The Hindu Business Line : Maritime security in dire straits

Seaports all over the world are considered the weakest security link. Particularly, container shipping is seen as the Achilles' Heel of the maritime trade, making insurance in this sector a vital necessity.

A few months ago, when Lloyd's, the London-based shipping insurer, decided to retain its "war-risk" rating on the Malacca Strait, the Malaysian Government expressed its disappointment saying the water-body was not a battle zone. The disappointment was understandable. After all, Malaysia along with its neighbours, Singapore and Indonesia, had been actively engaged in stepping up security efforts in a bid to make the Strait safe. There had been joint air and sea patrols to rid the region of piracy.

But Lloyd's was not convinced. According to Lloyd's Market Association Joint War Committee, the Malacca Strait had been assessed to "exceed benchmark of risk aggregation factors". The decision was a commercial decision made by people who would pay the price in the event of any mishap. The war risk rating means that a container vessel may have to pay up to $5,000 extra for each trip through the Strait.

The Malacca Strait was added by the shipping insurer to its list of 20 potential risk zones in June 2005. The list comprises countries or areas that are viewed as being prone to war, strikes, terrorism and other forms of violence or general security.

Security charge

But the governments of Malaysia, Indonesia and Singapore may draw comfort from the fact that a port facility security charge is being levied on imports/exports at all ports open for foreign trade in China. Reports have it that the charge will be levied on shippers or their agents or collectors or their agents when container documents are processed.

This is not surprising. Seaports all over the world are being considered today as the weakest security link in supply chain. Particularly, container shipping's potential for exposure to terrorism may make the industry the Achilles' Heel of maritime trade, the experts have warned. Some one, therefore, must take the bull by the horns, the experts emphasise. But how to do it? This is the biggest challenge facing those responsible for ensuring security in international maritime trade.

Weak link

Governments and port authorities across the globe acknowledge that the 17 million cargo containers are a weak link in security arrangements. After all, there are so many players in the global sea-borne trade. Asthe operation is distributed across thousands of ports and transport hubs, it is not easy to achieve success in any effort directed to improve security.

The hurdles are too many. First, the technology. Governments and industries concede the need to secure appropriate technology to combat the threat of shipping containers being used in terrorist attacks. But, then, technology should be such that it does not hinder the smooth flow of trade. The problem is that the container security market is yet to mature and, therefore, it is difficult for any government to opt for any single available technology as a cure-all solution.

Uniform standard

Efforts, however, are on to create a uniform standard for electronic container security system. Several manufacturers such as General Electric and IBM are believed to be engaged in designing electronic container security systems. Until something concrete emerges, the security will continue to be a matter of concern.

Next, the implementation. At one point of time, Washington was mulling inspection of all US-bound cargo in all foreign ports, a provision proposed by some members of the Democratic Party but opposed by the US business groups. The idea has been abandoned paving the way for Safe Port Act, which aims at enhancing port security in a number of other ways. The critical technological issue therefore is: How to develop a system that works efficiently and identically in thousands of facilities located all over the world without hindering the flow of trade.

Funding issue

Finally, the funding issue. A foolproof security system covering the ports of major trading nations, it is estimated, will cost an astronomical sum and it is not clear yet who is going to provide it. Even rich nations are divided among themselves about the probable funding pattern. Developing technology and systems is one thing but getting shippers and port operators to pay for it is another. After all investments in expensive systems that apparently provide no immediate return might not prove to be extremely popular among its probable users. Everyone wants improved security but waits for others to invest. Perhaps international bodies such as the World Customs Organisation or the International Maritime Organisation have to take some hard decisions and declare the use of appropriate technology, as and when it develops, as mandatory.

Then there are other issues. According to some experts, enhancement of security is not possible without sacrificing liberty or privacy. They, therefore, emphasise creation of what is called "security envelope," that is, a secure environment through which people and cargo can move "rapidly, efficiently and safely without sacrificing privacy".

Where does India, a country so vulnerable to terrorist attacks, stand in this regard? Not in an excellent position. Our authorities draw comfort from the fact that the country's major ports comply with the provisions of the International Ship and Port Facility Security (ISPS) Code, as prescribed by the IMO and therefore there is nothing to worry. It may be pointed that ports declared ISPS Code compliant have also been found to be vulnerable to terrorist attacks in certain parts of the globe, calling for extra security measures.

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