it is just not going to work.
    Mr. Groseclose, you do not know how fortunate you are. You 
are, what, the head of the Port Authority for South Carolina. 
They've got 14 Port Authorities in New Orleans now.
    The Chairman. Fourteen?
    Senator Breaux. Fourteen separate Port Authorities. At 
least 14 at last count when I left town a couple of weeks ago. 
They may have 15 when I get back.
    The Chairman. What's our Charleston friend up there?
    Senator Breaux. Todd Brinson----
    The Chairman. Todd Brinson, he has all 14?
    Senator Breaux. No, he just had one. There are 13 others 
just like him. And you try and get 14 Port Authorities to agree 
on the time of day, I want you to know it is not possible.
    The Chairman. I think you ought to--I understand your port, 
too, runs for a hundred miles.
    Senator Breaux. Yeah, it is a long port, yeah.
    The Chairman. Yeah.
    Senator Breaux. That is a lot of work. It is very difficult 
to coordinate and you all are fortunate in South Carolina that 
you have it under one umbrella. I think that is real important. 
I think, though, following up on the discussion here with 
Senator Hollings about the driver's check, I mean, I think that 
the people are not going to be able to enter the ports like 
they did before 9/11. Used to, they'd just drive around the 
port and what are you doing? Oh, looking at the ships, and not 
a lot of questions being asked of drivers or guests or tourists 
or people who had business there.
    In the future, the only people in ports are going to be 
people that have business there. And that is on land and sea. 
We talked to Mr. Groseclose about that plan.
    I am for restricting access to ports by sea to people who 
have a business to be there. No longer can you use the port 
area as a place for recreational purpose. And that is going to 
be a tough thing to do because many of the ports are next to 
private marinas and recreational boating areas. So it is really 
difficult. And the way you have to do it is by setting up 
security zones that are enforcing, not just a no trespassing 
sign. It has to be more than that.
    I mean, we were in the Port of Houston. I mean, you had LNG 
tankers that pulled up alongside chemical refineries and all 
the gas refineries and private vessels just going there. And 
the only thing they basically had was a no-trespassing notice 
to mariners that you're not supposed to be alongside the LNG 
tanker.
    A very small vessel blew up the USS COLE and killed a lot 
of servicemen, a very small, little boat, probably 40 feet or 
less, blew the ship out of the water and killed a number of 
service people. If you did that in the Port of Houston with a 
small vessel alongside an LNG tanker or alongside a chemical 
refinery, you could blow up the whole City of Houston, just one 
after the other.
    We cannot let that happen again. I mean, the times are 
different and the circumstances are different.
    I think on the question of getting the background check, I 
think that, for instance, drivers who rented a car from the 
ports, if they had a background check, they could get a special 
class of identification that allows them to come because 
they've had a background check, they are in the computer file, 
and people who do not submit to a background check are held to 
a greater degree of surveillance when they come to the port. I 
think you'd have most all your drivers being willing to submit 
to that.
    And that probably can be applied to aviation in the future. 
People who agree to a background check would not have to stand 
in line for 2 hours and have everything checked. Still would be 
security, but it wouldn't be the same degree as if they hadn't 
had a background check.
    And I think a port can do that. I think anybody going into 
a port, you pretty much have, I think, an authority to say if 
you're going to use this facility, you're going to have to 
abide by the rules that we set up. And I think that is 
important.
    Mr. Groseclose. Well, I couldn't agree with you more, 
Senator, but today, we do not have the legal authority to do 
background checks on anyone other than our own employees.
    Senator Breaux. But if this is port adopted--I am just 
asking. If the port adopted a ruling of the port that said 
anybody who comes on this port property has a background 
check--I mean, you wouldn't have to do it. You could get law 
enforcement to do it. But they would have to have some kind 
of--don't you have the authority to say if you're coming on my 
property, you have to have a background check?
    Mr. Groseclose. We are limited in terms of what we can do 
from that standpoint. We do restrict access to the terminals, 
or we should say the gates. Everybody passing through the 
gates, truck drivers, individual in an automobile must produce 
a photo ID, must have a reason for being there, you know, check 
for why they are there and so forth. And so that is a regular 
occurrence today and that has been stepped up considerably 
since September 11th. There are decals on vehicles that come 
and go through the facility. We have cut down considerably on 
those. Unlike a lot of other ports, we do not have recreational 
uses in close proximity. We have, you know, perimeter fencing, 
high-mass lights, and surveillance cameras.
    Senator Breaux. But you have recreational use on the water.
    Mr. Groseclose. Out on the water, you're absolutely right.
    The Chairman. If the Senator yields, you say that you've 
got the right to prevent anyone from coming on your property 
without a background check.
    Mr. Groseclose. Yes sir.
    The Chairman. Well, it seems like, then, you could require 
it before they came on the property, a background check. What's 
to restrict?
    Mr. Groseclose. There is a piece of legislation that has 
been introduced in the House this year----
    The Chairman. To not have background checks?
    Mr. Groseclose. No. To have background checks on all 
people. And that would provide the authority to undertake 
those.
    Mayor Summey. We are very limited in local government to 
run background checks. We have to go through SLED computers to 
run those and there has to be sufficient reason to run those 
under SLED guidelines.
    Senator Breaux. Well, maybe our legislation can explore 
that, but I mean, I think that it is solely appropriate. I 
think it would be a positive thing for the people who use the 
port because if they have a background check, you've got an ID 
to show that I have got a background check, go right through, 
and not be stopped for a long period of time. If you do not, 
you're going to have a greater--we need to explore that and see 
if that is a problem.
    Major Taylor, I know that you've done some research in 
Louisiana on waterfowl and fisheries over the years.
    Major Taylor. Yes, sir. I have. Great state.
    Senator Breaux. Raided some of my fisheries and waterfowl 
in that area.
    Major Taylor. Well, we'll let you have some fowl back.
    Senator Breaux. Well, this has been a great panel. I thank 
all of you. You've done a great job and I am delighted to be 
part of it.
    The Chairman. On the--Mr. Burdette, before you leave, that 
sailboat that caught fire yesterday, that wasn't terrorism.
    Mr. Burdette. No, sir.
    The Chairman. How about the Town of Mount Pleasant, the 
ship and portside firefighting capability on your great Town of 
Mount Pleasant?
    Mr. Burdette. Well----
    The Chairman. And I understand the Coast Guard came within 
12 minutes, but they had to come all the way from around the 
battery to get there. And I take it the individual was sort of 
trapped and--and couldn't get out and was already overcome by 
the smoke and fire. What you were talking about is well taken. 
But, in addition to that, without terrorism, we need better 
port and shipside firefighting facility. Do we have any--see, I 
live over there across the river.
    Mr. Burdette. We have very little. In all of Charleston 
there are 96 plain ship firefighters, in all of Charleston 
County are made up by all the municipalities and also some 
county personnel.
    The Chairman. We've got some in Mount Pleasant?
    Mr. Burdette. Oh, yes, sir. The problem is the equipment. 
When the Navy left, the tugs left with it. They were able to 
provide most of the water stream from waterside.
    The Chairman. Yeah. And, for your information, we do have a 
rule against unfunded mandating going on. We are going to make 
certain that we do not offload a bunch of requirements and 
responsibilities without the money.
    Mayor Summey. Senator, could I just----
    The Chairman. Yes, sir.
    Mayor Summey. The latest census, Mount Pleasant is the 
fastest growing city in the state. By the next census, it is 
going to be probably the fourth largest city in the State of 
South Carolina. And I was telling Harry the other day, I could 
see it now, you know, the signs coming in, in every direction 
to Mount Pleasant is going to say Mount Pleasant, home of Harry 
Hallman, across the river from the Hunley.
    The Chairman. Thank you all very, very much. All right, 
gentlemen. Let's have a little order here. Dr. Stephen E. 
Flynn. Dr. Flynn is a Senior Fellow from the National Security 
Studies, Council on Foreign Relations. Dr. Douglas R. Brown, 
Vice President for Business Development and Programs, Ancore 
Corporation, and Chris Koch of the World Shipping Council, 
President and CEO of the World Shipping Council, and we thank 
you very, very much for helping us in these hearings here in 
Charleston today. Dr. Brown.

   STATEMENT OF DOUGLAS R. BROWN, Ph.D., VICE PRESIDENT FOR 
     BUSINESS DEVELOPMENT AND PROGRAMS, ANCORE CORPORATION

    Dr. Brown. Mr. Chairman, Senator Breaux, on behalf of 
Ancore Corporation, I want to stress our appreciation for your 
leadership in passing the comprehensive maritime security 
legislation and offering the ports help in carrying out their 
day-to-day activities.
    Our company offers technology to help prevent terrorism, 
stop drug trafficking and money laundering, detecting smuggled 
goods, and helping speed commerce through our ports. We believe 
the private sector and government can develop systems of 
deterrence that will help protect our nation from terrorist 
attacks. We look forward to working with you and government 
agencies and port authorities in carrying out systems of 
deterrence.
    The terrorist attacks on our country on September 11th not 
only attacked our way of life, but also threatened our economy 
from free and open movement of commerce it is so much a part 
of.
    Nowhere is this more apparent than the nation's seaports. 
Last year, approximately 6 million containers moved through the 
United States. It is estimated that the U.S. maritime 
transportation system moved 2 billion tons of goods throughout 
the system. Such a staggering volume of cargo has tremendous 
economic value. They also pose significant risks for our 
nation's security, as we have proven so often today.
    Unfortunately, our government knows very little about 
what's in the containers themselves. We have heard a number, 2 
percent. Whatever it is, it is a small number of cargo 
containers that are actually inspected. Even more so, we know 
very little about containers that move under bond of foreign 
trade zones and in trans-shipping bonds color containers poorly 
enter the United States. Not much can be known about its 
contents. Its contents could pose a major security risk or 
danger.
    Since September 11th, quite frankly, the federal government 
has focused its attention on airport security. But just as 
terrorists recognize the weakness of our aviation system, be 
sure they are studying the vulnerabilities of our ports. Of 
course it is not possible, as we have heard, to inspect every 
container entering the ports. Nor, however, is it necessary in 
order to protect America.
    As long as our government can establish a credible 
deterrent, it can substantially reduce the risk of harm to the 
American public.
    We urge you to consider developing a combination of 
measures applied strategically at home and abroad. In a moment, 
I will describe our technology and show how it can make a 
significant contribution to this effort. Before doing so, I 
think it is important to point out, as others have, much can be 
done abroad to produce an integrated system of protection. We 
urge the federal government to work with our major trading 
partners to develop export screening programs and custom 
shipping programs to reduce the risk long before a vessel can 
approach our ports.
    The federal government should support programs and create 
incentives for major trading partners to inspect shipments 
abroad, such as advanced clearance programs. The government 
should work with private sector and foreign governments for 
more secure containers and to develop profiles on custom 
shippers. To document these kind of measures will discourage 
terrorists and will reduce the risk of threatening cargoes 
entering our ports. However, no such system can be 100 percent 
foolproof, nor can we enact it with all countries we trade 
with. So we also need to develop a portside capability for 
inspecting cargo containers.
    Our neutron scanning devices can play a dramatic role in 
accompanying our nation's security goals while keeping our 
ports open for business. With significant financing from the 
federal government, we have developed two technologies--pulsed 
fast neutron analysis and thermal neutron analysis. These 
technologies have evolved as a result of our combined 
experience in addressing terrorist threats in the aviation 
sector and fighting the scourge of drugs.
    Technology is now available to protect our ports. The PFNA 
technology is so sensitive because it can detect explosives, 
chemical agents, narcotics, flammable goods and currency and 
even nuclear devices. It can inspect shipping containers within 
2 to 7 minutes and the analysis is done automatically with no 
interpretation.
    PFNA technology is packaged in the cargo container 
inspection system that is shown in Figures 1 through 5 of the 
handout of my written testimony. *
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    * The information referred to has been retained in Committee files.
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    It uses libraries of signatures of material specific nature 
to detect the threats within a cargo container. Importantly, 
these signatures can be upgraded as new threats occur. And that 
is very important as we have seen moving through the 1990's 
where we went from drugs to counter-terrorist weapons. One of 
the figures there shows the detection of Sarin, the nerve gas 
used in the Tokyo city attacks by the terrorists. And we 
developed a signature that specifically targeted Sarin within a 
fully loaded cargo container.
    Also shown in my handout is what we envision for a portside 
inspection--use of inspection equipment mounted on a portable 
barge. Such a barge would be moved to the Port of Charleston 
here where you could move from terminal to terminal and inspect 
cargo containers before they actually hit the port at landside. 
Such a system is not yet developed. It could be developed 
quickly under a program.
    Finally, we have a TNA vehicular explosive detection system 
which could be employed here and other ports to detect 
explosives in cargo containers for chemical weapons.
    In summary, our neutron scanning technology capabilities 
far beyond present conventional inspection systems. Highly 
sophisticated equipment is available today for deployment and 
for protection. Thank you for providing Ancore the opportunity 
to share our vision and how we can work together to improve 
port security to abort further terrorist acts.
    [The prepared statement of Mr. Brown follows:]

