June 18, 2004

Industry asks conferees to reject House security move

Fourteen organizations have written a House-Senate conference to oppose a House effort to require foreign-flag ships have the U.S. Coast Guard review the security plans required under the U.S. maritime Transportation Security Act and the International Ships and Port Facilities Security Code (ISPS).

The organizations are:

American Maritime Congress
American President Lines
Chamber of Shipping of America
International Association of Independent Tanker Owners
Farrell Lines
Lykes Lines Limited, LLC
Maersk Sealand
Maritime Institute for Research & Industrial Development
National Association of Manufacturers
National Industrial Transportation League
Retail Industry Leaders Association
Transportation Institute
U.S. Chamber of Commerce
World Shipping Council

Here's the text of the letter:

Dear Members of the Coast Guard Authorization Act Conference Committee:

We are writing to you in anticipation of an upcoming conference committee vote regarding the proposed provision in Title IV, Section 415 of the House version of the U.S. Coast Guard Authorization Bill (H.R. 2443), which seeks to require the Coast Guard to review and approve vessel security plans for vessels that already have security plans approved by their governments pursuant to an international convention negotiated by the U.S government.

We strongly oppose the House provision, and are writing to urge you to support instead Section 326 of the Senate version of the bill.

The signatories to this letter represent U.S. importers, exporters, manufacturers, and carriers and their employees responsible for the movement of America’s international maritime trade. Taken together, the signatories’ contribution to the U.S. economy exceeds $2 trillion annually and millions of American jobs.

Background: Following September 11, in order to improve the security of international maritime commerce, the U.S. government led a successful initiative at the International Maritime Organization to create a new international vessel and port security regime. This new security code, called the International Ship and Port Facility Security (ISPS) Code, mirrors the regulations issued by the Coast Guard pursuant to the mandate of the Maritime Transportation and Security Act (MTSA) and will take effect on July 1st of this year – in approximately two weeks. The maritime authorities of all trading nations and the industry have been working diligently to be in compliance with the Code by July 1.

The Coast Guard has implemented the MTSA regulations and the ISPS Code in a consistent and effective manner, by requiring each flag state to approve security plans for its vessels and ports that comply with the Code, and by implementing a comprehensive port state enforcement program, in which all foreign vessels seeking entry to the United States are boarded by the Coast Guard and required to demonstrate compliance with the Code.

The House provision of the Coast Guard Authorization bill seeks to change the rules and now require the U.S. Coast Guard to review and approve all foreign vessel security plans. Proponents of the House provision have argued that failing to require the Coast Guard to perform these plan approvals would place America’s security in the hands of unreliable foreign governments and would limit the United States’ ability to ensure vessels calling the United States are secure. This is simply not correct for the following reasons:

1. The Coast Guard has implemented a robust port state enforcement program. Under the Coast Guard’s port state enforcement program, every foreign flag vessel will be boarded and required to demonstrate, not only that it has an approved vessel security plan that meets the requirements of the Code, but that it has fully implemented all security measures required by the Code. That is the key: The Coast Guard’s approach will ensure with on-site verification that all vessels have implemented the Code’s requirements.

2. This provision would detract from, not enhance, maritime security. In June 9th testimony before the House Coast Guard and Maritime Transportation Subcommittee regarding implementation of the MTSA, Admiral Hereth, U.S. Coast Guard Director of Port Security, stated unequivocally that vessels that fail to demonstrate full compliance with the ISPS Code --which mirrors the Coast Guard’s MTSA regulations-- will be denied entry to the United States. In reference to the House provision which we are writing to oppose, Admiral Hereth testified: "This provision runs counter to the Safety of Life at Sea (SOLAS) Convention and the International Ship and Port Facility Security Code and, if enacted, would detract from, rather than enhance, maritime security."

