[Senate Hearing 107-1065]
[From the U.S. Government Publishing Office]
S. Hrg. 107-1065
CRIME AND SECURITY ISSUES INVOLVING
U.S. SEAPORTS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JULY 24, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST 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
Mark Buse, Republican Staff Director
Jeanne Bumpus, Republican General Counsel
C O N T E N T S
----------
Page
Hearing held on July 24, 2001.................................... 1
Statement of Senator Edwards..................................... 28
Statement of Senator Hollings.................................... 1
Prepared statement........................................... 2
Statement of Senator McCain...................................... 5
Prepared statement........................................... 6
Witnesses
Carlton, Bruce J., Acting Deputy, Maritime Administration........ 16
Prepared statement........................................... 17
Craig, James M., Vice President, American Institute of Marine
Underwriters................................................... 42
Prepared statement........................................... 43
Graham, Hon. Bob, U.S. Senator from Florida...................... 7
Leone, Michael, Port Director, Massachusetts Port Authority...... 50
Prepared statement........................................... 53
Loy, Admiral James M., Commandant, United States Coast Guard..... 12
Prepared statement........................................... 14
Maher, Basil, President and Chief Operating Officer, Maher
Terminals, Inc................................................. 45
Prepared statement........................................... 46
Miller, John L., Executive Vice President, International
Transportation
Service, Inc................................................... 47
Prepared statement........................................... 49
Petersen, Kim E., Executive Director, Maritime Security Council.. 32
Prepared statement........................................... 38
Underwood, Rear Admiral James W., Director, Office of
Intelligence and Security, Department of Transportation........ 20
Prepared statement........................................... 22
Winwood, Charles, Acting Commissioner of Customs................. 9
Prepared statement........................................... 11
Appendix
Powell, Peter H., Sr., President, National Customs Brokers and
Forwarders Association of America, letter dated July 23, 2001,
to Hon. Ernest F.
Hollings....................................................... 63
CRIME AND SECURITY ISSUES INVOLVING
U.S. SEAPORTS
----------
TUESDAY, JULY 24, 2001
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 9:45 a.m., in
room
SR-253, Russell Senate Office Building, Hon. Ernest F.
Hollings, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. ERNEST F. HOLLINGS,
U.S. SENATOR FROM SOUTH CAROLINA
The Chairman. The hearing will come to order pending
Senator Graham's attendance here. We can have our opening
comments by myself and Senator McCain. I will file my statement
in the record. If I were in the drug business down in the
country of Colombia, I would load up 10 of those containers
that come into the ports of America, knowing that only one of
the 10 would be inspected. Nine would go through clear and
free, and I would have around 450,000 tons of cocaine in on the
market.
I am fascinated, because I live at a port and we always
find in concrete posts and big, 55-gallon asphalt drums,
cocaine, small amounts secured. But my point is that we do not
have port security. Port operations are very complex. You have
got all kinds of entities involved.
The captain of the port is in charge of the security, and
this observation by not having security is no criticism of the
Coast Guard. If I had to list one entity in my years up here
that has done a most creditable job, it would be the United
States Coast Guard.
They have been limited financially. The bill I introduced,
along with Senator Graham last week, is limited financially.
Everyone in the Administration wants to endorse it. There are
no real objections to it until they get to OMB and then OMB
says ``hold up, do not say anything.'' So it is really a money
problem. Understanding that, we have got to go about it in a
deliberate fashion.
The bill calls for a survey of all the ports, so they are
wanting the Coast Guard to come in and look at their particular
plans at 50 ports in the United States as to their security
plans and then go with a team and start the implementation.
This cannot be done overnight. It is a start, and particularly
favored to have authorities from the various entities all ready
to tell us about their concerns and their suggestions.
I yield to Senator McCain.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings,
U.S. Senator from South Carolina
Today, the Committee will examine the state of security at our
Nation's seaports, and for those that have yet to study this issue, I
think they may be surprised at what they hear. Despite the massive
volume of cargo that moves through our Nation's ports, there are no
Federal security standards, guidelines or otherwise, and the Federal
Government does not provide the resources to obtain the technology to
adequately screen the cargo moving through, leaving our seaports
vulnerable to criminal activity--from smuggling to terrorism to cargo
theft. The safety and security of our national borders is a Federal
responsibility, and given the security that we help to provide at our
Nation's land and air borders, we must do more for our seaports.
On Friday, Senator Bob Graham and I introduced the Port and
Maritime Security Act of 2001. This legislation is long overdue. It is
needed to facilitate future technological advances and increases in
international trade, and ensure that we have the sort of security
control necessary to ensure that our borders are protected from drug
smuggling, illegal aliens, trade fraud, threats of terrorism as well as
potential threats to our ability to mobilize U.S. military force. We
introduced similar legislation in the last Congress, but time did not
allow us to proceed any further with the legislative process. However,
this is just too important an issue to let go by, and I intend to work
with Senator Graham, and others, to try and craft a policy to help
protect our maritime borders.
The Department of Transportation recently conducted an evaluation
of our marine transportation needs for the 21st Century. In September
1999, then-Transportation Secretary Slater issued a preliminary report
of the Marine Transportation System (MTS) Task Force--An Assessment of
the U.S. Marine Transportation System. The report reflected a highly
collaborative effort among public sector agencies, private sector
organizations and other stakeholders in the MTS.
The report indicates that the United States has more than 1,000
harbor channels and 25,000 miles of inland, intracoastal, and coastal
waterways in the United States which serve over 300 ports, with more
than 3,700 terminals that handle passenger and cargo movements. These
waterways and ports link to 152,000 miles of railways, 460,000 miles of
underground pipelines and 45,000 miles of interstate highways.
Annually, the U.S. marine transportation system moves more than 2
billion tons of domestic and international freight, imports 3.3 billion
tons of domestic oil, transports 134 million passengers by ferry,
serves 78 million Americans engaged in recreational boating, and hosts
more than 5 million cruise ship passengers.
The MTS provides economic value, as waterborne cargo contributes
more than $742 billion to U.S. gross domestic product and creates
employment for more than 13 million citizens. While these figures
reveal the magnitude of our waterborne commerce, they don't reveal the
spectacular growth of waterborne commerce, or the potential problems in
coping with this growth. It is estimated that the total volume of
domestic and international trade is expected to double over the next 20
years. The doubling of trade also brings up the troubling issue of how
the U.S. is going to protect our maritime borders from crime, threats
of terrorism, or even our ability to mobilize U.S. armed forces.
Security at our maritime borders is given substantially less
Federal consideration than airports or land borders. In the aviation
industry, the Federal Aviation Administration (FAA) is intimately
involved in ensuring that security measures are developed, implemented,
and funded. The FAA works with various Federal officials to assess
threats directed toward commercial aviation and to target various types
of security measures as potential threats change.
Currently, each air carrier, whether a U.S. carrier or foreign air
carrier, is required to submit a proposal on how it plans to meet its
security needs. Air carriers also are responsible for screening
passengers and baggage in compliance with FAA regulations. We made sure
that airports, the FAA, air carriers and law enforcement worked
together to protect the flying public.
At land borders, there is a similar investment in security by the
Federal Government. TEA-21 approved $140 million a year for 5 years for
the National Corridor Planning and Development and Coordinated Border
Infrastructure Program. These funds will help facilitate the law
enforcement functions of the Federal Government, and are in addition to
funds that we invest in border patrol operations.
By way of contrast, at U.S. seaports, the Federal Government
invests nothing in infrastructure, other than the human presence of the
U.S. Coast Guard, U.S. Customs Service, and the Immigration and
Naturalization Service, and whatever equipment those agencies have to
accomplish their mandates. Physical infrastructure is provided by
State-controlled port authorities, or by private sector marine terminal
operators. There are no controls, or requirements in place, except for
certain standards promulgated by the Coast Guard for the protection of
cruise ship passenger terminals. Essentially, where seaports are
concerned, we have abrogated the Federal responsibility of border
control to the State and private sector.
I think that the U.S. Coast Guard and Customs Agency are doing an
outstanding job, but they are outgunned. There is simply too much money
in the illegal activities they are seeking to curtail or eradicate, and
there is too much traffic coming into, and out of the United States.
For instance, in the latest data available, 1999, we had more than 10
million TEUs imported into the United States. For the uninitiated, a
TEU refers to a twenty-foot equivalent unit shipping container. By way
of comparison, a regular truck measures 48-feet in length. So in
translation, we imported close to 5 million truckloads of cargo.
According to the Customs Service, seaports are able to inspect between
1 percent and 2 percent of the containers, so in other words, a drug
smuggler has a 98 percent chance of gaining illegal entry.
It is amazing to think, that when you or I walk through an
international airport we will walk through a metal detector, our bags
will be x-rayed, Customs will interview us, and may check our bags.
However, at a U.S. seaport you could import a 48 foot truckload of
cargo, and have at least a 98 percent chance of not even being
inspected. It just doesn't seem right.
In my own State, the Port of Charleston, which is the fourth
largest container port in the United States, just recently we got our
first unit even capable of x-raying intermodal shipping containers, and
we have the temporary deployment of a canine unit. By way of
comparison, the Dallas/Fort Worth Airport is the fourth largest airport
in the United States. It would be inconceivable that an airport of this
magnitude have just one single canine, and one piece of screening
equipment. This is simply not sufficient.
The request to evaluate our system of seaport security came from
Senator Graham, and I would like to commend him for his persistent
efforts in addressing this issue. Senator Graham has had problems with
security at some of the Florida seaports, and although the State has
taken some steps to address the issue, there is a great need for
considerable improvement. Senator Graham laudably convinced the
President to appoint a Commission, designed much like the Aviation
Security Commission, to review security at U.S. seaports.
The Commission visited 12 major U.S. seaports, as well as two
foreign ports. It compiled a record of countless hours of testimony and
reviewed the security practices of the shipping industry. It also met
with local law enforcement officials to discuss the issues and their
experiences as a result of seaport related crime.
For instance, the Commission found that the 12 U.S. seaports
accounted for 56 percent of the number of cocaine seizures, 32 percent
of the marijuana seizures, and 65 percent of heroin seizures in
commercial cargo shipments and vessels at all ports of entry
nationwide. Yet, we have done relatively little, other than send in an
undermanned contingency of Coast Guard and Customs officials to do
whatever they can.
Drugs are not the only criminal problem confronting U.S. seaports.
For example, alien smuggling has become increasingly lucrative
enterprise. To illustrate, in August 1999, INS officials found 132
Chinese men hiding aboard a container ship docked in Savannah, Georgia.
The INS district director was quoted as saying, ``This was a very
sophisticated ring, and never in my 23 years with the INS have I seen
anything as large or sophisticated.'' According to a recent GAO report
on INS efforts on alien smuggling (RPT-Number: B-283952), smugglers
collectively may earn as much as several billion dollars per year
bringing in illegal aliens.
Another problem facing seaports is cargo theft. Cargo theft does
not always occur at seaports, but in many instances, the theft has
occurred because of knowledge of cargo contents. International shipping
provides access to a lot of information and a lot of cargo to many
different people along the course of its journey. We need to take steps
to ensure that we do not facilitate theft. Losses as a result of cargo
theft have been estimated as high as $12 billion annually, and it has
been reported to have increased by as much as 20 percent recently. The
FBI has become so concerned that it recently established a multi-
district task force, Operation Sudden Stop, to crack down on cargo
crime.
The other issues facing seaport security may be less evident, but
potentially of greater threat. As a Nation in general, we have been
relatively lucky to have been free of some of the terrorist threats
that have plagued other nations. However, we must not become
complacent. U.S. seaports are extremely exposed. On a daily basis many
seaports have cargo that could cause serious illness and death to
potentially large populations of civilians living near seaports if
targeted by terrorism. Most of the population of the United States
lives in proximity to our coastline.
The sheer magnitude of most seaports, their historical proximity to
established population bases, the open nature of the facility, and the
massive quantities of hazardous cargoes being shipped through a port
could be extremely threatening to the large populations that live in
areas surrounding our seaports. The same conditions in U.S. seaports
that could expose us to threats from terrorism, could also be used to
disrupt our abilities to mobilize militarily. During the Persian Gulf
War, 95 percent of our military cargo was carried by sea. Disruption of
sea service could have resulted in a vastly different course of
history. We need to ensure that it does not happen to any future
military contingencies.
As I mentioned before, our seaports are international borders, and
consequently we should treat them as such. However, I am realistic
about the possibilities for increasing seaport security, the realities
of international trade, and the many functional differences inherent in
the different seaport localities. Seaports by their very nature, are
open and exposed to surrounding areas, and as such it will be
impossible to control all aspects of security, however, sensitive or
critical safety areas should be protected. I also understand that U.S.
seaports have different security needs in form and scope. For instance,
a seaport in Alaska, that has very little international cargo does not
need the same degree of attention that a seaport in a major
metropolitan center, which imports and exports thousands of
international shipments. However, the legislation we are introducing
today will allow for public input and will consider local issues in the
implementation of new guidelines on port security, so as to address
such details.
Substantively, the Port and Maritime Security Act establishes a
multi-pronged effort to address security needs at U.S. Seaports, and in
some cases formalizes existing practices that have proven effective.
The bill authorizes the Department of Transportation to establish a
task force on port security and to work with the private sector to
develop solutions to address the need to initiate a system of security
to protect our maritime borders.
The purpose of the task force is to implement the provisions of the
act; to coordinate programs to enhance the security and safety of U.S.
seaports; to provide long-term solutions for seaport safety issues; to
coordinate with local port security committees established by the Coast
Guard to implement the provisions of the bill; and to ensure that the
public and local port security committees are kept informed about
seaport security enhancement developments.
The bill requires the U.S. Coast Guard to establish local port
security committees at each U.S. seaport. The membership of these
committees is to include representatives of the port authority, labor
organizations, the private sector, and Federal, State, and local
government officials. These committees will be chaired by the U.S.
Coast Guard's Captain-of-the-Port, and will be used to establish
quarterly meetings with local law enforcement and attempt to coordinate
security and help facilitate law enforcement.
The bill also requires the Coast Guard to develop a system of
providing port vulnerability assessments for U.S. seaports. After
completion of the assessment, the seaport would be required to submit a
security program to the Coast Guard for review and approval. The
assessment shall be performed with the cooperation and assistance of
local officials, through local port security committees, and ensure the
port is made aware of and participates in the analysis of security
concerns. The legislation does not include provision for allowing the
Coast Guard to conduct criminal background checks of transportation
workers to reveal potential threats to facilitate crime or terrorism.
It had been my intent to include such a provision, but the need to get
it introduced in advance of a hearing scheduled on the subject of
seaport security precluded it from being included in the bill. I intend
to address this issue as we move the bill through the process, and feel
that I can work with interested parties to craft something that will
help address legitimate law enforcement concerns, while at the same
time, protecting individual rights and defining security risks to avoid
unnecessary and needless security review.
The bill authorizes MarAd to provide loan guarantees to help cover
some of the costs of port security infrastructure improvements, such as
cameras and other monitoring equipment, fencing systems and other types
of physical enhancements. The bill authorizes $8 million, annually for
4 years, to cover costs, as defined by the Credit Reform Act, which
could guarantee up to $320 million in loans for security enhancements.
The bill also establishes a grant program to help cover some of the
same infrastructure costs. Additionally, the bill provides funds for
the U.S. Customs Service to purchase screening equipment and other
types of non-intrusive detection equipment. We have to provide Customs
with the tools they need to help prevent further crime.
The bill requires a report to be attached on security and a
revision of 1997 document entitled ``Port Security: A National Planning
Guide.'' The report and revised guide are to be submitted to Congress
and are to include a description of activities undertaken under the
Port and Maritime Security Act of 2001, in addition to analysis of the
effect of those activities on port security and preventing acts of
terrorism and crime.
The bill requires the Department of Transportation, to the extent
feasible, to coordinate reporting of seaport related crimes and to work
with State law enforcement officials to harmonize the reporting of data
on cargo theft, or alternatively, the feasibility of utilizing private
data on cargo theft. Better data will be crucial in identifying the
extent and location of criminal threats and will facilitate law
enforcement efforts combating crime. The bill also requires the
Secretaries of Agriculture, Treasury, and Transportation, as well as
the Attorney General to work together to establish shared dockside
inspection facilities at seaports for Federal and State agencies, and
provides $1 million, annually for 4 years, to carry out this section.
Currently, there are some U.S. ports that do not have inspection space
in the organic port area. It is crucial that inspections occur as close
to the point of entry as possible.
The bill also establishes a program to train personnel involved in
maritime transportation and maritime security. A better prepared
security force will help enable us to more effectively combat potential
threats of crime and terrorism. The bill also requires the Customs
Service to improve reporting of imports at seaports to help ensure that
Customs will have adequate information in advance of having the entry
of cargo, and to do so in a manner consistent with their plans for the
Automated Commercial Environment (ACE) program.
Finally, the bill reauthorizes an extension of tonnage duties
through 2006, and makes the proceeds of these collections available to
carry out the Port and Maritime Security Act. These fees currently are
set at certain levels, and are scheduled to be reduced in 2002. The
legislation reauthorizes and extends the current fee level for an
additional 4 years, but dedicates its use to enhancing our efforts to
fight crime at U.S. seaports and to facilitating improved protection of
our borders, as well as to enhance our efforts to ward off potential
threats of terrorism.
I look forward to hearing the testimony from our witnesses today.
STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
Senator McCain. I thank you, Chairman Hollings, for holding
this hearing today and, in light of recent world events and
problems here at home, I know that we can all agree that
ensuring the security of our nation's seaports is a necessity.
The bombing of the USS Cole and the ongoing problems with
drug and alien smuggling, while highlighting the need for
action, also show the complexity of this issue.
In our efforts to increase our nation's seaport security,
we must ensure to take into account not only the wide range of
threats and crimes surrounding our seaports, but also the
unique nature of our ports.
I know today's witnesses are going to share their views on
the Interagency Commission Report on Crime and Security in U.S.
Seaports. As we found out last year, the commissioners
determined that seaport crime encompasses a broad range of
crimes. These include the importation of illicit drugs,
contraband, prohibited or restricted merchandise, stowaways and
alien smuggling, trade fraud and commercial smuggling,
environmental crimes, cargo theft, and the unlawful exportation
of controlled commodities and munitions, stolen property and
drug proceeds.
I once again want to thank all the members of the
Commission for their efforts in bringing their concerns to our
attention. I am interested in hearing from our witnesses, who I
understand share many of the concerns raised by the Commission
about what is needed to address security concerns. I hope they
will offer recommendations that can be utilized in advancing a
legislative resolution.
I am also interested in hearing their views on S. 1214, the
Port and Maritime Security Act, which was introduced by
Chairman Hollings last Friday. Specifically, I hope our
witnesses can shed some light on how they believe the
provisions of that bill could be implemented, what they believe
would be the cost to both the public and private sector, and
how the flow of commerce would be affected.
As I stated earlier, we must not ignore the need for
increased attention to the security of our nation's seaports
and we can ill afford to put clamps on ports that would degrade
their ability to facilitate the movement of commerce.
I thank you, Mr. Chairman, for taking the lead on this
issue for many years. I note our colleague, Senator Graham is
here, who has also been heavily involved. I look forward to
working with you and Senator Graham as we attempt to address a
very serious challenge that I think has been identified. The
question is how we go about it. I congratulate you, Senator
Hollings, on the introduction of your legislation to address
this challenge.
[The prepared statement of Senator McCain follows:]
Prepared Statement of Hon. John McCain,
U.S. Senator from Arizona
I want to begin by thanking Chairman Hollings for holding this
hearing today. In my capacity as Chairman, I held a similar hearing
last fall. In light of recent world events and problems here at home, I
know that we can all agree that insuring the security of our nation's
seaports is a necessity. The bombing of the USS Cole and ongoing
problems with drug and alien smuggling, while highlighting the need for
action, also show the complexity of the issue.
In our efforts to increase our nation's seaport security, we must
ensure that we take into account not only the wide range of threats and
crimes surrounding our seaports, but also the unique nature of our
ports. A ``one-size-fits-all'' approach will not work. Our ports are
complex and diverse in both geography and infrastructure. It is
essential that we keep this in mind as we go forward with legislation
to improve security.
I believe that we must proceed with caution in the development of
new programs to address problems of lax seaport security. In some
cases, the problems we face today in our seaports are not due to a lack
of programs to address them, but result more from a lack of attention
both in funding and hard assets for the agencies who are currently
responsible for seaport security.
I know today's witnesses are going to share their views on the
Interagency Commission's Report on Crime and Security in U.S. Seaports.
As we found during last year's hearing, the Commissioners determined
that seaport crime encompasses a broad range of crimes. These include:
the importation of illicit drugs, contraband, and prohibited or
restricted merchandise; stowaways and alien smuggling; trade fraud and
commercial smuggling; environmental crimes; cargo theft; and the
unlawful exportation of controlled commodities and munitions, stolen
property, and drug proceeds.
I want to once again thank all the members of the Commission for
their efforts in bringing their concerns to our attention.
I am interested in hearing from our witnesses, whom I understand
share many of the concerns raised by the Commission, what is needed to
address security concerns and hope they will offer recommendations that
can be utilized in advancing a legislative resolution. I am also
interested in hearing their views on S. 1214, the Port and Maritime
Security Act of 2001, which was introduced by Chairman Hollings last
Friday.
Specifically, I hope our witnesses can shed some light on how they
believe the provisions of that bill could be implemented, what they
believe would be the cost to both the public and private sector, and
how the flow of commerce would be effected. As I stated earlier, we
must not ignore the need for increased attention to the security of our
nation's seaports, but we can ill afford to put requirements on the
ports that will degrade their ability to facilitate the movement of
commerce.
The Chairman. Thank you. We both join in congratulating
Senator Graham because he is the real leader here on this
question of port security. Very interesting, he served here in
Washington when everybody talks about a surplus and there isn't
any. Everyone talks about the ABM Treaty and there is no
treaty, and now everyone is now all wound up about space-based
threats when it is port-based threats. That is the real threat
at the present and earlier on.
There is no one better equipped than our distinguished
colleague here from Florida, Senator Graham. We recognize you
at this time.
STATEMENT OF HON. BOB GRAHAM,
U.S. SENATOR FROM FLORIDA
Senator Graham. Thank you very much, Mr. Chairman, and
Senator McCain. I very much appreciate your holding this
hearing so promptly on this important legislation relative to
the security of America's seaports. Just a little personal
background.
