The Container Security Initiative (CSI) was devised by US Customs
in response to fears arising out of the 11 September 2001 attacks that
sea cargo containers bound for the US could be used to facilitate a
terrorist attack by providing direct access to a US port. By posting
officials at major foreign ports and requiring the advance transmission
of manifest documentation, US Customs hopes to be able to pre-screen
and clear containers bound for the US
before they are even loaded onto the ship. With nearly 50 per cent of
the total value of all imports into the US
arriving by ship, this is likely to have a major impact on the management
of sea cargo worldwide.
The CSI is currently operational in at least eighteen foreign
ports, and despite having been recognised by both the G-8 Group and
the World Customs Organisation (WCO), Australia has so far not signed
up to the initiative. The Australian Customs Service (ACS) is already
currently in the process of improving its cargo management and screening
systems and is already committed to implementing a variety of WCO and
International Maritime Organisation security initiatives, but is monitoring
progress of the CSI nonetheless. Given the significant logistical and
financial problems that have emerged with the introduction of the CSI
package, and in light of various issues that remain unaddressed, the
apparent intention of the ACS to monitor the development, uptake and
success of the CSI, seems a sensible course of action for now.
However, although Australia is already committed to, and possibly
better served by, making improvements to maritime security in a more
coordinated, internationally agreed fashion, Australia may ultimately
be unable to avoid the ever-increasing changes brought about by bilateral
arrangements such as the Container Security Initiative, the potential
implications of which, are significant.
In January 2002, the US Customs Service sparked
a revolution in the handling of containerised sea freight worldwide
when they launched their Container Security Initiative (CSI) in response
to fears arising out of the 11 September 2001 attacks that containers
bound for the US could be used to bring weapons, such as a nuclear/radiological
device, or even terrorists directly into a US port.
The CSI is being implemented in two main phases, with Phase 1 already
operational and aimed at the top twenty ports sending sea cargo containers
to the US,(1) and
Phase 2 designed to include smaller ports with the necessary infrastructure
and technology in place. In addition to the twenty ports identified
by US Customs as a priority under Phase 1, other countries around the
world have been approached to sign on for Phase 2, including Australia
and at least a further eleven European ports.
The key feature of the CSI is the posting of US Customs officials to
the world's major seaports, with the agreement of the host country,
to pre-screen at their port of loading, sea cargo containers destined
for the US. To avoid the inevitably
complex issues of sovereignty and jurisdiction, US Customs officials
have no authority to inspect containers themselves and serve only in
an observer capacity. It is also intended that this aspect of the CSI
be fully reciprocal, with outposted Customs officials from participating
countries welcome to establish themselves in US ports.(2)
The other three complementary components of the Initiative include:
A separate, but equally significant, initiative that is designed to
work in conjunction with the CSI is the US Customs requirement for the
electronic transmission of detailed manifest information 24 hours in
advance of a container's loading (the '24-hour rule'). This is being
implemented to further improve the identification and targeting of high-risk
containers, and applies to carriers in any country intending to send
cargo to the US.
Those containers which fail pre-screening, or for which manifest information
is too vague or submitted too late, are issued with a 'Do Not Load'
directive, which stays in place until the container satisfactorily meets
all the requirements. Shipping agencies which fail to provide the required
information in time may face monetary penalties or civil claims for
damages(4) arising from delays in shipments, and vessels
ignoring a 'Do Not Load' directive will be denied permission to unload
the container at any port in the US.(5)
Without any apology for the increased stringency, US Customs Service
Commissioner, Robert Bonner, has described compliance with the '24-hour
rule' as 'a matter of national security'.(6)
In addition to the obvious and intended security benefits of the CSI,
other advantages claimed by US Customs include the potential for the
exposure of revenue evasion, the protection and facilitation of legitimate
commerce, the real-time sharing of shipping intelligence and experience,
and greater long-term efficiency and cost-effectiveness of cargo processing.(7)
As an additional selling point, US Customs has indicated that in the
event of a terrorist incident occurring which involved sea cargo containers,
the US would allow trade with CSI ports to continue, but may refuse
vessels and cargo from other non-CSI ports as a security measure.
