Presentation by Llew Russell, Chief Executive Officer of Shipping Australia Limited to the: 8 th BITRE Transport Coll

1. Presentation by Llew Russell, Chief Executive Officer of Shipping Australia Limited to the: 8th BITRE Transport Colloquium 18-19 June, 2008 Canberra ‘Maritime security: A rapidly changing scene’

2. In this presentation I will be addressing: • The scene so far • Foreshadowed developments • Issues and problems • Conclusion

3. The scene so far

4. The scene so far • It has been a rapidly changing scene with the Maritime Transport Security Act implementing the IMO ISPS Code coming into force in Australia 1 July 2004 but it didn’t last a year before it was changed to the Maritime Transport Offshore Facilities Security Act. • To reflect the extension of the maritime security regime to Australia’s offshore oil and gas facilities. • A key component of the regime has been the establishment of Maritime Security Zones in Australian ports and on Australian Regulated ships with heavy penalties for unauthorised access. • In accordance with international regulations all foreign flag vessels visiting Australia have a ship security plan, International Ships Security Certificate, the IMO number to be clearly displayed, an Automatic Identification System with two hidden triggers etc. • Current measures are based on IMO Security Level 1 with potential significant tightening if those security levels are raised to 2 and 3. • Engagement in the various port security committees has been beneficial.

5. Subsequent developments • Both international and national action has been taken • Internationally amendments are being considered to the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, 1988 to cover possible terrorist activity and provide for offences for unlawfully and intentionally importing weapons of mass destruction including nuclear, biological or chemical weapons. • Importantly the SUA amendments will permit boarding and search of vessels beyond the limits of territorial seas if such vessels are reasonably expected to be involved in offences under the Convention. • The IMO has now agreed the framework for long range identification and tracking of vessels. • The World Customs Organisation has established its Framework of Standards to Secure and Facilitate global trade. • covering supply chain security. • enhancing role, functions and capabilities of Customs and strengthening cooperation between Customs administrations.

6. National developments • Development of the Maritime Security Identification Cards (MSICs) which are not access cards but identify those working in secure and regulated areas. It was a lengthy but very successful process in consultation between government and stakeholders. • Single checking agency called AusCheck is now established under the Attorney General’s Department for both MSICS and ASICs. • Following high level consultation between SAL and the Department of Immigration and Citizenship a six month transitional period for a full visa system for visiting foreign seafarers was implemented in the second half of last year and it became mandatory at the beginning of this year. • This primarily electronic system has resulted in over 320,000 visas being issued to date.

7. In terms of national developments National developments (continued) • Builds on the passport-to-face checking by Customs and another document of identification required previously. • Remaining concern to SAL is whether we will have inconsistency between countries as only the US and Australia have implemented a full visa system. • The Office of Transport Security has undertaken a full review of existing security arrangements prior to the expiry of existing security plans in July 2009. • Clear emphasis on contingency response and examining the supply chain. • Australian Customs Service also looking at various initiatives to enhance the security of the supply chain.

8. Foreshadowed developments

9. Foreshadowed developments • Increased security in the maritime industry in Australia has concentrated on security regulated port and ships rather than tackling what is a very difficult issue ie. supply chain security which raises many issues. • An alternative Customs cargo reporting regime eg. similar to North America 24 hours prior to loading overseas. (Currently on the back-burner) • Implementation of an Authorised Economic Operator Programme, tracking not only of containers but consignments (using the Unique Consignment Reference number/RFID technologies) • X-raying of containers with government objective of 7% of import containers on a targeted basis and in the recent budget ACS will receive $16 million over the next four years to increase container x-ray capabilities at Launceston, Darwin, Townsville and Newcastle joining the major facilities in Brisbane, Sydney, Melbourne, Adelaide and Fremantle.

10. Foreshadowed developments (continued) • Ongoing review and development of regulations • Powers of security guards, cruise passenger screening and interaction with other agencies such as the security of the national network and issues related to mass gatherings.

11. Internationally International developments • Development of the US 24 hour prior reporting system to add to the advanced data requirements (10+2 proposal) which I see as being consistent with the WCO SAFE framework which might help to reinforce the case for risk based security regimes. • Less welcome alternative of 100% container scanning. • has caused serious concern worldwide and likely to impact adversely on world trade. • Estimated to cost US trading partners more than US$500 per unit according to assessments by the European Commission; eg a 6 month Southampton trial involved the checking for radiation of 90,000 containers at the port gates and another 5,500 US bound containers were x-rayed for non intrusive imaging of the container contents. • The EU subsequently sent a letter to the US expressing strong concerns about such a unilateral US law which is supposed to be enforced by 2012 and claimed 100% scanning might even create a false sense of security and divert scarce resources from other essential measures. • There are serious issues associated with this proposal besides costs eg. monitoring and conveying of information urgently to the US if a problem is detected.

12. International developments (continued) • At the terminal operation conference held in China last March, the Acting Director of the US Secure Freight Initiative Office admitted that while scanning gate traffic was easy, the scanning of transhipment cargo could be a challenge and if it was really impossible to scan them ports may be granted an exemption on transhipment cargo and exemptions could also be granted for adverse financial conditions of a port. (This would clearly undermine the objective of the initiative) • China has introduced a 24 hour prior reporting rule but it is understood will not finalise risk assessments until a ship has actually reached China which could mean on arrival ship operators could be prevented from discharging any containers that have been identified as high risk. • All these problems raise serious issues for Australia.

13. Issues and problems

14. Issues and problems • US has recently targeted certain ports overseas as having unsatisfactory security arrangements and IMO level 2 and other special conditions will apply to them on arrival in American ports. • this is an issue that has not yet been considered by the Australian Government. • The increasing costs of these initiatives remain of concern and it is SAL’s view that such costs should continue to be transparent and separately identified to monitor impact. • Desperate need for global standards not just national/State/Territory standards • including RFID • Data sets/IT systems for earlier reporting can only be effective if there are global standards. • The rate and degree of standardisation, the lower the cost, the higher degree of compliance and reduction of risk.

15. Issues and problems (continued) • An on-going challenge is to reduce the incentive to develop regulations for regulations sake. • Real danger of over regulation. • There has clearly been a tendency in the past to introduce new measures and tighten existing regulations in order to be seen as fulfilling a security role and functions. • The Ric Smith Review of the need for a Department of Homeland Security will have important ramifications - even if a new department is not established there could be recommendations leading to a coast guard (effect Border Protection Command and other agencies) • Highly likely the minimum to be regulations to enhance coordination of security agencies which can only improve overall effectiveness.

16. Conclusion • The challenges for maritime security in Australia will arise as much as from overseas initiatives as those in Australia. • Continuing danger is the risk of increasing complacency as time goes by. • Absolutely essential that Australian Government concentrates not only on our national security protection but seeks to move as much of the risk offshore as possible and defend Australia’s national interests on the international stage as well. • A major test will be if we move to IMO risk level 2 (high) or 3 (extreme) which will require a high level of coordination and seamless interagency response. • emphasises the necessity for regular and realistic exercises. • There is no such thing as nil risk and Australia’s ability to respond to and recover from any attack on our soil will be the ultimate measure of how effective our maritime security measures have been to date.