The Arabs are controlling our ports!  They’re lovers of terrorism and sponsors of fundamentalist Islam and George Bush sold out American security to the highest bidder!  This is the kind of bigoted claptrap I expect at Little Green Footballs, not Booman Tribune.  Instead of panicking, let’s look at the facts.
There is a British company (not American) called the Peninsular & Oriental Steam Navigation Company or P&O for short.  Before 9/11 and until this year, this entirely foreign company was operating six maritime ports in the United States.  A company called Dubai World Ports (DWP) spent a few billion dollars (close to 7) and bought P&O, which means that DWP is now the third largest port operator in the world.

DWP also operates terminals and/or ports in Australia, China, Hong Kong, Romania, Germany, the Dominican Republic, Venezuela, Djibouti, India and Saudi Arabia.  Notice anything odd about those countries?  There have never been any international terrorist incidents in any of them.  If DWP was such a terrorist-lovin’ company, why haven’t their sprung their hordes of Qur’an-wavin’ suicide bombers on all those other despicable, capitalist, western imperialist nations?

The reason of course is that DWP will no more “control” or “own” the six ports in the United States than it does in Romania or Australia.  Let’s review exactly what these companies do.

The ports (in America) are all owned by the local governments, whether in Baltimore or Miami.  They didn’t belong to P&O and they won’t belong to DWP.  The title on the deed down in the courthouse will still show the owner to be the local American government.  Not only that, but as an international port of entry into the United States, the American government has full sovereignty and jurisdiction over all cargo and vessels entering the said ports.  This means that there will be Customs and Border Protection (formerly U.S. Customs Service) agents working there.  American law enforcement at all levels will have the same jurisdiction over these ports as they did six months ago when the British company operated them.

DBP is and proposes to be a port operator not port owner or port controller.  The easiest way to understand this is to look at your local airport.  I’ll use JFK International (serving New York City) as an example as it is the busiest airport in the country.  It is built on land that is owned by the local governments.  American law enforcement from CBP to Port Authority police to the FBI to ICE to the TSA all have jurisdiction and operate unhindered at this airport.  Yet it is actually “operated” by a company called JFK International Air Terminal LLC (JFK-LLC).

Did you know that?  And did you know that JFK-LLC is a private company, owned by a consortium of businesses incuding LCOR Incorporated, the Lehman Brothers and Schipol USA?  Schipol USA is a subsidiary of a company called the Schipol Group, which is a Dutch company that is also the operator of Schipol airport in Amsterdam (the capital of the Netherlands).  Lehman Brothers is a global bank with shareholders from all over the world.

So what exactly does JFK-LLC do then?  Well they do something very similar to what P&O currently does and DWP proposes to do.  They manage the place.  They handle the contracts for the various companies who want to do business at the terminal.  They often invest money in infrastructure upgrades or repairs.  They make their profits by renting vendor space to the horde of private companies that operate at these terminals.  If Burger King, for instance, wants to operate a restaurant at JFK Airport, a portion of their rent money goes to JFK-LLC.  Similarly, if an American shipping company wants to operate at the Baltimore port, a portion of their rent goes to P&O (and would go to DWP).

Many American ports are operated by international companies, including Hutchison (based in Hong Kong), Maersk (Denmark), Temasek (Singapore) and P&O (Britain).  For example SSA Marine, a global company based in the United States, is the terminal operator at Stockton but is also a terminal operator in Mexico and Panama.  SSA Marine also operates two terminals at the port in Seattle (18 and 25). I could go on and on.

A port that is used primarily for cargo works essentially like this – ships from all over the world dock at one of the terminals.  These ships then pay a fee to the operator of the terminal.  The cargo is then offloaded by longshoremen, who are sometimes called stevedores.  100 years ago this was largely a job requiring a person to physically carry off the cargo but today it is done with cranes and sophisticated equipment.  The majority of longshoremen in America are both American citizens as well as members of a union.  It doesn’t matter who owns or operates the port, the American, unionized longshoremen will be unloading the cargo.

The cargo is then moved out of the port by a wide variety of shipping companies either by rail or by truck.  Some of these companies are small, local outfits and others belong to very large, international companies.  None of this will change if a UAE-based company is the terminal/port operator or if its an American one or British one.  Nothing!

There is an excellent website called Homeland Security Watch which is hardly “liberal” or “progressive” in outlook.  They raise the issue that people should be talking about:

I wish that everyone who is expressing outrage about this deal would channel their anger into the issue of the government’s underinvestment in port security over the past 4 1/2 years. That’s the real issue. The potential vulnerabilities created by this deal are nothing in comparison with the real vulnerabilities that exist in our port system today due to the failure to make adequate security investments in port and supply chain security. The Maritime Transportation Security Act (MTSA) of 2002 provided a solid framework for improving port security, but Congress has not supplied the resources to effectively implement MTSA, which the Coast Guard had estimated would require a total of 7.3 billion over the 2003-2012 period. Congress has provided only a fraction of that: 175m for port security grants in current fiscal year, which itself was a significant improvement on the administration’s request. There have been many solid steps taken for port security, such as C-TPAT and the investments in radiation portal monitors at ports, but not the same system-wide commitment that we see today in the federal government to commercial aviation security.