With more than 50000 containers arriving in the US
every day(8) and nearly 50 per cent of the total value of
all imports into the US arriving
by ship,(9) the US
believes in-bound sea cargo containers pose a threat that can no longer
be ignored. US Customs asserts
that approximately 90 per cent of the world's cargo is transported by
container, and that some major economies, like the UK
and Japan, conduct more than
90 per cent of their total trade by sea.(10)
By comparison, for the year 200102, 76 per cent of the value of Australia's
trade was conducted by sea and 71 per cent of the total value of all
imports into Australia arrived
by ship.(11) For the same period, the top three ports of
Melbourne, Sydney and
Brisbane combined handled some 44 per cent of Australia's
trade by value,(12) with Melbourne and Sydney
accounting for well over three quarters of that. Given that most of
Australia's trade by value is conducted by sea in and out of the country's
two most populous cities, the consequences of a terrorist attack in
Australia utilising shipping and/or sea cargo could be potentially catastrophic.
The Director of Terrorism Studies at the Australian National University's
Strategic and Defence Studies Centre, Clive
Williams, has warned that terrorists could feasibly
take over a cargo ship and use it as a weapon against military vessels
or civilian infrastructure such as bridges.(13) Williams
also suggests a seized ship could be used to cause large-scale pollution,
and that containers could be used as a bomb, particularly as so few
containers are fully searched.(14) Indeed, the Australian
Customs Service has acknowledged that prior to the recent introduction
of container X-ray facilities, less than one per cent of sea containers
was examined, due mainly to the fact that containers had to be manually
inspected.(15)
Attacks at and by sea are known to have featured in al-Qaeda's ongoing
terrorism plans;(16) the speedboat attacks on the USS Cole
in Yemen in 2000 and the French oil tanker Limburg in October
2002 would appear to confirm the group's intentions and demonstrate
the devastating effect of such attacks.
Perhaps more worrying is the claim by US intelligence officials that
al-Qaeda owns and operates some fifteen cargo freighters worldwide,
many of which generate profits for the group through legitimate trade,
but which could potentially be used in attack anywhere in the world.(17)
Of particular relevance to the CSI is the fact that one such vessel
is believed to have carried and delivered the explosives used by al-Qaeda
in the 1998 US embassy bombings
in Africa.(18)
US Customs Service Commissioner,
Robert Bonner, claims
that if terrorists used commercial shipping in some way to stage an
attack, world trade would effectively shut down at a cost of billions
of dollars, and that it is in this way that the CSI will act to protect
global trade.(19) Bonner further claims that ' a shutdown
of global sea container traffic would be consequential to the economies
of all trading nations Even countries that are less dependent on sea
container traffic '(20) in much the same way that the international
commercial airline industry ground to a halt following the attacks of
11 September 2001.
Phase 1 of the Container Security Initiative is now operational and
enforcement of the
'24-hour rule' commenced on 3 February 2003.(21) As at the
end of February 2003, eighteen of the twenty foreign ports identified
by US Customs as a priority under Phase 1, had formally agreed to participate
in the CSI,(22) and many of these are now operating as CSI
ports. Only Kaohsiung (China)
and Laem Chabang (Thailand)
are yet to join, and Sweden
and Malaysia are the only countries
so far to have joined the CSI under Phase 2.
Included amongst those ports targeted under Phase 1 which have agreed
to participate, are Hong Kong, which ranks number one in the world in
terms of the number of containers it handles, Singapore, which is the
world's busiest transit port, and Antwerp, the third largest container
port in Europe.(23) Although these and the other seventeen
top ports exporting to the US account for almost 70 per cent of all
sea cargo containers shipped to the US,(24) US Customs continues
to emphasise that the CSI is not limited to these ports, and stresses,
too, that non-CSI ports will still be able to ship containers to the
US under normal circumstances.
If countries choose not to participate, cargo from these countries
will continue to be assessed, and if need be inspected, upon arrival
in the US. Although US Customs
has stated that not participating in the CSI does not prevent a country
exporting containers to the US,
Commissioner Bonner has indicated that the processing by the US
of shipments from non-CSI ports may be less efficient than the processing
of shipments from CSI-affiliated countries.(25) Of course,
in the event of a terrorist incident, the US
may decide to refuse vessels from non-CSI ports altogether.
However, the establishment of the CSI around the world has not been
entirely trouble free. Perhaps the biggest potential problem facing
the CSI is the fact that the European Commission (EC), the executive
body behind the European Union (EU), is initiating legal proceedings
against those member states which have individually entered into bilateral
agreements with the US.(26)
Claiming that any agreement to enter into the CSI has to be between
the US and the EU as a whole, the EC is reportedly concerned that European
ports will become divided into those which are approved by US Customs
and those which are not, resulting in the erosion of fair and genuine
competition between ports.(27)
Notwithstanding the threat of legal action by the EC, US Customs claims
to have won some endorsement from the World Customs Organisation (WCO)
and the G-8 group.(28) Possibly in recognition of the fact
that the CSI builds on some existing WCO concepts, such as the advance
transmission of manifest data and the increased use of technology, the
WCO unanimously passed a resolution on 28 June 2002 that enables all
161 member nations to begin developing container security programmes
of their own, in line with the CSI. The G-8 group also appeared impressed
enough to implement some of their own container security initiatives
in recognition of the US Customs CSI.