   Prepared Statement of Douglas R. Brown, Ph.D., Vice President for 
         Business Development and Programs, Ancore Corporation

Mr. Chairman and Senator Breaux:

    On behalf of Ancore Corporation, I appear to share with you our 
perspective on the current vulnerabilities facing our nation's seaports 
as a result of the enormous volume of uninspected cargo that moves 
through them and to suggest ways in which the private sector and the 
government can develop a system of deterrence that will help protect 
our nation from further terrorist attacks.
    We very much appreciate your leadership in passing S. 1214, the 
Port and Maritime Security Act of 2001. And we very much appreciate 
being given the opportunity to make recommendations about how we can 
help port authorities address the significant challenges they face in 
their efforts to protect the security of our country.
    As part of a comprehensive plan of seaport security, our 
technologies can help prevent terrorism, stop drug trafficking and 
money laundering, and detect smuggling, while helping to speed commerce 
through our nation's vital seaports.
  September 11th Demonstrated the Potential Vulnerability of Seaports
    The terrorists who attacked our country on September 11 not only 
attacked our way of life, but also threatened our economy that is so 
closely tied to the free and open movement of commerce. Nowhere is this 
more apparent than at our nation's seaports. Whereas the government now 
is seeking to protect our airports with 100 percent inspection of 
passengers, baggage and air cargo, our seaports remain relatively 
unprotected. We understand the Port of Charleston, for example, has in 
service only one bomb-sniffing dog and one x-ray machine.
    Last year, approximately 11.6 million containers entered the United 
States. It is estimated that the U.S. maritime transportation system 
moves roughly two billion tons of domestic and international freight 
per year. According to the Department of Transportation, the total 
volume of domestic and international freight will likely double over 
the next two decades. Just last year, the Port of Charleston handled 
1.5 million 20-ft. equivalent units (TEUs) and 520,391 tons of break 
bulk cargo. The South Carolina State Port Authority is justifiably 
proud of having served more than 2,589 ships and barges at its three 
principal seaport terminals.
    Such staggering volumes of cargo have tremendous economic value, 
but they also pose significant risks to our nation's security. 
Unfortunately, our government knows very little today about the 
contents of containers entering through our ports. Less than two 
percent is actually examined. The government knows even less about 
containers moving under bond to foreign trade zones or under a 
transshipment bond. Until a container formally ``enters'' the United 
States, not much may be known about its contents. But its contents may 
pose a major security threat the moment the container arrives in a port 
or makes it onto a highway.
    Since September 11, the federal government naturally has focused 
much of its attention on the threat posed by potential gaps in air 
security. But just as the terrorists recognized weaknesses in our 
aviation system, you can be sure that they are studying the 
vulnerabilities of our ports.
    As you know from the Committee's own work, the Interagency 
Commission on Crime and Security in U.S. Seaports concluded in 2000 
that the threat of terrorism at U.S. seaports was low, but that the 
vulnerability to terrorism was high. As the Commission noted, seaports 
are relatively open, accessible, and handle massive volumes of cargo 
that could be sabotaged at its source or in transit. In addition, 
seaports tend to be near large population bases and to waterway systems 
that could be used to carry harm widely throughout the population.
    We should have no illusions about how obvious these potential 
vulnerabilities are to terrorists. Moreover, we need to appreciate that 
the more successful our government is in shutting down potential 
attacks through our aviation system, the more likely our ports will 
become a means of wreaking terror.

The United States Should Implement a Comprehensive System of Prevention 
                             and Deterrence
    As you no doubt appreciate, it is not possible to inspect every 
container entering through our ports. Nor, however, is it necessary to 
do so in order to protect the American public. As long as the 
government can establish a credible deterrent, it can substantially 
reduce the risk of harm to the American public.
    The government and the private sector can establish an effective 
system of deterrence through a series of incremental measures that 
together will decrease any potential threat. No one measure, operating 
in isolation, can provide sufficient benefits at acceptable costs to 
society.
    We urge you to consider developing a combination of measures, 
applied strategically at home and abroad, to combat terrorism and to 
facilitate commerce. In a moment, I'll describe for you the technology 
we have developed with substantial federal government support that can 
make a significant contribution in this effort. But before doing so, I 
think it important to point out that much can be done abroad to produce 
an integrated system of protection.
    We urge the federal government to work with our major trading 
partners to develop export screening programs and trusted shipper 
programs to reduce risk long before a vessel nears our border. The 
federal government should explore programs that create incentives for 
our major trading partners to inspect cargo shipments abroad, such as 
through a system of advance clearance. The government should work with 
the private sector and foreign governments to develop more secure 
containers and to develop profiles for trusted shippers. Adopting these 
kinds of measures will discourage terrorists and will reduce the risk 
that threatening cargoes will ever reach our ports.
    No such system will ever be foolproof; nor can it be developed 
quickly or reliably enough for every nation with which we trade. We 
therefore believe it is equally essential that port authorities adopt 
measures that can identify threatening cargoes when they reach our 
ports, whether or not the containers are formally entering the country 
or are in-transit to a foreign trade zone.

 Ancore's Port-Security Technology Offers a Dramatic Improvement Over 
                         Conventional Products

    It is possible to reduce terrorist threats while maintaining a 
robust flow of commerce. We have the technologies available to 
accomplish our shared goals of upgrading our security systems while 
maintaining the flow of commerce. Our neutron scanning devices can play 
a dramatic role in accomplishing our nation's security goals while 
keeping our ports and borders open for business. (We describe the two 
technologies in greater detail in the attached appendix.*)
---------------------------------------------------------------------------
    * The information referred to has been retained in the Committee 
files.
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    With significant financial support from the U.S. Government, we 
have developed Pulsed Fast Neutron Analysis (PFNA) and Thermal Neutron 
Analysis (TNA). The technologies have evolved as a result of our 
collective experience in addressing aviation terrorist threats and in 
addressing the scourge of illegal narcotics. In 1985, after the bombing 
of an Air India flight leaving Canada, the Federal Aviation 
Administration and others recognized that x-ray machines were 
ineffective against explosives. X-ray detects shapes of dense objects, 
such as guns. Modern plastic and liquid explosives, however, can be 
molded into any shape and can have densities similar to many benign 
materials. The federal government recognized that it needed a 
technology that could identify the explosives themselves.
    During this same timeframe, the U.S. Customs Service was confronted 
with the scourge of increased importation of illegal drugs in cargo 
containers and trucks. It was clear that manual inspection, which takes 
about 15 man hours per container, could never cover more than a 
fraction of a percent of the incoming shipments--neither land nor 
manpower are reasonably available to do the job. In recognition of the 
problem, Congress passed legislation to develop technologies for non-
intrusively scanning trucks and cargo containers to detect illegal 
drugs. The program was run through DARPA, the DOD's premier research 
agency. Under this and follow-on counter-terrorism programs, the U.S. 
Government has put more than $40 million into the development of the 
PFNA scanning system.
    After years of extensive testing, PFNA technology is now available 
to protect our ports (as well as our aviation system and our land 
borders). Neutron scanning offers a breakthrough comparable to the 
significant advance offered by Magnetic Resonance Imaging (or MRI) in 
medical diagnostics. Prior to MRI, a brain tumor was invisible to x-
rays, which could detect the dense bone structure of the skull but 
could not tell a doctor much about the soft tissue where the tumor hid. 
With MRI, however, doctors now can quickly and non-intrusively pinpoint 
a tumor in three dimensions using chemical specific signals. In a 
similar fashion, PFNA can automatically pinpoint the position of 
contraband based on material specific signatures, contraband that would 
otherwise be undetected using traditional x-ray technology.
    PFNA technology is so sensitive that it can detect explosives, 
chemical agents, narcotics, dutiable goods, currency and even nuclear 
devices. It can inspect a shipping container within three to seven 
minutes, identifying and locating hazards without the need for human 
interpretation.
    PFNA uses a directed, pulsed beam of high-energy neutrons that 
interact with the nuclei of elements in scanned objects. This pulsed 
beam of neutrons is moved over the inspected object as it is 
mechanically conveyed across the beam during inspection. The 
penetrating neutron pulses interact with the elemental contents of the 
items within a container, producing unique gamma ray signals. The 
signals emanating are separately analyzed by the PFNA computer system.
    The PFNA technology has been packaged into the Ancore Cargo 
Inspector (ACI), which is an integrated device for inspection of fully 
loaded cargo containers and trucks. The drawing below shows the ACI 
system inspecting a fully loaded cargo container. The ACI uses 
libraries of signatures to produce material-specific images of the 
goods inside a cargo container. These libraries are part of the 
system's data base and can be continually updated to include signatures 
of new contraband or dutiable cargoes. The use of a high-speed data 
processing system allows the ACI to present the results of its 
inspection to the operator in a simple intuitive way.




                   Figure 1. PFNA inspection process.

    We also envision a cargo inspection facility based on a moveable 
platform, which would be particularly handy in a port such as the Port 
of Charleston. The platform could be moved throughout the port to check 
suspicious containers, at numerous terminals, before they ever reach 
land. Such a system is not yet ready for introduction, but might be 
quickly developed through a concentrated research and development 
project.




                  Figure 2. Cargo inspection at ports.

    Finally, our TNA-based Vehicular Explosive Detection System (VEDS) 
could be deployed here and in other ports to detect explosives in 
suspicious vans and trucks or for the detection of a ``weaponized'' 
cargo container full of explosives or chemical weapons. VEDS can detect 
all known explosives, including military, commercial, and home-made, 
while simultaneously detecting drugs.




     Figure 3. Portal Vehicular Explosive Detection System (VEDS).

