20080410 OAS CIP Presentation: The World Bank and Port Security

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Presentation at the IIIrd Hemispheric Conference on port security - Organization of American States OAS/CIP - April 2008

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  • 20080410 OAS CIP Presentation: The World Bank and Port Security

    1. 1. port and supply chain security 20081 IIIrd Hemispheric Conference on port security OAS/CIP Port Security and the World Bank Michel Luc Donner Port and Maritime Transport Specialist The World Bank
    2. 2. port and supply chain security 20082 Contents  ISPS cost of compliance report (in Developing Countries)  Supply Chain Security (SCS)
    3. 3. port and supply chain security 20083
    4. 4. port and supply chain security 20084  http://http://worldbank.orgworldbank.org/ports/ports  http://http://www.worldbank.orgwww.worldbank.org/transport/transport
    5. 5. port and supply chain security 20085 ISPS cost of compliance report  Why ?  Methodology  Analysis per Region  Global Analysis  Comparison with the UNCTAD report : Maritime Security: ISPS Code implementation, costs and related financing, March 2007
    6. 6. port and supply chain security 20086 Why ?  Requests by Country-Clients : concerns about financing and consequences of non-compliance  Not a compliance assessment  Centered on Developing Countries
    7. 7. port and supply chain security 20087 Methodology  12 selected ports  on-site missions
    8. 8. port and supply chain security 20088 12 selected ports Africa Black SeaBaltic Latin America Caribbean
    9. 9. port and supply chain security 20089 Analysis per Region  12 selected ports: o 3 in West Africa o 5 in Baltic and Black Sea o 4 in Latin America & Caribbean
    10. 10. port and supply chain security 200810 4 ports in Latin America & Caribbean  Heavy upfront investments  Annual Running Costs  Actual security costs per TEU or TON
    11. 11. port and supply chain security 200811 Up-front investments port L1 L2 L3 L4 security related 2.4 3.3 3.6 5.8 of which after July 2004 1.8 2.5 2.4 5.8 total 2.4 3.3 3.6 5.8 ( x usd 1mio )
    12. 12. port and supply chain security 200812 Annual Running Costs port L1 L2 L3 L4 Annual Running Costs 1.3 1.8 2.6 3.3 ( x usd 1mio )
    13. 13. port and supply chain security 200813 Actual security costs per category (in US$) port L1 L2 L3 L4 per TEU 2.31 3.68 4.59 9.91 Other cargo/ per ton 0.23 0.48 0.46 0.16 per passenger 0.69 0.86 - -
    14. 14. port and supply chain security 200814 Global Analysis  Heavy upfront investments  Actual security costs per category
    15. 15. port and supply chain security 200815 Up-front investments Up-front investments port A1 A2 A3 B1 B2 B3 B4 B5 L1 L2 L3 L4 Total expected 5,6 5 5.1 0.5 0.1 2.2 0.2 0.1 2.4 3.3 3.6 5.8 (x usd 1mio)
    16. 16. port and supply chain security 200816 Actual security costs per category Region/po rt cost/TEU cost/Ton /Passenger A1 1.06 0.04 A2 1.82 0.05 A3 2.59 0.04 B1 4.2 0.17 B2 0.4 0.50 B3 10.56 0.42 B4 14.33 0.03 B5 3.98 0.04 L1 2.31 0.023 0.69 L2 3.68 0.48 0.86 L3 4.59 0.46 L4 9.91 0.16 minimum 0.4 0.03 maximum 14.33 0.50 average 4.95 0.22
    17. 17. port and supply chain security 200817 Security Cost per TEU 0 2 4 6 8 10 12 14 16 CostperTEU(US$) A1 A2 A3 B 1 B 2 B 3 B 4 B 5 L1 L2 L3 L4 Port Security Cost per TEU
    18. 18. port and supply chain security 200818 Security costs per ton of cargo 0 0.1 0.2 0.3 0.4 0.5 Costpertonof cargo(US$) A1 A2 A3 B 2 B 2 B 3 B 4 B 5 L1 L2 L3 L4 Port Security costs per ton of cargo
    19. 19. port and supply chain security 200819 Conclusions and remarks  Range is quite wide  Orders of magnitude, not rocket science  Averages not as high as predicted  Uneven levels of security achieved  Contributing factors  Security fee  Collateral benefits
    20. 20. port and supply chain security 200820 Contributing factors  Starting point (navy base, free zone, drug traffic, political regime)  Total cargo throughput  Topography / layout of the port
    21. 21. port and supply chain security 200821 Collateral benefits  Reduction in number of stowaways  Reduction of theft and pilferage  Increase in Customs revenue (more & better control)  Reduction of cargo delays and waiting times  More orderly ports and terminals, leading to more efficiency
    22. 22. port and supply chain security 200822 Comparison with the UNCTAD Report  Unctad : 55 questionnaires / WB : 12 on-site  Unctad : majority in developed countries / WB : all developing countries  Unctad : small and large ports / WB : majority of smaller ports
    23. 23. port and supply chain security 200823 Comparison with the UNCTAD Report in US$ average cost / TEU average cost / TON UNCTAD 3.60 0.08 World Bank 4.95 0.22 pondered ports < 500,000 teu/annum ports <15 million tons p/a in US$ average cost / TEU average cost / TON UNCTAD 4.80 0.11 World Bank 5.40 0.17
    24. 24. port and supply chain security 200824 Supply Chain Security (SCS)  Background and genesis  Main components, initiatives and stakeholders  SCS Guide (project)
    25. 25. port and supply chain security 200825 Background  The ISPS Code in fact is a dedicated component of the larger global security initiative commonly known as “Supply Chain Security” (SCS).  Whereas the ISPS Code concentrates on security issues related to vessels, individual port facilities and the direct port environment, SCS aims to make the entire logistic chain, from producer to consumer, more secure, but, at the same time, more efficient.  While the ISPS, in spite of being an International Code sponsored and led by the International Maritime Organization (IMO), took quite some time to achieve full implementation, SCS is still a mosaic of components and initiatives that may be introduced and become compulsory on a global scale.