Although the Australian Customs Service (ACS) has recently upgraded
much of its detection technology and is currently 're-engineering' its
cargo management systems, Australia
has not rushed to join the CSI. At the 38th meeting of the
Customs National Consultative Committee (CNCC)(29) held on
17 September 2002, information on the CSI was presented by the ACS,
upon which it was resolved to simply continue monitoring its development.(30)
Members apparently expressed concerns about the 'practical difficulties
in meeting requirements, and uncertainty regarding the direction of
the US in establishing a security
regime'.(31)
At a hearing of the Senate Legal and Constitutional Legislation Committee
on 20 November 2002, the Committee noted the new measures imposed
on cargo vessels calling into the US
and enquired about the intention of the ACS to implement similar regulations
for cargo vessels sailing into Australian ports. In response, the Australian
Customs Service CEO, Lionel Woodward,
stated:
We are quite familiar with the new US
approach. It does require the transmission of manifest information 24
hours before the cargo is loaded. That relates to a broader container
security initiative At this stage, we are not proposing to change
the current reporting arrangements, but there may be international moves
that would cause us to reconsider that position (32)
Whilst the installation of container X-ray facilities at major Australian
ports(33)which the ACS claims will raise inspection rates
of imported sea cargo containers to five per cent(34)might
coincidently satisfy the technology aspect of the Container Security
Initiative, Australia has still not formally signed up to it (under
Phase 2).
Besides, Australia is committed
to implementing new international maritime security measures covering
ports, shipping and offshore installations, as directed by the International
Maritime Organisation (IMO); and the US Customs CSI might just have
pre-empted what is perhaps a more coordinated approach to improving
the security of commercial shipping worldwide. The IMO's International
Ship and Port Facility Security Code (ISPS Code) comprises a set of
maritime security measures which have been adopted as amendments to
the Safety of Life at Sea Convention, 1974 (SOLAS Convention),
to which Australia is a party.(35)
The format and wording of the Code was finalised in December 2002 by
member States and it was resolved that the measures are to be in force
in all jurisdictions by 1 July 2004. A memo issued by the IMO in February
2003 urged member States to expedite the installation of the necessary
legislative, administrative and operational infrastructure to ensure
that members meet the agreed deadline for the Code's commencement. The
200304 Federal Budget is expected to include provisions to begin implementing
the ISPS Code, such as $10 million to establish an administrative framework,
although it has been reported that the Government is expecting the shipping
industry to bear most of the cost of the plan, estimated at $100 million.(36)
Similar to the CSI, the security measures contained within the ISPS
Code are preventative measures which apply to ships and port facilities.
The overall objective of the Code is to establish an international framework
of cooperation between member States, respective Government agencies,
and shipping companies to identify security threats and to take preventative
action against incidents which would impact on shipping or port facilities
used in international trade. The Code also stipulates the formation
of security plans by ships and port facilities and outlines a three-point
security alert scale for use with shipping and ports. As such, many
of the Code's provisions overlap with the CSI's efforts to screen, identify
and assess threats to the security of shipping and cargo.
As the US Customs Service itself also concedes, the WCO too, already
promotes advance electronic transmission of customs documentation and
the use of technology and risk management processes through the WCO
Customs Data Model and revised Kyoto Convention.(37) The
WCO Customs Data Model(38) was developed after the G-7 group
(as it was then) resolved in 1996 that the existing non-standard systems
of data were confusing and overly complex to the extent that they had
become a trade barrier.
It was agreed that as documentation is essential to the control of
international trade, a standardised format was needed to cover common
Customs procedures. The current Model provides a framework of standard
formats for data and electronic messages which are submitted by industry
to Customs administrations worldwide to complete arrival, departure
and clearance formalities required in international trade. The main
benefits of the Model, which G-8 countries have undertaken to implement
by 2005, are that it reduces the amount of data transferred between
agencies, expedites the clearance of cargo and cuts compliance costs.
It also helps overall to ensure the security and facilitation of the
global supply chain.