    In summary, our neutron scanning technology offers capabilities far 
beyond those of conventional inspection systems. This highly 
sophisticated equipment is now ready to be deployed as part of a 
nation-wide system of deterrence. The unique automatic, material 
specific detection of terrorist threats can significantly increase the 
security at ports, border crossing stations, airports, and even within 
the domestic transportation infrastructure of potential urban targets.
    Thank you again for providing Ancore with this opportunity to share 
with you our vision on ways we can work together to improve port 
security and deter future terrorist attacks.

    The Chairman. Thank you very much. Dr. Flynn.

 STATEMENT OF STEPHEN E. FLYNN, Ph.D., SENIOR FELLOW, NATIONAL 
         SECURITY STUDIES, COUNCIL ON FOREIGN RELATIONS

    Dr. Flynn. Thank you very much, Mr. Chairman. My name is 
Stephen Flynn. I am a Senior Fellow with the National Security 
Studies Program at the Council on Foreign Relations. I am also 
a Commander in the U.S. Coast Guard and a professor at the U.S. 
Coast Guard Academy. Since 1999, I have been conducting 
research at the Council that has been examining in large part 
the security weaknesses associated with the system of 
intermodal transportation that is so indispensable to 
supporting global trade and travel. That project has afforded 
me the opportunity to conduct field visits within major 
seaports throughout the United States, in Montreal, Rotterdam, 
Hong Kong, and Kingston, Jamaica.
    It is a privilege for me to be here today to testify on the 
state of seaport security since the tragic events of September 
11 and to outline my views on S. 1214, the Port and Maritime 
Security Act. In my testimony, I hope to convey two things. 
First, I will add my voice to those of the other witnesses in 
validating the overdue government attention and resources now 
being given to the critical issue of seaport and maritime 
transportation security. Second, I will make the case for doing 
whatever can be done to bolster the international and 
intermodal dimensions of this historic piece of legislation.
    Mr. Chairman, I worry that as you pursue this important 
agenda to advance port and maritime security you are racing 
against a return to complacency. Rather than recognizing 
September 11 as a harbinger of how warfare will be waged in the 
21st century, it appears that many Americans are choosing to 
see it as an aberrant event where, thanks to our impressive 
counter-terrorist operations overseas, we soon will be largely 
free to return to our ``normal'' lives here at home. I hold 
just the opposite view. I would argue that we are at greater 
risk precisely because of the example of the catastrophic 
terrorist acts of September 11. The Al Qaeda terrorists who 
leveled the twin towers and slashed open the Pentagon made 
launching an attack on the territory of the United States look 
easy. Also, 19 men wielding box-cutters ended up accomplishing 
what no adversary of the world's sole superpower could ever 
have aspired to: the successful blockade of the U.S. economy 
that resulted from the rush by federal authorities to close 
U.S. airspace, shut down the nation's seaports, and slow truck, 
car, and pedestrian traffic across the land borders with Canada 
and Mexico to a trickle. They achieved a very big bang for a 
very small buck. We should expect that America's adversaries 
have watched and learned.
    Americans need to come to grips with three realities. 
First, there is military value to engaging in acts of 
catastrophic terrorism. It is not simply about killing people 
in large numbers or toppling buildings. It is about generating 
the collateral societal and economic disruption associated with 
these attacks, thereby weakening the power of the targeted 
state, and creating a substantial incentive for it to reassess 
its policies. Disruption is the military objective, not corpses 
and rubble.
    Second, for the foreseeable future, there will be anti-
American terrorists with global reach, capable of carrying out 
catastrophic attacks on U.S. soil, including the use of 
chemical and biological weapons. Regardless of our current 
efforts to roll up the Al Qaeda network, places will always 
exist for terrorists to hide, especially before they have 
committed widespread atrocities, and new adversaries will 
eventually arise to fill the shoes of those who have perished. 
As with the war on drugs, calls for ``going to the source'' may 
sound good in theory, but it will prove illusive in practice. 
Terrorism expert David Long suggests a compelling analogy when 
he asserts ``terrorism is like the flu--there will always be a 
new strain each season.''
    Third, many of America's adversaries will find catastrophic 
terrorism to be their most attractive military option precisely 
because of the complete dominance the United States possesses 
across the conventional spectrum of force. If anyone thinks 
they can succeed in a pitched battle against U.S. armed forces, 
they should check with the Iraqi Republican Guard or the 
Taliban army. The only rational option for the adversaries of 
the world's sole superpower is to conduct asymmetric warfare. 
And the most attractive asymmetric targets are the civil and 
economic elements of power precisely because they are the real 
basis for U.S. power and they are presently largely 
unprotected.
    As I survey the menu of tempting targets against which to 
conduct a catastrophic terrorist act, I find our seaports and 
the intermodal transportation system among the most attractive. 
First, because we start from such a low security baseline as 
documented by the report of the Interagency Commission on Crime 
and Security in U.S. Ports that helped spawn S. 1214. 
Inadequate security in our seaports is not simply a result of 
benign neglect in the face of what was perceived to be a low 
threat. It is also the cumulative result of what I would call, 
``malign neglect.'' Many in the maritime transportation 
industry, struggling in the face of competitive pressures for 
greater efficiencies and lower costs, actively resisted 
expenditures on security that would erode their already razor-
thin profit margins. Prior to September 11, the general neglect 
of America's seaports, both in terms of investment in public 
resources and attention from cash-strapped agencies like the 
Coast Guard and U.S. Customs, translated into a maritime front 
door that was virtually wide-open. Despite extraordinary 
efforts made by federal, state, and local officials since 9/11, 
things are now only marginally better. Seaports remain the only 
international boundaries that receive no federal funds for 
security infrastructure--something the Hollings bill properly 
aims to correct.
    The fact that greater vigilance within our seaports has not 
translated into much in the way of additional security is a 
reflection of the second reason why I believe seaports like 
Charleston make attractive targets--ports are part of a global 
transportation network that can be compromised at the weakest 
link within that network. Charleston is the fourth largest 
container port in the United States. More than 40 steamship 
lines carry U.S. trade between Charleston and 140 countries 
around the world. 1.5 million containers moved through this 
port last year that originated from loading docks of tens of 
thousands of factories or freight forwarders from every 
continent. At a cost of $1,500-$3,000, a multi-ton container 
can be shipped to practically anywhere on the planet. There are 
no security standards associated with loading a container. 
There is no requirement that a container be accounted for as it 
moves from its point of origin, to the port of embarkation. 
There are not even any agreed-upon security guidelines, though 
there was a discussion begun last week at the International 
Maritime Organization to begin to tackle that issue. What this 
translates into is that there are ample opportunities for a 
terrorist or a criminal to compromise freight shipments 
destined for U.S. ports. Drugs, arms, and migrant traffickers 
have been doing this for years.
    In short, seaports make great targets because you can 
essentially launch an attack from a factory, a freight 
forwarder, or virtually anywhere within the intermodal 
transportation system, far from our shores. If the Port of 
Charleston were to be targeted by a terrorist, there would be 
plenty of places to hide a weapon among the 12 million tons of 
cargo, loaded and unloaded in the terminals here in 2001. An 
adversary could invest in a GPS transponder and track the box's 
location by satellite and set it off using a remote control. Or 
he might install a triggering device that would set the weapon 
off if the door of the container were opened for examination.
    That brings me to my third reason to worry about the 
vulnerability of the seaports and the intermodal transportation 
system. If a container were to be used as a poor man's missile 
and it was set off in a seaport, the inevitable fallout would 
be to generate concern about the 11.5 million other containers 
that arrived in the United States last year. How would we know 
they were bomb free? The answer right now is that we couldn't 
really say one way or the other with any real confidence, 
unless we opened and inspected them all. With more than 90 
percent of all transoceanic general cargo being shipped in 
containers to and from the United States, stopping and 
examining every container would translate into grinding global 
commerce to a halt. It would make the disruption caused by the 
anthrax mailings look like a minor nuisance by comparison. When 
the mail service to Washington was compromised, we switched to 
using more e-mails, faxes, and FedEx. If we have to do a 
security scrub of the intermodal transportation system, there 
is virtually no alternative to a box for moving freight. Within 
a day, factories would go idle. As the world's leading importer 
and exporter, most of the world's economies would share our 
pain.
    Expressed succinctly, seaports and the intermodal 
transportation system are America's Achilles Heel. This fact 
has three very important implications for the subject of 
today's hearing on the vulnerability of U.S. seaports and how 
the government is structured to safeguard them:
    (1) Seaports cannot be separated from the international 
transport system to which they belong. Ports are in essence 
nodes in a network where cargo is loaded on or unloaded from 
one mode--a ship--to or from other modes--trucks, trains, and, 
on occasion, planes. Therefore, seaport security must always be 
pursued against the context of transportation security. In 
other words, efforts to improve security within the port 
requires that parallel security efforts be undertaken in the 
rest of the transportation and logistics network. If security 
improvements are limited to the ports, the result will be to 
generate the ``balloon effect''; i.e., pushing illicit 
activities horizontally or vertically into the transportation 
and logistics systems where there is a reduced chance of 
detection or interdiction.
    (2) Port security initiatives must be harmonized within a 
regional and international context. Unilateral efforts to 
tighten security within U.S. ports without commensurate efforts 
to improve security in the ports of our neighbors will lead 
shipping companies and importers to ``port-shop''; i.e., to 
move their business to other market-entry points where their 
goods are cleared more quickly. Thus the result of unilateral, 
stepped-up security within U.S. ports could well be to erode 
the competitive position of important American ports while the 
focus of the security risk simply shifts outside of our reach 
to Canada, Mexico, or the Caribbean to ports such as Halifax, 
Montreal, Vancouver, and Freeport.
    (3) Since U.S. ports are among America's most critical 
infrastructure, they should not be viewed as a primary line of 
defense in an effort to protect the U.S. homeland. It is only 
as a last resort that we should be looking to intercept a ship 
or container that has been co-opted by terrorists is in a busy, 
congested, and commercially vital seaport.
    The bottom line is that while we must put our own house in 
order, the maritime dimension of the homeland security 
challenge cannot be achieved at home. It is the international 
trade corridors that must be secure, not just the off-ramps 
that bring trade to our shores. S. 1214 recognizes this by 
including a chapter for international port security. But most 
general cargo does not originate in a port--it starts much 
further upstream, necessitating the need to move toward point 
of origin controls, supported by a concentric series of checks 
built into the system at points of transshipment, transfer of 
cargo from one conveyance to another, and at points of arrival.
    A common set of standard security practices to govern the 
loading and movement of cargo throughout the supply chain must 
be developed. The goal is to ensure that an authorized shipper 
knows precisely what is in a shipment destined for U.S. shores 
and can report those contents accurately. A second objective is 
to ensure the electronic documentation that goes with the 
shipment is complete, accurate, and secure against computer 
hackers. A third objective is to reduce the risk of the 
shipment being intercepted and compromised in transit.
    This last objective is best achieved by advancing the means 
for near-real time transparency of trade and travel flows 
through technologies that can track the movement of cargo and 
conveyances and which can detect when freight may have been 
tampered with. Such a system ideally creates a deterrence for 
criminals or terrorists to try and intercept and compromise 
shipments in transit. Greater transparency also enhances the 
ability for enforcement officials to quickly act on 
intelligence of a compromise when they receive it by allowing 
them to pinpoint the suspected freight. The importance of 
providing the means for intelligence-driven targeting cannot be 
overstated. The sheer number of travelers and volume of trade 
along with the possibility of internal conspiracy even among 
companies and transporters who are deemed low-risk makes 
critical the ongoing collection of good intelligence about 
potential breeches in security. But, that intelligence is 
practically useless if it helps only to perform a post-attack 
autopsy. Mandating ``in-transit accountability and visibility'' 
would provide authorities with the means to detect, track, and 
intercept threats once they receive an intelligence alert, long 
before a dangerous shipment entered a U.S. seaport.
    S. 1214 provides a toehold to advance such a comprehensive 
approach under section 115, ``mandatory advanced electronic 
information for cargo and passengers and other improved Customs 
reporting procedures''; section 118, ``research and development 
for crime and terrorism prevention and detection technology''; 
and section 207, ``enhanced cargo identification and 
tracking.'' If all these sections along with a section 108, 
``international port security,'' could be refined to take a 
more comprehensive systems approach and could be effectively 
put on steroids during the conference committee process, the 
Port and Maritime Security Act of 2001 would truly represent a 
substantial step forward in what promises to be a long and 
difficult war on global terrorism.
    In conclusion, building a credible system for detecting and 
intercepting terrorists who seek to exploit or target our 
seaports and international transport networks would go a long 
way toward containing the disruption potential of a 
catastrophic terrorist act. A credible system would not 
necessarily have to be perfect, but it would need to be good 
enough so that when an attack does occur, the public deems it 
to be as a result of a correctable fault in security rather 
than an absence of security.
    Ultimately getting seaport security right must not be about 
fortifying our nation at the water's edge to fend off 
terrorists. Instead, its aim must be to identify and take the 
necessary steps to preserve the flow of trade and travel that 
allows the United States to remain an open, prosperous, free, 
and globally engaged society.
    The Chairman. Very good. Thank you, Dr. Flynn. Mr. Koch.

