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Ports panic: ignorance and fear carry the day

Posted by Richard on March 9, 2006

In a just world, the consummation of a contractual business deal, such as Dubai Ports World’s purchase of the British firm P&O, wouldn’t require the approval of some government commission. Of course, in a just world, Chuck Schumer would be handing out business cards at accident scenes, and Barbara Boxer would be asking, "You want fries with that?"

It’s been two weeks since I scoffed at the security concerns that had everybody in a tizzie over the DP World deal. I’ve heard nothing about the ports situation since then to change my mind. In fact, I’ve heard plenty to confirm my opinion. For instance:

  • DPW wasn’t buying ports, "taking over" ports, or "controlling port security" — it bought a company that leases 24 out of 839 terminals in 6 US ports. Got that? Leasing 24 out of 839 port terminals. Stop hyperventilating and get a grip.
  • DPW’s security record, reliability as a business partner, and suitability for managing U.S. terminal operations were strongly vouched for (PDF) by Zim Integrated Shipping Services, Ltd., Israel’s largest shipping line.
  • If letting an Arab-owned company unload sealed containers in our ports is just too dangerous, what about letting Arab-owned companies operate passenger and cargo terminals at our airports and fly jets over our cities on a daily basis?

    While the entire US political-wonk class is frothing out the mouth over the sale of "port dock concessions to the United Arab Emirates" in a fashion I havent seen since the great "Flouride Wars of the 1950’s", it turns out that "Emirates Air" and its subsidiary "Emirates Sky Cargo" has Passenger and Cargo Terminal Space at JFK.

  • While Sen. Clinton was preparing to demagogue the ports deal to appear tough on national security, her husband was advising the UAE and DPW on how to get the deal through. In fact, he’s collected fees reaching seven figures from the UAE, and the Justice Dept. is trying to determine if he’s an unregistered foreign agent. As for the Senator’s claim that she didn’t know anything about it:

    In fact, at least two senior outside advisers to Senator Clinton were attempting to get business out of the Port Deal, and President Clinton was the go-between. Associates with the Glover Park Group, which houses just about the entire shadow staff for Hillary’s run-up to a Democratic presidential bid, were attempting to get a slice of the DPW deal before the deal was made public about three weeks ago. According to current and former President Clinton staff, Hillary Clinton’s Senate office was aware that Glover Park was in the running to do work on the DPW deal.

In my first post on this topic, I noted that the unloading of containers at U.S. ports isn’t nearly as important to our security as the loading of those containers in their ports of origin. I was reminded of that when I read Robert M. Green’s new article, Still Dubious About Dubai?, at TCS Daily. Green makes a strong argument that DP World would increase our security, an argument based in part on DP World’s leadership in innovation and modernization of shipping and port operations in general and container terminal operations specifically:

Carved from the Dubai Ports Authority, the company’s reputation for technological implementation dates back to its project to automate many of its processes in the 1990s. At that time, Dubai became one of the first ports in the world to implement so-called e-shipping, digitizing most of its planning, scheduling and operations while "building out" a CRM (customer relations management)/Web portal system that was one of the first of its kind used by a port.

According to American e-commerce experts who followed the UAE technology implementation as it has evolved, it was Dubai’s willingness to invest in IT that allowed it to offer container shipping and related services at lowered costs for its customers. Last year, a Homeland Security official called the two-terminal Dubai facility "modern and extremely efficient ports."

While the immediate aftermath of the 9/11 attacks and the implementation of the White House-backed Container Security Initiative (CSI) tested the resilience of port operators both here and abroad, the port of Dubai continued even in that period to grow both in volume and influence in worldwide shipping. In 2004 Dubai made another bold-stroke decision, becoming the first Middle Eastern port (and 35th overall) to agree to the CSI, signing formally last March. CSI gives U.S. Customs personnel a foothold in foreign ports and requires that state-of-the-art security systems such as gamma ray, x-ray and radiological detection systems be implemented for cargo inspection.

DP World is, in fact, operating the most advanced container terminals in the world, both in terms of security and efficiency, and we should consider ourselves fortunate that they are, since those terminals are the source of many containers bound for the U.S.:

At the recently opened Pusan Newport in South Korea, DP World and tech partner Samsung of Japan worked with the Korean port authority to build a state-of-the-art security port.

Pusan opened for business late last year fashioned around a Samsung-developed central security system in which threats are anticipated and met via a network of monitors including advanced CCTV, lasers, radiological and other sensors, and explosives- and motion-detection fencing of the sort normally found in high-sensitivity military settings.

During the 2004 campaign, John Kerry tried to make an issue of the fact that "only 5%" of the containers entering the U.S. are inspected. He never got much traction with that complaint, but it also wasn’t slapped down as hard as it should have been. Our focus, quite properly, isn’t on inspecting containers after they arrive on our docks — it’s on ensuring that we know what’s going into them at the factories in China, India, Germany, and Korea, and that the security is reliable in ports like Shanghai and Pusan, where DP World loads those containers onto ships bound for the U.S.

Two weeks ago, I asked Republicans and conservatives:

Doesn’t it bother you to be on the same side as the utterly hypocritical Democrats who up until now have insisted that we’re not at war and that Bush is just trying to scare us with all this national security stuff? The Democrats who oppose profiling young Arab men in airports, but are eager to profile rich capitalist Arab businessmen? The Democrats whose opposition is probably fueled by longshoremen’s union contributions? (DP World has a history of modernizing and greatly improving the efficiency of container operations, something the union will fight tooth and nail to prevent.) The Democrats who are tickled pink that they can demagogue this issue to appear strong on national security without jeopardizing their support from the MoveOn, Deaniac, anti-war crowd?

Apparently it didn’t bother them. The Republicans in Congress, led by RINO Rep. Peter King, have raced to beat the Democrats to the credit for killing this deal. It’s contemptible, craven cowardice. But it worked. DP World has announced that they’ll sell all U.S. port operations to a U.S. company. There aren’t many potential buyers qualified to run such operations. I hope they sell the operations to Halliburton subsidiary KBR.

No matter. Whoever the buyer is, this means container terminal operations in those six ports won’t become as efficient, modernized, and secure as they would have under DP World management. But the gutless, unprincipled Republicans can breathe a sigh of relief, the Democrats can puff out their chests over their newfound national security stones, the nativists and xenophobes can turn their attention back to Mexicans, and the longshoremen’s union can gloat about all the featherbedding jobs that have been saved.

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