I became interested in this years ago when we were
receiving weekly, even daily reports of crime, narcotics, human
trafficking through seaports in Florida. I took occasion in
October 1997 to spend a day working with Customs at Port
Manatee, one of the ports serving the Tampa Bay area, and saw
the extent to which not only were crimes coming into the United
States, but crimes that had been committed inside the United
States such as auto theft were being exported through our
ports.
At that time, I became very concerned that the seaports
lacked the advanced security procedures and equipment that are
necessary to prevent acts of theft, drug trafficking, even acts
of terrorism.
What impressed me was the stark contrast between the
security levels at our seaports and the security levels at our
nation's airports. I also learned that seaport security
suffered from some severe communication deficiencies.
Although seaports conduct the vast majority of our
international trade, about 95 percent of our international
trade flows in and out of our seaports, the activities of law
enforcement and trade processing agencies such as the Coast
Guard, Customs, Department of Agriculture, FBI, and State and
local agencies are often uncoordinated, fragmented.
Taken together, this lack of security and lack of
interagency coordination in U.S. seaports presents an extremely
attractive target for criminals and a variety of criminal
activities. The severity of the problem will dramatically
increase over the next 20 years as the total volume of imported
and exported goods at U.S. seaports is expected to more than
double.
The variety of trade and commerce carried out in the
seaports has greatly expanded. Everything from bulk cargo,
containerized cargo, passenger cargo, tourism, intermodal
transportation, present targets of opportunity for illicit
activities at our seaports.
The continued expansion of activities at the seaports has
increased these opportunities. Now is the time for the United
States in coordination with Federal, State, local, and users of
the ports and others who support the port activities to come
together in an effective effort to begin to suppress the level
of crime being conducted at America's seaports.
Some of the proposals which are contained in this
legislation, most of those proposals are a direct result of a
Commission entitled the Interagency Commission on Crime and
Security in U.S. Seaports, which was established by President
Clinton on April 27th, 1999. This Commission conducted onsite
surveys of 12 U.S. ports. At each location interviews and focus
group sessions were held with representatives of governmental
agencies and the trade community.
In August of last year, the Commission issued its final
report which identified many of the common security problems
that were discovered in U.S. seaports. The report also issued
20 recommendations for improving security at U.S. ports.
To highlight a few of those recommendations which are
contained in the legislation you are considering today, the
creation of a national level Security Subcommittee of the
Interagency Committee on Maritime Transportation System with
the specific goal of developing voluntary minimum security
guidelines for seaports and a model port concept that would
include detailed site plans and procedures that could be
adopted by all ports in America to improve their security; the
establishment of local port security committees with Federal,
State, local and private sector membership; the preparation of
an annual interagency crime threat assessment for each seaport;
the development of a 5-year crime and security technology
deployment plan to identify and evaluate advanced investigative
technologies that can be deployed at seaports.
If I could, Mr. Chairman, that is an area of particular
interest to me because in my visits to seaports outside the
United States, particularly Rotterdam in Holland, I was
impressed with how further advanced they were in the
application of technology to deal with seaport crime.
Next, the establishment of interagency Federal inspection
stations at seaports to facilitate cooperation among Federal
agencies and to expedite the flow of legitimate trade and
commerce; and finally, an analysis of future Federal personnel
resource requirements at seaports based upon future projections
of seaport crime, trade volume, and technology improvements.
Mr. Chairman and Senator McCain, I believe it is important
to note that not all these actions with regard to seaport
security will be taken at the Federal level. Our seaports have
had a long tradition, preceding by a century the American
Revolution, of local control of those seaports. That is one of
the things that distinguishes seaports from airports, airports
being a product of the 20th Century, started with a much higher
level of Federal involvement.
I would bring to the Committee's attention that at the
State level, several legislatures are now involved with this
issue. The Florida Legislature recently passed legislation that
calls for the development and implementation of security plans
within the seaports of our State. I believe this is indicative
of the kind of initiative that this Federal legislation could
prompt elsewhere.
Mr. Chairman, the publication of the Commission's final
report should be viewed as only the initial chapter in our
efforts to improve the safety and security of U.S. seaports.
I would hope that the passage of the Port and Maritime
Security Act of 2001 would be another chapter.
Seaports play one of the most critical roles in expanding
our international trade and protecting our borders from
international incidents. Both the report of the Commission and
this legislation recognized the important role in our seaports
and advocate the use of appropriate resources to move our ports
into the 21st Century.
Mr. Chairman, I look forward to working with you, Senator
McCain, and other Members of your Committee in the early
consideration and adoption of this legislation.
The Chairman. Thank you very much, Senator Graham. It may
be well to note at this point that most of that Seaport
Commission's recommendations went to the Collector of the
Customs. But since the turn of the century, the Seaport
Security Act fixes the responsibility to the captain of the
port.
Now, the reason that the captain of the port hadn't taken
over more of that responsibility has been budgetary. I remember
when we extended, back in the 1980s, the Continental limits out
200 miles--the economic zone. We increased the size of the
United States by one-third, gave the jurisdiction and
responsibility to the Coast Guard, and then promptly cut their
budget. Senator Stevens and myself, working on both the
authorization and the Department of Defense, we've been robbing
function 050, the Department of Defense, about $320 million
each year to supplement the Coast Guard budget. And we are
going to work hard to repair that situation.
But what needs to be known is that by Congress, the
authority and the responsibility is with that captain of the
port. I am confident that we are on the right track with
Admiral Loy and his team, because they will oversee it, we will
finally get plans, and begin to implement it. We can't do this
thing overnight. We couldn't buy the Rotterdam screener for
every one of the 378 ports in America and we wouldn't want to.
But there are 50 secure ports that have been designated by
the Coast Guard that need that kind of security.
Let me yield to Senator McCain.
Senator McCain. Thank you, Senator.
The Chairman. Thank you very much, Senator Graham, for your
leadership on this thing. We will follow it on through.
Senator Graham. Thank you very much, Mr. Chairman.
The Chairman. We have our first panel, Charles Winwood, the
Acting Commissioner of Customs; Admiral Loy, the United States
Coast Guard Commandant; Bruce J. Carlton, the Acting Deputy of
the Maritime Administration; and Admiral James W. Underwood,
Director of the Office of Intelligence and Security, Department
of Transportation. All of your full statements will be included
in the record and we will ask to you summarize as best you can.
We will start with Commissioner Winwood.
STATEMENT OF CHARLES WINWOOD,
ACTING COMMISSIONER OF CUSTOMS
Mr. Winwood. Thank you, Mr. Chairman, and thank you for the
opportunity to testify on the security of our nation's
seaports. Before I begin, let me express my appreciation to the
Members for your support of the United States Customs Service
and other Federal agencies involved in the effort to strengthen
seaport security. Your assistance, of course, is vital to any
success we will have.
As you know, last year Customs took part in the Interagency
Commission on Crime and Security in U.S. Seaports and that
Commission issued its report in October of 2000. The report has
mentioned, cited the presence of key risks in the seaport
environment including weaknesses in physical security,
jeopardizing our fight against drug smuggling, exposure to
international conspiracy, trade fraud, cargo theft, illicit
export of vehicles and other serious crimes.
The good news is that the Commission also judged
partnership between the Federal and private sectors at the 12
major seaports it surveyed to be productive. It also found
coordination among Federal law agencies and State and local to
be strong. Customs is also an active participant in the harbor
safety committee that has been formed at major seaports.
Committee meetings serve as key advocacy channels through
which our personnel can stress the priority of port security
needs.
Clearly, the basis for cooperation exists to improve
conditions in our seaport environment. Our challenge now is to
focus that cooperation and provide proper resources to make it
effective. A boom in activity in our nation's seaports poses
unique challenges for the United States Customs Service and the
other agencies involved. We have to process an ever-expanding
stream of commerce with an eye toward protecting America from
crime. Our employees are continuing with this increasing volume
of trade to the best of their abilities.
But today's environment demands that we supplement their
efforts with an effective balance of technology and risk
management strategies. Through the principles of risk
management, we are conducting a more rigorous analysis of trade
data that we collect and are using that information to spot
trends and anomalies. This strategy is essential in helping us
to direct resources to where they are needed most.
Our electronic targeting systems, which include automated
targeting systems and ACS, the Automated Commercial System, are
important tools to help us to select incoming shipments for
examination. They have played a key role in many of our most
significant drug seizures at our seaports. Likewise, we are
also cognizant of the threat in the export environment.
Customs' use of the Automated Export System--or AES--now
covers 90 percent of the outbound filings made by maritime
shippers. That offers us a powerful means to interpret
compliance with U.S. export laws.
We also look forward to the day in the near future when we
can employ Customs' new automated system in the effort to
strengthen seaport security. The Automated Commercial
Environment--or ACE--represents one of the agency's most
crucial infrastructure needs. ACE's powerful applications will
revolutionize the way we select cargo and process the nation's
trade.
I want to take the opportunity to thank the Members for
their support of ACE and ask for your continued assistance as
we work to obtain the funds to complete the system on time.
Customs is also relying heavily on new non-intrusive
inspection technologies to protect America. We are using
powerful new x-ray systems capable of examining entire trucks
and rail cars at one time. These systems have been used very
effectively along our Southwest border and hold great promise
in the seaport environment as well.
Tighter security practices at seaports will help us to
eliminate threats that technology alone cannot. In that regard,
Customs welcomes the Interagency Commission's recommendations
to improve physical security and to tighten controls on
movement of goods within ports, restrict access to sensitive
areas and implement other practical security measures.
Finally, I would like to stress that despite the gains
technology and better information offer us, our personnel
continue to be our most valuable resource. There is no
replacement for the dedicated work of our special agents,
inspectors, canine enforcement officers and other Customs staff
in protecting our nation's seaports.
Thank you again for this opportunity to testify and I look
forward to answering questions you might have at another time.
[The prepared statement of Mr. Winwood follows:]
Prepared Statement of Charles Winwood,
Acting Commissioner of Customs
Chairman Hollings, Senator McCain, Members of the Committee, thank
you for this opportunity to testify on security in our nation's
seaports.
Before I begin, let me express my appreciation to the Members for
your support of U.S. Customs and other Federal agencies involved in the
effort to strengthen seaport security. Your assistance is vital to our
success.
As you know, last year Customs took part in the Interagency
Commission on Crime and Security in U.S. Seaports. That Commission
issued a report in October of 2000. The report cited the presence of
key risks in the seaport environment, including: weaknesses in physical
security jeopardizing our fight against drug smuggling; exposure to
internal conspiracies; trade fraud; cargo theft; illicit export of
stolen vehicles; and other serious crimes.
The good news is that the Commission also judged partnership
between the Federal and private sectors at the 12 major seaports it
surveyed to be productive. It also found coordination among law
enforcement agencies at the Federal, State, and local levels to be
strong.
Customs is also an active participant in the Harbor Safety
Committees that have been formed at major seaports. Committee meetings
serve as a key advocacy channel through which our personnel can stress
the priority of port security needs.
Clearly, the basis for cooperation exists to improve conditions in
our seaport environment. Our challenge now is to focus that
cooperation, and provide the proper resources to make it effective.
Booming activity at our nation's seaports poses unique challenges
for the Customs Service. We have to process an ever-expanding stream of
commerce with an eye toward protecting America from crime.
Our employees are contending with this increasing volume of trade
to the best of their abilities. But today's environment demands that we
supplement their efforts through an effective balance of technology and
risk management strategies.
Through the principles of risk management, we are conducting a more
rigorous analysis of the trade data we collect. We are using that
information to spot trends and anomalies. This strategy is essential in
helping us to direct limited resources where they're needed most.
Our electronic targeting systems--which include ATS and ACS--are
important tools that help us to select incoming shipments for
examination. They have played a key role in many of our most
significant drug seizures at seaports.
Likewise, we are also cognizant of the threat in the export
environment. Customs' use of the Automated Export System, or AES, now
covers 90 percent of the outbound filings made by maritime shippers.
That offers us a powerful means to ensure compliance with U.S. export
laws.
We also look forward to the day, in the near future, when we can
deploy Customs new automated system in the effort to strengthen seaport
security. The Automated Commercial Environment, or ACE, represents one
of the agency's most crucial infrastructure needs.
ACE's powerful applications will revolutionize the way we select
cargo and process the nation's trade. I want to take this opportunity
to thank the Members for their support of ACE and ask for your
continued assistance as we work to obtain the funds to complete the
system on-time.
Customs is also relying heavily on new non-intrusive inspection
technologies to protect America. We are using powerful new x-ray
systems capable of examining entire trucks and railcars at a time.
These systems have been used very effectively along our Southwest
border and hold great promise in the seaport environment as well.
Tighter security practices at seaports will help us to eliminate
threats that technology alone cannot. In that regard, Customs welcomes
the Interagency Commission's recommendation to improve physical
security and tighten control on the movement of goods within ports,
restrict access to sensitive areas, and implement other practical
security measures.
Finally, I would highlight the need for added manpower to implement
the Commission's recommendations. The fact remains that despite the
gains technology and better information offer us, we must have the
personnel available to contend with our spiraling workload.
Thank you again for this opportunity to testify. I look forward to
answering any questions you have.
The Chairman. Thank you.
Admiral Loy.
STATEMENT OF ADMIRAL JAMES M. LOY, COMMANDANT,
UNITED STATES COAST GUARD
Admiral Loy. Good morning, Mr. Chairman. First let me thank
Senator Graham, as you and Senator McCain noticed there, for
his leadership and direction on having the Commission happen to
begin with, and following the recommendations and the results
of the Commission to your Committee, and certainly for your
leadership, Mr. Chairman, and direction for this very important
issue.
Many of us have been working very hard these past 3 or 4
years seeking to place the maritime dimension, if you will, of
our national transportation system on the same level as our
land and air systems as you described. TEA-21 and Air 21 have
directed attention and resources toward badly-needed
improvements in all facets of our land and aviation systems.
In September 1999, Secretary Slater submitted a carefully
crafted report to the Congress on the U.S. Maritime
Transportation System (MTS). Port security was a very key part
of that report. The MTS report also addressed safety in the
environment, infrastructure, investment, among many other
things.
The report culminated 2 years of listening by the
Department of Transportation team joined by 24 other Federal
agencies and countless representatives from State, local,
industry, academic, labor and other interests around the
country's ports and waterways.
I continue to think it is among the most important products
I have personally been associated with in the 3-plus years I
have had this job. My concern is that we may have sent too much
too fast for the Congress to consume. Last year, the Crime
Security in U.S. Seaports Commission broke out port security as
a more consumable challenge. The Commission's report is solid,
and I think the Committee's recent legislation is a strong and
supportive step in the right direction.
Recent history shows us--and should frighten us to the
degree that throughout the world, terrorists target
transportation systems. All of us remember the terrorist
bombing of Pan Am 103; the sarin gas attack on a Tokyo subway;
and deliberate derailment of Amtrak's Sunset Limited, each an
example of an attack on a transportation target.
Ridership on cruise ships has increased exponentially over
the past 10 years. Two years ago, a cruise ship of 70,000 gross
tons was the largest in the world. Today we have an entire
class of cruise ships exceeding 140,000 gross tons. These new
megaships carry upwards of 5,000 passengers and crewmembers. A
successful terrorist attack on any one of these ships could
result in a catastrophic number of casualties and threaten the
economic viability of that entire industry. Just last week, the
Coast Guard and the Customs Service units in Miami, along with
the FBI, responded to a bomb threat against a cruise ship
capable of carrying 3,000 passengers and 1,000 crewmembers.
The ship implemented their security plan, a plan, by the
way, required by the Passenger Vessel Safety Act to prevent the
threat from being realized. We successfully ensured the safety
of the passengers, the crew and the vessel, and the port as a
whole. Who can say what would have happened had we not
responded as we did, or if the cruise line personnel had
followed their well-prepared plan in a different manner.
Examples, unfortunately, abound in anyone's imagination
where dire consequences can result in our ports from illicit
activity associated with drug smuggling, cargo theft,
environmental crime and others that we've heard about already
this morning.
I am even concerned, as you know, sir, about the terrorist
acts associated with nuclear, biological or chemical threats of
mass destruction. These are not fantasies. Many of these
illegal activities are actually going on in U.S. ports as we
speak this morning.
In the interest of time, I'd just like to offer sort of a
menu of things I remain very concerned about and that I believe
are worth our attention and I'll be happy to address any of
these during our questions.
First of all, our notion is, sir, and I think you have
reinforced it, that our ports are low threat at the moment, but
enormously high vulnerability targets. Again, 95 percent of our
global trade goes through our ports. Protecting our ports
requires the significant coordination that Commissioner Winwood
has already described. Federal, State and local, industry,
labor, all those involved must be part of the solution.
Third, the threat information that we have has to be
developed and it has to be shared. Knowledge in this instance
is power and we have to translate data collection efforts to
become usable knowledge that we, the captain of the port, and
others can deal with constructively at the port scene.
I have a sense of three things in a sequence that have to
occur. First, this notion of developing what we consider to be
the attributes of a generic model port. I do not mean a
specific port that we pick out that we think is the best.
Rather, a generic model port and what the attributes of that
port ought to be. Then when we make, as the legislation will
require, vulnerability assessments, we can gauge each port
against this generic model to see where the shortfalls lie in
that particular port. Then that would allow the local harbor
safety committee or port security committee to develop an
adequate action plan to close those shortfalls.
So that sequence of events, understanding what the model
port ought to be, assessing the vulnerability of all those
ports in question and then developing action plans that follow
is a sequence of events that I think is enormously important
for us to understand.
Mr. Chairman, every port is different, leading to this
notion that harbor safety committees and/or port security
committees are the right places for us to leave the development
of the action plans. There may be some sense of low, medium,
and high categories of threat that might be helpful to that
thinking process, but the notion that it needs to be done
locally is, I think, an imperative.
The Seaport Commission recommendations, Mr. Chairman, are
sound. They represent a good place to start, and we must
recognize that the security issue is just one dimension of that
larger report that we sent to the Congress back in September,
1999. The others will eventually need people's attention.
We must find a way to balance the seemingly conflicting
notions of security on one hand, and commercial flow on the
other. The Hart-Rudman Commission discussed that very carefully
and very thoroughly and we have been working on a concept
called Maritime Domain Awareness that may be the key to success
in that issue. Again, knowledge is power if we can take data,
convert it to knowledge and act on it in local ports.
In closing, Mr. Chairman, I find the latest draft of the
Maritime and Port Security Act a solid step forward. It
discusses vulnerability assessments, a task force to make
things happen, shared dockside facilities to expedite
commercial flow and perhaps more importantly, this notion of
calling for better data collection on which we can build
analytically sound action.
Mr. Chairman, as we consider the bigger picture, the
national dialog on homeland security is underway.
Commissions, think tanks and the Pentagon's QDR are all
talking about it. This hearing goes right to the heart of that
discussion. The Seaport Commission and the President's Task
Force on the Coast Guard Roles and Missions both reaffirm our
responsibility as the lead agency for port security, and when
properly resourced, we are ready to get on with that important
work.
I look forward to your questions and thank you, Mr.
Chairman.
[The prepared statement of Admiral Loy follows:]
Prepared Statement of Admiral James M. Loy,
Commandant, United States Coast Guard
Good morning, Mr. Chairman and distinguished Members of the
Committee. As Commandant of the U.S. Coast Guard, I want to thank you
for the opportunity to appear before you today to discuss the Coast
Guard's views regarding seaport security.
As a multi-mission, maritime, military service within the
Department of Transportation, the Coast Guard is a leader in ensuring
America's maritime security. As a lead agency for seaport security, we
provide a valuable service to the American people by making the nation
safer, cleaner, more mobile, and more secure.
As you may know from the September 1999 Report to Congress on the
U.S. Marine Transportation System (MTS), U.S. trade is expected to more
than double by the year 2020. The Interagency Commission on Crime and
Security in U.S. Seaports identifies a lack of adequate security for
our critical MTS infrastructure, which can potentially affect our
entire economy. We don't think often enough of our maritime ports as
security threats. But, as indicated in the Interagency Report on Crime
and Security in U.S. Seaports, our maritime borders are more porous and
have lower security levels when compared to our airports and land
borders.
Recent history shows us that, throughout the world, terrorists
target transportation. All of us remember the terrorist bombing of Pan
Am Flight 103, the sarin gas attack on the Tokyo subway, and the
deliberate derailment of Amtrak's Sunset Limited--each an example of an
attack against a transportation target. Ridership on cruise ships has
increased exponentially over the past 10 years. Ten years ago, a cruise
ship of 70,000 gross tons was the largest in the world. Today, we have
an entire class of cruise ships that exceed 140,000 gross tons. These
new mega-ships carry upwards of 5,000 passengers and crewmembers. A
successful terrorist attack on any one of these ships could result in a
catastrophic number of casualties, and threaten the economic viability
of the entire industry. Just last week, Coast Guard units in Miami,
along with the FBI, responded to a bomb threat against a cruise ship
capable of carrying approximately 3,000 passengers and 1,000
crewmembers. The ship implemented their security plan--a plan required
by the Passenger Vessel Safety Act--to prevent the threat from being
realized. We successfully ensured the safety of the passengers, crew,
vessel, and port as a whole. Who can say what would have happened had
we not responded as we did, or if the cruise line personnel had not
followed their well-prepared plan?
The same security activities used to prevent a terrorist attack
also aid in preventing criminal acts such as smuggling of illicit
drugs, contraband and stowaways; trade fraud and commercial smuggling;
environmental crimes; cargo theft; and the unlawful exportation of
controlled commodities, munitions, stolen property, and drug proceeds.
This same security provides for secure ports in support of military
deployments and national defense.
In addition to the traditional physical security threats, the
information age brings with it new vulnerabilities. We need to protect
our critical information systems as well as our physical
infrastructure. As we modernize our transportation infrastructure by
integrating technology with automation, we also make their associated
information systems more interdependent and interconnected. These
systems become declared targets for attacks by hackers and cyber-
terrorists. Someone intent on disruption, or destruction, of the flow
of sensitive operational information contained in our transportation
management systems will cause crippling damage. Consequently, we face a
significant challenge to ensure our information systems are protected
from those who would cause harm, and yet remain accessible to our
customers--the traveling public, commercial transportation operators
and government agencies alike.
The MTS is especially vulnerable to crime and terrorism because of
the scale, complexity, and pace of activity in our ports. The task of
protecting our transportation system is complex and requires close
coordination between our regulatory, intelligence, and law enforcement
organizations. Effective deterrence, prevention and response activities
affecting U.S. transportation assets and programs must be coordinated
between Federal law enforcement authorities, the Coast Guard, State and
local officials, and the transportation community. The willingness of
intelligence and law enforcement agencies to share threat information
with the Coast Guard greatly enhances our ability to work with the
transportation industry to increase security awareness and, if
necessary, implement security countermeasures.