  STATEMENT OF CHRISTOPHER L. KOCH, PRESIDENT AND CEO, WORLD 
                        SHIPPING COUNCIL

    Mr. Koch. Thank you, Mr. Chairman, Senator Breaux. Last 
year, the international liner shipping industry carried 
approximately 18 million TEUs of containerized cargo in U.S. 
foreign trade, containing $480 billion worth of goods, 
representing \2/3\ of the value of all of the nation's ocean-
borne commerce. That was approximately 4.8 million containers 
of U.S. export cargo and about 7.8 million containers of import 
cargo.
    Now, the immediate challenges for the industry and for 
government are: one, to design the security process and to 
deploy the capability necessary to minimize, detect, and 
intercept security risks as early as possible--before they are 
loaded on a ship for delivery to their destination; and two, to 
have the systems and the international protocols in place to 
ensure an efficient flow of international commerce during all 
possible security conditions.
    What is at issue here is, as Dr. Flynn just said, not just 
maritime security or transportation, or even the global 
intermodal transportation system, but the flow of international 
trade and the world's economic health. We all recognize, as Mr. 
Bonner and Admiral Loy stated, the concern over the possibility 
that the international transportation system might be used as a 
conduit for terrorists. At the same time, we are aware that 
government officials have indicated that if terrorists were to 
attack this system, the government's response might be 
literally to shut down trade. That, however, would allow the 
terrorist threat to strangle international commerce. It would 
be extremely damaging to the American and the world economy. 
The BMW plant upstate, whether it is manufacturing for domestic 
consumption or export, poultry exporters, furniture exporters--
everybody would be caught up in this economic impact that would 
be felt across the nation and would be severe.
    The government must have the strategy and the capability to 
ensure that trade continues to flow, even if there is an 
incident. The alternative is to create an even greater 
incentive for terrorists to target the transportation industry 
because the consequences would be so destructive.
    I would like to observe that the World Shipping Council 
would recommend four principles be observed as we construct 
this model. First, there must be a unified and coordinated 
strategy to address the issue. We recognize that the Department 
of Transportation oversees transportation and the Customs 
Service oversees trade. But improving security of intermodal 
containerized cargo shipments requires a tightly integrated, 
common approach and clear responsibilities.
    Second, there should be clear, mandatory rules informing 
each responsible person in the transportation chain of what is 
required. Voluntary programs designed to provide enhanced 
security levels and to expedite the transportation of loads of 
cargo are important and should be pursued. But effective 
security against terrorist threats also requires minimum, clear 
requirements, with clear accountabilities which are uniformly 
applied and enforced.
    Third, the security regime must allow for the efficient 
flow of trade. Efficient transportation and secure 
transportation are not incompatible.
    And finally, international cooperation is clearly necessary 
to effectively and comprehensively extend enhanced security to 
international supply chains.
    Now, of the various components of this challenge, let me 
start with ships. The Coast Guard clearly has the authority to 
deal with the ``ship'' issues. S. 1214 gives them additional 
tools, and we are fully supportive of that. We are also fully 
supportive of the Coast Guard's mission at the IMO to expand 
international security standards dealing with ships.
    The second piece of this security challenge is the marine 
terminal. Again, as you have pointed out earlier in the 
hearing, Mr. Chairman, the report on the Interagency Commission 
on Crime and Security, which started the whole initiative with 
S. 1214, pointed out that in the United States, seaport 
security has been found wanting. Your legislation is an 
excellent start, and we are fully supportive of the bill in 
that regard and the efforts of the Coast Guard.
    The third issue is personnel. Again, we support S. 1214 and 
the current Department of Transportation efforts to establish a 
national credentialing program with uniform, minimum federal 
standards for credentialing, with a federal background check 
process using criminal histories and national security data and 
smart card technologies for the credentialing of appropriate 
transportation personnel. It should cover people with access to 
restricted terminal areas and vessels, to truckers hauling the 
container and other security sensitive positions. America's 
seaports should have systems to ensure and record that only 
approved people who are supposed to be there are there and only 
when they are supposed to be there.
    We also support the Coast Guard's initiative for the IMO, 
to establish an international credentialing and background 
check system for seafarers of all nations.
    Let me turn now to the issue of the container. 
Containerized cargo transportation presents distinct and 
clearly complex challenges from a security perspective. First, 
there are a number of different entities and different 
jurisdictions involved in a shipment--those involved in loading 
the container and sealing it, the documentation of the 
shipments, the storage, the trucking, the railroad, the inland 
terminal, the marine terminal and the ocean carrier.
    Second, there's a current lack of a clearly defined and 
coordinated information system to receive, analyze and act on 
the data determined by the government to be necessary to pre-
screen containerized shipments before they are loaded on the 
ship.
    And third, there is a lack of an established or coordinated 
global capability to inspect containers, when warranted, before 
they are loaded aboard ships.
    Accordingly, we believe it may be helpful to look at 
separate, but complementary, aspects of addressing the issue, 
the first being operations. We support the government 
establishing a requirement that the shipper must seal a box, 
originating in or destined for the United States, immediately 
upon stuffing it and record the seal number on all shipping 
documents. We support the government establishing standards 
that all seals on containers should meet, a requirement that 
the party receiving the container at each interchange check and 
record the seal number and its condition, and require 
procedures for when a container is received with a seal 
discrepancy.
    As to new equipment technology, the World Shipping Council 
members have offered their support and are currently engaged in 
helping the government in testing and evaluation of cost-
effective seal and equipment technologies for containers. While 
such technologies have not yet been sufficiently proven to have 
government standards and be required, we continue to work with 
the government and are fully supportive of those initiatives.
    Third, regarding cargo documentation and the government's 
information requirements, you heard earlier today both 
Commissioner Bonner and Admiral Loy speak very eloquently about 
the need for container security initiatives to ``push out'' the 
borders so that the government can acquire essential cargo 
shipping information in time to analyze it and determine if 
further inspection of a container is needed or appropriate 
before it is loaded on a ship. That logic is clear. It is 
unarguable. The port of discharge is not the place or the time 
to check for terrorism.
    So the government's objective should be to obtain and 
analyze shipment information early enough to carry out this 
objective. The first step is the government has to establish 
its information requirements. What information does it want, 
from whom, delivered when?
    Each person in the shipping process is going to have a 
role, from the shipper, to the carrier, to the intermediary. 
Ocean carriers are willing to do their part. They understand 
that the cargo manifest is a relevant source of information and 
they are certainly willing to comply with the manifest 
requirement. However, I would like to point out that the 
earliest information required by the government as to cargo on 
the ship is the ocean carrier's cargo manifest which is 
electronically transmitted 48 hours in advance of arrival. 
Importers are not required by law to provide cargo information 
or make entry of the goods until 5 days after they have been 
unloaded. Even more time is allowed for goods that are moving 
in bond.
    This is not the information process that is going to 
support accomplishing the government's objective. My point here 
is not to simply identify an obstacle in front of us, but to 
identify the need to have an information process that allows 
commerce to flow smoothly because people know what is in that 
stream of commerce in time to act on it for security screening 
purposes.
    We understand the Department of Transportation is 
considering this issue. We understand the Customs Service is 
considering this issue. We understand the private sector 
information are trying to determine how they can help. We hope 
a single, coordinated government approach will be developed 
soon.
    Finally, let me touch base on container inspection 
capability. It is not feasible nor is it necessary to 
physically inspect every container entering a marine terminal 
or port. It is necessary, however, for the government to have 
the capability to inspect those containers that it identifies 
as deserving further attention, whether that is on a random 
basis or based on specific information. And the better the 
information about a shipment, the better the government will be 
able to identify which containers warrant inspection. Unless 
such inspection equipment and competence is available to the 
government authorities, not only in U.S. ports, but at overseas 
ports, the government will have an obvious difficulty in 
accomplishing its objectives. To be fully effective, a security 
information system requires a way to check out a questionable 
container before it is loaded on a ship heading to or from a 
U.S. port. That is the whole point of ``advanced awareness.'' 
We believe that this issue requires immediate inter-
governmental planning and execution.
    Mr. Chairman, in conclusion, we fully support S. 1214. We 
think it is an excellent start. We hope the House will act on 
it as quickly as you were able to act on it. We also commend 
the Coast Guard and the Customs Service who have done a 
magnificent job since the 11th of September. Their enhanced 
vigilance has improved security in the U.S. and we need to 
build on that. We particularly point to the advanced 
information system and planning processes and inspection 
capabilities and the international protocols necessary to make 
that work. Thank you.
    [The prepared statement of Mr. Koch follows:]

     Prepared Statement of Christopher L. Koch, President and CEO, 
                         World Shipping Council

