International Law & Trade - Law Firms Cargo Security Strategy Vel Non

Saturday, October 1, 2005 - 01:00

In December 2004, the U.S. Department of Homeland Security released its draft White Paper on a National Cargo Security Strategy. The Department said that it was seeking stakeholder feedback, but it did not widely distribute the White Paper. The vision expressed in the paper was for "a system for supply chain security that mitigates the evolving terrorist threat and facilitates the free flow of global commerce in order to ensure the physical and economic well being of the United States and its trading partners."

The White Paper was a long-belated and somewhat half-hearted attempt to mend fences and to appear to be moving forward, while expending little new capital. The paper ran on for nine pages, offering no new ideas and making few commitments. It had the appearance of an uneasy political compromise between feuding federal agencies. Given the fact that nothing further has been heard regarding the White Paper in the months since its release, this assessment appears justified.

The one clear commitment in the White Paper is found on page eight, where it says the Department "will, as a short-term step, mandate the use of high security mechanical seals on all in-bound containers." However, as yet, there is no official government standard as to what constitutes a high security mechanical seal. While there is a recently-developed ISO standard on this topic, it is unclear if qualifying seals are being produced in sufficient numbers to meet the projected need. Again, nothing further regarding mandatory use of high security mechanical seals has been promulgated to date.

The remainder of the White Paper was vague, talking about enhancing the physical security of the supply chain, leveraging federal resources, pushing out the border and working with the international community without really explaining how. The document itself was what the State Department would call a "non-paper." It was marked "Draft." It bore no letterhead or other indication that it is an official DHS document. It was distributed at a forum sponsored by DHS, but hosted by the Homeland Security Institute. It talked about seeking industry feedback, but provided no points of contact or addresses to which comments could be submitted. The term "plausible deniability" comes to mind.

Cargo Security Strategy

The concept with which DHS is laboring is - at its heart - fairly direct, although the execution is extremely difficult. There are three basic elements to a cargo security strategy and they all require the authorities to know the following:

(1) what cargo is entering the system bound for the United States, where entry is being made, and who is responsible for the entry

(2) that the cargo is secure during transit

(3) when the shipment is complete, so that it can be deleted from the active system

For intermodal containers, cargo security means knowing what is being stuffed into the box, where the box is being stuffed and who is doing the stuffing. The White Paper briefly discusses the need for information at the point of box stuffing. It then indicates that meeting this strategic objective requires the rapid build-out of the Automated Commercial Environment (ACE) platform, being developed by Customs and Border Protection (CBP). The problem is that ACE was designed in the pre-9/11 era and is not intended to capture box-stuffing information. Express package companies, such as UPS, already track their items electronically from pickup to delivery. A similar approach, but admittedly more complex, could be used for cargoes generally. Unfortunately, DHS and CBP, to date, seem unwilling to start down this road.

Security During Transit

Currently, security during transit is virtually non-existent. There is no international or U.S. requirement that containers even be locked until they arrive on the pier for the maritime portion of their carriage. The current dumb box is inherently insecure. There is an Internet site showing how to remove the doors from a standard container without disturbing the seal, just by jimmying the hinges. There have been cases where goods have been inserted into (or removed from) a container by going through the floor. Until a secure, tamper-evident container is developed and deployed, putting a high security mechanical seal on the door only deters amateurs and creates a false sense of security. Installation of GPS transponders (like those placed on many trucks) should also be considered.

The use of non-intrusive sensors should be significantly increased. Detectors utilizing the entire electro-magnetic spectrum (x-rays, gamma rays, infrared, radiation, etc.) are available, but expensive. Probes have been developed for insertion into containers for detection of humans, chemicals and other unauthorized or unmanifested material. Deployment of sensors and training of personnel have been slow.