The reports from the Interagency Committee on the Marine
Transportation System (ICMTS), the Marine Transportation System
National Advisory Committee (MTSNAC), the 1999 Report to Congress on
the U.S. Marine Transportation System (MTS), and the Interagency
Commission on Crime and Security in U.S. Seaports contain
recommendations for improving security that will require additional
resources for implementation. Both the ICMTS, chaired by the Coast
Guard, and MARAD's MTSNAC are discussing many of these security issues
and beginning to coordinate efforts ranging from national defense and
terrorism to theft and our economic security. Examples include
implementing infrastructure improvements to allow for interagency
systems integration, and pursuing the ``model port concept'' through
which best practices by marine terminal operators are shared, and
voluntary minimum-security guidelines are developed. These groups are
working to balance security imperatives and the increasing need for a
fast and efficient U.S. transportation system, a key contributor to the
country's overall economic prosperity. To the extent there are resource
implications, they must be weighed against other priorities in the
context of the overall budget.
In summary, the Coast Guard is encouraged that seaport security
concerns are receiving national attention. It is not my intent to
instill fear or alarm in anyone today. But the sobering reality is,
because we live in a country that prides itself on the openness of its
democracy, we are always at risk of a terrorist attack. Therefore, it
is very important that we address the issues of security and crime in
seaports now. If we do, we can assure our national security and our
ability to keep our nation's transportation system the very best in the
world.
The Chairman. Very good.
Mr. Carlton.
STATEMENT OF BRUCE J. CARLTON,
ACTING DEPUTY, MARITIME ADMINISTRATION
Mr. Carlton. Thank you very much, Mr. Chairman. Good
morning. It is a pleasure to be here to talk to you about the
issue of port and maritime security and I'd like to begin by
joining my colleagues in thanking you and this Committee for
your leadership on efforts to improve in this area.
The security of our ports is vital to our economic and
national security. A disruption of the flow of cargo through
our ports would have a significant negative impact on our
economy and our military readiness. Security lapses at port
facilities can cause cargo handling delays or losses and
jeopardize personal safety and society at large. Security
weaknesses in and around our ports reduce competitiveness,
threaten military readiness and degrade our quality of life.
The movement of military cargoes through our commercial
ports is standard practice, and the security of commercial
ports during times of military mobilization is critical to
national defense. Ports around the world are contending with
security issues such as alien smuggling, cargo theft, drug
smuggling and terrorist activities.
Simply having the ability to move large quantities of cargo
through a port in a short period of time is no longer enough in
order to remain both safe and competitive.
Government cooperation with industry to identify and
correct security weaknesses, while at the same time maintaining
or improving upon the efficiencies for the movement of cargo,
is the basis upon which all port security measures should be
approached.
Because we are focused on the development and maintenance
of a strong maritime industry for both economic and national
security purposes, my agency, the Maritime Administration, is
well positioned to help ensure that both objectives continue to
be met while concurrently focusing on new security measures. We
would be very happy to offer this Committee any assistance it
may need in the area of developing this legislation on improved
port security. Many factors contribute to the need for
increased port and maritime security.
As the Interagency Commission on Crime and Security in U.S.
Seaports pointed out in its 1999 report, thefts of high
technology cargoes alone from U.S. manufacturers and their
customers may exceed $5 billion annually in direct and indirect
costs. But theft costs also include lost productivity, lost
time, lost resources spent with the police, attorneys and
claims adjusters. Theft results in increased insurance
premiums, greater liability exposure, lost trade, erosion of
goodwill and damaged reputations. Billions of dollars per year
are stolen from us at the hands of thieves in and around our
port areas as well as on various intermodal systems going to
and from our ports.
In an extreme case, unchecked theft could retard the
expansion of international trade. In the end, the annual multi-
billion cost of cargo theft is borne by you and me and all
Americans as taxpayers and consumers. As my colleagues have
already noted, alien smuggling and stowaways continue to be a
major seaport security challenge. Aside from the risks of harm
to stowaways and mariners, their discovery aboard a vessel can
cost the ship operator hundreds of thousands of dollars in
route diversion costs and result in the disruption of cargo
services and expensive delays.
Vessel operators are responsible not only for the complete
cost of repatriating the stowaways, but are generally subject
to fines for violating our immigration laws. The financial cost
to steamship companies in a highly competitive global market
would be very significant. Efforts to eliminate this practice
will not only save money but more importantly will save lives.
Recognizing the need for heightened seaport security is
essential. Strict control of access to port areas, containers
and ships is critical, yet without better international
cooperation, immigration crimes will continue to plague our
ports and hinder international trade.
As Admiral Loy has already mentioned, drug smuggling is the
most prevalent crime affecting seaport security. It also
results in a significant negative economic impact.
Inspections of arriving passenger and cargo ships must be
sufficiently effective to deter smugglers, yet not so intrusive
as to hinder the smooth flow of cargo to and from our port
areas.
Terrorism is yet another area of concern for seaport
security. Our seaports are generally seen as relatively low
threat areas for terrorist actions. Addressing port
vulnerabilities is key to ensuring that our ports are not
targeted for terrorist and criminal activity. It is very
reasonable for the Federal Government to achieve coordination
among the various agencies concerned with port and maritime
security and to work with the ports to explore ways to minimize
criminal activity.
However, achieving appropriate levels of security in our
seaports is not just a matter of heightened diligence. Port
security infrastructure improvement is an important aspect of
modern port security needs, both here, in the United States and
in foreign countries. We recognize that each port is different
and that a one size security plan does not fit all.
Partnering with the maritime industry and the port industry
on a voluntary basis is, we believe, the key to progress.
Let me close by noting two areas of work at the Maritime
Administration which I believe illustrate some useful outreach
efforts. We chair a national port readiness network, which is a
group focused on planning and coordinating military
mobilization security at each of the 13 commercial ports around
the country designated as strategic ports. We also serve as
chair of the technical advisory group in the Organization of
American States to develop multilateral approaches to improving
port security throughout the Western Hemisphere.
Again, Mr. Chairman, thank you for this opportunity to
appear. I look forward to any questions you have.
[The prepared statement of Mr. Carlton follows:]
Prepared Statement of Bruce J. Carlton,
Acting Deputy, Maritime Administration
Mr. Chairman and Members of the Committee: I welcome the
opportunity to be here today to discuss the important issue of port and
maritime security on behalf of the Maritime Administration (MARAD). I
would first like to thank the Committee for your continued efforts in
this area. The security of our ports is vital to our nation's economic
and national security. A disruption of the flow of cargo through our
ports could have a significant negative impact on our economy and our
military readiness.
Ports around the world contend with security issues such as alien
smuggling, cargo theft, drug smuggling and terrorist activities. Simply
having the ability to move large quantities of cargo through a port in
a short period of time is no longer enough in order to remain both safe
and competitive. Security lapses at port facilities can cause cargo
handling delays or losses, and jeopardize personal safety and society
at large. Security weaknesses in and around our ports reduce
competitiveness, threaten military readiness and degrade our quality of
life.
Government cooperation with industry to identify and improve
security weaknesses, while at the same time maintaining or improving
upon the efficiencies for the movement of cargo, is the basis upon
which all port security measures should be approached. Because we are
focused on the development and maintenance of a strong maritime
industry for both economic and national security purposes, MARAD is
uniquely positioned to help ensure that both objectives continue to be
met while concurrently focusing on new security measures.
THE NEED FOR HEIGHTENED PORT SECURITY
In April 1999, an Executive Memorandum established an Interagency
Commission on Crime and Security in U.S. Seaports (The Commission). The
Commission's objective was to undertake a comprehensive review of
seaport crime, the state of seaport security and the ways in which
Government is responding to the problem. The Commission report,
completed in August 2000, specifically identified threats to seaports
and makes recommendations intended to reduce the vulnerability of
maritime commerce, national security and the infrastructure that
supports them.
Many factors contribute to the need for increased port and maritime
security. As the Commission pointed out in its report, thefts of high
technology cargoes alone, from U.S. manufacturers and their customers,
may exceed $5 billion annually in direct and indirect costs. The cost
of cargo theft is not limited to the manufacturer's expenses to produce
a certain product. Among other things, theft costs include lost
productivity, lost time and resources spent with police, attorneys, and
claims adjusters. Theft also results in increased insurance premiums,
greater liability exposure, lost trade, erosion of goodwill and damaged
reputation. Billions of dollars per year are stolen from us at the
hands of thieves in and around our port areas as well as on various
intermodal systems going to and from the ports. Underwriters are
increasingly unwilling to insure high value cargo. Some view the
problem as an impediment to the expansion of international trade. In
the end, the annual multi-billion dollar cost of cargo theft is borne
by you and me, as taxpayers and consumers.
Immigration crimes including alien smuggling and stowaways continue
to be a major seaport security challenge. Stowaways, in particular, are
a significant concern for many U.S. ports. Vessels arriving in the U.S.
from Third World countries frequently carry stowaways hiding on the
ship or in empty containers. Ship's crews spend precious time
inspecting the ship and empty containers prior to departure from
foreign ports seeking to ensure that stowaways are not aboard. These
same crewmembers also jeopardize their safety by confronting determined
stowaways desperate to seek a better life. The discovery of stowaways
aboard a vessel can cost the operator hundreds of thousands of dollars
in route diversion costs. The discovery of stowaways in port can result
in a disruption of cargo services and expensive delays. Vessel
operators are responsible not only for the complete costs of
repatriating the stowaways but are generally subject to fines for
violating immigration laws. The financial costs to steamship companies
in a highly competitive global market can be very significant.
Even so, the financial aspects of this issue pale in comparison to
the toll in human life that is levied upon stowaways each year. In one
of the most shocking incidents, 54 Chinese nationals were found dead in
a truck last year that had crossed from Belgium to the United Kingdom.
Efforts to eradicate this practice will not only save money but, more
importantly, will save lives.
The problems created by stowaways domestically also point directly
to the shortcomings of port security abroad and security aboard
merchant vessels generally. International seaport cooperation and
recognition of the problem is essential to the eradication of this
problem. Strict control of access to port areas, containers and ships
is critical. Without international cooperation, immigration crimes will
continue to plague our ports and hinder international trade.
Drug smuggling is the most prevalent crime affecting seaport
security, and results in a significant economic impact. Inspections of
arriving passenger and cargo ships must be sufficiently effective to
deter smugglers, yet not so intrusive as to hinder the smooth flow of
cargo to and from port areas. In an era where ``just-in-time''
logistics allows companies to maintain their competitive edge, undue
delays to prevent the importation of contraband can upset entire supply
chains with a ripple effect of negative consequences across the globe.
Terrorism is also a concern for seaport security. The threat of
such activity and the vulnerability of seaports are the reasons for
concern. While U.S. airports and land border crossings have well
structured security measures, our ports do not enjoy the same level of
security even though they offer unparalleled intermodal access to our
nation's interior. Addressing port vulnerabilities is key to ensuring
that our ports are not targeted for terrorist and criminal activities.
Moreover, most of the serious crimes that take place in our seaports
are in fact violations of Federal law. For this reason, it makes good
sense for the Federal Government to achieve coordination among the
various agencies concerned with port and maritime security and to work
with the ports to explore ways to minimize criminal activity.
MARAD'S ROLE IN CONTRIBUTING TO PORT SECURITY
Infrastructure
Achieving appropriate levels of security in our seaports is not
just a matter of heightened diligence. Port security infrastructure
improvement is a critical aspect of modern port security needs. There
exists a need for more secure port infrastructures both at home and
abroad, and we support potential progress in this area.
Industry Relations
MARAD is well situated to help carry out many of the objectives of
the seaport Commission's report, by working with industry and the ports
to develop and implement meaningful voluntary guidelines on port
security. We believe that partnering with industry on a voluntary basis
is the key to progress. We also recognize that each port is different
and that one size security plan does not fit all. That is why
cooperation between Government and industry is necessary to achieve our
common goal of secure ports while promoting marine transportation.
National Security
The movement of military cargoes through our commercial ports is
standard practice. Because of our dual mission, MARAD works closely
with both the maritime industry and the Department of Defense (DOD). As
the Commission's report noted, forward deployment of U.S. troops and
equipment overseas in this post cold war era is declining. Ongoing base
closure and realignment initiatives have resulted in the closure of
several military owned and operated ports. As a result, U.S. commercial
ports have become critical centers for military mobilizations. The
security of commercial ports during times of military mobilization is
therefore critical to national defense.
In developing port security standards MARAD continues to work to
bridge the gap between military requirements and industry concerns. A
National Port Readiness Network was established between MARAD, Coast
Guard and various DOD Commands to ensure, in part, the readiness of
commercial seaports in the event of a mobilization. MARAD, as the chair
of the National Port Readiness Network (NPRN), also continues its
effort to strengthen the NPRN in planning and coordination for military
mobilization security at each of 13 commercial ports around the country
designated as Strategic Ports.
Domestic Training
The United States Merchant Marine Academy's (USMMA) Global and
Maritime Transportation School (GMATS) has teamed with the National
Cargo Security Council as well as other key transportation and trade
associations to offer leading edge training for professionals in the
transportation industry. Among other courses, USMMA's continuing
education program offers a comprehensive cargo security training
program. The program consists of an intensive 4-day training period
using top industry, law enforcement, and Government instructors.
Program highlights include instruction in the areas of asset
protection, organized crime threats, vulnerabilities of the freight
transportation system, industry best practices for minimizing cargo
theft and site visits to three major cargo handling facilities
representing air, marine and rail modes. Participants also learn how to
develop a cargo security management plan and to deal with losses
efficiently.
GMATS has also developed customized security programs for
Government agencies needing a better understanding of maritime security
issues. The school also trains senior level merchant marine officers
and naval reservists in pertinent maritime security issues as they
relate to shipboard and port security. The intensive program is part of
the 2-week national sealift training program designed to improve
readiness in the Ready Reserve Fleet and aboard American flag vessels
in general.
MARAD has also been instrumental in developing a maritime and
terrorism course for the Federal Law Enforcement Training Center. Over
the last 5 years, MARAD has conducted training sessions for Gulf Coast
port authorities on bomb threats to determine best practices and
capabilities of various government agencies and bomb squads. Over 100
port personnel have been trained in this effort.
International
MARAD serves as Chair and Secretariat of the Technical Advisory
Group (TAG) on Port Security of the Organization of American States
(OAS) Inter-American Committee on Ports. The purpose of the port
security TAG is to develop solutions and coordinate multilateral
approaches to improving port security in the Western Hemisphere. The
TAG seeks to: (1) develop a hemispheric approach to improving the
security of the Inter-American maritime trade corridors; (2) develop a
common port security strategy; (3) devise basic guidelines and minimum
standards of security for ports of member countries of the OAS; and (4)
organize and conduct annual courses planned under the Inter-American
Port Security Training Program, managed by MARAD.
MARAD has had an on-going port security program with the
Organization of American States (OAS) since the 1980s, including port
security outreach. Since 1995, MARAD has been conducting port security
training courses in the Western Hemisphere. Over 300 commercial port
authority police and security personnel from the 34 member countries of
the OAS have been trained.
MARAD engages in outreach to foreign countries and their port
authorities to enhance the efficiencies of global commerce, which in
turn benefit our own maritime industry. By its very nature, trade is an
international business in which U.S. companies rely upon the security
and efficiencies of foreign ports. For example, MARAD and the Port
Authority of Argentina signed a bilateral document on June 24, 1999,
declaring their intention to: (1) promote improved security of seaports
and waterways, (2) exchange information in matters related to crime and
security in seaports and waterways, and (3) develop and coordinate
training programs for personnel responsible for seaport operations and
security. This bilateral declaration began in multilateral sessions
through the OAS Inter-American Committee on Ports.
Publications
MARAD has also played a lead role in developing DOT security
publications. These include Port Security: A National Planning Guide
and Port Security: Security Force Management. These guides provide
local governments and the commercial maritime industry with a common
basis upon which to establish port security standards and the outcomes
expected from meeting those standards. MARAD also publishes a report
entitled the ``Maritime Security Report''. The report is an
unclassified periodic publication prepared to inform the commercial
maritime industry and senior Maritime Administration officials of
international criminal activity and security issues which could pose a
threat to U.S. commercial maritime interests and the movement of
civilian cargoes in foreign trade. The Maritime Security Report is
intended to increase awareness of the scope and severity of economic
crime affecting U.S. maritime commerce in order to deter criminal
exploitation of the maritime transportation system and improve port and
cargo security in international trade corridors.
Conclusion
Mr. Chairman, we recognize the urgent need for better port
security. We heartily support the recommendations of the port security
Commission. We look forward to the opportunity to work with other
agencies, the industry, and this Committee to improve port security in
order to maintain the flow of cargo that is so important to our economy
and our military readiness. We appreciate your willingness to consider
our views on this topic. I would be happy to answer any questions you
or the other Committee members may have at this time.
The Chairman. Very good.
Admiral Underwood.
STATEMENT OF REAR ADMIRAL JAMES W. UNDERWOOD,
DIRECTOR, OFFICE OF INTELLIGENCE AND SECURITY,
DEPARTMENT OF TRANSPORTATION
Admiral Underwood. Good morning, Mr. Chairman and
distinguished Members of the Committee. I too would like to
thank you and Senator Graham for your leadership in this effort
to improve port and maritime security and for inviting me to
discuss the importance of transportation security in our ports
and its nexus toward strengthening national security.
As the national security advisor to the Secretary of
Transportation, my job is to focus attention on land, sea, and
air transportation security issues that protect the safety of
the traveling public, ensure the movement of the nation's cargo
and preserve the transportation system's critical
infrastructure.
Within the department, the Office of Intelligence and
Security attempts to identify physical and cyber-
vulnerabilities of the nation's transportation system, while
working to protect it from asymmetric threats of criminals,
terrorists and rogue states bent on attacking Americans here at
home.
The Aviation Security Act of 1990 mandated increases to
aviation security, including the use of advanced technology,
training and awareness to prevent terrorist acts like the
bombing of Pan Am Flight 103. The capacity of the aviation
industry in the United States has grown since enactment and
thankfully, security measures on aircraft and within airport
terminals have kept pace.
This is not the case with maritime port security. While the
amount of cargo shipped through the U.S. ports has
significantly increased during the same period, security
resources and measures have not kept pace.
The Interagency Commission on Crime and Security in U.S.
Seaports signaled the need for comparable and sustained effort
focused on improving maritime transportation and set the
groundwork by which multi-jurisdictional government and law
enforcement bodies in an industry may fully cooperate with one
another.
The Office of the Secretary has taken the lead in bringing
together various groups to examine threats to the
transportation system infrastructure and we are learning from
each other. Our nation's maritime transportation system has
been designated as a critical infrastructure essential to both
national security as well as economic security.
As our transportation systems become increasingly complex,
extensive and interdependent, America's need to move people and
cargo quickly and efficiently depends on a transportation
infrastructure that will function continuously without serious
interruption or delays. Challenging the reliability of the
system is an evolving set of asymmetric threats and physical
and electronic vulnerabilities yet to be fully assessed.
We must protect against two broad types of threats. First,
those that target our transportation system to inflict serious
personal injury or disruption, and second, those that use our
transportation system as a means to engage in criminal and
hostile acts.
It is not necessary to live near or work in a port to be
impacted by the threats of port crime. Ships, rail, trucks, and
air transportation modes are linked and move cargo thousands of
miles across the United States. A container loaded overseas may
reach its Midwestern destination without ever being opened for
inspection. I am concerned that border security controls and
voluntary reporting currently in place are not enough to stop
someone intent on causing severe harm to our seaports in the
United States.
Prudent and practical measures must be taken to
fundamentally improve our nation's security within our
unprotected ports and maritime approaches. The risk of a weapon
of mass destruction being deployed against the United States by
such low tech means as a shipping container delivered to a
seaport presents a difficult challenge, but one the United
States cannot afford to ignore.
The Office of Intelligence and Security supports the
Secretary's effort to coordinate transportation security
measures through the department's operating administrations and
other Federal, State, and local agencies. The Department of
Transportation, through the Office of Intelligence and
Security, has served the transportation industry as a source of
intelligence and threat dissemination on terrorism.
Furthering the security of our ports requires the
involvement of the Office of the Secretary and the United
States Coast Guard, the Maritime Administration and other law
enforcement agencies at all levels and especially industry.
Maritime transportation is an integral component of our
nation's vitality and one of our greatest strengths supporting
free markets, free trade and personal freedoms. To advance the
safety and security of our ports and waterways requires us to
be proactive in our approach, collaborative in our work with
Federal, State authorities and private sector and resolute in
our determination to diminish the threat of terrorism and crime
within the critical maritime infrastructure. I welcome any
questions that you have.
[The prepared statement of Rear Admiral Underwood follows:]
Prepared Statement of Rear Admiral James W. Underwood, Director,
Office of Intelligence and Security, Department of Transportation
Good morning, Mr. Chairman and distinguished Members of the
Committee. Thank you for inviting me to appear before you today to
discuss the importance of transportation security in our ports and its
nexus toward strengthening national security.
As National Security Advisor to the Secretary of Transportation, my
job is to focus attention on land, sea and air transportation security
issues that protect the safety of the traveling public, ensure the
movement of the nation's cargo, and preserve the transportation
system's critical infrastructure. Using a nautical analogy, the Office
of Intelligence and Security (OIS) serves as the Secretary's lookout,
scanning the horizon for the first signs of danger, and then
recommending alternatives for safe passage in advance of reaching
extremis. Within the Department, OIS attempts to identify physical and
cyber vulnerabilities of the nation's transportation system, while
working to protect it from the asymmetric threats of criminals,
terrorists and rogue states bent on attacking Americans here at home.
The Aviation Security Improvement Act of 1990 created the Office of
Intelligence and Security to protect the traveling public from
terrorist incidents such as the December 1988 bombing of Pan AM 103
over Lockerbie, Scotland. In the years following the enactment of this
legislation, increased and publicized security measures, employed
technologies, training and awareness have bolstered the public's
confidence to fly. And as the capacity of the aviation industry in the
United States grew during this period, security measures on aircraft
and within airport terminals thankfully kept pace.
This is not the case with maritime port security. The release of
the Report of the Interagency Commission on Crime and Security in U.S.
