Wednesday, February 22, 2006

Coast Guard Guidance on the Purchase of P&O.

Background: It was recently reported that the U.S. Committee on Foreign Investment in the United States (CFIUS), a 12-member panel chaired by the Secretary of the Treasury and comprised of members of the departments of State, Defense, Justice, Commerce and Homeland Security approved the $6.8 billion sale of terminal facility operations in at least six major U.S. ports operated by British-owned Peninsular & Oriental Steamship Co. (P&O) to Dubai Ports World, a government-owned company of the United Arab Emirates. P&O currently runs commercial operations in the ports of New York, New Jersey, Norfolk, New Orleans, Baltimore, Philadelphia, Miami, and Houston. As a component agency of DHS, the Coast Guard was asked to provide information and expertise to DHS necessary for its consideration when reviewing the acquisition proposed by DPW. Some lawmakers are considering legislation to either stop or delay the acquisition citing port security concerns. The President indicated he’d veto legislation aimed at delaying or stopping the transaction.

Talking Points:
“The Coast Guard recognizes we live in a global economy and that foreign-owned corporations own and operate businesses within the United States. Laws and international conventions currently in place -- such as the International Ship and Port Facility Security Code and the Maritime Transportation Security Act -- regulate the security measures with which vessel and facility operators must comply. The Coast Guard strictly enforces these federal laws and international conventions to ensure compliance and protect the security of our vital ports and waterways.”

 As the lead federal agency for maritime security, the Coast Guard routinely inspects and assesses the security of 3,000 regulated facilities in more than 360 U.S. ports at least annually in accordance with the Maritime Transportation and Security Act (MTSA) and the Ports and Waterways Security Act (PWSA).

 Every regulated U.S. port facility, regardless of owner/operator, is required to establish and implement a comprehensive Facility Security Plan (FSP) that outlines procedures for controlling access to the facility, verifying credentials of port workers, inspecting cargo for tampering, designating security responsibilities, training, and reporting of all breaches of security or suspicious activity, among other security measures. Working closely with local port authorities and law enforcement agencies, the Coast Guard regularly reviews, approves, assesses and inspects these plans and facilities to ensure compliance.

 In addition to the Coast Guard’s broad authorities for ensuring the security of U.S. port facilities and operations, the Coast Guard works closely with U.S. Customs and Border Protection (CBP) to ensure foreign port facilities and ships comply with the International Ship and Port Facility Security (ISPS) Code in an effort to push out our borders and create a layered maritime security posture.

 Given the scale of this pending acquisition, the Coast Guard is ordering its Captains of the Port to re-visit and re-examine all existing P&O port facilities and operations to ensure DHS has the most up-to-date information, which includes an audit of the facility security plan. The Coast Guard will conduct a full on-site MTSA compliance exam at each port facility where P&O maintains a substantial interest, including stevedore services.

The Armorer has more.

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