Programs And Organizations Need To Be More Effective

Current programs, such as Operation Safe Commerce, the Customs-Trade Partnership Against Terrorism (C-TPAT), and the Container Security Initiative (CSI), were a good first step. Follow-through, though, has been lacking. C-TPAT was advertised as providing participants with expedited handling of their cargoes upon arrival in the United States. CBP is unable, though, to demonstrate that C-TPAT cargoes receive preferential treatment. Operation Safe Commerce seems to have stalled. These programs have not been coordinated and potential synergies have been lost. In addition, these programs constitute tactics, not strategy.

In June 2005, the World Customs Organization (WCO) issued its "Framework of Standards to Secure and Facilitate Global Trade." The Framework is long on generalities (43 pages) and short on how its goals are to be accomplished. In fact, it makes reference to the realities of capacity building and the promulgation of requisite legislative authority in member countries. In other words, it envisions no near-term resolution to the cargo security problem.

Recently, Secretary of Homeland Security Michael Chertoff has mentioned the concept of "Secure Freight" in various speeches. The goal of this vague initiative would be to gather, fuse and assess more complete data from the global movement of marine cargo that touches U.S. shores as it moves from origin to destination. Further details regarding this nascent program await development.

The Lemongate Affair

An example of the consequences of a lack of cargo security strategy may be found in the so-called Lemongate affair. On July 29, 2004, an unnamed bureaucrat in the U.S. Department of Agriculture received an anonymous e-mail reporting that an unspecified harmful biological substance could be found in one of five containers of lemons on the CSAV RIO PUELO, scheduled to arrive the next day in Port Elizabeth, New Jersey, from Argentina. The report was passed to the U.S. Coast Guard for action. The ship was detained offshore. Officials from the Coast Guard and Customs and Border Protection boarded the ship and quickly located the containers. Customs wanted to bring the containers ashore and examine them with Vehicle and Cargo Inspection System (VACIS) technology to determine whether any dispersal devices were in the containers. But, by that time, approximately 40 federal, state, and local agencies and authorities were involved. State and local officials insisted that the ship and its suspect containers be kept offshore until all risk of danger was eliminated. The ship was finally allowed to dock and unload its cargo on August 6. As a precaution, the containers were fumigated with chlorine dioxide. No "harmful biological substance" was ever located and it now appears that the original e-mail was probably sent by an economic rival of either the exporter or the importer of the lemons. By that time though, the lemons were spoiled and had to be incinerated.

Radioactive Tile - Another False Alarm

Almost two years earlier, on September 10, 2002, U.S. Coast Guard personnel were conducting a routine examination of the container ship PALERMO SENATOR when their radiation detectors were activated. A security zone was immediately established around the vessel, which had recently arrived in Port Elizabeth, New Jersey, from Valencia, Spain. The vessel was escorted to anchorage near the Ambrose Light Tower where it was fully examined by personnel from the Coast Guard, Customs Service, FBI, Department of Energy and U.S. Navy Seals. After six days, it was eventually determined that the radiation was being naturally emitted by a container carrying clay tiles from Italy.

Few, if any, strategic lessons seem to have been learned from the PALERMO SENATOR incident for application in Lemongate. It is hoped that government officials will do better in responding to future cargo security incidents - but without a formal cargo security strategy, doubts persist.

A Complicated Problem With No Simple Solution

I do not, by these comments, mean to imply that the cargo security problem is easily solved. I do mean, though, to say that the White Paper employs far too much bureaucratic language and leaves one with the impression that we just need to let the government finish what it has started. In some instances, there are excellent government initiatives that promise to bear fruit. In other areas, however, the government needs to have meaningful dialogues with other stakeholders in order to just figure out the problem, let alone coming up with a viable solution. Having a semi-private group host a two-day meeting in Washington, D.C. on cargo security, having a group of senior Customs officials issue a vague Framework of Standards and dropping hints into speeches is not the end of the process. These steps were only just the most basic beginning, and were long overdue. Meaningful engagement at all levels and with all stakeholders is paramount.

Dennis L. Bryant is a Senior Counsel in the New York and Washington DC offices of Holland & Knight LLP. His practice primarily involves national and international maritime, regulatory and environmental matters. He can be reached at (202) 828-1865.

Please email the author at dennis.bryant@hklaw.com with questions about this article.