I. Introduction
    America is a free nation that generally aspires to free trade. Our 
international transportation and trading system reflects that relative 
openness and freedom, and we all benefit from it. But today we face a 
serious, new challenge: How best to design and implement effective 
maritime security measures that will successfully defend our trading 
and transportation system from terrorism--while preserving the 
efficiencies and benefits which consumers, businesses and every 
national economy derive from today's system.
    Meeting that challenge is not a simple task. ``Maritime security'' 
covers a variety of different, distinct industries and elements, 
including: inland waterways, port facilities, marine terminals, non-
maritime facilities located on navigable waters, bridges, cruise ships, 
tankers of various types, and the liner industry. This testimony will 
address only the liner shipping \1\ aspects of this agenda, which, 
while representing only a portion of the issues this Committee is 
reviewing, are substantial enough to have produced multiple ``container 
security'' initiatives within the Executive Branch.
---------------------------------------------------------------------------
    \1\ Unlike bulk carriers or ``tramp'' ships that operate for hire 
on an ``as needed, where needed'' basis, liner vessels operate in 
regular, scheduled services on fixed routes.
---------------------------------------------------------------------------
    In 2001, the international liner shipping industry carried 
approximately 18 million TEUs (twenty-foot equivalent units) of 
containerized cargo in America's international trade--roughly $480 
billion dollars worth of goods. That represents slightly over two-
thirds of the value of all of the nation's oceanborne commerce. It 
represents approximately 4.8 million containers of U.S. export cargo 
and 7.8 million containers of import cargo.\2\
---------------------------------------------------------------------------
    \2\ Containers are different sizes, including 40 foot (most 
common), 45 foot, and 20 foot. For that reason a specific number of 
TEUs does not equal that number of containers, as a 40 foot container 
equals two TEUs.
---------------------------------------------------------------------------
    Over 800 ocean-going liner vessels, mostly containerships and roll-
on/roll-off vessels, make more than 22,000 calls at ports in the United 
States each year. That's more than 60 vessel calls a day--providing 
regular scheduled services to and from virtually every country in the 
world. Liner shipping makes it easier and cheaper for U.S. exporters to 
reach world markets, and provides American businesses and consumers 
with inexpensive access to a wide variety of goods from around the 
world--strengthening our economy and enhancing our quality of life. The 
members of the liner shipping industry who comprise the World Shipping 
Council \3\ carry over 90 percent of this volume. They truly are 
``Partners in America's Trade,'' and they recognize that this 
partnership requires the industry to work effectively with the 
government to address the new threat that terrorists might try to use 
or attack our transportation system.
---------------------------------------------------------------------------
    \3\ The membership of the Council is attached as Appendix A.
---------------------------------------------------------------------------
    The immediate challenges are (1) to design the security process and 
deploy the capabilities necessary to minimize, detect and intercept 
security risks as early as possible--before they are loaded aboard a 
ship for delivery to their destination, and (2) to have the systems and 
international protocols in place to ensure the efficient flow of 
international commerce during all possible security conditions. We must 
protect the system that facilitates world trade, and prevent 
transportation assets from becoming means of delivering destruction. We 
must protect the lives of people who make the international trade 
system operate and who work and reside in areas through which trade 
flows. We must protect the nation's ability to continue its trading 
relations in the event terrorists do attack. And, we must recognize 
that this terrorist threat is not going to go away, but only become 
more challenging to address as world trade volumes grow.
    For that reason, what is at issue is not just maritime security, or 
the even the global, intermodal transportation system, but the flow of 
international trade and the world's economic health.
    Government officials have clearly stated their concern over the 
possibility that our international transportation system might be used 
as a conduit for terrorism. Accordingly, governments must devise and 
implement effective strategies to reduce and manage such risks, and 
carriers, shippers, ports, marine terminals, importers and third 
parties need to support what is necessary to achieve those objectives.
    At the same time, government officials have indicated that, if 
terrorists were to attack this system, the government response might be 
to shut down trade.\4\ That, however, would allow the terrorist threat 
to strangle international trade. It would be extremely damaging to the 
American and world economy. The government must have a strategy and the 
capability to ensure that trade continues to flow, even if there is an 
incident. The alternative would create an even greater incentive for 
terrorists to target the transportation industry, because the 
consequences would be so destructive.
---------------------------------------------------------------------------
    \4\ Customs Commissioner Bonner last month stated that ``the 
shipping of sea containers would stop'' if a nuclear device were 
detonated in a container. One can only agree with his comment that this 
would be ``devastating,'' would cause ``massive layoffs'' in the 
economy, and that ``we must do everything in our power to establish a 
means to protect the global sea container trade, and we must do it 
now.'' Speech of Commissioner Robert C. Bonner, before the Center for 
Strategic and International Studies, January 17, 2002, Washington, D.C. 
Coast Guard officials have made similar comments.
---------------------------------------------------------------------------
    There is no single solution for this problem. No single government 
agency that can solve this problem. No single government that can solve 
this problem on its own. Every commercial party involved in the 
transportation of goods has a role to play. Every government has a role 
to play.
    Shippers, consignees, carriers, ports and terminal operators all 
fear that in the endeavor to address these security concerns, the free 
and efficient flow of commerce will be impeded, and that requirements 
may be imposed that unnecessarily impede commerce and raise operating 
costs, but do little to improve security. This is an entirely 
legitimate concern. The answer, however, is not to delay action. What 
is needed is for the government to clearly identify the new security 
requirements, and for the industry to work cooperatively and quickly 
with the government to determine the best, most efficient way to meet 
them.
    After September 11, the World Shipping Council established a 
Security Advisory Committee in order to consider how the liner industry 
could assist the government in the effort to improve security and 
protect the flow of commerce. On January 17, the Council issued a White 
Paper, which was provided to the Department of Transportation, the 
Customs Service and this Committee. Based on that paper and the 
continuing commitment of the liner industry to help the government 
develop effective responses to these challenges, I'd like to offer the 
following comments to the Committee.

II. The Challenges
    Designing and implementing an effective maritime security program 
will require cooperation, information sharing, and coordination between 
government and industry. At the outset, the Council recommends that the 
federal government's strategy and actions should be consistent with 
certain principles.
    First, there must be a unified, coordinated strategy to address the 
issue. We recognize that the Department of Transportation oversees 
transportation and the Customs Service oversees trade, but improving 
the security of intermodal, containerized cargo shipments requires a 
tightly integrated approach and clear responsibilities. This is 
particularly true when considering information requirements for cargo 
shipments, which I will discuss later. It also requires government 
agencies to effectively share the information that they require.
    Second, there should be clear, mandatory rules informing each 
responsible person in the transportation chain what is required of 
them. Voluntary programs designed to provide enhanced security levels 
and to expedite the transportation of low risk cargo are important and 
should be pursued. But, effective security against terrorist threats 
also requires clear minimum requirements, with clear accountabilities, 
which are uniformly applied and enforced.
    Third, the security regime must allow for the efficient flow of 
trade. Efficient transportation and secure transportation are not 
incompatible.
    Fourth, international cooperation is necessary to effectively and 
comprehensively extend enhanced security to international supply 
chains. We all recognize that there are both

   legitimate concerns about unilateral U.S. actions that have 
        international implications and about the need for international 
        standards on many of these issues, rather than a crazy quilt of 
        differing national laws, and

   legitimate concerns that the international community may not 
        act with the urgency and determination that the U.S. government 
        regards as essential.

    This tension may be unavoidable, but it need not be destructive. It 
requires sensitivity and effective communication on all sides. For 
example, a recent Customs Service proposal to set up close security 
relations with a select number of large, non-U.S. ports, including the 
Port of Rotterdam, caused concern in Belgium because the ports of 
Antwerp and Zeebrugge, which compete with Rotterdam, felt that the 
proposal might effectively disadvantage them in their trade with the 
United States. That was clearly not the intent of the proposal; 
however, the reaction to it illustrates the importance of effective, 
broad-based international cooperation and sensitivity to actions that 
are not uniformly applied.
III. Various Aspects of Containerized Cargo Shipping
A. Ships: On the issue of ship security, we fully support the various 
initiatives undertaken by the Coast Guard to address vessel security, 
both using their existing authority and in leading the initiative at 
the International Maritime Organization to obtain international 
agreement.
    The Coast Guard immediately after September 11th implemented 
several measures to improve tracking vessels destined for U.S. ports 
and the crews and passengers onboard these vessels. Through its sea 
marshal program, implementation of safety and security zones around 
vessels and escorting certain types of vessels, the Coast Guard is also 
taking steps to prevent vessels from becoming terrorist targets or from 
being used by terrorists as weapons.
    The Coast Guard has submitted to the International Maritime 
Organization (IMO) additional proposals pertaining to vessel security. 
Among the proposals are the designation of security officers on every 
vessel and in every company that owns or operates vessels; the 
availability of alarms or other means on a vessel to notify authorities 
and other ships of a terrorist hijacking; and the expedited 
installation on all vessels of the Automatic Identification Systems 
(AIS) by July 1, 2004, instead of the existing target date of 2008. AIS 
provides, among other things, a ship's identity, position, course and 
speed. The Coast Guard has also proposed to the IMO an international 
system for the issuance of verifiable seafarers' documents and 
background checks of individual seafarers.
    These and other proposals were discussed at a U.S. initiated 
working group meeting of the IMO that ended last week. Additional IMO 
meetings are scheduled for later this spring and summer with a view to 
approving new international vessel security measures at a special IMO 
session in December.
    It is too early to assess which measures may be approved later this 
year by the IMO and thus become internationally binding requirements. 
As an international industry operating liner vessels with multinational 
crews, and under the jurisdiction of many different flag 
administrations, and calling ports in many different countries, the 
Council's member companies would prefer that, to the greatest extent 
possible, mandatory vessel security measures be agreed to at the 
international level. Clear and uniformly applied and enforced rules 
would create certainty and clarity for our vessels and their crews and 
help protect against breaches in, and of, the international supply 
chain.
    One final point about ships and security: Concern has been 
expressed about terrorist organizations using shell businesses to 
obtain ownership of vessels to provide a source of income and for 
logistical purposes. It is very important for flag administrations to 
work cooperatively with U.S. authorities to track any such terrorist 
ownership, and we understand that these concerns are being addressed.

B. Marine Terminals: The security of ports and marine terminals in this 
country was analyzed in the Report of the Interagency Commission on 
Crime and Security in U.S. Seaports (Fall 2000) and found wanting. This 
issue has been discussed at previous Committee hearings, and that 
report provided an impetus for your legislation (S. 1214), Mr. 
Chairman, which is now before the House of Representatives, and which 
we support.
    The Coast Guard, using existing statutory and regulatory authority 
and working with terminal owners and operators, has already implemented 
certain measures to increase security in and around waterfront 
facilities.
    Earlier this year, the U.S. Coast Guard Commander for the Pacific 
Area issued guidelines for the individual Captains of the Port for the 
inspection and maintenance of adequate security measures for waterfront 
facilities in the Pacific Area. Developed in cooperation with industry 
stakeholders, these guidelines are intended for all types of maritime 
terminals and facilities. They cover areas such as physical property 
security, personnel security, passenger security, vehicle access and 
rail security, and are differentiated according to three risks levels. 
As guidelines, they do not replace or supersede existing regulations. 
Rather they are intended to assist the individual Captains of the Port 
and the operator of a facility in evaluating the security of that 
facility and taking corrective measures, if necessary. The guidelines 
are a constructive first step, but further actions are needed. For 
example, these guidelines do not address the issue of credentials and 
access controls for people at marine terminals.
    The U.S. Coast Guard included in its submission to the IMO a 
proposal that all port facilities be required to develop and maintain 
security plans, and that these plans would have to be approved by the 
government in whose jurisdiction the facility is located according to 
internationally agreed standards. In addition to this proposal, the 
Coast Guard has also proposed that IMO agree to a mandatory requirement 
that every port undergo, by the government in whose jurisdiction it is 
located, periodic port vulnerability assessments based on 
internationally agreed vulnerability assessment standards. We fully 
support the efforts of the Coast Guard to raise enhanced terminal 
security at the IMO. The Coast Guard has also begun the process of 
preparing to conduct vulnerability assessments of U.S. ports, and, 
towards that objective, is developing a so-called ``Model Port'' 
security concept.