Perhaps the ACS CEO, Lionel Woodward, is anticipating that the impact
of the apparent emergence of a new world standard for sea cargo reporting
being spearheaded by the CSI, on top of the new IMO and WCO measures,
will become harder to bear and ultimately trigger a change in Australia's
cargo reporting arrangements. The development and existence of the IMO
and WCO measures prior to the introduction of the US Customs CSI might
also help explain the 'uncertainty' members of the (Australian) Customs
National Consultative Committee expressed regarding attempts by the
US to use the CSI to establish 'a security regime'. The changes brought
about by the CSI are indeed dramatic, and by all accounts, have been
a massive shock to the industry, but such major change will become harder
to resist over time. Change, for better or worse, may well be forced
upon Australia.
In Australia at least, the commencement of the '24-hour rule' alone
has resulted in headaches for all involved. Issues such as different
time zones, tight documentation deadlines, changes to stevedoring practices,
and questions over responsibility for the extra costs involved, are
just the beginning. Logistical problems will be sorted out over time
as shipping companies develop new timetables to accommodate the strict
deadlines imposed by the '24-hour rule', but the US community may find
itself bearing the increased costs associated with it if US Customs
wants the CSI adopted globally.
For example, the UK freight industry has been urged by the British
International Freight Association to forward to US importers all costs
arising from the CSI and the '24-hour rule' on the basis that the new
regulations are a requirement of the US domestic homeland security agenda,
not HM Customs and Excise, and that the US party to the transaction
should therefore pay the compliance costs associated with what is essentially
'a mandatory US domestic security requirement'.(39) This
frustration and annoyance with the US
initiative looks set to continue until the significant changes imposed
upon the industry are fully bedded down. Although there does not appear
to be any similar moves so far in Australia, with several shipping lines
instead intending to charge their customers an additional fee, it is,
at least superficially, a logical option.
Whilst there is some resentment over US authorities imposing their
will and methodologies upon the international maritime industry, particularly
in the face of similar changes proposed by the IMO and WCO, few would
disagree that the world has changed dramatically since 11 September
2001 and that commercial shipping is as potentially vulnerable as the
aviation industry was.
Without doubt, the Container Security Initiative is a step in the right
direction, but despite what the marketing of the CSI might suggest,
it is not the only answer and nor is it failsafe. Just as no one realistically
expects an alarm to guarantee your house completely safe from burglary,
the CSI cannot guarantee to prevent terrorists from utilising sea cargo.
As with the alarm in your house, the CSI is best viewed as another barrier
giving additional layers of protection. It does so by increasing both
the chances of detection and the level of deterrence.
However, a major issue of concern is the fact that the integrity of
the CSI as a whole seems to rely heavily on the security and integrity
of the tamper-proof seals used to secure a cleared container en route.
If sealed containers are indeed not re-assessed upon importation, as
is the plan under the CSI, and the seal happens to be breached after
clearance without the authorities knowing, then the CSI has done nothing
to prevent the entry of a potentially unsafe container into the US.
Like all security technologies, it would only be a matter of time before
the security afforded by the seals was circumvented and this begs the
question of who would be liable for such a breach, particularly if a
terrorist incident occurred as a result.
While the US Customs Container Security Initiative certainly has merit,
it needs to be considered in the context of other similar changes developed
by international bodies like the World Customs Organisation and the
International Maritime Organisation. With the emphasis on reciprocity
however, and the freedom granted by the WCO to member states to begin
developing their own CSI-type initiatives, one wonders just how long
it will be before other countries start imposing their own specific
restrictions on in-bound containers. The chaos that could potentially
result from the individual actions of several different countries in
response to the CSI would only confuse and undermine the range of internationally
agreed security measures currently being developed.
Domestically, the Australian Customs Service is currently in the process
of dramatically improving its cargo management and screening systems
and continues to assess emerging technologies for their potential benefit
to Customs functions. As such, Australia
already has in place a number of different mechanisms to deter and detect
criminal misuse of the supply chain. Whilst Australia
is both able and prepared to meet the technological requirements of
the CSI, and currently routinely screens both imported and exported
cargo, the question of whether or not the ACS is prepared to have its
screening processes effectively supervised by US Customs may be the
real issue at the heart of Australia's reluctance to join the CSI.
For the moment, the apparent intention of the Australian Customs Service
to monitor the development, uptake and success of the CSI, seems a sensible
course of action for now. On the international front, Australia (through
the Department of Transport and Regional Services) is currently engaged
in responding to the recent IMO directives concerning maritime security,
and as a member of the WCO, would also be obliged to act on any further
directives it issued. However, despite the fact that Australia is already
committed to, and possibly better served by, making improvements to
maritime security in a more co-ordinated, internationally agreed fashion,
Australia may ultimately be unable to avoid being swept up in the ever-increasing
changes to the global supply chain brought about by bilateral arrangements
such as the Container Security Initiative. In the event that this occurs,
Australia must be ready to
respond.