Similarly, on May 27, Secretary of Homeland Security, Tom Ridge sent you a letter in opposition to this House provision stating: "Section 415 would detract from, rather than enhance, maritime security…Administrative review of a security plan, whether conducted by U.S. or foreign agencies, will not provide sufficient insight into a vessel’s security condition. On-site examination, as envisioned by the Department, is the only method that verifies that a vessel has proper security measures in place."

3. This provision would establish a very troubling security precedent that could cause major problems for U.S. flag vessels in foreign countries.
Approval of this provision would establish a very troubling precedent that all vessels, including U.S. flag vessels, must show their vessel security plans to foreign authorities in any port state they call. Vessel security plans include, among other things, sensitive and detailed ship-specific information (such as measures to prevent weapons, dangerous substances, and devices for use against ports, ships and people from being taken onboard, identification of restricted areas on the ship, and procedures for operating and disabling the ship security alert system) that must be safeguarded to protect the vessel, its crew and the ports called by the vessel. Disclosure of this information would undermine -- not enhance -- U.S. maritime security. It is not permissible under the ISPS Code for a port state to routinely demand the submission of all vessels’ security plans, and doing so could cause severe breaches of security.

4. Enactment of the House provision would violate the U.S. government’s international commitments. The House provision would repudiate the ISPS Code negotiated by the U.S. government, and it is strongly opposed by the governments of the United States’ major trading partners who negotiated the ISPS Code with the U.S. government in good faith. On May 18, the governments of Belgium, Denmark, Finland, France, Germany, Greece, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom informed all conferees of their opposition to the House provision, expressed the view that this provision could undermine "international cooperation in our fight against maritime terrorism", and expressed fully justified concerns that the concept would subject all vessels to the chaotic situation of having to submit their vessel plans to multiple nations’ approval.

5. The House provision would cripple U.S. commerce. Requiring administrative review and approval of an additional 10,000 foreign vessel security plans, which would be impossible for the Coast Guard to accomplish by July 1st, would not only be a wasteful expenditure of Coast Guard resources, but would cripple the American economy. Because the provision would restrict foreign vessels from operating in U.S. waters until the Coast Guard had approved their plans, thousands of vessels carrying tens of billions of dollars of America’s commerce would be unable to call U.S. ports to unload U.S. imports or load U.S. exports.

6. There is no factual support for the House provision. Finally, there is absolutely no factual support for the proposition that all foreign flag vessels and registries are untrustworthy, as the above governments have pointed out. If a particular flag state fails to properly enforce the terms of the Code, the Coast Guard has clearly identified an available, adequate remedy—deny entry to the noncompliant vessel. The Coast Guard’s port state enforcement program will include detailed documentation of the security compliance histories of all vessels, flag state administrations, and recognized security organizations and factor this information into the decisions regarding what port state enforcement action to take for vessels seeking entry to the United States.

We urge you to oppose retention of Title IV, Section 415 of the House version of the U.S. Coast Guard Authorization Bill in conference. We appreciate your continued efforts to develop and support security initiatives that enhance the security of America’s international trade.

Sincerely yours,

American Maritime Congress
Gloria Cataneo Tosi, President

American President Lines
Eric Mensing, Vice President, Government Markets & Government Affairs

Chamber of Shipping of America
Joseph J. Cox, President

International Association of Independent Tanker Owners
Peter Swift, Managing Director

Farrell Lines
Michael J. White, President

Lykes Lines Limited, LLC
John W. Murray, President & CEO

Maersk Sealand
Eugene K. Pentimonti, Vice President for Governmental Affairs

Maritime Institute for Research & Industrial Development
Jim Patti, President

National Association of Manufacturers
Keith W. McCoy, Director of Environmental Policy

National Industrial Transportation League
Peter J. Gatti, Executive Vice President

Retail Industry Leaders Association
Sandra L. Kennedy, President

Transportation Institute
James L. Henry, Chairman & President

U.S. Chamber of Commerce
Andrew Howell, Vice President, Homeland Security

World Shipping Council
Christopher L. Koch, President & CEO



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