C. Personnel: We support S. 1214 and the Department of Transportation 
efforts to establish a national credentialing program, with uniform, 
minimum federal standards for credentialing, with a federal background 
check process using criminal history and national security data, and 
``smart card'' technology for the credentialing of appropriate 
transportation workers. It should cover people with access to 
restricted marine terminal areas and to vessels, the truckers hauling 
the container, and other security sensitive positions. America's 
seaports should have systems to ensure and record that only approved 
people who are supposed to be there are there, and only when they are 
supposed to be there.
    S. 1214 appropriately instructs the Department of Transportation to 
work to enhance the security at foreign ports. To be credible, the 
United States needs to do the same. Many foreign ports have more 
developed security procedures than U.S. ports, and the institution of 
credentialing, background checks, and positive access controls at U.S. 
ports would be a constructive step to show the U.S. government's 
resolve.
    We also support the Coast Guard's initiative at the IMO to 
establish an international credentialing and background check system 
for seafarers of all nations. The Coast Guard estimates that 200,000 
seafarers a year come to the United States. The agency's IMO proposal 
is a good-faith proposal to establish an internationally accepted 
system that would provide enhanced security and ensure the desired 
freedom of movement for seafarers.

D. Containerized Cargo: Containerized cargo transportation presents 
distinct and clearly complex challenges from a security perspective (1) 
because of the number of different entities in different jurisdictions 
involved in a shipment--those involved in loading and sealing the 
container, documentation of the shipment, storage, trucking, railroads, 
inland terminals, marine terminals, and the ocean carrier, (2) because 
of the current lack of a clearly defined and coordinated information 
system to receive, analyze and act on the data determined by the 
government to be necessary to pre-screen containerized shipments before 
they are loaded aboard a ship, and (3) because of the lack of an 
established or coordinated global capability to inspect containers 
before they are loaded aboard ships. Accordingly, we believe that it 
may be helpful to look at separate, but complementary, aspects of 
addressing this issue.

        (1) Operations: We support the government establishing:

     a legal requirement that the shipper must seal a container 
            originating in or destined for the United States upon 
            stuffing it, and record the seal number on all shipping 
            documents;

     the standards that such seals must meet (preferably an 
            internationally accepted standard);

     a requirement that the party receiving the container at 
            each interchange (e.g., trucker, railroad, ocean carrier) 
            check and record the seal and its condition upon receipt;

     a requirement that when persons having custody must break 
            the seal for legitimate reasons, they be responsible for 
            affixing a new one, noting the reason, and recording the 
            new seal number on the documentation;

     procedures for when a container is received with no seal, 
            a broken seal, or a seal discrepancy; and

     a requirement that no loaded container be stowed aboard a 
            vessel without an intact, conforming seal.

          While the industry recognizes that seals will not by 
        themselves solve security concerns, the Council believes the 
        above requirements would be an appropriate step to ensure a 
        more secure chain of custody.

        (2) New Equipment Technologies: Council members have offered 
        their support for government efforts in the research, testing, 
        development and evaluation of cost-effective new technologies 
        that could help provide enhanced security, such as electronic 
        seals, and container tracking and intrusion detection 
        technology. While such technologies have not yet been 
        sufficiently proven to have government standards and be 
        required, carriers will continue to work with the government in 
        testing and evaluating such possibilities. Because there are 
        roughly 11 million existing containers serving as instruments 
        of international commerce involving multiple national 
        jurisdictions, it is very important that any technology 
        standards or devices be internationally available and accepted.

        (3) Cargo Documentation and Government Information 
        Requirements: Customs Commissioner Bonner and Admiral Loy have 
        both spoken clearly about the need for container security 
        initiatives to ``push'' the nation's borders out, so that the 
        government can acquire essential cargo shipment data in time to 
        analyze the information and determine if further inspection of 
        that container is needed before it is loaded aboard ship. The 
        logic is clear and unarguable. The port of discharge is not the 
        place or the time to check for terrorism.
          If the vision of earlier, more effective container security 
        is to become a reality, it requires better, earlier information 
        about cargo shipments, and the capability to effectively 
        inspect containers before they are loaded aboard ships. Let me 
        turn to these issues.
          The government's objective is to obtain and analyze shipment 
        information early enough to implement more timely and effective 
        screening. The first step is for the government to establish 
        its information requirements--specifically, what information 
        does it need, from whom, when, electronically delivered to what 
        information system?
          Each person in the shipping process has a role and an 
        appropriate set of requirements: the importer who has ordered 
        and is purchasing the goods, the shipper who is loading the 
        goods into the container, the carriers who are transporting the 
        goods, and the brokers and forwarders who assist in the cargo 
        information process. Today, the earliest information required 
        by the government is the ocean carriers' cargo manifests, which 
        are electronically transmitted 48 hours in advance of 
        arrival.\5\ Importers are not required by law to provide cargo 
        information and make entry of the goods until five days after 
        they have been unloaded (even more time is allowed if the goods 
        are moving ``in bond''). This is not the information process 
        that is going to support accomplishing the government's 
        objective.
---------------------------------------------------------------------------
    \5\ NVOCC's (which are responsible for up to 40% of the cargo in 
some trade lanes) are not subject to the same Customs bonding and 
information filing requirements as ocean carriers; they are not 
required to file cargo manifests for inbound shipments. They should be 
subject to the same information filing obligations at the same time as 
ocean carriers.
---------------------------------------------------------------------------
          Ocean carriers are willing to do their part. They understand 
        that the cargo manifest is a relevant source of information, 
        and they will submit those manifests when required. By 
        themselves, however, carriers' cargo manifests have practical 
        limitations and are not likely to be the means by which the 
        government satisfies its information requirements. 
        Specifically, the manifest's cargo description is the 
        information the carrier is provided by the shipper; its level 
        of detail is limited; there is no uniform or detailed 
        definition of what is an acceptable cargo description for a 
        carrier's manifest; and, penalties for inadequate or inaccurate 
        cargo descriptions on cargo manifests are imposed only on the 
        carriers transmitting the information, not on the cargo 
        interests providing the information to the carrier--at best, an 
        antiquated approach when dealing with sealed containers.
          An effective information system for security purposes 
        presumably needs specific information, from the appropriate 
        parties who possess that information, sooner. The information 
        exists--it's a matter of how best to obtain it and analyze it. 
        Cargo interests know what has been ordered before a container 
        is stuffed. The shipper who stuffs the container knows what was 
        put in the box. What is needed--and this is admittedly easier 
        to state than to implement--is a system that obtains the needed 
        data, from the appropriate parties, at times sufficiently in 
        advance of loading as to allow for effective security 
        prescreening.
          We understand the Department of Transportation is considering 
        this issue. We understand the Customs Service is considering 
        this issue. We understand that private sector information 
        enterprises are trying to determine whether they can play a 
        role in this effort. We hope that a single government approach 
        will be developed soon.
          Finally, Mr. Chairman, we support S. 1214's recognition that 
        maritime security requires attention to export cargo, as well 
        as import cargo. We support your legislation's ``no 
        documentation/no loading'' requirement, and the requirement 
        that export shippers provide complete documentation as soon as 
        possible and no later than 24 hours after tendering cargo to 
        the marine terminal. We recommend an additional clarifying 
        requirement to prohibit loading a container for export unless 
        the shipper has provided complete documentation at least 24 
        hours before the commencement of loading, in order to avoid the 
        pressure of last minute demands that a box be loaded when the 
        documentation is just being provided and the government has not 
        had a chance to review it. Effective attention to export cargo 
        will demonstrate to the international community that the United 
        States is committed to addressing security risks in a coherent 
        fashion, and not just the risks involved in one direction of 
        foreign trade.

        (4) Container Inspection Capability: There can be no argument 
        that non-intrusive container inspection equipment, \6\ operated 
        by trained personnel, is necessary, and that this is a very 
        important government competence. Mr. Chairman, the industry 
        recognizes your leadership in S. 1214's authorizing $168 
        million for this purpose over the next several years, and 
        appropriating $33 million for this in the Customs Service 
        Appropriations bill this year.
---------------------------------------------------------------------------
    \6\ This testimony uses the term ``inspection equipment'' 
generically, but recognizes that there are different kinds of equipment 
(e.g., mobile, crane mounted, hand held), using different technologies 
(e.g., X-ray, gamma ray) with different capabilities to identify 
different materials (e.g., drugs, radioactivity, carbon dioxide, 
explosives).
---------------------------------------------------------------------------
          It is not feasible or necessary to physically inspect every 
        container entering or leaving a port. It is necessary, however, 
        for the government to have the capability to inspect those 
        containers that it identifies as deserving further attention, 
        whether that be on the basis of random selection or specific 
        information. And the better the information about a shipment, 
        the better the government will be able to identify which 
        containers warrant such inspection.
          Unless such inspection equipment and competence is available 
        to government authorities, not only at U.S. ports, but at 
        overseas ports of loading, the government will have obvious 
        difficulty accomplishing its objective. To be fully effective, 
        an advanced security information system requires a way to check 
        out a questionable container before it is loaded on a ship 
        heading to or from a U.S. port. That's the point of advanced 
        awareness.
          This year's appropriations bill and the Administration's 
        budget for the coming fiscal year do not appear to provide any 
        funding for such equipment beyond U.S. shores. Perhaps the U.S. 
        government can enter into agreements at IMO or bilaterally with 
        its trading partners that provides for this. But, it is an 
        issue that requires immediate inter-governmental planning and 
        execution. Inspection equipment standards should be agreed 
        upon, and inspection capabilities and international cooperation 
        protocols established. Delay in having this capability means 
        that the government will have one less effective tool to 
        intercept dangerous cargo, and to keep commerce flowing in the 
        event of a terrorist incident.

        (5) Sharing Information: While there are many aspects of 
        addressing this issue, intelligence will be a key part of 
        securing the transportation infrastructure from terrorists 
        threats. Appropriate means should be developed for sharing 
        intelligence alerts and warnings on a timely basis with 
        designated carrier personnel.
IV. Conclusion
    Mr. Chairman, the Coast Guard has done a magnificent job in 
responding to maritime security since September 11, as has the Customs 
Service. Maritime security has been improved because of their efforts, 
and their enhanced vigilance and intelligence efforts continue. The 
challenge is to build on those efforts and create a more complete and 
permanent set of security procedures and systems that can better ensure 
the safety of America's foreign trade. The members of the World 
Shipping Council are ready and willing to help. A safe, efficient and 
reliable transportation system is essential to our country's prosperity 
and to the prosperity of all of our trading partners. We appreciate 
your early and continued leadership on this issue, and we look forward 
to working with you, the Committee, and the House of Representatives on 
these issues.
                               Appendix A
                         World Shipping Council
                              Member Lines
APL
A.P. Moller-Maersk Sealand (including Safmarine)
Atlantic Container Line (ACL)
CP Ships (including Canada Maritime, CAST, Lykes Lines,
  Contship Containerlines, TMM Lines, and ANZDL)
China Ocean Shipping Company (COSCO)
China Shipping Group
CMA-CGM Group
Compania Sud-Americana de Vapores (CSAV)
Crowley Maritime Corporation
Evergreen Marine Corporation (including Lloyd Triestino)
Gearbulk Ltd.
Hamburg Sud (including Columbus Line and Alianca)
Hanjin Shipping Company
Hapag-Lloyd Container Line
HUAL
Hyundai Merchant Marine Company
Italia Line
Kawasaki Kisen Kaisha Ltd. (K Line)
Malaysia International Shipping Corporation (MISC)
Mediterranean Shipping Company
Mitsui O.S.K. Lines
NYK Line
Orient Overseas Container Line, Ltd. (OOCL)
P&O Nedlloyd Limited (including Farrell Lines)
Torm Lines
United Arab Shipping Company
Wan Hai Lines Ltd.
Wallenius Wilhelmsen Lines
Yangming Marine Transport Corporation
Zim Israel Navigation Company