Seaports signaled the need for a comparable and sustained effort
focused on improving maritime transportation security--especially our
strategic and economically vital ports. As you are aware, this report
prescribes numerous recommendations directed at preventing both crime
and terrorism. Whether it is crime, involving cargo theft and trade
fraud, or terrorism occurring either within the port or via weapons of
mass destruction transshipped to anywhere in the United States, the
Report's recommendations provide a firm foundation to improve maritime
security and safety. And perhaps most importantly, the Report sets the
groundwork by which multi-jurisdictional and authoritative government
and law enforcement bodies and industry may fully cooperate with one
another.
The Office of the Secretary has taken the lead in bringing together
various groups to examine threats to the transportation system
infrastructure. We are learning from each other. FAA's experience in
improving security at airports offers valuable lessons for seaport
security. For example, they have already developed a system for
checking the criminal history of employees with access to sensitive
areas. This is one of the recommended measures in the report of the
Interagency Commission on Crime and Security in U.S. Seaports for which
the aviation security model may be applicable.
Our nation's maritime transportation system has been designated as
a critical infrastructure, essential to both national security as well
as economic security. As our transportation systems become increasingly
more complex, extensive, and interdependent, America's need to move
people and cargo quickly and efficiently depends on a transportation
infrastructure that will function continuously, without serious
interruption or delays. Challenging the reliability of this system is
an evolving set of asymmetric threats and physical and electronic
vulnerabilities yet to be fully assessed.
We must protect against two broad types of threats: (1) those that
target our transportation system to inflict serious personal injury or
serious disruption, and (2) those that use our transportation system as
a means to engage in or perpetrate criminal and hostile acts.
It is not necessary to live near or work in a port to be impacted
by the threats of port crime. Ships, rail, trucks and air
transportation modes are linked and move cargo thousands of miles
across the United States. A container loaded overseas may reach its
Midwestern destination without ever being opened for inspection. In
light of the recent outbreak of Hoof and Mouth Disease in the United
Kingdom and Europe, national border security was increased to thwart
the introduction of this disease. However, I am concerned that border
security controls and voluntary reporting would not be enough to stop
someone intent on causing severe harm, by way of our seaports, to the
United States.
Several recent studies and threat assessments have underscored the
persistent nature of the threats that require U.S. attention as they
relate to port security:
The December 2000 International Crime Threat Assessment
indicates that the threat to the U.S. from international crime
continues to grow as criminals and terrorists exploit the globalization
of trade and finance and rapid changes in technology. It further states
that drug trafficking, illegal migration, and environmental crimes as
well as international terrorism using both sophisticated and crude
weapons will persist.
The CIA's Global Trends 2015 Report identifies the
propensity for present and potential adversaries to avoid U.S. military
strengths and exploit perceived national weaknesses. Furthermore, this
report notes that such asymmetric opportunism will ``become the
dominant characteristic of most threats to the U.S. homeland.'' A
balanced national security strategy requires an effective and
comprehensive action plan that addresses such traditional ``low
technology'' threats.
Prudent and practical measures must be taken to fundamentally
improve our nation's security within our unprotected ports and maritime
approaches. Our attention could not be more appropriate given the
concern expressed by President Bush in his 1999 speech at the Citadel,
in which he noted: ``weapons can be delivered, not just by ballistic
missiles, but by everything from airplanes to cruise missiles, from
shipping containers to suitcases.'' The risk of a weapon of mass
destruction being deployed against the United States by such low-tech
means as a shipping container delivered to a seaport presents a
difficult challenge, but one the United States cannot afford to ignore.
The Office of Intelligence and Security supports the Secretary's
effort to coordinate transportation security measures throughout the
Department's operating administrations and other Federal, State and
local agencies. The Department of Transportation, through the Office of
Intelligence and Security has served the transportation industry as a
source for intelligence and threat dissemination on terrorism.
Furthering the security of our ports requires the involvement of the
Office of the Secretary, the U.S. Coast Guard and the Maritime
Administration, and other government law enforcement agencies at all
levels, and especially industry.
Maritime transportation is an integral component of our nation's
economic vitality, and one of our greatest strengths supporting free
markets, free trade and personal freedoms. To advance the safety and
security of our ports and waterways requires us to be proactive in our
approach, collaborative in our work with Federal, State, local
authorities and the private sector, and resolute in our determination
to diminish the threat of terrorism and crime within the critical
maritime infrastructure.
The Chairman. I am pleased this morning to have Senator
Edwards with us.
Admiral Underwood, we talk in terms of drugs. We talk in
terms even of immigration. I noted last year I think it was,
some of these containers actually had Chinese refugees--or
whatever you want to call them--actually, when they opened the
container, several were dead. They just piled into these
containers.
So going right to your observation about reaching a Midwest
destination, not immigration, not drugs, but hoof and mouth
disease. They could be loaded on at some foreign destination
and get all the way into the Midwest and spread the disease
itself and we would be running around checking every airport
and everything else of that kind and stepping up security. But,
it might well get to Omaha, Nebraska and be unloaded with
nobody looking around or anything else of that kind, couldn't
it?
Admiral Underwood. It is a very good concern that we have
and share. One example that I'm aware of was during the recent
hoof and mouth outbreak of a rock band that was in Britain at
the time and had its next concert in New Orleans and the
shipping container that had its stage loaded on it was shipped
through Charleston, South Carolina and fortunately, inspectors
on the dock in Charleston stopped that container and found mud
that was in on the stage inside the container.
The Chairman. Talking about Charleston, South Carolina,
Admiral Loy, you described what happened down in Miami and an
alert with respect to a passenger vessel and you had a plan on
course and it was completed and engaged in. Do you have one for
Charleston? I suppose if you had a similar kind of alert?
Admiral Loy. Yes, sir, we certainly do. There are several
things important in play there. First of all, the Passenger
Vessel Safety Act. Had the cruise ship been in Charleston or
Savannah or any other port, we would have been able to exercise
it because of two things. First of all, the local captain of
the port has his own contingency plans to deal with a variety
of different possibilities.
Second, in this case, the cruise liner itself and the ICCL,
the International Cruise Line Association, imposes the
requirement for them to be able to deal with those kind of
events when they occur.
Now, are they even remotely foolproof? No, sir, they are
certainly not. But in the instance of the Miami case, we were
able--first of all, because we had the bomb threat, had the
culprit simply planted the bomb and never made the threat,
whether or not the activation process would have been adequate
is a very different story.
The Chairman. That is for the vessel, but not the port
itself. For example, the captain of the port there in
Charleston, how often does he check, not just with the Coast
Guard and his own troops, seamen you can call it, but rather
Customs, the DEA, the actual local authorities and everything
else? Has he enunciated a plan of security for the Port of
Charleston and everybody knows about it and everybody is ready
to go to war if something occurs and so forth?
Admiral Loy. No, sir. I don't believe those are in place
and the reality there is that we would hope that in the wake of
vulnerability assessments taken on our ports we could depend on
the captain of the port's led harbor safety committees and port
security committees to produce precisely those action plans, to
tabletop exercise them and to, in fact, field exercise them in
some kind of frequency over the course of the future.
The Chairman. This is rather new, but at the Coast Guard
Academy, are these graduates all inculcated in port security?
Do they know, I mean, other than just going on the vessel
and everything else, which is the usual 95 percent or 99
percent of the work out at sea, and so forth like that, would
they know about port security?
Admiral Loy. Not at the level that you would want them to
know to be a good operator in your port, sir. Those are, if you
will, on-the-job training kinds of opportunities that one gets
specialized in either through our marine safety track as a
marine safety professional or in our shore operations track,
where they would populate the stations and groups to be
supportive when necessary to the local captain of the port.
So not focused training at the academy, no.
The Chairman. How about the Port and Maritime Security Bill
updating the 1936 Act that we introduced last week? Do you have
any criticisms, misgivings about it or suggestions that we can
do to improve on it?
Admiral Loy. Sir, as I indicated in my sort of menu that I
wanted to leave with my verbal statement, I am convinced that
the Act is a terrific step in the right direction.
I was trying to paint the picture of 2 years ago when we
sent the Marine Transportation System Report from the
Department to the Congress, it talked about safety, security,
environmental issues, infrastructure, investment issues and
many, many other things. I am convinced that tactically we did
not have our act together very well then, and we sent up
something that was sort of unconsumable by the Congress.
The Commission that Senator Graham and others influenced,
in reality last year broke the security piece out from that
bigger picture and said ``let's focus on this first and get
about the business of improving security.'' I think both the
results of the Commission and the recommendations now found in
the law that you found in the bill that you have offered, take
us exactly in the directions that we should be going, sir.
The Chairman. Very good.
Mr. Carlton, what about the Maritime Administration. Do you
have any suggestions?
Mr. Carlton. Mr. Chairman, I would join Admiral Loy in just
commenting very briefly that we believe that you and the
Committee have done us all a great service by turning on the
bright light on this issue. That has been missing.
We devoted a tremendous amount of resources in our Federal
budget and through our other activities in aviation in
particular. The shortcomings that the Commission and other
studies have highlighted, bring this into sharper focus and
what I believe the draft bill does is it is going to stimulate
this discussion, stimulate this debate and we look forward to
working with you and your staff to move this on.
The bill is a massive undertaking. I note that in passing
the bill has grown in size substantially. It is broad,
comprehensive and it has a very extensive reach. In all truth,
I have not digested all of its content, but I am looking
forward to a full and thorough look through it.
We will be back to talk to your staff about the details,
but it is absolutely, as Admiral Loy has just said, it is
absolutely a major step in the right direction to bring
appropriate national level, Congressional level attention to
this issue.
The Chairman. That is exactly what we need is that media,
friends in the media, to bring attention to the American
public, the Congress in particular, that we have got to do
something about maritime. I know at the beginning of Desert
Storm, we were recruiting retired 85-year-old ship captains,
broken down vessels. For a while, they thought we were invading
Seville, Spain, with all of them limping in there rather than
getting all the way to the Gulf. I have been, for 34 years now,
meeting, meeting, meeting, and ``this is an emergency and we've
got to do something,'' but nothing ever happened.
Mr. Winwood, with respect to the budget, your budget has
been cut back, too, because I will never forget in the debate
on NAFTA, my colleague on the House side gave up his vote in
favor of NAFTA when he was promised 500 extra Customs agents.
You folks have testified it was $5 billion in textiles, in
violation of Customs, just trans-shipped through Customs that
you weren't able to check. So we got supposedly 500 extra
agents and they never were hired.
I went back to you folks in Customs and you said ``well,
what do you want me to do, stop textiles or stop drugs?'' I
said ``Well, obviously, stop drugs.'' Are you still short
agents over there?
Mr. Winwood. I'll tell you, Senator, thanks to a lot of
good support of the Congress in general, and the Senate
specifically, if you look at the year 2001, we had an influx of
a tremendous amount of personnel. I am pleased to say that all
the salary moneys we received in the budget year of 2001, we
have hired every position. We have added several hundred people
to the rolls this year and I think we are doing a much better
job in bringing balance, not only to commercial fraud and trade
responsibilities, but also heavy emphasis on our narcotics
responsibilities to include the influx of technology.
I would like to make one more mention, if I may. We're
continuing to get great support in the Congress and, I must
say, Senator Edwards, I appreciate very much the letter that
you sent to our Subcommittee on Postal, Treasury on ACE
funding. In the automated commercial environment which will
take us to the next generation of the proper type of automation
necessary to take what Admiral Loy has been referring to, is
you take a stream of data, you turn that into knowledge and you
turn that into tactical information. The influx of money and
the building of this new modern ACE infrastructure will go a
long way to totally supporting the future of the government's
effort in this area and the Customs Service specifically.
The Chairman. You stated in the prepared statement: ``We
are using powerful new x-ray systems capable of examining
entire trucks and rail cars at a time.'' I take it this is down
at the Southwest border?
Now, we had a transportation hearing just last week. We
found out that 27 checkpoints coming up from Mexico, only two
of them are really manned for trucks. Is that the two of them
where you have got this x-ray equipment?
Mr. Winwood. Well, we have the x-ray equipment in several
locations along the Southern border. If I may just digress for
a second.
The Chairman. I want this kind of equipment at Charleston.
We do not care about Wilmington.
Mr. Winwood. We are trying to get it there.
Senator Edwards. You don't care.
Mr. Winwood. We had what we call an NII, or Non-Intrusive
technology 5-year plan that we put together in 1997. Thanks
again to the Senate and Congress, we received $134 million 2
years ago to have this plan put into place.
This plan allows us to buy, either through research and
development or through existing equipment, buy what we call
high-tech equipment, x-ray, Vax machines, gamma machines that
we started on our southern tier.
The good news is we are putting it in our seaports and we
are putting in our high threat seaports first. For instance, we
already have 15 pieces of this high technology in 13 seaport
locations.
The Chairman. Is that the equivalent they have at Rotterdam
where they can scan or screen an entire container?
Mr. Winwood. Yes, sir. As a matter of fact, we have 22 more
pieces coming online to be placed in the other seaports between
now and fiscal year 2003, and based on some additional money
you are trying to get us, we have plans to put another 22
pieces of equipment to put into 20 locations at our seaport
locations. So the good news is we got a good start. The
additional news is we have a long way to go.
But we are using high-tech equipment. We have a plan to
increase the use of high-tech equipment at our seaports and we
are demonstrating the value of that high-tech equipment at our
seaports right now.
We did start at our Southern tier because of the massive
influx of trucks and the fast movement, but we are using those
systems at our seaports for container examinations that have
been quite successful. We have tremendous success with this
technology for narcotics interceptions.
The Chairman. Obviously in the 20s, the plan, is Charleston
included in that 20?
Mr. Winwood. I will have to go back and check our sheet and
then let you know. I don't know for sure, but we are definitely
putting it in high threat areas.
The Chairman. Well, we have got $68 million in our bill,
too. We are watching that transportation bill because we
include extra moneys in it. It is really getting ahead of the
authorization, which is fine business with me.
Senator Edwards.
STATEMENT OF HON. JOHN EDWARDS,
U.S. SENATOR FROM NORTH CAROLINA
Senator Edwards. Thank you, Mr. Chairman.
Mr. Chairman, thank you very much for your work in this
area and I hope we will be able to work with you on this
seaport security legislation that I know you are leading the
way on. I also want to thank my other Chairman, Senator Graham
for his leadership as the Chairman of the Intelligence
Committee and also thank the witnesses for all the work you do,
how important it is to our national security, how important it
is to controlling criminal activity at our seaports. And we
have a seaport in Wilmington, North Carolina that we are very
proud of and we thank you very much for the work that you do.
I want to focus if I can this morning specifically on the
issue of terrorism and potential terrorism at the seaports. I
have become convinced during the time I have been on the
Intelligence Committee that the most serious national security
risk that we face over the course of the next decade is
terrorism. In response to that, I had been working on a set of
comprehensive ideas and proposals to address the terrorism
issue, and how it affects our national security here in this
country.
But today, I want to focus specifically on terrorism at
seaports. Now, some of the things, some of the ideas and
proposals I have are things that you all have talked about or
made reference to.
Mr. Woodward just made reference to the ACE during his
testimony. But let me just mention these ideas, if I can, to
you. I have got basically five proposals.
First is that we need to improve our ability to detect
chemical, biological, nuclear weapons, weapons of mass
destruction. I know that you are aware of the fact that there
are very promising new technologies available out there and my
belief is that we need to invest in these new technologies and
begin to use them as soon as we possibly can, as soon as it
becomes practical. We also need to make better use of these so-
called ``smart containers'' that places these GPS tracking
devices on cargo.
Second is to streamline the movement of legitimate commerce
through our ports so we can focus more on high-risk cargo and
carriers. That sounds kind of counterintuitive to some people,
but I think if we can move more quickly, the cargo that we know
is low risk, deal with the shippers that we know are reliable
and good citizens, then I think it allows us to focus more of
our resources and attention on those that we need to be most
concerned about.
Third is to just strengthen and modernize the Coast Guard
and to improve its ability to interdict potential threats to
our seaports before they get to our shores.
Fourth, to improve the coordination between law enforcement
and trade agencies and at the Federal, State, and local level.
Like so many of our efforts to fight terrorism, lack of
effective communication can sometimes be an enormous obstacle
and I think we need to integrate this effort, make sure that
these folks are working together and that they are
communicating, and communicating efficiently.
Finally, to help our allies and our trading partners
improve security at their seaports. Obviously, that is a
critical component of trying to avoid terrorism and protect our
national security. I know some of these you all have made
reference to during the course of your testimony, but I would
like for you, if you would, to comment on these ideas and
proposals.
Mr. Winwood, we will just start with you.
Mr. Winwood. Well, first of all, Senator, I think this is a
great list and I agree wholeheartedly with these actions. I'm
sure the Admiral will be glad to hear me say I support the
increased support to the Coast Guard.
But I would like to make a couple of comments on something
that we've already started and I'll start at the bottom of the
list. You talk about help our allies. I won't speak to Europe
and some of the other places, but I will give you one example
of where cooperation with a foreign government and our
counterparts can be very productive. If somebody would have the
opportunity to take a look at the advancement in security
issues that have been handled in Cartagena, Colombia, which is
a major threat to the United States as far as the movement of
illicit narcotics, etcetera, coming into this country.
Cartagena, based on a combination of working, or a program
we've started in the Customs Service called BASC, the Business
Anti-Smuggling Coalition, which is a partnership between the
business community and the government to look at ways to help
educate those people to take care of themselves to improve
security to avoid them being victims of crime. Between that and
the security measures that Cartagena has put in for additional
security controlling access and egress, special background
checks of their employees who work on the seaport, control of
who works there, they have done a tremendous job in securing
that particular port which makes our life easier for that type
of activity coming into the United States.
Coordination with the trade and the Federal, State and
locals. I think there's some good news there and I think it
could be even better. So I wholeheartedly support that. The
more we can talk together, the more we can share information,
the more we can work on a common goal, the more effective we
will be.
If I may say something about the legitimate cargo, which is
one of the areas that we consider ourselves to be an expert in,
we have some great programs going in that area. For instance,
we have, through our risk management strategy that we have
established in the Customs Service, we have come up with a
methodology to divide our world into three parts: that which is
low risk through 3 or 4 years worth of continued analysis;
cooperation with the business community and examinations to
prove our case; to high risk, those which we need to be more
focused on or we do not know much about.
We now have a series of 160 major importers that bring
goods into the United States that we have classified as low
risk, which means we can divert our attention away from those
types of companies and their commodities and their containers
and focus on the unknown and high risk.
Now, that doesn't sound like a lot, 160, but what that
represents is 20 percent of the volume and value of goods
coming into the United States. It means that next year we can
avoid approximately 25,000 exams that we won't have to do
because we have already identified these particular companies
and we are going to expand on that strategy, very detailed,
very comprehensive approach. I think it is the only way.
It is not how many you examine, it is what you examine. You
have to examine the right--it is not the percentage, it is are
you examining the right ones and that is what we are trying to
focus on.
And of course, I can't say more about technology. I mean,
it is critical that we have the technology and as we get
available to us the types that help us discern chemical and
biological, we will most definitely try it.
If I may add one thing, I misspoke, Senator. If you have
the opportunity, we do have a mobile Vax truck in the port of
Charleston, South Carolina, and it is one of our high-tech
pieces of equipment. I'm sorry I didn't mention earlier, but
I'd welcome you to take a look at it sometime at your
convenience.
The Chairman. It has got to be mobile because it has to go
from Columbus Street to the North terminal and back again.
Mr. Winwood. That's why we made it mobile.
Senator Edwards. Admiral Loy, would you mind responding?
Admiral Loy. Yes, sir, I would certainly agree with Chuck
that the list you have offered us here as a set of challenges
is right on target. There are a couple of thoughts with respect
to several of those things that we are working on very hard.
This notion of being able to differentiate between the low
threat and high threat, whether it is a shipper, whether it is
an owner, whether it is a ship, whether it is a person on that
ship, a master or a member of the crew, whether it is cargo
destinations or cargo, where it began. We have entered into a
memorandum of agreement with the National Security Council,
with INS, with the State Department, with DOD, with the
Department of the Navy. The notion here is this idea of
maritime domain awareness, that knowledge, in fact, is power
and we have got to get a better handle on where data becomes
actionable for us to actually separate the suspicious from the
non-suspicious.
Chuck's discussion of their efforts in that regard are, I
think, right on target. We are attempting to do the same thing
simply coming from the premise that we are dealing with either
vessels, people or cargo one way or the other. And if we can
get an integrated set of data that we can fuse together such
that the national databank on people fused with the national
databank on vessels fused with the national databank on cargo,
would allow any of us in the business to access that fused
package and make a better set of decisions as to which
container to inspect. Or in our instance, as we execute our
port State control evolutions day after day after day in every
port in the United States, which ones of those vessels are we
going to stop and scrub to their keel before we allow them
continued entry into our ports.
So the waterside side of that as well as shoreside of that
has to be a hand-in-glove kind of operation. The Customs
Service has been very aware what we are doing with this
maritime domain awareness notion. We are centering the effort
at the Coast Guard Intelligence Center here in Suitland,
Maryland. I think it is about at the level, sir, where perhaps
even a visit so as to gain an appreciation of what we are
trying to do there would be of value to you.
Second, I would go back to this notion of a model port.
I want to make sure that folks like you will hear from in
the second panel are not turned away from the notion because
what it is, is a generic set of attributes that we would like
to see reach whatever the minimum thresholds are with respect
to not only security, but safety, environmental protection and
lots of other dimensions of any given port's work.
If we can have that set of standards determined by a group
of people that will be gathered together to form them and then
when we on our teams go and assess the vulnerability of any one
of those ports we have an index against which to measure the
assessment.
We can determine gaps and we can encourage them, the harbor
safety committees and port security committees in those local
ports to build the action plan that will close the gap to get
us to the acceptable level of security and safety that we want
in our ports.
Risk management, a phrase that the Customs Service uses an
awful lot these days because of the volume of challenge we
have, is a rather simple notion. It is about probability times
consequences; the probability of an event occurring times the
consequences if it occurs. That is what a risk management
evolution and thought pattern is all about. We want to be able
to identify those risk management solutions that offer us the
very best opportunity to have the most impact with the
resources that we can devote to the issue.
So I think this streamlining notion that you have is right
on target, sir. Certainly, the technological end with our
partners in the FBI and DOD who are doing an awful lot of good
work with respect to the sensors dealing with weapons of mass
destruction is right on target, and we have to be joined hand-
in-glove with them to do that as well.
