IIIrd Hemispheric Conference on port security OAS/CIP

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IIIrd Hemispheric Conference on port security
OAS/CIP

• The World Bank activities in relation to Port
  Security and Supply Chain Security
• Michel Luc Donner
• Port and Maritime Transport Specialist
• The World Bank

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Contents

• ISPS cost of compliance report (in Developing
  Countries)
• Supply Chain Security (SCS)

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• http//siteresources.worldbank.org/INTTRANSPORT/Re
  sources/tp_16_ISPS.pdf
• http//worldbank.org/ports
• http//www.worldbank.org/transport

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ISPS cost of compliance report

• Why ?
• Methodology
• Analysis per Region
• Global Analysis
• Comparison with the UNCTAD report Maritime
  Security ISPS Code implementation, costs and
  related financing, March 2007

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Why ?

• Requests by Country-Clients concerns about
  financing and consequences of non-compliance
• Not a compliance assessment
• Centered on Developing Countries

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Methodology

• 12 selected ports
• on-site missions

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12 selected ports
Baltic
Black Sea
Caribbean
Africa
Latin America
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Analysis per Region

• 12 selected ports
• 3 in West Africa
• 5 in Baltic and Black Sea
• 4 in Latin America Caribbean

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4 ports in Latin America Caribbean

• Heavy upfront investments
• Annual Running Costs
• Actual security costs per TEU or TON

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Up-front investments

port L1 L2 L3 L4
security related 2.4 3.3 3.6 5.8
of which after July 2004 1.8 2.5 2.4 5.8

total 2.4 3.3 3.6 5.8
( x usd 1mio )
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Annual Running Costs
port L1 L2 L3 L4
Annual Running Costs 1.3 1.8 2.6 3.3
( x usd 1mio )
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Actual security costs per category
(in US) (in US) (in US) (in US) (in US)
port L1 L2 L3 L4
per TEU 2.31 3.68 4.59 9.91
Other cargo/ per ton 0.23 0.48 0.46 0.16
per passenger 0.69 0.86 - -
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Global Analysis

• Heavy upfront investments
• Actual security costs per category

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Up-front investments
Up-front investments Up-front investments
port A1 A2 A3 B1 B2 B3 B4 B5 L1 L2 L3 L4
Total expected 5,6 5 5.1 0.5 0.1 2.2 0.2 0.1 2.4 3.3 3.6 5.8
(x usd 1mio)
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Security Cost per TEU
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Security costs per ton of cargo
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Conclusions and remarks

• Range is quite wide
• Orders of magnitude, not rocket science
• Averages not as high as predicted
• Uneven levels of security achieved
• Contributing factors
• Collateral benefits

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Contributing factors

• Starting point (navy base, free zone, drug
  traffic, political regime)
• Total cargo throughput
• Topography / layout of the port

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Collateral benefits

• Reduction in number of stowaways
• Reduction of theft and pilferage
• Increase in Customs revenue (more better
  control)
• Reduction of cargo delays and waiting times
• More orderly ports and terminals, leading to more
  efficiency

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Comparison with the UNCTAD Report

• Unctad 55 questionnaires / WB 12 on-site
  missions
• Unctad majority in developed countries / WB
  all developing countries
• Unctad small and large ports / WB majority of
  smaller ports

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Comparison with the UNCTAD Report
in US average cost / TEU average cost / TON
UNCTAD 3.60 0.08
World Bank 4.95 0.22

pondered ports lt 500,000 teu/annum ports lt15 million tons p/a
in US average cost / TEU average cost / TON
UNCTAD 4.80 0.11
World Bank 5.40 0.17
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Supply Chain Security (SCS)

• Background and genesis
• Main components, initiatives and stakeholders
• SCS Guide (project)

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Background

• The ISPS Code in fact is a dedicated component of
  the larger global security initiative commonly
  known as Supply Chain Security (SCS).
• Whereas the ISPS Code concentrates on security
  issues related to vessels, individual port
  facilities and the direct port environment, SCS
  aims to make the entire logistic chain, from
  producer to consumer, more secure, but, at the
  same time, more efficient.
• While the ISPS, in spite of being an
  International Code sponsored and led by the
  International Maritime Organization (IMO), took
  quite some time to achieve full implementation,
  SCS is still a mosaic of components and
  initiatives that may be introduced and become
  compulsory on a global scale.

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Main Stakeholders and actors

• World Customs Organization (WCO)
• International Organization for Standardization
  (ISO)
• International Maritime Organization (IMO)
• World Trade Organization (WTO)
• Regional Organizations
• National Governments
• International Trade, Logistics and Transport
  professional Associations

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Main initiatives

• 24-hours manifest
• C-TPAT
• CSI
• ISO 28.000(1)
• ATDI
• 102
• 100 scanning (2012)
• AEO
• Multilateral, bilateral, unilateral

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Main components

• Advanced Electronic Cargo Information
• Data collection, aggregation and analysis
• Risk management
• Container seals
• Scanning equipments and image analysis
• Integrated Border Management (border agency
  cooperation)
• Authorized Economic Operator management
• Real-time cargo tracking and tracing

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SCS Guide (project) - genesis

• The concept of this Guide started to take shape
  during the 25th International Association of
  Ports and Harbors (IAPH) Biannual Conference that
  was held in Houston, Texas, USA from April 27 to
  May 4, 2007, when experts from the following
  organizations and companies
• The Rotterdam Port Authority
• The International Association of Ports and
  Harbors (IAPH)
• The company SOGET (a Joint Venture of Port of Le
  Havre Authority and Port of Le Havre Port
  Community)
• The Port of Le Havre Authority
• The World Bank (Energy, Transport and Water
  Department)
• concurred on the need to increase the awareness
  of the global trade and transport community, and
  in particular that in the developing world, of
  the developments in the field of Supply Chain
  Security, or SCS.
• This meeting was followed up with another
  meeting in Rotterdam in September 2007 in which
  also a Representative of the World Customs
  Organization (WCO) participated.

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SCS Guide (project) (I)

• Commented Inventory of on-going and future
  initiatives and their reciprocal compatibility
• Insight in international developments and
  uncertainties
• Status of SCS from a Regulatory point of view
• Insight to the overlaps, bridgeability and
  interoperability between the proposed
  certification systems (C-TPAT AEO - ISO
  28.000(1)
• Status of mutual recognition

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SCS Guide (project) (II)

• Outline of container integrity solutions
  including High Security Seals and RFID seals, and
  their state of standardization and affordability
  in Developing Countries
• Outline of Advanced Inspection Technology
  including radiation detection and high speed
  scanning relevance of AIT for Developing
  Countries (scanning for Customs scanning for
  security ?)
• Users check-lists

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Conclusion

• OPENING ADDRESS BY Mr LEE KUAN YEW,
• MINISTER MENTOR, AT THE INAUGURAL SINGAPORE
  MARITIME LECTURE, 25 SEPTEMBER 2007
• A balance must be struck between ensuring
  security and facilitating trade, if we are to
  preserve the efficiency of shipping and cargo
  operations and allow global trade to flourish

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Conclusion

• To ensure that the measures introduced are
  sensible and pragmatic, a multilateral approach
  is more likely to produce pragmatic solutions
  than uncoordinated unilateral initiatives

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• And, to be truly global, Global Trade must take
  on board the Developing Countries.