The Coast Guard has an Office of Port Security and I see they are holding a meeting of the National Maritime Security Advisory Committee on March 3, 2005.  They will “provide advice” to the Secretary of the Department of Homeland Security on what needs to be done in terms of making our ports safe.  If there’s any reason to be upset, it’s that our ports are largely unprotected and security measures have been underfunded.  If you want to raise awareness on this issue, this is the group to focus on.

In 2002, the Congress (with much applause from the White House) passed the Maritime Transportation Security Act (MTSA), which called for at least 5.4 billion dollars in funding for upgrading port security.  This was one of those “unfunded mandates” however as the money has not been forthcoming.

The American Association of Port Authorities issued a press release in May 2005:

The American Association of Port Authorities (AAPA), the organization representing public ports throughout the Western Hemisphere, today welcomed news that the Department of Homeland Security (DHS) has opened up nearly 141 million in funds to help America’s seaports pay for hardening security at their terminals and making other needed infrastructure upgrades in an effort to prevent terrorist acts.  However, considering Coast Guard estimates in 2002 that ports would need to spend 5.4 billion over 10 years to comply with new mandated Maritime Transportation Security Act (MTSA) enhancements, AAPA continues to seek a much higher level of security grants for U.S. seaports.

Past grant rounds have only funded between 8 percent and 25 percent of eligible applications.

“We applaud the Department of Homeland Security for making available these vital grant funds to help America’s seaports address their immediate security needs and assessments,” said Kurt Nagle, AAPA president and chief executive officer. “However, future funding is also critical.  AAPA believes the money appropriated for the grant program must be increased to at least 400 million a year to ensure the ability of U.S. seaports to protect themselves and their communities against attack.

The Washington Times, hardly a liberal bastion, wrote an article on February 8, 2006:

Unfortunately, the U.S. port industry is facing unprecedented challenges that should concern every American consumer, as well as the president and Congress. If unaddressed, these challenges could weaken the nation’s supply chain and economic vitality.

Port security remains a critical issue in this post-September 11 world. International trade is growing at a phenomenal rate, and ports are struggling to keep up with demands on their facilities. With today’s cargo volume level expected to at least double by 2020, adequate port infrastructure is a growing concern.

Federal law mandating port security enhancements set up a program in 2002 to help protect port facilities from terrorist attack. This program has been dramatically under-funded, leaving ports no choice but to pay the lopsided balance themselves to ensure that their facilities are safe and secure — not only for the nearly 5 million Americans who earn their livelihoods in the maritime industry, but also for the urban communities near commercial seaports and for the well-being of the nation’s economy, in which ports and goods movement play a critical role. The problem is, this has required ports to divert limited funds away from expanding port infrastructure in order to pay for hardening their facilities against terrorism.

Here’s another press release from the American Association of Port Authorities, this one from February 7, 2006.  It was issued after the administration published its budget proposal:

“The federal share of the seaport facility security funding partnership needs to be increased, not reprogrammed and diluted,” said AAPA’s Mr. Nagle.  “Another top federal priority should be to adequately fund the U.S. Army Corps of Engineers to keep the nation’s deep-draft channel maintenance projects on schedule.  Simply put, we believe all authorized channel projects with positive benefit-cost ratios should be maintained at their authorized project depths.”

Mr. Nagle noted that United States economy, safety and national defense depend largely on how well the country can protect its seaports and ensure deep-draft shipping access to them.

“When the Administration proposed lumping port security into the TIP last year, the proposal was debated in the Congressional appropriations process and rejected,” said Mr. Nagle.  “It’s not in the nation’s best interest to dilute the focus on maritime security.”

Since its inception in 2002, the Port Security Grant program has provided much-needed support to address immediate security needs and assessments.  But federal money allocated in the first five rounds of the program – about 708 million – accounted for only about one-fifth of what seaports identified as needs. AAPA has urged the Administration and Congress to annually fund the program at the 400 million level.  AAPA also urges DHS to allow all U.S. port facilities that handle international cargo to be eligible to apply for port security grant assistance.

Although airports, first responders and research and development centers receive most of the federal attention and funding for security and terrorism prevention, seaports – which support 5 million jobs and annually handle 2 trillion worth of cargo and more than 8 million cruise ship passengers – remain largely under-funded at the federal level.  As a result, they must divert limited port resources to pay for enhanced security, often at the cost of improving their facilities to handle fast-growing trade volumes.

Shall I continue?  Our nation’s ports are so unsecure that human beings have been smuggled inside shipping containers.  So far they haven’t been terrorists, just people desperate to get into the United States to work.

All this political uproar over a Dubai-based company operating some ports in the United States is moving the focus away from the critical underfunding for security at our ports.  That is the issue you should be getting upset about, if anything.

This is cross-posted from Flogging the Simian

Peace