Improved coordination was the most straightforward and
simple recommendation that emerged from our Maritime
Transportation System Report to the Congress that we submitted
in September 1999. It is no less important today as it was then
and the opportunity for to us do better is very, very real.
Last comment, on international seaports. I too, have
visited the Hong Kongs and the Singapores and Rotterdams of the
world and watched both the technological innovations there, a
sea-land port in Rotterdam which is totally robotic. You pull
that ship up to the pier, you don't see a person anywhere, but
a computer-controlled set of access to deal with which
container is going to go where. The process end of it is one
thing. The security dimension can be built right into that same
system if we are careful of what we do.
The Hart-Rudman Commission in its first report said, sir,
two things. One, we have two phenomena going on in this world
that are very real: globalization of the economy and this
notion of homeland security and a widening threat to the
security of the nation, of the United States. They appear to be
conflicting things that if we wanted to deal only with
facilitating commerce, we would open the security valves at our
ports and let the commerce flow. But if we are concerned about
homeland security, we have to tighten those valves down to
restrict access to the ports. We think this domain awareness
notion is the umbrella that can allow both of those things to
go on as constructively as we can.
Senator Edwards. Thank you, Mr. Chairman.
The Chairman. That is exactly what we are concerned about,
Admiral Loy. I guess the port officials, the local folks,
there's a culture that we let the cargo go. Do not worry about
it, it moves if it comes through our particular port. And that
culture has got to be indoctrinated to deal with security.
Admiral Loy. Absolutely.
The Chairman. There is no question that is really badly
needed and how to get them to move and cooperate is the tough
part. That is why we are going in a gradual fashion. There is
also the question of labor. If you want a job out here with the
captain of police, you have got to get a polygraph.
I find that on the Intelligence Committee. Maybe you can
get the staff checked. When I was on it, they had all kinds of
leaks. So I figured it was the staff and we learned in the
world that you never ask a man to do anything that you are not
going to do yourself first. So I went over there to get me a
lie detector test, and the first question, I started my answer:
``In my humble opinion''; and the needle just went right
straight across over there. So I don't know how to comment,
whether he got the same kind of test or not. But that is what
we have to do.
Now, we want to get something done, and we did not want
just a roadblock. And our good labor friends that really run
these ports, and just nothing happened. We have to work out
some way to check those in particularly secure positions and we
will look for a recommendation from each of you on that
particular score because that was left out of the bill.
We have got a very important second panel here. The
Committee is indebted to each of you and the record will stay
open for questions by the Members. Thank you very much, and we
will ask panel two to come forward as quickly as possible.
Mr. Michael Leone, the Port Director of the Port of
Massachusetts; Basil Maher, the President and Chief Operating
Officer, Maher Terminals; John L. Miller, the Executive Vice
President of International Transportation Service; James M.
Craig, the Vice President of the American Institute of Marine
Underwriters; and Kim E. Petersen, the Executive Director of
the Maritime Security Council.
Mr. Petersen, thank you very much. I understand Mr.
Petersen has got to catch a plane, so we will start over here
on my right.
Mr. Peterson, we welcome you and we are glad to hear from
you at this time. The full statements will be included in the
record and we will ask you to summarize as best you can.
STATEMENT OF KIM E. PETERSEN, EXECUTIVE DIRECTOR,
MARITIME SECURITY COUNCIL
Mr. Petersen. Thank you, Mr. Chairman and Members of the
Committee. As the Executive Director of the Maritime Security
Council, I am pleased to have this opportunity to address the
Committee today to relate the views and concerns of our
membership on the proposed Port and Maritime Security Act of
2001. With your indulgence, I would like to provide you with a
thumbnail sketch of the Maritime Security Council.
The MSC was created in 1988 to address the many security
concerns of the U.S. and international and maritime community.
The MSC is a member-driven organization that works closely with
United States Government agencies concerned with maritime
security and counterterrorism.
Our mission is to advance the security interests of the
international merchant marine community against terrorist and
criminal threats. The MSC represents maritime interests before
government bodies, works in partnership with industry and
government, disseminates timely information to its members,
encourages the development of industry-specific technologies
and convenes conferences and meetings for the membership. The
MSC has established partnerships with a number of these
agencies to prevent illegal drug trafficking, stowaways, theft,
piracy, terrorism and hijackings.
Our membership consists of 65 percent of the world's
commercial ocean carrier fleet, including cruise lines,
numerous maritime services companies and port authorities. We
work with many agencies, including the UN's International
Maritime Organization, U.S. Customs, U.S. Coast Guard, INS,
State Department, U.S. Navy, Drug Enforcement Agency, the U.S.
intelligence agencies, the Federal Law Enforcement Training
Center, as well as government bodies in the United Kingdom and
Canada.
With regard to the Port and Maritime Security Act of 2001,
the MSC finds laudable the steps taken by the Committee and
Senators Hollings and Graham and their efforts to establish
minimum and effective security standards for U.S. and foreign
ports. This last decade has seen shipowners invest significant
amounts in security infrastructure in operations improvements.
But the sad fact is that port authorities have failed to keep
pace. Rarely has this been due to oversight by port directors;
rather, it is the unfortunate by-product of shortsighted budget
cuts, departmental downsizings and the lack of Federal
leadership in financial assistance.
The past year has demonstrated it is incumbent upon many
ports to review, analyze and implement improvements in
physical, personnel and information security, particularly now
as the range of threats has expanded. Unlike 10 years ago, the
U.S. now faces an amalgam of threats that have heretofore been
more likely the subject of ``Rambo'' movies than reality.
Weapons of mass destruction, chemical and biological agents,
nuclear devices, sophisticated human smuggling schemes, high-
tech approaches to narcotics smuggling are all at the top of
the list.
Many shipowners have made huge strides to protect their
vessels, employing state-of-the-art access control devices,
electronic narcotics and explosives detectors, and even devices
that detect stowaways by way of CO2 concentrations
in their intermodal containers.
Equal resolve has not been shown by many ports who have
been relying upon shipowners to do the heavy lifting. Clearly,
the efforts of the Interagency Commission on Crime and Security
in the United States Seaports demonstrated that it is incumbent
upon ports to match this effort in the protection of their
perimeters and facilities. Additionally, the MSC believes there
has been a systemic failure to adequately address security
awareness within the maritime community.
Security has become an integral part of the operational
fabric within the aviation industry, as an example, with strong
messages of security awareness broadcast both publicly and
internally--and with the consequent effect of heightened
deterrence and employee participation. A similar approach must
be taken by the maritime industry, and as an industry we look
to the government to support such an effort with funding,
research and long-term commitment.
While the MSC applauds the efforts of the President's
Seaport Commission, it also recognizes the intrinsic weakness
of its mandate: providing a critical review of United States
ports as they relate to maritime security. The MSC would like
to underscore that, no less important, and arguably more so
than U.S. ports, are the relative standards of security found
in foreign ports that are a direct sources of merchant shipping
bound for U.S. ports. Whether it is WMDs, stowaways, or drugs,
the fundamental fact is that each of these threats will likely
have as their source some port outside the United States. So
long as the emphasis is on interdiction rather than prevention
at the source, the U.S. will remain vulnerable. We applaud this
legislation for addressing this issue.
In 1999, the MSC launched an initiative that recommends a
partnership between key Federal agencies and the MSC to first
quantify the scope of the problem associated with the lack of
internationally recognized minimum standards of security for
all international ports, (that is, ports with merchant traffic
that have points of origin or destination outside their own
national boundaries), and second, to develop and recommend
tiered standards pegged to the cargo/passenger throughput, GNP,
et cetera, that would codify such standards much like what was
previously done with international airports.
We hope that this initiative, and the Maritime Security
Council's unique ability to assist in such efforts, will not be
lost in the scramble to accomplish the goals of this
legislation.
While we applaud the intent of the legislation, we
nevertheless have reservations about the key elements of its
provisions. For example, we concur that intelligence and
information sharing among law enforcement agencies needs to be
improved and coordinated at many seaports. Most seaports have
little or no idea of the threats they face from crime,
terrorism, stowaways, and other illegal activities, due to lack
of coordination and cooperation between law enforcement and
intelligence agencies and the sea carriers themselves.
It is vital for the Members of this Committee to understand
that the lion's share of intelligence relating to maritime
crime comes from the industry itself. Just like the seaports,
the sea carriers, which include cargo ships, cruise ships and
other merchant vessels, are victims in these illegal
activities, and as such, they work tirelessly to identify
threats, minimize vulnerabilities and reduce their risk.
If you ask the Office of Naval Intelligence or the Central
Intelligence Agency or the Coast Guard where the bulk of their
intelligence comes from, they will certainly tell you it is the
industry and the shippers themselves.
Many are not aware of the fact that there exists today an
ad hoc working group that is composed of key Federal agencies,
including the Defense and intelligence groups and industry
representatives from the Maritime Security Council and the
ICCL. The MSC and ICCL members have U.S. security clearances
and the technical means to communicate classified information
in order that they and the government agencies represented in
the working group can share information and, if necessary,
discuss raw intelligence findings so as to jointly propose
reasonable actions to take so as to protect innocent lives and
property. The reason that this unique and effective partnership
exists is that the government agencies involved in maritime
security recognize that much of the expertise and the
intelligence from the field resides in the sea carrier
community and not in the government. Any effort to improve the
standard of communication between law enforcement and other
government agencies and seaports must also include provisions
for industry participation. Absent such provisions, the efforts
to strengthen U.S. seaport security is doomed to failure.
The same participation by industry is also essential for
the establishment of Port Security Task Force and the local
port security committees recommended in this legislation.
Umbrella non-profit organizations representing sea carriers
must be included to ensure that their resources and concerns
are not overlooked. Indeed, we can only assume it to be an
oversight that membership in the proposed seaport committees is
limited to the port authorities, Federal, State and local
government and their law enforcement agencies, labor
organizations and transportation workers, and those private
sector representatives whose inclusion is deemed beneficial by
the Coast Guard Captain of the Port. I do not believe it was
the intention of the Committee to have seaport security issues
reviewed by stevedore's unions, but not by the sea carriers as
well.
Seaport security and vulnerability assessments are vital
for conducting risk assessments of U.S. and foreign ports. The
U.S. Coast Guard has done an admirable job in performing such
assessments of foreign ports of what can only be described as
ridiculously low funding.
Funding for these assessments is anemic. Despite hundreds
of thousands of U.S. citizens visiting ports around the world,
the risks of which are little known to the government. In some
years, less than five assessments are performed--in some cases
the assessments are canceled altogether due to the ports being
deemed too hazardous for military personnel to visit. Yet these
same ports are visited by American tourists on a regular basis,
not knowing the potential risks.
The Committee should know that the maritime industry itself
is committed to improving the safety of foreign ports,
particularly those visited by cruise ships. As the former
Director of Security for both Princess and Renaissance Cruises,
I performed security audits in over 160 ports in 106 countries.
If a port had problems, the industry would assist the port
authority in identifying weaknesses and those low-cost or no-
cost measures that could reduce their exposure to risk. Mind
you, none of this is mandated by legislation or done with U.S.
assistance. It is just good business to protect the lives and
property of our passengers and cargo. But there needs to be
Federal help to do this correctly.
The Act also recommends the use of the FBI's Integrated
Automated Fingerprint Identification System for port authority
background checks. The MSC recognizes the sensitivity of this
issue, particularly given the volatility of any form of
background checks with various unions and waterfront
organizations. While the majority of dock workers are honest
and absent a criminal background or criminal ties, it is
nevertheless recognized by government agencies, port
authorities and sea carriers that the majority of crimes
committed within the ports are by those employees that have
access within their confines. Access controls, coupled with
background checks of all those port employees that have access
to restricted areas, which by definition includes docks and
ships, would have a significant effect in reducing the over $1
billion lost in cargo theft annually, as well as minimizing
overall criminal risks within these ports. There also needs to
be effective visitor controls, using state-of-the-art
technologies such as Fast Pass and A-Pass.
The Act recommends an International Seaport Security
Initiative designed to encourage the development and adoption
of seaport security standards under international agreements in
other countries. This, and the follow-on Port Accreditation
Program, were first proposed in an international conference on
maritime security hosted by the Maritime Security Council in
1998.
In 2000, I met with the UN's International Maritime
Organization in London and discussed this issue. The IMO
expressed interest in working with the MSC and United States
Government in the creation of a tiered set of standards of port
security that could be used to increase the security in Third
World countries to acceptable levels. It is important to
recognize that by itself, the United States would be hard put
to see such far-reaching an effort succeed without the
assistance of the international sea carrier community.
The MSC's constituents are both familiar with the ports of
concern and work with these port authorities on a regular
basis. For reasons previously articulated, and due to its
extant efforts in this pursuit, we believe that the MSC must be
an integral partner in the Act's International Seaport Security
Initiative.
The Act proposes the creation of a Maritime Security
Institute to develop standards and procedures for training and
certification of maritime security professionals. The MSC is
flattered that such an initiative is being proposed, as the MSC
created the Maritime Security Institute in 2000 for the same
purposes as detailed in the Act. It was also the intention of
the MSC to combine efforts with the U.S. Treasury's Federal Law
Enforcement Training Center, which is already recognized for
its outstanding course work in seaport security and
counterterrorism. The MSC stands ready to work with the U.S.
Merchant Marine Academy and the International Association of
Airport and Seaport Police to further develop the Maritime
Security Institute.
However, the MSC recommends that the Maritime Security
Institute be based in Charleston, South Carolina, not at the
U.S. Merchant Marine Academy, as is recommended in the
legislation. The Federal Law Enforcement Training Center
already has established in Charleston a training facility that
sees nearly 30,000 students per year. While the U.S. Merchant
Marine Academy is undoubtedly one of the finest merchant marine
training centers in the world, the Maritime Security Institute
will focus more on law enforcement than it will merchant marine
training. Given the quality of maritime security, law
enforcement, and criminal investigation training that already
takes place at the Charleston facility, plus the added benefits
of its proximity to a major U.S. port, a mild climate that
lends itself to year-round outdoor training, and greater
accessibility to the majority of sea carriers which tend to be
located in the southern United States, Charleston is a better
choice and the MSC recommends a change.
The Act recommends that loans and grants be made available
for port security infrastructure improvements, which the
Maritime Security Council applauds. Under eligible projects,
the MSC would recommend including conferences and seminars
which aim is to educate and improve maritime security in the
U.S. and overseas. The role of education should be seen as a
predicate to hardware improvements at our seaports and such
inclusion under this section of the Act would help to ensure
that.
Finally, Mr. Chairman, the Act recommends that the revision
of the Department of Transportation's Port Security Planning
Guide be made available over the Internet. The MSC believes
that the dissemination of information, including guides of this
sort, that provide detailed security planning guidance
regarding the nation's seaports, is best done through official
sources. Placing such information on the Internet could place
sensitive security guidelines in the hands of terrorists or
criminals that could derive benefit from their contents. It is
not likely that those ports and other end-users who have a
legitimate need for security planning information, would not
have access to it through the U.S. Coast Guard, U.S. Department
of Transportation, MARAD or other official sources. The Port
Security Planning Guides should be treated as ``For Official
Use Only'' documents and promulgated as such.
I'd like to thank the Committee and its Members for this
opportunity to address this important legislative effort. The
proposed Port and Maritime Security Act of 2001, with the
modifications we have put forward to you today, as well as the
details and budgetary changes spelled out in my prepared
remarks which I asked to be included in the record, stands to
be one of the most important steps taken by any government to
protect its ports and sea carriers from an amalgam of unchecked
risks.
We at the MSC stand prepared, as we always have, to assist
this Committee and its staff in this important undertaking. The
Maritime Security Council will be dedicating a significant
portion of its annual conference here in Washington to the
issues raised in this hearing. I invite each of you to attend
on the 18th and 19th of September to help us find new ways to
improve maritime security.
Mr. Chairman, I look forward to answering any questions you
may have.
[The prepared statement of Mr. Petersen follows:]
Prepared Statement of Kim E. Petersen, Executive Director,
Maritime Security Council
Thank you Mr. Chairman and Members of the Committee. As the
Executive Director of the Maritime Security Council, I am pleased to
have this opportunity to address the Committee today to relate the
views and concerns of our membership on the proposed Port and Maritime
Security Act of 2001.
BACKGROUND
The Maritime Security Council was created in 1988 to address the
many security concerns of the U.S. and international maritime
community. The MSC is a member-driven organization that works closely
with United States government agencies concerned with maritime security
and counterterrorism.
Our mission is to advance the security interests of the
international merchant marine community against criminal and terrorist
threats. The MSC represents maritime interests before government
bodies; works in partnership with industry and government; disseminates
timely information to its members; encourages the development of
industry-specific technologies; and, convenes conferences and meetings
for the membership. The MSC has established partnerships with a number
of these agencies to prevent illegal drug trafficking, stowaways,
theft, piracy, terrorism, and hijacking.
The MSC's international membership includes over 65 percent of the
world's commercial ocean carrier fleet (by tonnage), cruise lines,
numerous maritime service companies, port authorities, P&I clubs,
shipping groups, ships' agents, maritime law firms, and technical and
engineering firms serving the maritime industry. The MSC works with
many agencies, including the U.N.'s International Maritime
Organization, the U.S. Customs Service, U.S. Coast Guard, U.S.
Immigration and Naturalization Service, U.S. Department of State, U.S.
Navy, U.S. Maritime Administration (MARAD), U.S. Drug Enforcement
Agency, U.S. intelligence agencies, Federal Law Enforcement Training
Center, U.K. Department of the Environment, Transportation and the
Regions, and the U.K. Ministry of Defense.
In addition to being the principle clearinghouse for the exchange
of information between its carrier members, the MSC also acts as a
liaison with regulators and governments offering vital intelligence on
crimes at sea. As a consequence of this role, the MSC assisted in the
development of the U.S. Sea Carrier Initiative and Super Carrier
Programs and participates in international activities with the U.S.
Drug Control Program, World Customs Organization, and the Baltic and
International Maritime Council. The MSC also maintains an extensive
library of information and training aids on maritime security.
The Committee should know that the Maritime Security Council is the
proud recipient of the Vice President's National Performance Review or
``Hammer Award'' and has been a consultant to The White House, National
Security Council, U.S. Customs, U.S. Department of Transportation, U.S.
Coast Guard, and many other government entities. In 2000, the Maritime
Security Council was asked to become maritime security advisors to both
the U.S. State Department, through its Overseas Security Advisory
Council, and Interpol, the international police agency.
The Maritime Security Council was the first maritime organization
to work with the President's Interagency Commission on Crime and
Security in United States Seaports. In fact, MSC executives provided a
confidential state-of-the-industry briefing to key staff of the
Commission at the White House prior to its actual authorization by the
President in the Fall of 1999.
PORT AND MARITIME SECURITY ACT OF 2001
The MSC finds laudable the steps taken by the Committee and
Senators Hollings and Graham in their efforts to establish minimum and
effective security standards for U.S. and foreign ports. The last
decade has seen shipowners invest significant amounts in security
infrastructure and operations improvements, but the sad fact is that
port authorities have failed to keep pace. Rarely has this been due to
oversight by port directors; rather, it is the unfortunate byproduct of
shortsighted budget cuts, departmental downsizings, and lack of Federal
leadership and financial assistance.
The past year has demonstrated that it is incumbent upon many ports
to review, analyze, and implement improvements in physical, personnel,
and information security, particularly now as the range of threats has
expanded. Unlike 10 years ago, the U.S. now faces an amalgam of threats
that have heretofore been more the subject of Rambo movies than
reality: weapons of mass destruction (WMD); chemical and biological
agents; sophisticated human smuggling schemes; and, hi-tech approaches
to narcotics smuggling are at the top of the list. Many shipowners have
made huge strides to protect their vessels, employing state-of-the-art
access control devices, electronic narcotics and explosives detectors,
and even devices that detect stowaways by way of CO2
concentration. Equal resolve has not been shown by many ports, who have
relied upon shipowners to do the heavy lifting; clearly, the efforts of
the Interagency Commission on Crime and Security in United States
Seaports demonstrated that it is incumbent upon ports to match this
effort in the protection of their perimeters and facilities.
Additionally, the MSC believes there has been a systemic failure to
adequately address security awareness within the maritime community.
Security has become an integral part of the operational fabric within
the aviation industry, as an example, with strong messages of security
awareness broadcast both publicly and internally--and with the
consequent effect of heightened deterrence and employee participation.
A similar approach must be taken by the maritime industry, and as an
industry we look to the government to support such an effort with
funding, research, and long term commitment.
The MSC feels that an impediment to holistic improvements in the
area of maritime security can be traced to a confusing array of would-
be agency ownership of this issue. It is a daunting task, to say the
least, for a maritime director of security to weigh which agency to
report an incident to or request guidance from, when the sheer numbers
of these agencies exceed that which can be counted on two hands and a
few toes thrown in for good measure. If not outright consolidation of
responsibility, the industry would benefit from greater articulation of
agency responsibility on issues involving security.
While the MSC applauded the efforts of the President's Seaport
Commission, it also recognized the intrinsic weakness of its mandate:
providing a critical review of U.S. ports as they relate to maritime
security. The MSC would like to underscore that no less important, and
arguably more so than U.S. ports, is the relative standards of security
found in foreign ports that are direct sources of merchant shipping
bound for U.S. ports. Whether it is WMDs, stowaways, or drugs, the
fundamental fact is that each of these threats will likely have as a
source some port outside the United States. So long as the emphasis is
on interdiction rather than prevention at the source, the U.S. will
forever remain vulnerable. We applaud this legislation for addressing
this issue.
In 1999, the MSC launched an initiative that recommends a
partnership between key Federal agencies and the MSC to first quantify
the scope of the problem associated with the lack of internationally
recognized minimum standards of security for all international ports
(i.e., ports with merchant traffic that have points of origin or
destination outside their own national boundaries); and second, to
develop and recommend tiered standards pegged to cargo/passenger
throughput, GNP, etc. that would codify such standards much like what
has previously been done with international airports. We hope that this
initiative, and the Maritime Security Council's unique ability to
assist in such efforts, will not be lost in the scramble to accomplish
the goals of this legislation.
While we applaud the intent of this legislation, we nevertheless
have reservations about key elements of its provisions. For example, we
concur that intelligence and information sharing among law enforcement
agencies need to be improved and coordinated at many seaports. Most
seaports have little or no idea of the threats they face from crime,
terrorism, stowaways, and other illegal activities due to a lack of
coordination and cooperation between law enforcement and intelligence
agencies and the sea carriers themselves.
