By Paul Blustein and Eric Rich
Washington Post Staff Writers
Wednesday, February 22, 2006
As a furor erupted yesterday over the prospective takeover by a United Arab Emirates company of terminal operations at six major U.S. ports, officials from the company and the Bush administration scrambled to assuage fears that the deal would undermine security and anti-terrorism efforts at some of America's biggest maritime facilities.
Stewart A. Baker, assistant secretary for policy at the Department of Homeland Security, said at a news conference yesterday that Dubai Ports World, which won a takeover battle for a British firm that now operates terminals in the ports, promised during an internal administration review that it would continue participating in security programs previously entered into with the U.S. government.
And Michael Seymour, head of North American operations for Peninsular and Oriental Steam Navigation Co., the British firm being bought by the UAE firm, said the workers handling security in U.S. ports are supplied by longshoremen's unions -- an arrangement he said would remain in effect. "So it doesn't make any difference whether we are their employers, or other terminal operators are their employers," he said.
Those pledges did not quell the uproar in Congress, statehouses and city halls over the approval by an administration interagency task force of the $6.8 billion takeover of P&O by Dubai Ports World. Lawmakers, governors and mayors from both parties decried the decision, which would put the state-owned UAE company in charge of handling operations at terminals in Baltimore, Miami, New Jersey, New York, New Orleans and Philadelphia.
Although the deal has been approved by P&O shareholders, lawmakers threatened to pass legislation blocking it, and state and local officials suggested that they may refuse to allow their port facilities to be managed by the UAE firm.
But whatever happens, experts in port operations said they feared broader issues about security in the country's docks were being lost in the controversy over Dubai Ports World.
Stephen E. Flynn, a specialist in maritime security at the Council on Foreign Relations, noted that although the company is state-owned, several members of its top management are Americans -- including its general counsel, a senior vice president and its outgoing chief operating officer, Edward H. Bilkey, who is a former U.S. Navy officer. And since the Sept. 11, 2001, terrorist attacks, the United States has increasingly depended on such foreign port operators to cooperate in inspecting cargo before it heads for U.S. shores.
"It's a global network at the end of the day that we're trying to secure here," Flynn said. "And that doesn't happen by the United States owning every bit of it. What we should be focusing on instead is the question, are the security standards adequate?"
Robert C. Bonner, who until November headed U.S. Customs and Border Protection, agreed. Although U.S. dock workers have occasionally been caught colluding with drug traffickers, the possibility that terrorists or their sympathizers would end up working in U.S. ports is remote because of the strong role of unions in hiring, he said.
"I think there's some specter that people from the Middle East are going to come over here and operate terminals," he said. "I don't think anything like that is going to happen."
Dubai Ports World is one of several foreign giants that operate terminals in ports around the globe; other big companies are from Denmark, Singapore, Taiwan and South Korea. Few U.S. terminals are managed by American-owned firms.
The pending deal would make Dubai Ports World, which manages maritime facilities in Asia, Europe and Latin America, one of the three largest port operators in the world. At the Port of Baltimore, for example, it would take over operation of one of six terminals, where about 4 million tons of cargo carried on 371 vessels passed through last year, according to Richard Scher, a spokesman for the Maryland Port Administration.
Dubai Ports World differs from most foreign operators because of its state ownership. But if its takeover of P&O goes through, it would have to comply with the same security procedures in its U.S. facilities that other operators do.
Terminal operators typically lease facilities from a local port authority and are responsible for attracting shipping lines to use their terminal, where their main task is to move the thousands of containers that come in and out onto the right vessels, rail cars or trucks. In the process, they must maintain security at the facility, with the government providing backup and oversight.
At the Port of Seattle, for example, SSA Marine, the biggest U.S.-owned terminal operator, uses an X-ray machine to screen all the containers that come in, said Bob Watters, the company's vice president. Customs agents, who are supposed to receive advance notice of the cargo on incoming ships, have the right to open any container and inspect the contents; such procedures are conducted on about 5 percent of all containers nationwide. "We also have overall security plans that we have to develop and have vetted by the U.S. Coast Guard," Watters said.
Critics voiced strong doubts about whether the existing procedures are commensurate with the threat. "There are not enough Customs and Border Protection inspectors at the nation's ports to handle the incoming traffic that we have now, and our guys at the ports are being told that they can't do any overtime," said Charles Showalter, president of the American Federation of Government Employees union, which represents officers who inspect ships. "That combination often results in uninspected ships being left unattended in port overnight."
Concerns over insufficient inspectors worry many security experts far more than the issue of who owns the companies managing the terminals.
Flynn cited a litany of unsettling practices, such as the lack of any screening for the thousands of truck drivers, many of whom are immigrants, hauling containers from the ports of Los Angeles and Long Beach, Calif., to railway lines.
"What I hope for out of this whole debate is that, as Americans suddenly realize most of our marine terminals are managed by foreign-owned companies, they ask, given that that's a reality, how do we secure it?" Flynn said. "I also hope this current situation doesn't lead to a feeding frenzy [against foreign operators], because if we want things to be secure over here, we're going to have to work with foreign counterparts."