    26. 26. port and supply chain security 200826 Main Stakeholders and actors  World Customs Organization (WCO)  International Organization for Standardization (ISO)  International Maritime Organization (IMO)  World Trade Organization (WTO)  Regional Organizations  National Governments  International Trade, Logistics and Transport professional Associations
    27. 27. port and supply chain security 200827 Main initiatives  24-hours manifest  C-TPAT  CSI  ISO 28.000(1))  ATDIATDI  10+210+2  100% scanning (2012)100% scanning (2012)  AEOAEO  Multilateral, bilateral, unilateralMultilateral, bilateral, unilateral
    28. 28. port and supply chain security 200828 Main components  Advanced Electronic Cargo Information  Data collection, aggregation and analysis  Risk management  Container seals  Scanning equipments and image analysis  Integrated Border Management (border agency cooperation)  Authorized Economic Operator management  Real-time cargo tracking and tracing
    29. 29. port and supply chain security 200829 SCS Guide (project) - genesis The concept of this Guide started to take shape during the 25thThe concept of this Guide started to take shape during the 25th International Association of Ports and Harbors (IAPH) BiannualInternational Association of Ports and Harbors (IAPH) Biannual Conference that was held in Houston, Texas, USA from April 27 toConference that was held in Houston, Texas, USA from April 27 to May 4, 2007, when experts from the following organizations andMay 4, 2007, when experts from the following organizations and companies:companies:  The Rotterdam Port AuthorityThe Rotterdam Port Authority  The International Association of Ports and Harbors (IAPH)The International Association of Ports and Harbors (IAPH)  The company SOGET (a Joint Venture of Port of Le Havre AuthorityThe company SOGET (a Joint Venture of Port of Le Havre Authority and Port of Le Havre Port Community)and Port of Le Havre Port Community)  The Port of Le Havre AuthorityThe Port of Le Havre Authority  The World Bank (Energy, Transport and Water Department)The World Bank (Energy, Transport and Water Department) concurred on the need to increase the awareness of the global tradeconcurred on the need to increase the awareness of the global trade and transport community, and in particular that in the developingand transport community, and in particular that in the developing world, of the developments in the field of Supply Chain Security, orworld, of the developments in the field of Supply Chain Security, or SCS.SCS. This meeting was followed up with another meeting in Rotterdam inThis meeting was followed up with another meeting in Rotterdam in September 2007 in which also a Representative of the WorldSeptember 2007 in which also a Representative of the World Customs Organization (WCO) participated.Customs Organization (WCO) participated.
    30. 30. port and supply chain security 200830 SCS Guide (project) (I)  Commented Inventory of on-going and future initiatives and their reciprocal compatibility  Insight in international developments and uncertainties  Status of SCS from a Regulatory point of view  Insight to the overlaps, bridgeability andInsight to the overlaps, bridgeability and interoperability between the proposedinteroperability between the proposed certification systems (C-TPAT – AEO - ISOcertification systems (C-TPAT – AEO - ISO 28.000(1))
    31. 31. port and supply chain security 200831 SCS Guide (project) (II)  Outline of container integrity solutionsOutline of container integrity solutions including High Security Seals and RFID seals,including High Security Seals and RFID seals, and their state of standardization andand their state of standardization and affordability in Developing Countriesaffordability in Developing Countries  Outline of Advanced Inspection TechnologyOutline of Advanced Inspection Technology including radiation detection and high speedincluding radiation detection and high speed scanning; relevance of AIT for Developingscanning; relevance of AIT for Developing CountriesCountries  Users check-listsUsers check-lists
    32. 32. port and supply chain security 200832 ConclusionConclusion  ““A balance must be struck between ensuringA balance must be struck between ensuring security and facilitating trade, if we are tosecurity and facilitating trade, if we are to preserve the efficiency of shipping and cargopreserve the efficiency of shipping and cargo operations and allow global trade to flourishoperations and allow global trade to flourish”” (…)(…)“In the ongoing Western-driven development of“In the ongoing Western-driven development of a global framework of rules and standardsa global framework of rules and standards governing international shipping”governing international shipping”(…)(…)  To ensure that the measures introduced areTo ensure that the measures introduced are sensible and pragmatic, a multilateralsensible and pragmatic, a multilateral approach is more likely to produce pragmaticapproach is more likely to produce pragmatic solutions than uncoordinated unilateralsolutions than uncoordinated unilateral initiatives”initiatives”
    33. 33. port and supply chain security 200833 ConclusionConclusion To ensure that the measures introducedTo ensure that the measures introduced are sensible and pragmatic, aare sensible and pragmatic, a multilateral approach is more likely tomultilateral approach is more likely to produce pragmatic solutions thanproduce pragmatic solutions than uncoordinated unilateral initiatives”uncoordinated unilateral initiatives” OPENING ADDRESS BYOPENING ADDRESS BY MRMR LEE KUANLEE KUAN YEW,MINISTER MENTORYEW,MINISTER MENTOR, AT THE INAUGURAL, AT THE INAUGURAL SINGAPORESINGAPORE MARITIME LECTURE, 25 SEPTEMBERMARITIME LECTURE, 25 SEPTEMBER 20072007
    34. 34. port and supply chain security 200834 And, to be truly global, Global TradeAnd, to be truly global, Global Trade must take on board the Developingmust take on board the Developing Countries.Countries.

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