ISPS A Year On

A pilot programme in the US tracks containers along the chain Intertek Testing Services fixed container scanning facility in Freetown, Sierra Leone
A pilot programme in the US tracks containers along the chain Intertek Testing Services fixed container scanning facility in Freetown, Sierra Leone
Industry Database

There is little doubt that for many in the ports and terminals industry the build-up to and implementation of the ISPS Code in July 2004 came as something of a shock to the system. TT Club believes the industry deserves a pat on the back.

Many port operators, while endeavouring to respect boundary integrity in relation to theft and smuggling from their premises, had become accustomed to the operation of a more or less 'open port' concept. Whatever the origins of or motivation for the 'open port', such thinking was clearly incompatible with the demands of the ISPS Code. The IMO's adoption of the Code in December 2002 and its timetabled implementation for July 2004 were followed, in general, by a sensible realisation that systems and practices had to change. There also came the realisation that substantial amounts of effort and money would need to be expended to effect that change.

Many doomsayers predicted that varying degrees of readiness for the ISPS Code would produce a cataclysmic interruption of world trade immediately after July 2004. In reality, as with the Y2K computer bug four years earlier, the breakdown and subsequent chaos never happened. At the TT Club we believe that port and terminal operators should be given credit for and take some pride in that fact.

So where does the industry stand a year later, what have been the consequences of the ISPS Code and what may the future hold?

While accepting that there are bound to be some dissenting voices, the tone of comment back to the Club is overwhelmingly positive. And indeed, from the perspective of the insurer, we believe the ISPS Code introduced a much-needed 'reality check' that has contributed significantly to improvements in the safe and secure operation of ports.

The introduction of the ISPS Code has, in the Club's opinion, been the catalyst that has focused minds on security in a sector that had not had to think too carefully about it in the past. Now, everyone knows the rules, and port and terminal security officers are getting the facilities and management support they need to implement effective measures.

We also see a much more integrated approach to security. The ISPS Code has turned out to be a pebble cast into the supply chain pond - the ripples have spread up and down the supply chain beyond the sectors of ships and port facilities that the Code directly affects.

CLEAR BENEFITS IN FOUR AREAS Concentrating on the sector served by this publication, the ports industry, the Club believes that the ISPS Code has yielded clear benefits in four distinct areas.

First, there is the concern that primarily motivated the Code: antiterrorism. Although it is doubtful that any potential target can ever totally protect itself against the threat of a truly determined terrorist assault - one has only to observe that it was possible to infiltrate and explode a bomb in a port in such a security-conscious country as Israel - that does not mean that we may as well make it easy for terrorists by tolerating lax security.

But there are other, less intended benefits that have been delivered by the Code. Personal safety is one. Even though many ports have, over the years, realised the necessity to segregate people from equipment, they remain dangerous places even for those accustomed to their hazards. A bi-product of the Code has been a dramatic reduction in the number of people, primarily 'visitors', allowed access to port facilities, and this will surely improve ports' liability risks.

Though not cured, cargo theft from ports is falling. While no official statistics are available, TT Club's experience since July 2004 is that fewer claims are being received. As an example, we know of at least one UK port that has suffered no incidents of cargo theft since the introduction of the Code.

We are also observing that the Code is achieving success in reducing the number of stowaway attempts. Here, not only do wouldbe migrants now have to overcome much tighter port security but also access to ships themselves has been restricted by the Code.

Much of the criticism of the ISPS Code has been levelled at the increased costs incurred in compliance. It is true that there has been a step-change in the levels of investment in security but the Club would contend that this has not proved to be as severe a burden for the ports as many in the industry had feared.

The Club's admittedly largely anecdotal evidence, partly gleaned at the recent ESPO conference in Malta, suggests that the great majority of ports have been able to pass on most if not all the extra costs.

As to the future, it would be an error to believe that, having achieved ISPS compliance, ports can now lessen their focus on security issues. The Club views the initial steps made under the Code very much as a 'work in progress' and we expect a number of new initiatives to emerge from the considerable international activity that is taking place behind the scenes.

For example, both the US and the EU are pressing ahead with further requirements for supply chain security, while international bodies as diverse as ISO, ILO and the World Customs Organisation are all working on defining standards or codes of practice intended to improve the security regime.

It will surely be interesting, at this time in 2006, to review the regulatory landscape again. The ports industry has made immense strides now, a year after the implementation of the ISPS Code. We believe the challenges the industry faces in maintaining security will continue to make demands on all involved, but equally we believe that ports have shown themselves to be more than equal to those challenges.


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