It is vital for the Members of this Committee to understand that
the lion's share of intelligence relating to maritime crime comes from
the industry itself. Just like the seaports, the sea carriers (which
includes cargo ships, cruise ships, and other merchant vessels) are
victims in these illegal activities, and as such they work tirelessly
to identify threats, minimize vulnerabilities, and reduce their risk.
If you ask the Office of Naval Intelligence or the Central Intelligence
Agency or MARAD or the Coast Guard where the bulk of their intelligence
comes from, they will certainly tell you it is the industry and the
shippers themselves.
Many are not aware of the fact that there exists today an ad hoc
working group that is composed of key Federal agencies, including the
defense and intelligence groups, and industry representatives from the
Maritime Security Council and the International Council of Cruise
Lines. The MSC and the ICCL members have U.S. security clearances and
the technical means to communicate classified information in order that
they, and the government agencies represented in the working group, can
share information and, if necessary, discuss raw intelligence findings
so as to jointly propose reasonable actions to take so as to protect
innocent lives and property. The reason this unique and effective
partnership exists is that the government agencies involved in maritime
security recognizes that much of the expertise and the intelligence
from the field resides in the sea carrier community, and not in the
government. Any effort to improve the standard of communication between
law enforcement and other government agencies, and seaports, must also
include provisions for industry participation. Absent such provisions,
the efforts to strengthen U.S. seaport security is doomed to failure.
The same participation by industry is also essential for the
establishment of a Port Security Task Force and the local Port Security
Committees recommended in this legislation. Umbrella non-profit
organizations representing sea carriers, such as the Maritime Security
Council, must be included to ensure that their resources, and concerns,
are not overlooked. Indeed, we can only assume it to be an oversight
that membership in the proposed Seaport Security Committees is limited
to the port authority; Federal, state, and local government and their
law enforcement agencies; labor organizations and transportation
workers; local management organizations; and those private sector
representatives whose inclusion is deemed beneficial by the USCG
Captain of the Port. Can it really be the intention of the Committee to
have seaport security issues reviewed by stevedores' unions but not by
the sea carriers themselves?
Seaport security and vulnerability assessments are vital for
conducting risk assessments of U.S. and foreign ports. The U.S. Coast
Guard has done an admirable job in performing such assessments of
foreign ports with what can only be described as ridiculously low
funding. Despite hundreds of thousands of U.S. citizens visiting ports
around the world, the risks of which are little known to the
government, funding for these assessments is anemic. In some years less
than five such assessments are performed--in some cases the assessments
are canceled altogether due to the ports being deemed ``too hazardous''
for military personnel to visit. Yet American tourists will visit such
ports regularly not knowing the potential risks.
The Committee should know that the industry itself is committed to
improving the safety of foreign ports, particularly those visited by
cruise ships. As the former Director of Security for both Princess and
Renaissance Cruises, I performed security audits in over 160 ports in
106 countries. If a port had problems, the industry would assist the
port authority in identifying weaknesses and those low-cost or no cost
measures that could reduce their exposure to risk. Mind you, none of
this is mandated by legislation or done with U.S. assistance. It's just
good business to protect the lives and property of our passengers and
cargo. But there needs to be Federal help if we are to do it right.
The Act recommends the creation of Maritime Transportation Security
Programs for the purpose of prescribing regulations to protect the
public from threats originating from vessels in a U.S. seaport against
an act of crime or terrorism. The Maritime Security Council again urges
the Committee to include organizations such as the MSC in these
programs to ensure that all relevant voices are heard. Without the MSC,
a significant percentage of maritime security expertise, experience,
and information will be unavailable to those most in need of it.
The Act also recommends the use of the FBI's Integrated Automated
Fingerprint Identification System for port authority background checks.
The MSC recognizes the sensitivity of this issue, particularly given
the volatility of any form of background checks with the various
stevedoring and other waterfront labor unions. While the majority of
dock workers are honest and absent a criminal background or criminal
ties, it is nevertheless recognized by both government agencies, port
authorities, and sea carriers, that the majority of crimes committed
within the ports are by those employees that have access within their
confines. Access controls coupled with background checks of all those
port employees that have access to restricted areas, which by
definition includes docks and ships, would have a significant affect in
reducing the over $1 billion lost in cargo theft, as well as minimizing
overall criminal risk.
The Act proposes Security Program Guidance for the development of
voluntary security recommendations that will serve as a benchmark for
the review of security plans. The Maritime Security Council and its
members have experience in depth in the development of security
policies and procedures. In areas covering general security, access to
sensitive areas, vehicular access, firearms restrictions, and private
security guards, the sea carriers themselves have experience extending
beyond U.S. borders, thereby giving a global perspective.
The Act recommends an International Seaport Security initiative
designed to encourage the development and adoption of seaport security
standards under international agreements in other countries. This, and
the follow-on Port Accreditation Program, were first proposed in an
international conference on maritime security hosted by the Maritime
Security Council in 1998. In 2000, I met with the U.N.'s International
Maritime Organization in London and discussed this issue. The IMO
expressed interest in working with the MSC and the U.S. Government in
the creation of tiered standards of port security that could be used to
increase security in Third World countries to acceptable levels. It is
important to recognize that by itself, the United States would be hard
put to see such far reaching an effort succeed without the assistance
of the international sea carrier community. The MSC's constituency is
both familiar with the ports of concern, and works with these port
authorities on a regular basis. For reasons previously articulated, and
due to its extant efforts in this pursuit, we believe the MSC must be
an integral partner in the Act's International Seaport Security
initiative.
Furthermore, the MSC believes that, given the gravity of the
problem associated with foreign port security standards, and the
magnitude of this effort, the proposed budget of $500,000 per year for
3 years is entirely inadequate. An amount of $1,000,000 per year would
be a minimum amount necessary to accomplish this goal of the Act.
The Act proposes the creation of a Maritime Security Institute to
develop standards and procedures for training and certification of
maritime security professionals. The Maritime Security Council is
flattered that such an initiative is being proposed, as the MSC began
the creation of a Maritime Security Institute in 2000 for the same
purposes as detailed in the Act. It was also the intention of the MSC
to combine efforts with the U.S. Treasury's Federal Law Enforcement
Training Center, which is already recognized for its outstanding course
work in seaport security and counterterrorism. The MSC stands ready to
work with FLETC, as well as the U.S. Merchant Marine Academy and the
International Association of Airport and Seaport Police to further
develop the Maritime Security Institute.
However, the funding recommended is woefully inadequate given the
demand for such training and certification. I believe the Committee has
underestimated the number of persons involved in seaport and sea
carrier security, and a budget of $2,500,000 for the first 2 years and
$1,000,000 for the following 2 years, is simply unrealistic and setting
the program up for failure. The MSC and its members strongly believe
that a budget of $3,750,000 for the first year, $2,500,000 for the next
3 years, and $1,750,000 each following year would be the minimum
necessary to accomplish the goal of establishing a U.S.-based
Institute, coupled with an ability to send Mobile Training Teams to
foreign governments and ports in concert with the Port Accreditation
Program.
The MSC further recommends strongly that the Maritime Security
Institute be based in Charleston, South Carolina and not at the U.S.
Merchant Marine Academy. The Federal Law Enforcement Training Center
already has established in Charleston a training facility that sees
nearly 30,000 students per year. While the USMMA is undoubtedly one of
the finest merchant marine training centers in the world, the Maritime
Security Institute will focus more on law enforcement than it will
merchant marine training. Given the quality of maritime security, law
enforcement, and criminal investigation training that already takes
place at the Charleston facility, plus the added benefits of proximity
to a major U.S. port, a mild climate that lends itself to year round
outdoor training, and greater accessibility to the majority of sea
carriers which happen to be located in the southern United States, this
location is a superior choice and the MSC encourages a change.
The Act recommends that loans and grants be made available for port
security infrastructure improvements, which the Maritime Security
Council applauds. Under eligible projects, the MSC would recommend
including conferences and seminars which aim is to educate and improve
maritime security in the U.S. and overseas. The role of education
should be seen as a predicate to hardware improvements at our seaports
and such inclusion under this section of the Act would help to ensure
that.
Finally, the Act recommends that the revision of the Department of
Transportation's Port Security Planning Guide be made available on the
Internet. The MSC believes that the dissemination of information,
including guides of this sort, that provides detailed security planning
guidance regarding the nation's seaports, is best done through official
sources. Placing such information on the Internet could place sensitive
security guidelines in the hands of terrorists or criminals who could
derive benefit from their contents. It is not likely that those ports
and other end-users who have a legitimate need for security planning
information would not have access to it through the U.S. Coast Guard,
Department of Transportation, MARAD, or other official sources. The
Port Security Planning Guides should be treated as ``For Official Use
Only'' documents and promulgated as such.
The Maritime Security Council thanks the Committee and its Members
for this opportunity to address this important legislative effort. The
proposed Port and Maritime Security Act of 2001, with the modifications
we have put forward to you today, stands to be one of the most
important steps taken by any government to protect its ports and sea
carriers from an amalgam of unchecked risks. We at the MSC stand
prepared, as we always have, to assist this Committee and its staff on
its important efforts. The Maritime Security Council will be dedicating
a significant portion of its Annual Conference to the issues raised in
this hearing. I invite each of you to attend on the 18th and 19th of
September here in Washington as we work to find new ways to improve
maritime security.
I will make a copy of my remarks available to your staff and will
remain to answer any of your questions.
Thank you.
The Chairman. Thank you very much, Mr. Petersen. You
favored the Committee by your appearance and we understand if
you have got to catch a flight and be excused.
Mr. Craig.
STATEMENT OF JAMES M. CRAIG, VICE PRESIDENT,
AMERICAN INSTITUTE OF MARINE UNDERWRITERS
Mr. Craig. Thank you, Mr. Chairman. My name is James M.
Craig and I am Vice President of the American Institute of
Marine Underwriters. AIMU is the national association of U.S.-
based insurance and reinsurance companies which insure vessels
of all types, the cargoes they transport and the liabilities
they face. Our membership also includes brokers, claims
adjusters, surveyors and attorneys. I am here to testify that
cargo crime is a huge national problem which the private sector
is trying very hard to make a dent in. Cargo insurers strongly
support enactment of the Port and Maritime Security Act. We
believe that our efforts to combat the problem of cargo theft
can be greatly assisted by applying more and better coordinated
Federal resources as the proposed legislation would do. The
views expressed in my statement are also shared by the Inland
Marine Underwriters Association. IMUA members insure cargoes
transported domestically, while AIMU members cover cargoes
moving by sea or transported internationally by any mode. Both
AIMU and IMUA are members of the National Cargo Security
Council, which has labored for many years on this issue.
Cargo theft represents a costly drain on our economy,
beginning with the impact on the victimized companies and
spreading to their employees who may become unemployed when
bankruptcy results, or, even worse, can be killed in a violent
robbery. Then there is the cost to the consumer. An independent
study conducted by one of our member companies estimated that
theft of high-tech cargo adds $150 to the cost of an average
computer. All of this is just part of an even bigger picture.
We are told by the FBI that stolen computer components are
often accepted in place of cash in drug deals. The same
criminals involved in cargo theft have been linked to money
laundering, counterfeiting, illegal gambling, illegal
immigration, smuggling, all kinds of business frauds, narcotics
and weapons violations. Resources applied to preventing cargo
crime will have a ripple effect in helping to combat terrorism
and other national security concerns and vice versa.
Several key features of the legislation are important to
the insurance companies and their customers, which include all
of corporate America. These provisions would improve the
collection of data to document the problem of cargo theft,
increase criminal penalties for cargo thieves, and provide
training in maritime security to law enforcement professionals.
We discussed these same matters with the Interagency Commission
on Crime and Security in U.S. Seaports which addressed them in
their final report. Your legislation incorporates most of what
we recommended to the Commission, and our list of key
provisions also comprises most of the priorities on the agenda
of the National Cargo Security Council. We appreciate the work
of all who have brought us to this point and thank you for the
opportunity to testify today.
[The prepared statement of Mr. Craig follows:]
Prepared Statement of James M. Craig, Vice President,
American Institute of Marine Underwriters
My name is James M. Craig and I am Vice President of the American
Institute of Marine Underwriters. AIMU is the national association of
U.S.-based insurance and reinsurance companies which insure vessels of
all types, the cargoes they transport and the liabilities they face.
Our membership also includes brokers, claims adjustors, surveyors and
attorneys. I'm here to testify that cargo crime is a huge national
problem which the private sector is trying very hard to make a dent in.
Cargo insurers strongly support enactment of the Port and Maritime
Security Act. We believe that our efforts to combat the problem of
cargo theft can be greatly assisted by applying more and better
coordinated Federal resources, as the proposed legislation would do.
The views expressed in my statement are also shared by the Inland
Marine Underwriters Association. IMUA members insure cargoes
transported domestically, while AIMU members cover cargoes moving by
sea or transported internationally by any mode. Both AIMU and IMUA are
members of the National Cargo Security Council, which has labored for
many years on this issue.
Cargo theft represents a costly drain on our economy, beginning
with the impact on the victimized companies and spreading to their
employees who may become unemployed when bankruptcy results, or, even
worse, can be killed in a violent robbery. Then there is the cost to
the consumer. An independent study conducted by one of our member
companies estimated that theft of high-tech cargo adds $150 to the cost
of an average computer. And all of this is just part of an even bigger
picture. We are told by the FBI that stolen computer components are
often accepted in place of cash in drug deals. The same criminals
involved in cargo theft have been linked to money laundering,
counterfeiting, illegal gambling, illegal immigration, smuggling, all
kinds of business frauds, narcotics and weapons violations. Resources
applied to preventing cargo crime will have a ripple effect in helping
to combat terrorism and other national security concerns--and vice
versa.
Several key features of the legislation are important to the
insurance companies their customers, which include virtually all of
corporate America. These provisions would improve the collection of
data to document the problem of cargo theft, increase criminal
penalties for cargo thieves, and provide training in maritime security
to law enforcement professionals. We discussed these same matters with
the Interagency Commission on Crime and Security in U.S. Seaports,
which addressed them in their final report. Your legislation
incorporates most of what we recommended to the Commission, and our
list of key provisions also comprises most of the priorities on the
agenda of the National Cargo Security Council. We appreciate the work
of all who have brought us to this point and thank you for the
opportunity to testify today.
DATA COLLECTION
Several independent studies discussed in the Seaport Commission's
report--including one by the John A. Volpe National Transportation
Systems Center and another by the RAND organization--place the losses
due to cargo theft near $10 billion annually. However, we need to
improve the collection of data so that law enforcement efforts can be
better focused. Statistics currently available are seriously deficient
for a variety of reasons. Your legislation would mandate an evaluation
of existing governmental data bases in an effort to ensure the
collection of data on cargo theft occurring in the ports or anywhere
else in the intermodal chain of transportation. We understand that the
current unified Federal crime reporting system suffers from a lack of
resources on the State and local levels. The bill requires an outreach
program to help channel resources to State and local law enforcement
agencies to improve their information systems and harmonize them with
the Federal system. In addition, we strongly recommend that a
requirement be added for officials to report cargo theft as a separate
crime so this data may be easily retrieved.
CRIMINAL PENALTIES
We have observed that cargo criminals are not being adequately
deterred by the existing penalties. In fact, indications are that those
who once specialized in other types of crime are turning to cargo theft
because the rewards are lucrative and the threat of prosecution is
minimal. We strongly support the provision in your bill which directs
the U.S. Sentencing Commission to amend the Federal sentencing
guidelines to provide a sentencing enhancement of not less than two
levels for a violation of the Federal cargo theft law.
SECURITY TRAINING
The legislation addresses an important need by building on the good
work already being done at the United States Merchant Marine Academy's
Global Maritime and Transportation School (GMATS) at Kings Point, New
York. A new Maritime Security Institute to be established at this
Federal facility will expand the current offerings and enable the
training and certification of maritime security professionals in both
the law enforcement and private sectors. With a better understanding of
the intricacies of the shipping business, law enforcement officials
will be better equipped to do their jobs.
TEAMWORK
The problems addressed by the legislation are multidimensional, and
they are best approached through interagency cooperation and the
sharing of information and resources. We are pleased that the Port
Security Task Force proposed in the bill will have a subcommittee
comprised of Federal, State and local government law enforcement
agencies. This ``Law Enforcement Subcommittee'' will have the ability
to collaborate with public and private entities. We would like to call
your attention to a group of interagency task forces which have already
been established in various regions of the country to combat cargo
theft. They were organized as a result of a speech made in 1994 by the
Attorney General, but they have never had a sufficiently high profile
to make an appearance in the Federal budget and thus suffer from a lack
of resources. Ideally, each of the task forces should be funded and
include representatives of the U.S. Attorneys, the FBI, Customs
Service, DEA, INS, the Coast Guard, and State and local prosecutors and
law enforcement officials. Due to budget constraints, agencies are
sometimes unable to participate in the task forces. We would appreciate
the opportunity to work with Committee staff to ensure that the most
critical cargo theft task forces are able to benefit from your
legislation.
PRIVATE SECTOR'S WORK TO PREVENT CARGO CRIME
Those involved in cargo transportation know they have a
responsibility to do as much as they can to address security issues.
AIMU recently surveyed its members to determine what advances are being
made by the private sector in cargo loss prevention. We would like to
share with the Committee the following findings:
Increased use of video and digital cameras and videotape.
Trailer satellite GPS/tracking systems including
temperature monitoring and door monitoring.
Electronic seals and locks on trailers and containers.
Tamper indicating tape for use on cartons and pallets,
pallet brands and seals.
Trailer/chassis anti-theft devices that disarm the
ignition or lock the brakes.
Use of security escorts on high valued loads within the
United States and some overseas areas.
Increased documentation of proven packaging methods,
including the elimination of brand markings and labels from the outside
packages.
Increased use of packing, loading and discharge surveys.
Closer vetting of all modes of transportation involved in
high-valued loads.
Greater use of independent security experts and surveyors.
The Chairman. Very good. Thank you a lot.
Mr. Miller.
Mr. Miller. Mr. Maher is going to speak first.
STATEMENT OF BASIL MAHER, PRESIDENT AND CHIEF OPERATING
OFFICER, MAHER TERMINALS, INC.
Mr. Maher. Good morning, Mr. Chairman and Members of the
Committee. I am Basil Maher, President and Chief Operating
Officer of Maher Terminals, Inc., Jersey City, New Jersey.
Maher Terminals is the largest container terminal operator in
the port of New York and New Jersey, handling about 900,000
containers annually. We have operated in this port in excess of
50 years, and I have been personally involved in every aspect
of terminal operations for 28 years.
I am here today on behalf of the National Association of
Waterfront Employers, or NAWE, and the United States Maritime
Alliance, or USMX. The former is the national trade association
representing the U.S. terminal and stevedoring industry; the
latter is management's collective bargaining representative
that consists of ocean carriers, marine terminal operators and
port associations to negotiate with the ILA on the East and
Gulf coasts. I sit on the board of NAWE and on its special
committee on port security.
Mr. John Miller, another NAWE board member who also sits on
our special committee on port security joins me today. John
will elaborate on the general points contained in my remarks.
NAWE and USMX appreciate the opportunity you have extended
to us to testify on this all-important issue. Given the fact
that we only recently received a copy of your bill, we ask for
additional time beyond this hearing to get input from a large
cross-section of the industry. I ask that both NAWE and USMX be
permitted to submit more detailed comments for the record.
Hopefully this can be done within the next 4 weeks or so.
By way of background, NAWE and USMX members have always
cooperated with the Federal law enforcement agencies having
jurisdiction over marine terminals. Normally, this is done on a
local basis, and occasionally on a national basis. We will, of
course, continue to do so when this legislation becomes public
law.
Unquestionably, marine terminals are subject to the
maritime jurisdiction of the United States, and NAWE and USMX
members readily understand that the security of our borders is
a fundamental responsibility of the Federal Government. When
the Interagency Commission on Crime and Terrorism in the U.S.
Seaports conducted its fact-finding mission last year, the
commissioners observed many terminal operations. Clearly, the
Federal law enforcement agencies comprising the Commission
became quite concerned with security, and recommended
legislative changes designed to make marine terminals acquire
the look and security practices of airport terminals.
When the Interagency Commission's recommendations were
first made public last fall, the NAWE board also became
uncomfortable. Our discomfort was due less to the nature of
recommendations, but rather centered on the broad and
unconstrained delegation of new enforcement powers sought by
the law enforcement agencies.
After a thorough review, the NAWE board believes security
procedures established by this bill must be successfully
implemented without creating port terminal congestion and new,
expensive mandates on private businesses. The following
specific principles should guide any port security legislation
and the security plans to be created by the provisions of this
bill.
These principles are: legislation must not shift Federal
law enforcement obligations to private terminal operators;
legislation must not duplicate any present State or local
statutory legal practices or laws which substantially address
similar security requirements; legislation must be flexible to
the maximum extent possible, i.e., security measures must be
taken on a port-by-port basis after considering as much local
input as possible. No two ports are the same; therefore, their
unique operational characteristics and existing security
programs must be considered when implementing this legislation;
legislation must not assess fees or tax terminal operators for
costs properly borne by the Federal Government.
Your legislation, Mr. Chairman, appears to have generally
adopted these principles. It is the implementation that
concerns us.
Should this legislation be implemented without the guidance
of these principles, it could seriously impact container
terminal operations and the $400 billion in goods that are
annually imported or exported through these terminals.
Therefore, the private terminal industry asks that the
legislation--in the clearest possible terms--contain guidance
to the implementing authorities consistent with these
principles. The legislation should also clearly emphasize the
importance of local input and discussion well in advance of the
implementation of the bill's requirements.
That said, Mr. Chairman, the marine terminal industry
pledges to work with this Committee and its staff, as well as
the Federal law enforcement agencies, to implement the
provisions of this legislation in a timely manner with a
minimum of disruption to terminal operations and the commerce
it supports.
Mr. Miller will now address in more detail some of the
specific concerns shared by marine terminal operators. We will
then be happy to answer any questions from the Committee.
[The prepared statement of Mr. Maher follows:]
Prepared Statement of Basil Maher, President and Chief Operating
Officer, Maher Terminals, Inc.
Good morning, Mr. Chairman, and Members of the Committee. I am
Basil Maher, President and Chief Operating Officer of Maher Terminals,
Inc, Jersey City, N.J. Maher Terminals is the largest container
terminal operator in the port of NY/NJ, handling about 900,000
containers annually. We have operated in this port in excess of 50
years, and I have been personally involved in every aspect of terminal
operations for 28 years.