    The Chairman. Well, thank you, each of you. Dr. Flynn, you 
talked about return--or race against a return to complacency. 
Complacency begins in Washington. I find the people with the 
war are ready to go to war. They are ready to sacrifice. And 
yet at the same time, in Washington, we run an advertisement 
telling people just do not worry about it; take a trip, get 
your family, enjoy yourself, enjoy yourself. We say, yeah, we 
are going to have to have a war, but we are not going to pay 
for it; we are going to run a deficit. We have always paid for 
every war. But we are going to run a deficit and do not worry 
about it.
    Here back home, every state is struggling, cutting back 
appropriations and cutting back spending and cutting back tax 
cuts.
    Like Governor Bush down in Florida, he had to suspend his 
tax cut. So at the local level, there is no complacency. The 
race against a return to complacency is in Washington. We talk 
big. But it took us 6 weeks to get airport security. Had 
language that the President would stand up to bin Laden, but 
couldn't stand up to Congressman Armey--now we passed port 
security in two months, unanimously passed, all Republicans, it 
is bipartisan, but it languishes in the House. Our Committee 
has following that a rail security bill, to prevent the blowing 
up of Grand Central Station in New York.
    So we have got all of these things and we are trying to 
move them ahead and I come back and I definitely am confirmed, 
Senator Breaux, with the feel for the briefing. For example, we 
got this morning that this crowd is not waiting on Washington. 
The Coast Guard, the Port Authority, the local entities, not 
just the state ports, but there are a lot of folks with private 
concerns up and down these rivers all working together, pulling 
together, the mayors, the natural resources department, 
everybody is dovetailing and ready to go and not waiting on 
Washington. There's no complacency, but we cannot get our own 
bill through the House of Representatives.
    That is a frustration to me. I do not see Washington really 
leading. I think they are really following the people, which I 
hope we'll continue to do because I think the people are right.
    With respect to equipment, Dr. Brown, your neutron 
scanners, how many do we have and in how many ports and how 
soon can we get a sufficient number to start checking and 
scanning the way we should?
    Dr. Brown. Thank you. Right now, we are working actually 
under pre-9/11 situation with the DOT counter-drug program to 
get our first scanner on the border with New Mexico--I'm sorry, 
Texas and Mexico. We have looked at production. We believe we 
can produce the first commercial units in about 12 months, and 
20 within the next 2 years, 50 within the next 3 years.
    The Chairman. Fifty within the next 3 years?
    Dr. Brown. Yes.
    The Chairman. Well, you can see how far behind we are. 
There's no question.
    Dr. Brown. Well, I think the--leading into the events of 9/
11, the big problem was--would be for drugs at the border. You 
saw Commissioner Bonner's pictures. It was a bunch of equipment 
developed with congressional backing in the 1990's, non-
intrusive inspection equipment. There's low- and high-energy 
radiography systems which you saw from Commissioner Bonner with 
regards to that which is material-specific. It is a different 
type, meant for fully loaded containers.
    To date, Customs has only adopted the lower energy, empty 
and lightly-loaded container inspection equipment. They haven't 
adopted the fully-loaded container inspection equipment. So 
they really haven't solved the seaside problem as far as 
actually loaded equipment goes.
    The Chairman. Senator Breaux.
    Senator Breaux. Thank you very much, Mr. Chairman. You 
know, I think about the fact that Senator Hollings is not only 
on the airport security, but port security, and I am going to 
start calling him Senator Security. I think that is a title 
well deserved. There's nothing more important right now than 
homeland security. A lot of people talk about it, but I think 
you really have done something about it in both of these two 
areas.
    Dr. Brown, I am just really excited about what you've 
presented. You know, with these hearings, a lot of times we do 
not hear a lot from them, but I think in this case, we have 
learned a lot from the port and the local people in Charleston. 
But you know, I didn't really know that Congress had actually 
passed legislation to develop technology for the non-intrusive 
scanning of trucks and cargo containers to detect illegal 
drugs. The program was run over at the Department of Defense.
    Dr. Brown. Yeah, it was DARPA-headed program.
    Senator Breaux. We spent $40 million developing this PFNA 
scanning system. And you know, from what you're telling us, 
that the technology is so simple, and yet it can detect 
explosives, chemical agents, narcotics, durable goods, 
currency, and even nuclear devices. I would liken the 
comparison to the x-ray of a human compared to an MRI of a 
human where the x-ray just shows bone density and the MRI shows 
the tumors.
    I mean, this technology I think is just outstanding. And do 
you think that there's sometime in the future where we could 
have in place a system where we could have the capacity to in 
fact PFNA scan every container?
    Dr. Brown. I do not think it is necessary to scan every 
container. I mean, to do the numbers, you would need 50 
scanners if they ran night and day and were in the right place 
which they probably wouldn't be, you would need 50 scanners to 
handle the 10 million containers coming to port.
    Senator Breaux. I mean this, again, is way off in the 
future, but I mean, do you envision a system sometime outside 
of our time of being, for doing this, but this type of work 
where you can scan an entire ship?
    Dr. Brown. That, I do not think physics will allow you to 
do at least in the near future. But we have talked a lot about 
pushing the borders out. A year ago, I was in Dubai. They had 
this huge free port. It is in the Gulf State--near Gulf states. 
What happens is cargo containers come in there with raw goods 
unscreened. They go to a factory area where 30,000 people are 
employed largely from third-world countries and small 
factories. Those cargo container goods are reprocessed, goods 
such as computers, clothing, you name it or you can think of 
what it might be, and they are all shipped out of there, all 
unscanned. I think that would be a perfect place to start your 
across-the-water scanning.
    Senator Breaux. Well, I think the technology is truly 
outstanding and certainly represents the future. And you know, 
people are always cussing the federal government. This is an 
example of the federal government working with private sector 
to develop something that may not have been done had it not 
been for the research dollars that the government helped put 
into this program.
    Dr. Brown. That is absolutely true.
    Senator Breaux. Chris, thanks again. Dr. Flynn. And you're 
right, I mean, your association would be critical in helping us 
solve this. I am really glad to see the shipper has such a 
positive attitude. You're not fighting it. You're really 
standing up together with it. Thank you, gentlemen, very much.
    The Chairman. Mr. Koch, thank you very, very much, the 
World Shipping Council, and everything else for your wonderful 
assistance. For each of the witnesses, the record will stay 
open for further questions. Thank you all very much. The 
Committee is adjourned.
    [Whereupon the hearing was adjourned.]

                            A P P E N D I X

 Prepared Statement of Robin Lynch, President, Sea Containers America 
                                  Inc.
    Good morning. Mr. Chairman. My name is Robin Lynch and I am the 
president of Sea Containers America Inc. My career spans thirty-four 
years, serving in the maritime industry in five countries, joining Sea 
Containers in 1981, and assuming my current position in 1987.
    Our company was founded by Mr. James B. Sherwood during the infancy 
of containerization in the mid-1960's. From that time, Sea Containers 
has been unique in two respects.
    First, we have remained a designer, manufacturer and lessor of 
marine container equipment, giving us a unique perspective shared by no 
other company; second, we have gained our reputation in the 
international shipping world as being on the cutting edge of design, 
construction, and deployment of special containers that have taken our 
industry far beyond the original ten, twenty and forty foot boxes. We 
have also had on-going experience as a container carrier--from 1968 
with CONTAINERSHIPS SCANDINAVIA and MAERSK WEST AUSTRALIA, so we have 
seen how the container world operates from both perspectives.
    From that beginning, Sea Containers has evolved into a worldwide 
transport group in over eighty countries that covers three main 
activities: marine container design, manufacturing and leasing, 
passenger transport, and leisure-based operations. Within each of these 
segments is a number of operating units and my responsibilities cover 
not only all container related matters in North and Central America 
under our joint venture with General Electric (GESEACO), but also our 
fast ferry service in New York Harbor (SEASTREAK).
    GESEACO is the largest marine container leasing company, with close 
to 1m TEU of assets, with depots and repair facilities throughout the 
maritime world. Our fleet contains nearly 100,000 TEU of refrigerated 
containers, 32,000 flatracks, 25,000 opentops, and 25,000 palletwide 
style units. Interestingly enough, we believe this new container can 
contribute to the efforts in the war on terrorism, which I will 
describe below.
    Our American corporate headquarters is in New York, however here in 
Charleston is our North American Operations Center, our largest depot 
and repair facility, our key administrative staff, and last but not 
least located in the former Navy Yard is Charleston Marine Containers 
Inc., which is the only ISO container manufacturing facility in the 
United States. I am pleased to advise that CMCI's leading customer is 
the Pentagon and at the moment thousands of QUADCONS for the Army and 
TRICONS for the USMC are on order and being produced on our assembly 
line. Of course, we have also designed and manufactured special units 
for other government agencies, ocean carriers, railroads and trucking 
companies--indeed all segments of the intermodal network.
    This subcommittee has before it, in this hearing on port security 
and terrorism, one of the most important topics that our nation and 
industry faces today. The central point that I would like to make in my 
testimony is that since container standardization through the ISO 
method and nearly all manufacture of containers rests beyond total 
jurisdiction of this country, we believe that the time has come for a 
new global era of container ``use and responsibility''.
    By this term, I believe that we can assist in the difficult task of 
identifying possible terrorist-tampered containers so that they will 
not enter the stream of international commerce, or if they do, enable 
us to remove them before harming our fellow citizens or our vital 
multimodal transport network. Multimodalism is successful in its 
simplicity by allowing a seller (exporter)/purchaser (importer) to load 
a container, seal it and transport to destination intact without 
interruption other than a physical customs check (if required). It is 
necessary to verify what is loaded in a container prior to sealing it 
before the seal has any useful purpose. Assuming this was done, then 
whatever type of electronic seal or hinge lock would become a 
meaningful indicator if tampered with. Also, a box inspection to review 
any suspicious recent (new looking) repairs or modifications would also 
be necessary.
    I am certain this panel recognizes that the overall issue of port 
security raises concerns among each segment of the commerce chain that 
their particular activity not be singled out for blame or carry an 
unfair burden of responsibility. For example, several ocean carriers I 
have discussed this matter with point out that they are the 
intermediary between the shipper and the ultimate consignee. They 
recognize that other than operations that they directly control--such 
as consolidation services, container freight stations, or destination 
distribution--it is only known to the shipper and consignee what is 
loaded in a box and declared for customs purposes. These carriers know 
the sting of being held liable when their ships are found to have drugs 
placed on them without their knowledge.
    This subcommittee has previously examined and heard testimony on 
the very sophisticated methods of those who would tamper with the 
legally stowed boxes. There have been many cases of immigrant smuggling 
gangs not breaking the container lock seal, but merely removing the 
door hinges and carefully removing them. There have been other 
instances where boxes have been pierced open with the skills of a 
surgeon to conceal drugs and other illicit cargoes. An important 
opportunity for inspection authorities comes when a determination is 
made to physically open and inspect a particular box. If the 
authorities order the container to be unstuffed, this is a costly and 
time-consuming process which causes possible cargo damage and opens up 
theft potential. If, however, the cargo is palletised the whole 
operation is much quicker and damage and theft opportunities lessened. 
This is why the new palletwide containers are now being produced to 
accommodate the common worldwide metric pallet.
    Unfortunately, the number of boxes moving in international commerce 
into our country, over 5.7m annually--in an intricate pattern of 
container leasing company/ocean carrier/large shipper owned regime--is 
so large and the flow through every U.S. port is so strong, that there 
is no simple, ``one size fits all'' solution. In fact, if we are to 
confront and defeat this terrorist threat we must move on a number of 
fronts with coordination to ensure that carriers, port authority, 
involved federal agencies and container companies are following a 
concerted plan of action.
    From our unique, and might I add neutral, perspective on this 
matter I would suggest that the major action Congress could take would 
be initiation of a system approved by an interagency task force which 
would require shippers and consignees to have their facilities pre-
screened, inspected both here and abroad, and approved for movement of 
goods in international commerce. Cargo shipped from known hostile areas 
can be subjected to scientific developments, such as the latest seal 
and hinge technology, electronic monitoring, and tracking of container 
contents. Shippers and consignees who are not approved must then 
receive special attention. In addition, we must promote use of x-ray, 
gamma ray, and bomb detection devices.
    For our part as a container designer and manufacturer, I have 
prepared for the subcommittee a list of enhanced security options that 
could be implemented on both a short and longer-term basis:

    1. Electronic seals for containers supplied by the shippers, that 
have been approved by government/ocean carrier authorities.

