Practical consequences of new rules in harbour operation and goods’ traceability after 9-11

1. Practical consequences of new rules in harbour operation and goods’ traceability after 9-11

2. Wilh. Wilhelmsen ASAHead office at Lysaker • Wallenius-Wilhelmsen Lines • Eukor • Wilhelmsen Maritime Services • Barwil • Barber Ship management • Barber Marine Consultants • Wilhelmsen Bunker • Wilhelmsen Insurance • DockWise http://www.ww-group.com/

3. The Barwil global networkPort coverage 227 Offices in 58 Countries http://www.barwil.com/

4. The Barwil global network The key activities Port & Marine Services Handling 42.000 port Calls p.a. Representing leading Liner operators Affiliated Services Wilhelmsen Bunkers Abeer Marine Offshore Utility Boats Freight & Logistics Stevedoring and Warehouse Freight Forwarding Supply chain logistics

5. Background A new type of terrorism, aiming to destabilize the global economy, with long term focus, well financed and high degree in sophistication in planning and execution.

6. Maritime Security- Issues of Complexity Vessels Cargo • Using the vessel as a weapon • Using the vessel to launch an attack. • Sinking the vessel to disrupt infrastructure • Using cargo to smuggle people and/or weapons. • Using cargo to transport conventional, • nuclear, chemical or biological • weapons. ExternalImpacts • Loss of life and damage to property. • Disruption to trade flows. • Additional cost of transport due to additional security measures People Money • Attacking the ship to provoke human casualties. • Using the cover of seafarer identities to • insert terrorist operatives. • Using revenue from shipping to fund terrorist activities. • Using ships to launder illicit funds for terrorist organisations.

7. Strategies to encounter “new terrorism” • CSI(USC container security initiative) • C-TRAT(USC trade partnership against terrorism) • CSP (Crew security plan) • Homeland security act • AMS (Automated manifest system) • ISPS(International Ship and Port facility Security Code) • Safe Sea Net • AIS (Automatic identification system) In short: Transparency, clarification of responsibilities and proactive intelligence, seems to be the key strategies.

8. Security in Maritime Trading Systems What are the Challenges? • Approx. 90% of world trade moves in shipping containers - Any reduction of throughput is likely to have a significant impact on regional and national economies. • Global business enterprise, and trading systems in particular, are vulnerable to terrorist incidents - Perturbation of maritime supply chains will impact on movements of material across large sections of the network. • The asymmetry of approach in modern terrorism can make use of systems of commerce - Maritime trade as a vector for terrorism.

9. Security Initiatives across Supply Chains Decomposition Composition Producer Buyer Trans Trans Maritime Customs (Port) Customs (Port) ISPS CSI C-TPAT

10. ISPS – International Ship and Port facility Security Code • Initiated by IMO (International Maritime Organization) in December 2002. • Part of the 1974 SOLAS convention (148 Contracting Governments) • Implemented from 1st July 2004 “ Considered to be of crucial significance not only to the international maritime community but the world community as a whole, given the pivotal role shipping plays in conduct of world trade”

11. ISPS – the requirements • Mandatory • Ship Security plans • Ship security officers • Company security officers • Certain onboard equipment • Port facility security plan • Port facility security officer • Certain security equipment • Monitoring and controlling access • Monitoring the activities of people and cargo • Availability of security communication • (Marsec level 1,2 and 3) • Non-mandatory • Guidelines on how to meet the requirements ISPS is risk management of ports, offshore terminals or when underway at sea, with objective to reduce the vulnerability related to the threat of terrorism.

12. ISPS – implementation • 90% of all ships and ports certified already August 2004 • Huge variation in how the ISPS is implemented in the Ports: • Bare minimum approach most common. • US and Panama more strict • Huge variation in how the ISPS is implemented onboard the vessels • Bare minimum approach most common • Chemical, container, Ro/Ro & cruise more strict. • Limited experience related to impact on changes in security level • Marsec 2 or 3 is expected to have serious negative impact on operations. • In general : Now considered to be a part of the normal business. The implementation of ISPS took only 18 months, against the usual 6 to 8 years for other IMO adoptions.

13. Albania Benin Dem. Rep. of Congo Equatorial Guinea Guinea Guinea-Bissau Kiritbati Lebanon Liberia Madagascar Mozambique Nauru Nigeria Serbia and Montenegro Sierra Leone Solomon Islands Suriname Countries Currently not in Compliance with ISPS There are no penalties or “black list” of countries not complying with ISPS. It’s expected that market force and economic factors will drive compliance.

14. Consequences of non-compliancy to various security measures • Cargo / containers rejected for loading • Vessels to be denied berthing • Terminals declined as option for port call • Ports excluded as option for port calls • Countries to be found too risky and thus not preferred as trade partner. “The consequences of either failing to comply or failing to maintain continuous compliance with IMO’s special measures to enhance security, could be serious and far reaching”

15. Future? How will the terrorists success in the future? How effective are the security measures implemented? What kind of impact will the security regulation have on trades? The effect of “fear” driven security regulation to ensure stable operations environment would need to be balanced against the negative impact these regulations might have on the global trade.

16. Thank you for the attention!