I am here today on behalf of the National Association of Waterfront
Employers, or NAWE, and the U.S. Maritime Alliance, or USMX. The former
is the national trade association representing the U.S. terminal and
stevedoring industry: the latter is management's collective bargaining
representative with the ILA on the East and Gulf coasts. I sit on the
board of NAWE and on its Special Committee on Port Security.
I am joined today by Mr. John Miller, another NAWE board member who
also sits on our Special Committee on Port Security. John will
elaborate on the general points contained in my remarks.
NAWE AND USMX appreciate the opportunity you have extended to us to
testify on this all-important issue. Given the fact that we only
recently received a copy of the latest draft of your bill, we ask for
additional time beyond this hearing to get input from a large cross
section of the industry. I ask that both NAWE and USMX be permitted to
submit more detailed comments for the record. Hopefully this can be
done in the next 4 weeks or so.
By way of background, historically, NAWE members have always
cooperated with the Federal law enforcement agencies having
jurisdiction over marine terminals. Normally this is done on a local
basis, and occasionally on a national basis. We will, of course,
continue to do so when this legislation becomes public law.
Unquestionably marine terminals are subject to the maritime
jurisdiction of the U.S., and NAWE members readily understand that the
security of our borders is a fundamental responsibility of the Federal
Government. When the interagency commission on crime and terrorism in
U.S. seaports conducted its fact-finding last year, the commissioners
observed many terminal operations. Clearly the Federal law enforcement
agencies comprising the commission became quite concerned with
security, and recommended legislative changes designed to make marine
terminals acquire the look and security practices of airport terminals.
When the interagency commission's recommendations were first made
public last fall, the NAWE board became uncomfortable. Our discomfort
was due less to the nature of the recommendations, but rather centered
on the broad and unconstrained delegation of new enforcement powers
sought by the law enforcement agencies.
After a thorough review, the NAWE board believes security
procedures established by this bill must be successfully implemented
without creating port terminal congestion and new, expensive mandates
on private businesses. The following specific principles should guide
any port security legislation and the security plans to be created by
provisions of this bill.
These principles are:
Legislation must not shift Federal law enforcement
obligations to private terminal operators.
Legislation must not duplicate any present State or local
statutory legal practices or laws which substantially address similar
security requirements.
Legislation must be flexible to the maximum extent
possible. I.e., security measures must be taken on a port-by-port basis
after considering as much local input as possible. No two ports are the
same; therefore their unique operational characteristics and existing
security programs must be considered when implementing this
legislation.
Legislation must not assess fees or tax terminal operators
for costs properly borne by the Federal Government.
Your legislation, Mr. Chairman appears to have generally adopted
these principles. It is the implementation that concerns us.
Should this legislation be implemented without the guidance of
these principles, it could seriously impact container terminal
operations, and the $400 billion in goods that are annually imported or
exported through these terminals.
Therefore, the private terminal industry asks that the
legislation--in the clearest possible terms--contain guidance to the
implementing authorities consistent with these principles. The
legislation should also clearly emphasize the importance of local input
and discussion well in advance of the implementation of the bill's
requirements.
That said, Mr. Chairman, the marine terminal industry pledges to
work with this committee and its staff, as well as the Federal law
enforcement agencies, to implement the provisions of this legislation
in a timely manner with a minimum of disruption to terminal operations
and the commerce it supports.
Mr. Miller will now address in more detail some of the specific
concerns shared by marine terminal operators. We will then be happy to
answer any questions from the committee.
The Chairman. Mr. Miller.
STATEMENT OF JOHN L. MILLER, EXECUTIVE VICE
PRESIDENT, INTERNATIONAL TRANSPORTATION SERVICE, INC.
Mr. Miller. Good morning, Mr. Chairman. I am John Miller,
Executive Vice President of International Transportation
Service of Long Beach, California. ITS, as we are called, is a
wholly-owned subsidiary of K Line, a Japanese flag carrier, and
operates three container terminals on the West Coast. Like Mr.
Maher, I have spent over 30 years in this industry, and
hopefully believe I can impart some of that experience to the
Members of the Committee.
As Mr. Maher noted, I am also a NAWE board member and a
member of NAWE's special committee formed to review and comment
on port security legislation. Mr. Maher has addressed NAWE's
general concerns; I will address some of NAWE's specific
concerns with any port security legislation.
As an initial matter, I would like to state that the West
Coast terminal operators also recognize the concerns of the
Federal law enforcement agencies. We recognize that preventing
marine-related terrorism is a fundamental responsibility of the
Federal Government and that this legislation is really a
defense of the borders issue. We, too, will also do our best to
carry out any statutory directives required by this legislation
in conjunction with the port authorities and other affected
parties on a port-by-port basis.
Mr. Chairman, let me briefly state what this legislation
cannot be allowed to become.
This bill must not become a vehicle for regulations
converting private sector industry employees into a federalized
police force with--or without--authority to carry firearms.
Terminals employ gatekeepers, commonly known as watchmen or
guards. Watchmen are expected to do many things, but law
enforcement is not one of those things. Nor should the Federal
law enforcement agencies expect industry watchmen to become
surrogate policemen. If a beefed-up police presence is
necessary at any given port complex, that needs to be entirely
a function of the Federal Government or the port authority.
This bill must not become authority for any agency to issue
regulations requiring procedures that impede the flow of
intermodal movements. For example, to the extent that
credentialing of truck drivers or other service personnel is
deemed necessary, the credentials process must not be done in a
manner that slows down terminal productivity. In order to
minimize the risk of converting a credentialing requirement
into an operational impediment, the government agencies making
these determinations--whether Federal, State or local--must
recognize that every affected private sector party must be
consulted in a timely manner, and that sufficient lead time
must be provided to ensure the smooth flow of terminal
operations. Provision also must be made for drivers who will
only occasionally visit a terminal.
Mr. Chairman, a nightmare is having thousands of containers
backed up at a marine terminal due to a poorly implemented
credentialing process. This concern, I might add, is equally
valid for any new regulatory requirements issued by the Customs
Service based on the technology to be developed by this
legislation. Another nightmare is having ships miss their
departure time because some new Customs inspector is insisting
on x-raying every import container as it comes under the hook
of the container crane. While I think there is little
likelihood of this ever occurring, the agency--and its new
inspection technology--need keep pace with industry technology
and operating procedures.
This bill cannot arbitrarily require marine terminal
employers to drop experienced members of our workforce for
long-past or non-serious violations of the criminal laws. This
Committee, as well as the Federal law enforcement agencies
which are granted regulatory authority, needs to give careful
thought to the specifics of any requirement to conduct criminal
background checks of terminal personnel, whether management or
labor. Nobody wants to employ workers at risk of committing a
terrorist act or cargo-related crime, but neither do we wish to
weed out solid workers because of past youthful indiscretions.
I presume the representatives of our workforce share this
concern.
I note, Mr. Chairman, that there is language in your latest
draft which addresses these concerns. I suggest that many
others in the industry need to look at these proposed standards
to see if they need further work. If this section is not
carefully thought out, we risk creating a real injustice to our
workforce.
Finally, Mr. Chairman, I would like to point out that any
final Coast Guard/MARAD regulations issued under the authority
of this legislation must be uniform as applied to the 50 ports
affected by this bill. This is the tricky part, because Federal
regulation of the ports must be consistent as required by the
customary uniformity requirement of Federal maritime law. This
must be done while granting the industry, as your legislation
now does, considerable leeway to implement the provisions of
the legislation on a port-by-port basis. It is important, I
believe, for the Committee not to underestimate the
difficulties that will be encountered in many of these ports as
the provisions of this bill become effective. None of this will
be easy. It is going to take considerable goodwill and a lot of
hard work by every party to accomplish the goals of this
legislation.
With that, Mr. Chairman, I will conclude my remarks and I
will be pleased to answer any questions.
[The prepared statement of Mr. Miller follows:]
Prepared Statement of John L. Miller, Executive Vice President,
International Transportation Service, Inc.
Good morning, Mr. Chairman. I am John Miller, Executive Vice
President of International Transportation Service, Inc., Long Beach,
California. ``ITS'' is a wholly owned subsidiary of K Line, a Japanese
Flag Carrier, and operates three container terminals on the West Coast.
Like Mr. Maher, I have spent over 30 years in this industry, and
hopefully believe I can impart some of that experience to the members
of the committee.
As Mr. Maher noted, I am also a NAWE board member and a member of
NAWE's special committee formed to review and comment on port security
legislation. Mr. Maher has addressed NAWE's general concerns; I will
address some of NAWE's specific concerns with any port security
legislation.
As an initial matter, I would like to state that West Coast
terminal operators also recognize the concerns of the Federal law
enforcement agencies. We recognize that preventing marine related
terrorism is a fundamental responsibility of the Federal Government and
that this legislation is really a defense of the borders issue. We,
too, will also do our best to carry out any statutory directives
required by this legislation in conjunction with the port authorities
and other affected parties on a port-by-port basis.
Mr. Chairman, let me briefly state what this legislation cannot be
allowed to become:
This bill must not become a vehicle for regulations
converting private sector industry employees into a Federalized police
force with--or without--authority to carry firearms. Terminals employ
gate-keepers, commonly known as watchmen. Watchmen are expected to do
many things, but law enforcement is not one of those things. Nor should
the Federal law enforcement agencies expect industry watchmen to become
surrogate policemen. If a beefed up police presence is necessary at any
given port complex, this needs to be entirely a function of the Federal
Government or the port authority.
This bill must not become authority for any agency to
issue regulations requiring procedures that impede the flow of
intermodal movements. For example, to the extent that credentialing of
truck drivers or other service personnel is deemed necessary, the
credentialing process must not be done in a manner that slows down
terminal productivity. In order to minimize the risk of converting a
credentialing requirement into an operational impediment, the
government agencies making these determinations--whether Federal, State
or local--must recognize that every affected private sector party must
be consulted in a timely manner, and that sufficient lead time must be
provided to ensure the smooth flow of terminal operations. Provision
also must be made for drivers who only occasionally visit a terminal.
Mr. Chairman, a nightmare is having thousands of containers backed
up at a marine terminal due to a poorly implemented credentialing
process. This concern, I might add, is equally valid for any new
regulatory requirements issued by the customs service based on the
technology to be developed by this legislation. Another nightmare is
having ships miss their departure time because some new customs
inspector is insisting on x-raying every import container as it comes
under the hook of a container crane. While I think there is little
likelihood of this ever occurring, the agency--and its new inspection
technology--need keep pace with industry technology and operating
procedures.
This bill cannot arbitrarily require marine terminal
employers to drop experienced members of our workforce for long past or
non-serious violations of the criminal laws. This committee--as well as
the Federal law enforcement agencies which are granted regulatory
authority--needs to give careful thought to the specifics of any
requirement to conduct criminal background checks of terminal
personnel, whether management or labor. Nobody wants to employ workers
at risk of committing a terrorist act or cargo related crime, but
neither do we wish to weed out solid workers because of past youthful
indiscretions. I presume the representatives of our workforce share
this concern.
I note, Mr. Chairman that there is language in your latest draft
which addresses these concerns. I suggest that many others in the
industry need to look at these proposed standards to see if they need
further work. If this section is not carefully thought out we risk
creating a real injustice to our workforce.
And Finally, Mr. Chairman, I would like to point out that
any final Coast Guard/MARAD regulations issued under the authority of
this legislation must be uniform as applied to the 50 ports affected by
this bill. This is the tricky part, because Federal regulation of the
ports must be consistent as required by the customary uniformity
requirement of Federal maritime law. This must be done while granting
the industry, as your legislation now does, considerable leeway to
implement the provisions of the legislation on a port-by-port basis. It
is important, I believe, for the Committee not to underestimate the
difficulties that will be encountered in many of these ports when the
time comes to implement the provisions of this bill. None of this will
be easy. It is going to take considerable goodwill and a lot of hard
work by every party to accomplish the goals of this legislation.
With that, Mr. Chairman, I will conclude my remarks, and I will
pleased to answer any questions.
The Chairman. Very good.
Mr. Leone.
STATEMENT OF MICHAEL LEONE, PORT DIRECTOR,
MASSACHUSETTS PORT AUTHORITY
Mr. Leone. Good morning, Mr. Chairman and Members of the
Committee. I am Mike Leone. I am the Port Director of the
Massachusetts Port Authority and Chairman of the American
Association of Port Authorities Task Force on Seaport Security.
I am here today representing the U.S. delegation of AAPA.
AAPA port members are public entities that have invested
billions of dollars of public and private funds to expedite the
transportation of people and cargo. Ports have invested
significant resources in improving security at seaports and
continue to make improvements.
Security at seaports involves multiple State, local, and
Federal Government jurisdictions as well as the private sector.
Addressing seaport security requires a strong commitment of
Federal resources, a partnership between all parties involved
and the flexibility to develop local security programs that
consider the unique needs of each port.
The Association recognizes the need for the port industry
to continue to make improvements in seaport security. However,
AAPA does not believe the adoption of a new Federal program is
the best approach. We agree that the Federal Government should
play a larger role in maintaining security at these
international borders by increasing resources, both monetary
and manpower, for current law enforcement programs rather than
establishing a new program. The report on the Interagency
Commission on Crime and Security in U.S. Seaports concludes
that the primary criminal activity at seaports is in violation
of Federal laws for which Federal agencies are primarily
responsible.
We have concerns that the bill as crafted places more
responsibility on ports for solving seaport crime problems by
instituting security guidelines and offering limited loan
guarantees and grants for making infrastructure improvements.
Issues such as terrorism, drug smuggling, illegal aliens, trade
fraud and export crimes require significant Federal resources.
Confronting these challenges requires a national commitment
and resources by all levels of government. More specifically,
it means that Federal and non-Federal jurisdictions must share
information and expertise, dedicated resources and work
together to deter criminal activity.
Overall, the bill is an improvement from last year and we
would like to thank the Committee staff for making the
legislation more accommodating. It is narrow in focus, provides
some more partnership opportunities as recommended in the
Commission report, allows more flexibility to recognize the
unique nature of ports and provides more funds to make security
improvements.
We do, however, maintain some concerns with the legislation
that I will highlight in my oral comments. In general, AAPA is
concerned with the bill's requirements with regard to the
development of security programs and security guidance and with
the redundancy of creating a new Federal program on crime and
terrorism.
We are pleased to see that the Committee adopted many of
the AAPA's recommended changes, especially deletion of minimum
standards. The bill, however, still outlines specific
requirements for port security programs will give a priority to
these areas rather than true risks identified in the
vulnerability assessment.
It is our view that attempts to address seaport security at
an individual port must be justified by security assessment so
that improvements are made based on a proven need. The bill
requires that the Coast Guard and the Maritime Administration
develop a set of best practices that include a list of specific
requirements to be used as a benchmark for the review of local
security programs. Although port authorities are not required
to comply with this list of security requirements, the bill
does require them to be included in all seaport security
programs, whether or not they are necessary.
The result will be programs that do not take into account
the uniqueness of each port, or the findings from a
vulnerability assessment. In addition, we recommend that local
committees be charged with developing these security programs
because port authority jurisdiction varies by port and does not
include all privately owned areas.
Further, making improvements to security such as the ones
listed in the bill can be very costly. Though the bill provides
more funding than last year's version, AAPA is concerned that
it is not enough to pay for the improvements that would be
adopted in the guidance.
According to the Interagency Commission report, it could
cost one port as much as $45 million to address the security
issues outlined in the report. If new legislation policies
require or warrant security improvements, the Federal
Government must provide the resources necessary to address this
issue.
To this end, AAPA is strongly opposed to unfunded mandates.
The AAPA is also concerned about the redundancy of creating a
new Federal program dealing with crime and terrorism. Security
at seaports involves multiple State, local and Federal
Government jurisdictions as well as the private sector. AAPA
does not believe that the enactment of a new Federal program is
the most effective means to increasing security.
We believe increased coordination and information sharing
among these various agencies in the private sector combined
with additional resources for current seaport law enforcement
programs is the appropriate method to address these important
issues.
For example, the Coast Guard has already instructed the
captains of the port to develop local committees to facilitate
information-sharing on crime and security issues. We support
this initiative and believe that the information sharing that
comes through these committees will result in stronger security
programs that address actual problems.
Also, there are several agencies that coordinate terrorism
prevention programs. In fact, recently there was a Federal
directive through the Department of Justice that each State
conduct a risk assessment to determine areas most vulnerable to
a terrorism attack. Some seaports were identified as at-risk
and are developing plans and exercises to prepare in the event
of such an incident.
This is one of the many simultaneous, in many cases,
redundant efforts by various Federal, State and local agencies
to address terrorism. There must be better coordination to cut
costs and ensure a better end result.
Finally, the bill should go farther in coordinating the
efforts of the various agencies and groups involved in seaport
security and should guarantee that the task force play a
greater role in this capacity. Although we are pleased that the
newest draft legislation requires the task force to partner in
the development of voluntary security guidelines and the
development of regulations, the bill should be clarified to
require the task force to be consulted in the development of
standards and procedures for conducting seaport security,
vulnerability threat assessments.
Coordinating these efforts with all the groups involved in
seaport security will ensure better results that take into
account the needs of the stakeholders and agencies charged with
implementing these programs. Since these vulnerability
guidelines will be used as the basis for all assessments, the
task force involvement in the process is critical.
With regard to security officer training and international
cooperation, AAPA commends the legislation for its
recommendations. Security officer training is important and
AAPA encourages the development of an appropriate program for
this purpose. We do, however, recommend that AAPA be listed in
the bill as one of the groups to be consulted so we will have
the opportunity to provide input in the development of the
security officer training program.
AAPA is a leader in port security issues in the United
States and the entire Western Hemisphere when it comes to
international cooperation, enhanced crime and security
information exchange provides an opportunity to reduce the flow
of drugs and other illegal shipments. The bill appropriately
gives the Maritime Administration new authority in this area
and should consider requiring the State Department and other
agencies to play a greater role in sharing information
internationally.
In conclusion, AAPA believes that new Federal seaport
security legislation is not necessary. There are more
appropriate solutions to addressing this issue that do not
include the establishment of a new program that duplicates many
current efforts and could result in considerable cost to the
agency. The Association remains committed to working closely
with the Coast Guard and other agencies already charged with
overseeing the security of our nation's international borders.
Through greater coordination at all levels and the
necessary resources, we can build on the programs already in
existence and enhance seaport security.
This concludes my remarks. I appreciate the opportunity to
share the views of AAPA's U.S. members on this important issue.
[The prepared statement of Mr. Leone follows:]
Prepared Statement of Michael Leone, Port Director,
Massachusetts Port Authority
Good morning. I am Mike Leone, Port Director of the Massachusetts
Port Authority, representing the American Association of Port
Authorities (AAPA) as Chairman of its Ad Hoc Task Force on Seaport
Security. Founded in 1912, AAPA is an association of more than 150
public port authorities in the United States, Canada, Latin America and
the Caribbean. In addition, the Association represents more than 250
sustaining and associate members, firms and individuals with an
interest in the seaports of the Western Hemisphere. My testimony today
reflects the views of AAPA's United States delegation.
AAPA port members are public entities, divisions or agents of State
and local government mandated by law to serve public purposes. Public
Port Authorities are charged with developing port facilities,
facilitating waterborne commerce, and promoting economic development.
Ports are key to this nation's ability to trade internationally,
providing American consumers and businesses with the choices they
demand for worldwide products and markets. Ports provide this
connection to the world by handling 95 percent of all U.S. overseas
trade by weight, and 75 percent by value. Ports also support the
mobilization and deployment of U.S. Armed Forces.
Today, we are here to discuss legislation aimed at enhancing the
security of U.S. seaports that are also international borders. U.S.
port authorities do not condone illegal acts of any kind taking place
in public ports. Ports believe that the protection of port cargo,
passengers and facilities from pilferage, theft, terrorism and other
criminal activity is critical to ports, their customers, as well as to
the nation as a whole. In fact, AAPA has a long-standing port security
committee focusing on these issues.
Ports have invested significant resources in improving security at
seaports to prevent seaport crime from occurring, and continue to make
improvements. Some ports spend millions of dollars on their own port
police, as well as patrol vehicles, training, computer systems, etc.
Also, many of our port members have and continue to invest in security
infrastructure such as fencing, lighting and barriers. Some of these
improvements have been based on State requirements, which address
specific problems in individual States. In addition to providing this
infrastructure, our members work with local and Federal authorities to
eliminate criminal activities and will continue to seek new avenues to
stop crime at seaports.
Security at seaports involves multiple State, local and Federal
Government jurisdictions as well as the private sector. The Federal
Government should play a large role in maintaining security at these
international borders. Addressing seaport security requires a strong
commitment of Federal resources, a partnership among all parties
involved and the flexibility to develop local security programs that
consider the unique needs of each port. Ports are diverse, with a
variety of security needs and concerns. There is no universal approach
to security that would appropriately address the wide range of
individual port requirements. Additionally, ports already devote
significant resources to their security programs; therefore, any
attempt to further address this issue should build on or strengthen the
programs that are already in existence on the local level and should be
supported with adequate Federal resources.
While the Association recognizes the need for the port industry to
continue to make improvements in seaport security, AAPA does not
believe the enactment of a new Federal program is the most effective
means to increasing security. We believe increased coordination and
information sharing among local/Federal agencies as well as the private
sector, combined with additional resources for current seaport law
enforcement programs, is the appropriate method to address these
important issues. For example, the Coast Guard has already instructed
the Captains-of-the-Port to develop local committees to facilitate
information sharing on crime and security issues. We support this
initiative and believe information sharing through these committees
will result in stronger security programs that address actual problems.
While AAPA does not believe a new Federal program is needed, the
remainder of our testimony will address specific comments regarding the
``Port and Maritime Security Act of 2001.'' Overall, the bill is an
improvement from legislation introduced last year (S. 2965). It is
narrower in focus (covering only 50 ports), provides for more
partnership opportunities with the non-Federal sector, allows more
flexibility to address the unique nature of ports, and provides more
resources to the Federal Government and the private sector to address
crime. AAPA is pleased to see the changes in the bill, especially the
deletion of minimum standards for security plans and security
guidelines. AAPA remains strongly opposed to minimum standards and
believes that any guidance on security provided in the bill must be
flexible to reflect the actual security needs of a port.
The bill also provides more funding than last year's version;
however, AAPA is concerned that it is not enough to pay for the
improvements mentioned in the bill. According to the Interagency
Commission report it would cost ports as much as $45 million to address
the security issues listed in the model port concept. If new
legislation or policies require or warrant security improvements, the
Federal Government must provide the resources necessary to address this
issue. (AAPA is strongly opposed to unfunded Federal mandates).