    2. Enhanced cargo documentation to enable shippers or their 
brokers to transmit data direct to U.S. authorities prior to vessel 
arrival in our ports.

    3. Coordinated computer-tracking technology.

    4. Container x-ray/gamma ray options that do not impede terminal 
cargo flow.

    5. Accelerated R&D on improved tracking, locks, and production of 
new secure palletwide units.

    6. Increased use of sniffer dogs for detection of explosives and 
other dangerous materials.

    7. Look for recent repairs or work carried out to a container that 
might be of a suspicious nature.

    8. Accomplish all, if not most, of cargo and container inspections 
at origin load point.

    Other than the above, one has to always look at inspecting 
containers from unknown/little known shippers and consignees, being 
mindful a terrorist could always pretend to be a true shipper or 
consignee!
    In conclusion, Sea Containers is firmly committed to working with 
our maritime partners in this important effort. To that end, we applaud 
and fully support your efforts here today and look forward to passage 
and rapid implementation of the Port and Maritime Security Act of 2002. 
I am requesting that the attached articles from Lloyd's List on 
container terrorism be included in the record.
    Thank you for affording me the honor of testifying and I would be 
pleased to answer any questions that you might have, or supply 
additional materials for the record.

                        Ports in the front line
                          Lloyd's List, London
                        Monday, February 4, 2002

Section: Special Report-Maritime Emergencies

    Ports around the world face the prospect of being screened by the 
US and, if their security is found wanting, being graded as ``high-
risk,'' with the possibility of loss of trade.
    Under proposed US legislation any country which the US determines 
has a port security problem will be notified and a list of such 
countries will be published prominently in US ports, on passenger 
tickets and in travel advice from the US state department.
    The US may ban from its own ports ships arriving from a foreign 
port with insufficient security, while the US president is authorised, 
without prior notice or hearing, to suspend the right of a US vessel or 
person to enter such a port.
    The situation is being closely watched by the international ports 
industry. Peter Van Der Kluit, head of the International Association of 
Ports and Harbours' European office, said his organisation was ``very 
anxious'' about the security-grading plan, although the fine details 
were still being made clear.
    The grading could mean some ships arriving from a high-risk port 
are either denied entry or subject to strict controls. One possibility 
is the placing by the US Coast Guard of ``sea marshals'' on ships 
deemed to be a security risk. Sea marshals have already been used on 
ships classed by the Coast Guard as potentially hazardous, with the LNG 
carrier Polar Eagle being boarded by a four-man team during its transit 
of the Cook Inlet in Alaska last month.
    The power to act against foreign ports will come if the Port and 
Maritime Security Act, passed by the US Senate last December, is 
adopted by Congress and signed into law by President Bush. Similar 
proposals have been included in the US submission to next week's 
special meeting on security at the International Maritime organisation.
    The Senate bill also calls on ports and terminal operators to draw 
up and submit for approval a maritime facility security plan.
    The plan has to be made in conjunction with new local port security 
committees, their memberships drawn from port authorities, unions, the 
private sector, local, state and federal agencies and law enforcement 
and under the chairmanship of the local Coast Guard captain of the 
port.

                           What's in the box?
                          Lloyd's List, London
                        Monday, February 4, 2002

Section: Special Report-Maritime Emergencies

    Millions of containers move around the world on ships, trains and 
trucks and being able to pinpoint all those which contain illegal 
immigrants, drugs, contraband or terrorists or terrorist materials is a 
virtual impossibility.
    There have been and continue to be successes as drug seizures are 
made or refugees discovered. Recently, in an Italian port a container 
was found to be housing a man equipped with a laptop computer, mobile 
phone and enough supplies to sustain him on a long sea voyage. The ship 
was bound for Canada and the man was arrested as a suspected terrorist.
    Such successes, however, are rare examples since the resources 
available to customs, immigration and narcotics agencies around the 
world are insufficient to meet the demand. The only hope of minimising 
the risk of terrorists smuggling themselves or their deadly equipment 
in containers is in making the intermodal transport system as secure as 
possible without hindering the free flow of trade.
    The threat of terrorism delivered via a box has been known for some 
time. A report by the US Department of Transportation in August 2000 
suggested terrorists would be more likely to ship a nuclear bomb or its 
components in one of the 550 ships, 2,500 aircraft or 45,000 containers 
that entered the US every day. It also cited a war game, Wild Atom, run 
by the Washington-based Centre for International Strategic Studies in 
1996 in which terrorists smuggled a nuclear bomb into the US disguised 
as commercial cargo on a ship.
    The modern intermodal transport system of ships, rail and trucks is 
already heavily exploited by organised crime. Once the container was 
seen as the solution to cargo pilfering, reducing it to a fraction of a 
percent, but criminals soon realised stealing the container itself 
could be even more lucrative. According to a recent report commissioned 
by the National Cargo Security Council, the average value of cargo 
theft increased fivefold to $500,000 between the 1970s and 1990s.
    ``Intermodal shipping,'' the report noted, ``has revolutionised the 
supply chain and transportation function by using standardised cargo 
containers, computerised cargo tracking and automated cargo transfer 
equipment that enables shippers to securely and efficiently transfer 
containers delivered by sea to other ships for onward shipment onto 
commercial railroads and trucks for overland transportation.''
    The container is not only vulnerable to being stolen intact or 
being broken into, despite the use of locks and seals (enterprising 
thieves are known not only to break into containers but, having removed 
the targeted goods, then replace them with sandbags to make up the 
weight), but can also be the convenient means for smuggling contraband 
goods around the world. Criminals are able to exploit the complexity of 
the intermodal system to conceal the true origin of cargo within which 
contraband goods are hidden.
    Containers are also used to smuggle ``hot'' money from activities 
such as drug dealing out of the US, exploiting the high volume of 
containerised trade and the fact that US Customs devotes the majority 
of its resources to inspecting inbound containers.
    As it is, US Customs can only inspect a tiny percentage of import 
containers, a rate that was expected prior to September 11 to fall as 
low as 1% in the next few years as trade increased. An increase in its 
budget, however, under the Port and Maritime Security Act passed by 
Congress last December may enable it to maintain if not expand its 
inspection rate.
                                 ______
                                 
                            J. Al Cannon, Jr. Esq., Sheriff
                            Charleston County, SC, February 6, 2002
Senator Ernest F. Hollings,
U.S. Senate
Washington, DC

Dear Senator Hollings:

    The terrorist attacks of September 11th, and subsequent discovery 
of further planned attacks have highlighted the suddenness with which 
the security of the United States can be breached, as well as the 
terrible cost of such a breach. Every region of the United States has 
its own particular character and each geographic region brings with it 
its own unique challenges from a security perspective.
    In Coastal South Carolina, we are particularly mindful of the 
fertile ground our coastline affords illicit maritime traffic of all 
types. Coastal South Carolina has been favored grounds for smuggling 
and piracy since before the American Revolution. In the current 
situation, we are faced not only with the ongoing challenges of 
narcotics and alien smuggling, but the clandestine importation of 
weapons of mass destruction, and the potential conversion of hazardous 
cargo and large seagoing vessels into weapons themselves. Methods used 
to smuggle aliens can easily be used to smuggle those trained for, and 
intent on, hostile terrorist action against the citizens of this 
country. Now that this threat has made its presence known, we expect it 
to continue for the foreseeable future.
    The Charleston County Sheriff's Office supports ongoing security 
operations by the United States Customs Service, as well as the United 
States Coast Guard in Charleston Harbor. We further support port and 
Customs operations with an explosives-sniffing canine. The current 
level of security is taxing personnel and machinery to their limits on 
all fronts. In addition to the bulk cargo entering the Charleston Area, 
and the commercial fishing traffic, there is a constellation of 
personal watercraft operating in the Coastal Waters of South Carolina. 
Any of these personal watercraft can be ``weaponized'' in the manner of 
the attack on the U.S.S. Cole. In the event of a high-value cargo 
escort, all available local and State agencies must contribute 
personnel and craft to provide adequate coverage. This is in addition 
to their normal patrol duties and responsibility for the safety and 
security of the boating public. There is no shortage of commitment and 
professionalism, but there remains a desperate need for additional 
manpower, vessels and equipment.
    Weapons of mass destruction or terrorist personnel who gain entry 
here can be swiftly transported via the Intracoastal Waterway along the 
Eastern Seaboard from Norfolk, Virginia to Key West Florida. Rail and 
road nets emanating from the Charleston area provide additional 
transport options, which are already being used by those schooled in 
smuggling narcotics.
    Charleston itself is frequently transited by ``high-value target'' 
shipping, such as shipping directly supporting military operations, as 
well as hazardous materials. Any one of these ships, once targeted for 
sabotage or used as a weapon, could cause tremendous devastation and 
loss of life in the area. There is also a substantial threat to 
blockage of the harbor from a disabled or sunken vessel or sabotaged 
bridge. The effects of such a disruption in commerce would ripple 
across the nation.
    Each of these threats provide additional challenges for local law 
enforcement, and each of these threats to Charleston's maritime 
operation are not limited to containerized cargo itself. Sabotage to 
navigational aids, land-based intermodal facilities, bridges and access 
roads has been a practice in warfare in the past, and can only be 
expected to be a continued practice. The convergence of these high-
value targets in the Charleston area is of tremendous concern to those 
in law enforcement.
    In the furtherance of the defense of Charleston from these threats, 
law enforcement is in dire need of increased personnel as well as 
sufficient watercraft to provide an appropriate level of security for 
high threat cargo and vessels, as well as technology to employ those 
assets in the most efficient and productive manner. The transfer of 
intelligence and information in rapid fashion between responsible 
agencies, aided by an analysis capability is also essential to the 
effective use of our assets. No single agency can accomplish this task 
alone, or without the help of the maritime community and the public.
    In closing, I wish to thank the Committee for consideration of this 
document, and extend my appreciation for the Committee's attention to 
this vital security issue.
        Sincerely,
                                    J. Al Cannon, Jr., Esq.
                                                           Sheriff.
Cc: Mr. Joe Maupin

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