Below are more detailed comments on specific sections of the bill.
PORT SECURITY TASK FORCE AND OVERSIGHT
Section 3 of the legislation calls for the establishment of a Port
Security Task Force to implement the Act and coordinate programs to
enhance security and safety at U.S. ports. Last year, AAPA recommended
that this Task Force be expanded to include the private sector, as
recommended by the Interagency Commission on Crime and Security at
Seaports. AAPA also recommended that the Task Force be consulted in the
development of port security guidance and regulations. We are pleased
to see that the new bill incorporates these changes.
The bill also should be clarified to indicate that the Task Force
should be consulted by the Coast Guard in the development of standards
and procedures for vulnerability threat assessments. These standards
will serve as the basis for how all 50 vulnerability assessments will
be performed. In the development of these standards, Section 5 (a) does
provide that appropriate public and private sector organizations be
consulted, which AAPA strongly endorses. We also, however, recommended
that the Port Security Task Force specifically be included in the
outside groups to consult with. This would require changes under
Section 3, which describes the jurisdiction of the Task Force, and
Section 5 (a), which discusses the vulnerability assessment. This
change will ensure a partnership approach and is in line with the
jurisdiction of the Task Force as outlined in the bill.
AAPA recommends that any discussions or decisions on seaport
security made at the national level must be based on the
recommendations of the Task Force that includes representation from the
port industry. The Task Force could make recommendations; however,
ultimately AAPA believes that tailored security plans should be
coordinated at the local level in conjunction with the U.S. Coast
Guard.
LOCAL SEAPORT SECURITY COMMITTEES
AAPA views information sharing at the local level as a key
component in making improvements to seaport security. Information
sharing on the actual crime and threats at a particular port will
encourage better targeting of security efforts to address local issues.
The local security committees, called for in the bill, are an excellent
way to accomplish this goal of information sharing. The bill should be
amended under Section 6 to give local security committees the authority
to develop a security program for the port, rather than the port
authority or marine terminal. Port authorities do not have jurisdiction
over the entire port area, especially private areas of the port.
Ports already work closely with the local Coast Guard Captain-of-
the Port (COTP) on a number of safety and security issues, and AAPA is
pleased that the legislation states that these committees may use or
augment existing harbor safety committees or seaport readiness
committees. Under the Oil Pollution Act (OPA 90) many ports have set up
an area committee to develop plans to handle catastrophic release into
navigable waters. AAPA recommends that these committees also could be
used to address security issues. These committees are headed by the
COTP, include all elements of the local port industry and have resulted
in the development of contingency plans, pre-deployment of equipment
and conducting drills to test the validity of the plans. The bill also
should ensure that these committees do not duplicate on-going anti-
terrorism programs, but complement them through coordination of
efforts.
Section 4 of the bill calls for ``an annual exercise to be
conducted to verify the effectiveness of each port's security plan.''
The bill does not specify whether the exercise must be a ``full scale''
or a ``table-top exercise'' and therefore the requirement may be
redundant to what is already taking place at the port. Ports conduct
numerous exercises each year that include security elements, especially
at strategic ports. It may be more appropriate to conduct a full-scale
security exercise once every 3-5 years at the COTP's discretion to
cover this need.
SECURITY PROGRAM GUIDANCE/SECURITY PROGRAMS
The bill requires that the Coast Guard and the Maritime
Administration develop a set of guidance/best practices to be used as a
benchmark for the review of the local security programs developed by
local port authorities. AAPA is pleased to see that the bill now
requires the Coast Guard to take into account the different nature and
characteristics of U.S. seaports in developing this voluntary security
guidance.
While AAPA believes these plans can be of value as a planning
exercise, the bill as written still raises some challenges.
First, the legislation calls on the plans to be evaluated based on
guidance in particular areas. For example, Section 7 notes that the
guidance, and therefore the program, must include physical, procedural
and personnel security; a credentials process for access to sensitive
areas; restrictions on vehicular access; restrictions on firearms, and
certification of private security officers. While we are pleased to see
that these areas are no longer considered mandatory or minimum
standards, AAPA still has concerns about the impact of these
requirements. These areas will become priorities, rather than the true
risks identified in a vulnerability assessment. It is our view that
attempts to address seaport security at an individual port must be
justified by a security assessment so that improvements are made based
on a proven need, rather than on a list of areas outlined in a bill.
AAPA is also concerned about how the Coast Guard will develop this
guidance. If it is based on the ``model port'' included in the
Commission report, the cost of these improvements is very high. The
report notes that the total estimated cost for maximum-level
implementation is $44 million per port. While the bill does provide
some financial assistance, it is not nearly enough to cover the ``model
port'' recommendations. Ports should be given the opportunity to
explain why they are not following the guidance. For example, if the
guidance says all port facilities should be fenced and have security
lights, the port could, in its security plan, be allowed to state why
fencing is not needed.
AAPA believes that plans should be tied to the findings of
vulnerability assessments. The bill does not require plans to be based
on the findings of the assessment but only states that a port have a
security program in place within 1 year of an assessment being
completed. AAPA believes that once a vulnerability assessment is
conducted, the local security committee should identify the security
issues at the port and develop recommendations based on a broad set of
``best practices.'' These recommendations should then serve as the
basis for port security plans. AAPA recommends that a ``best
practices'' approach for the issues listed under minimum standards is
better than requiring all plans to be judged against minimum standards.
The bill also calls for port authorities to develop the port
security programs. We recommend that the local committees be charged
with this duty, because port authority jurisdiction varies by port and
does not include private areas. Since port authorities would
participate on the local committee, they would continue to be involved.
In addition, the bill should be amended to clarify that private areas
of the port must be included in any port plan.
VULNERABILITY ASSESSMENTS
AAPA agrees that individual vulnerability assessments are important
in determining a port's true risk; however, several improvements should
be made to the bill. First, the development of standards and procedures
for conducting seaport security vulnerability threat assessments should
include advice from the Task Force. The Task Force must be consulted to
ensure that these assessments are done in a manner that is helpful to
port authorities and the private sector that are tasked with making
improvements.
AAPA also recommends that the local committees be more involved in
conducting individual port vulnerability assessments to ensure they are
locally relevant. We recommend that the vulnerability assessments be
conducted by the local Coast Guard in conjunction with the port
authority and/or the local committee. It may be appropriate to use a
consultant for these assessments because the Coast Guard's assessments
may be too costly, may not be done in a timely manner, and may provide
too little detail. There must also be cooperation from appropriate
agencies to provide financial support and the threat information
necessary to determine risk. Congress should also consider whether the
assessments should be limited to cargo crime, since Federal agencies
already conduct threat assessments on terrorism and weapons of mass
destruction. Once the assessment is completed, it should be used as the
basis for developing seaport security programs at each port. This
connection is missing from the bill. Finally, these reports must be
held in strict confidence with the local port authority and law
enforcement agencies. A report to Congress may disclose security
sensitive information and could create a competitive disadvantage.
INFORMATION SHARING
Another important aspect of partnering at the local level is the
ability to share information. According to the Interagency Commission
report, most ports/terminal operators are not aware of the crimes that
are taking place. In many cases, information is not communicated to the
ports/terminal operators by the Federal or local law enforcement
agencies that have jurisdiction over these criminal areas. Agencies
such as the Federal Bureau of Investigation and the U.S. Customs
Service often provide little information to ports. Enhancing
communication between these agencies and the seaport industry,
including labor unions involved in day-to-day operations at the port,
would allow local seaport security committees to better focus their
efforts within the port area. Though a port has little control over
internal conspiracies or drug interdiction, the local port committee
can work closely with the Federal agencies that have jurisdiction over
this criminal activity to address these issues.
SEAPORT SECURITY OFFICER TRAINING
AAPA commends the legislation for addressing the issue of seaport
security officer training and encourages the development of appropriate
programs for this purpose. Such programs could provide the kind of
training specific to handling security on the waterfront. Upon
completion, the security officer could receive certification that he/
she has been officially trained as a seaport security officer. Existing
training programs could serve as models. We recommend, however, that
the bill be amended to include AAPA as one of the groups to be
consulted with in establishing the program. Since port authorities are
charged under the bill with security duties, and we have expertise
throughout the Western Hemisphere on port security issues, we believe
we can provide vital counsel in the development of this training
program.
SUPPORT FOR CUSTOMS AND INTERNATIONAL COOPERATION
The issue of controlling imports and exports is something over
which port authorities have little direct control. In order for the
U.S. Customs Service to more closely monitor cargo flowing in and out
of the country, and conduct more inspections without slowing the
movement of commerce, they must have additional resources, both in
terms of personnel and equipment. Modernizing Customs resources, such
as upgrading the Automated Commercial System, would greatly improve the
Customs Service's ability to more closely monitor what is coming into
and out of the country while ensuring the continuous flow of commerce.
AAPA also is pleased to see that the new bill provides resources for
Customs to purchase more non-intrusive screening and detection
equipment.
With trade rapidly increasing, inspections must not interfere with
a port's ability to move cargo; therefore, AAPA has some concerns with
section 15 (2) of the bill. This section requires the same level of
data for an in-bond entry as for a consumption entry to obtain a
``release.'' More importantly, if all entries have to be made at the
first seaport of entry, the congestion and time it takes to move
freight would increase considerably. An undesired consequence could be
diversion of transshipped cargo to Canada and the Caribbean, resulting
in a loss of U.S. jobs. We urge the Committee to ensure that this
section is crafted in a way that addresses both security issues and
protects transshipping.
The United States has little control over what is being placed on a
vessel in another country. However, AAPA believes that enhanced crime
and security information exchange internationally provides an
opportunity to reduce the flow of drugs and other illegal shipments.
The bill appropriately gives the Maritime Administration new authority
in this area. In addition, the State Department and other international
organizations should play a greater role and take the lead in sharing
information internationally to reduce the types of illegal shipments
that are coming into the United States. Finally, AAPA is committed to
coordinating with its member ports throughout the Western Hemisphere on
seaport crime and security issues.
CONCLUSION
Overall, AAPA believes that legislation is not necessary to address
seaport security; however, the Association is committed to working
closely with the Coast Guard and the other appropriate Federal agencies
to strengthen our nation's international borders. The Federal
Government, however, must invest significant resources to ensure proper
funding of essential programs and provide adequate personnel for
addressing these serious issues. Through greater coordination at the
local level and the necessary resources, AAPA believes we can build on
the programs already in existence and enhance seaport security.
The Chairman. Mr. Leone, we appreciate your statement and
your appearance. It is quite obvious that you folks, you said,
do not favor a program or any legislation. On the contrary, you
say you are the principal entity, the port authorities are the
principal entities for security and, in fact, you all have had
long-standing port security commissions and committees and
everything else, and yet the reality is we don't have any
security.
It ought to be somewhat of an embarrassment to port
authority officials to say nothing is needed, certainly no
legislation, when everybody else recognizes that is exactly
what we have got to do. We have got to bring them together.
There is no arbitrariness of one way to get it done, but we
are listening to everybody and we are beginning to coordinate.
This legislation is really a first step because it can be
far more categorical in enforcement of its requirements. We are
not trying to get it that way. We are trying to work with the
port authorities because they have disregarded security,
obviously.
I can go example after example. We have had hearings on
this thing last year. Things come in and go to another terminal
point and the truck is never seen again.
When you get 9 of 10 containers coming in unchecked, you do
not have security, and so to say that you got good going, you
got committees and what you ought to do is emphasize more
coordination and everything else like that is just dancing
around a fire.
We have got to do something about it and we have got to get
the port authorities to get off the idea that they are there
just to make money and move cargo and not have any
responsibility whatsoever for security.
You admit that you do have responsibility for security. You
say you have got long-standing committees on security. You
cannot go in two different directions in the same way at the
same time. Any comments you would like to make, we would
appreciate it.
Mr. Leone. Mr. Chairman, I think the port authorities have
made significant investments in security. I can go back to the
Port of Boston, the Massachusetts Port Authority.
The Chairman. Do you think it is working?
Mr. Leone. I believe that--go back to Admiral Loy's
testimony this morning. The Federal program that was dealing
with passenger vessel security worked in the particular case
they had in Florida because there is a program in place for
passenger terminal and passenger vessel security issues that
was implemented, and in that particular case deterred--
investigated and handled the bomb threat. In the Port of
Boston, we have invested a significant amount of money in
training of our watchmen. We have incorporated our watchmen
into the port authority jurisdiction, have made them special
State police officers, have trained them at the State Police
Academy, and also have our own State Police barracks that is
assigned to the seaport.
We have made investments in fencing. We have made
investments in lighting. We have made significant investments.
I know this is true in other ports in the United States as
well. So there has been a significant amount of investment. We
cooperate regularly with the captain of the port on harbor
safety committees, work with them on security issues as well,
and we participate in every one of these and share information
with Federal, local and State law enforcement jurisdictions and
continue to make investments in all the different programs and
coordinate with all the different programs that are in place.
So it is not that we are not inactive. We are very, very
active on this, making significant amount of investments and
using investments of many of the private terminal operators,
such as Maher Terminal and others, in using seaports of the
United States to increase the amount of investment that has
been made in these areas.
So it isn't that we put a blind eye. We think security is
very, very important. We just think there are a significant
amount of programs that are already in place, and the funding
of those agencies, I believe, to a greater extent will enhance
seaport security and deter seaport crime.
The Chairman. Well, we had a Commission study 17 agencies
and departments of the Federal Government and they found that
security ranges from fair to poor. I mean, that is their
finding and no one really disputes it. You keep talking about
investment and training and time and everything else, but it
would be, to me, somewhat of an embarrassment to talk about
that investment, training, time, and everything else like that,
and have the result that we've got 9 out of 10 of those
containers coming in unchecked, unlooked at, gone.
Mr. Leone. If I recall, the Commission report did not know
where the actual theft occurred and it occurred anywhere
along--or if it was hijacked, didn't have enough information to
examine where cargo theft occurred in that particular case, and
in those particular circumstances, had a very difficult time
assessing exactly where some of these crimes were taking place.
So in some of these circumstances, certainly the additional
funding for Customs and the Coast Guard will help in these
particular areas, but the port authorities and certainly local
law enforcement jurisdictions have made investments as well,
Mr. Chairman.
The Chairman. We know about investments. I can't seem to
make the point. I understand about the investment. We
appreciate it. We have got investments made at my own hometown,
but we do not have security and everybody has found that.
Those containers come in and they are not checked and
nobody wants to really assume the responsibility and right to
the point, the captain of the port has not really been steeped
in this kind of responsibility.
He has been out at sea and we have not given him the money,
so you cannot fault him. Nobody is trying to find fault. We are
trying to find a solution, and to say that no legislation is
necessary and just let us all keep on talking to each other is
not going to get us anywhere.
We have a dangerous situation with respect to the ports,
much more like I stated in the initial comment about space-
based dangers. It is port-based dangers. We do not have any
semblance of port security as we do with airport security. I
can go through both of them, but I'm checked at the airport.
But you just come right in and tie up and walk away at the
port. That is about the situation. All people--the port
people--have put security last.
That is my observation from living, working. I used to be a
lawyer for the port authority and I can tell you the last
emphasis they had was on security. They had other things,
solicitation and moving cargo. And you talk, Mr. Maher, but
have got coming now, we know those containers are owned by
somebody through Hong Kong, through London, back through
somewhere else and so the port driver, he has to come 2 hours
ahead of time to get a safe container. Because if he gets
stopped, he gets charged on the highway for a defective
container and he gets fined and his livelihood, poor fellow's
working around the clock and everything else, while some rich
guy up in some tower in some city somewhere in the world owns
that container. You would have to be a detective to find out
who owns it.
But it has got to be safe and we do not want--the port
authority doesn't want to fix that responsibility. They want to
put it on the poor driver who has no wherewithal to do it. So
the only way he solves his problem is to come there 2 hours
early and roam all around and everything else like that to
finally get what he knows is a safe one, and then he takes it
out and thank goodness, he doesn't get stopped. But if you get
there late, if you do not find quite a safe one, your job, your
livelihood is gone.
Those are the kind of things that are going on at these
ports. It is not that we make an investment, we got lights, we
got police, we got training. It is not working. I can tell you
that.
But, be that as it may, Mr. Craig, you had some more
testimony, I think, you wanted to elaborate on four points.
Mr. Craig. May I? Thank you.
Data collection: Several independent studies discussed in
the Seaport Commission's report including one by the John A.
Volpe National Transportation System Center and another by the
Rand organization placed the losses due to cargo theft near $10
billion annually. However, we need to improve the collection of
data so that law enforcement efforts can be better focused.
Statistics currently available are seriously deficient for
a variety of reasons. Your legislation would mandate an
evaluation of existing governmental databases in an effort to
ensure the collection of data on cargo theft occurring in the
ports or anywhere else in the intermodal chain of
transportation.
We understand that the current unified Federal crime
reporting system suffers from a lack of resources on the State
and local levels. The bill requires an outreach program to help
channel resources to State and local law enforcement agencies
to improve their information systems and harmonize them with
the Federal system.
In addition, we strongly recommend that a requirement be
added for officials to report cargo theft as a separate crime
so this data may be easily retrieved.
Criminal penalties: We have observed that cargo criminals
are not being adequately deterred by the existing penalties. In
fact, indications are that those who once specialized in other
types of crime are turning to cargo theft because the rewards
are lucrative and the threat of prosecution is minimal.
We strongly support the provision in your bill which
directs the U.S. Sentencing Commission to amend the Federal
sentencing guidelines to provide a sentencing enhancement of
not less than two levels for violation of the Federal cargo
theft law.
Security training: The legislation addresses an important
need by building on the good work already being done at the
United States Merchant Marine Academy's Global Maritime and
Transportation School, (GMATS), at Kings Point, New York. A new
maritime security institute to be established at this Federal
facility will expand the current offerings and enable the
training and certification of maritime security professionals
in both the law enforcement and private sectors.
With a better understanding of the intricacies of the
shipping business, law enforcement officials will be better
equipped to do their jobs.
Teamwork: The problems addressed by the legislation are
multidimensional, and they are best approached through
interagency cooperation and the sharing of information and
resources. We are pleased that the port security task force
proposed in the bill will have a subcommittee comprised of
Federal, State, and local government law enforcement agencies.
This ``law enforcement subcommittee'' will have the ability to
collaborate with public and private entities.
We would like to call your attention to a group of
interagency task forces which have already been established in
various regions of the country to combat cargo theft. They were
organized as a result of a speech made in 1994 by the Attorney
General, but they have never had a sufficiently high profile to
make an appearance in the Federal budget and thus suffer from a
lack of resources.
Ideally, each of the task forces should be funded and
include representatives of the U.S. Attorneys, the FBI, Customs
Service, DEA, INS, the Coast Guard, and State and local
prosecutors and law enforcement officials.
Due to budget constraints, agencies are sometimes unable to
participate in task forces. We would appreciate the opportunity
to work with Committee staff to ensure that the most critical
cargo theft task forces are able to benefit from your
legislation. The rest of my comments can be entered into the
record.
The Chairman. Very good.
The Committee appreciates the appearance of each of you
here this morning, and the record will stay open for any
further comments that any of you have and any questions by the
other Senators. Thank you very much.
The hearing will be in recess subject to the call of the
chair.
[Whereupon, at 11:30 a.m., the hearing was adjourned.]
A P P E N D I X
National Customs Brokers and Forwarders Association of
America
July 23, 2001
Hon. Ernest F. Hollings,
Chairman,
Senate Committee on Commerce, Science, and Transportation
Dear Senator Hollings:
The following represents the views of the National Customs Brokers
and Forwarders Association of America (NCBFAA) with respect to S. 1214.
Please incorporate these comments into the record of your hearing
tomorrow, July 24.
As a general matter, NCBFAA supports legislation to improve
security at the nation's ports. Customs brokers and ocean
transportation intermediaries (``OTIs'') have a stake in protecting
cargo and in ensuring that the public has confidence in our ports'
reputation. Our commercial viability depends on a dynamic domestic port
system.
NCBFAA's litmus tests for support of the bill are threefold: Will
cargo proceed to its ultimate destination in the most expeditious
manner possible, moving just as quickly after this bill is enacted as
before? Will cargo be encumbered with more cost and unnecessary
regulation because of this legislation? Will the bill effectively
provide security at the ports? In light of the foregoing, we believe
that the bill makes many sensible additions to assessing and
redesigning port security. There are several areas of the bill,
however, where we suggest improvement.
First, however, let us tell you that we are gratified that you have
responded favorably to our suggestion that freight forwarders be added
to those serving on the port security task force. They will contribute
considerable value added to the proceedings of that group, especially
by bringing unique commercial considerations to their attention.
On the other hand, we continue to be concerned about a requirement
in Section 16 that the Customs Service require information about in-
bond entries at the same level of detail as is provided on a
consumption entry. This information is not now required, particularly
at this level of detail, for one important reason: Customs does not
need it. Merchandise entering the U.S. under bond is in transit
merchandise, destined for another port, or for export. Furthermore,
much of the information required is not available from the carrier and
instead would necessitate the provision of professional services. This
would greatly encumber in-bond transactions, adding cost and delay.
This in turn defeats the very purpose behind sending goods under bond.
It imposes a layer of regulation where none now exists. In fact, we do
not believe that it would be overstated to say that this would threaten
the entire in-bond movement system, with dire consequences to ``just-
in-time'' supply chain management. Because of this requirement and in
order not to duplicate costs, importers would prepare entry data at the
port of arrival. We think this would detrimentally affect ports such as
Charleston, New Orleans and Portland.
We acknowledge changes made in the final draft, but believe that
they are inadequate to resolve the basic problem: encumbering ``in-
bond'' transactions. Furthermore we do not believe it is helpful to
communicate to Customs that this should be done through regulation,
even in the context of making it compatible with Automated Commercial
Environment (ACE) requirements.
There are also sections within the bill that we believe will
inevitably add to port congestion. For example, in the findings section
(Section 2, paragraph 12), the bill refers to ``securing entry
points.'' This concerns us in that ``controlling movements'' of trucks
is broad enough to result in measures that produce a major slowdown in
the movement of goods. We would make a similar observation about
Section 7(c)(3), providing guidance on vehicular access. Again, this is
overly broad, might include public access roads, and could result in
substantial delays to the movement of goods.
We are prepared to work with the Committee to address our concerns,
as we have in the past. At present however, we view these as
fundamental flaws in the legislation.
Sincerely,
Peter H. Powell, Sr.
President.