- 1. Assurance of Security in Maritime Supply Chains: Conceptual Issues of Vulnerability and Crisis Management Dr Paul Barnes & Mr Richard Oloruntoba School of International Business Queensland University of Technology, Brisbane, Australia
2. Overview of Presentation
- Aspects of Maritime Security - Old & New
- Supply Chain Threats - Economic Impacts
- A Conceptual Framework Systemic & Organisational Vulnerability
- Options for Crisis Management & Vulnerability reduction
- Issues for further Research and Inquiry
- In October 2001, authorities in the southern Italian port of Gioia Tauro discovered an unusually well-equipped and neatly dressed stowaway locked inside a shipping container.
- Italian police named the stowaway as Rizik Amid Farid, 43, and said he was born in Egypt but carried a Canadian passport.
- He was found to be carrying:
- several cameras, batteries,
- airport security passes and,
- an airline mechanics certificate valid for four major American airports.
4. What are the Challenges ?
- Approx. 90% of world trade moves in shipping containers
- -Any reduction of throughput is likely to have a significant impact on regional and national economies.
- Global business enterprise, and trading systems in particular, are vulnerable to terrorist incidents
- -Perturbation of maritime supply chains will impact on movements of material across large sections of the network.
- The asymmetry of approach in modern terrorism can make use of systems of commerce
- -Maritime trade as a vector for terrorism.
Security in Maritime Trading Systems 5. The Management of Crises(including prevention) is critical
- Crises have become Normal : o ften suddenly emergent
- With major consequences across many sectors
Further issues of Importance 6. Why does do these issues matter?
- Could the incidents have been prevented or deflected?
- Could their consequences have been better mitigated?
- Could they have beenanticipated?
- Attacking the ship to provokehuman casualties.
- Using the cover of seafarer identities to
- insert terrorist operatives.
- Using cargo to smuggle people and/or weapons.
- Using cargo to transport conventional,
- nuclear, chemical or biological
- Using the vessel as a weapon
- Using the vessel to launch an attack.
- Sinking the vessel to disruptinfrastructure
- Using revenue from shipping to fundterrorist activities.
- Using ships to launder illicit fundsfor terrorist organisations.
- Loss of life and damage to property.
- Disruption to trade flows.
- Additional cost of transport dueto additional security measures
External Impacts Maritime Security-Issues of Complexity 8. Estimated ISPS Code Costings Maritime Security
- Maritime carrier companies
- Initial Cost (million USD)$1170.6
- Yearly Costs (million USD)$725.6
- Initial Cost (million USD)$757.4
- Yearly Costs (million USD)$4.3
- Initial Cost (million USD)$55.8
- Yearly Costs (million USD)$1.6
- Participants are expected to:
- Establish security criteria to identify high-risk containers.
- Pre-screen those containers prior to arrival at US ports
- - Involving the deployment of American Customs staff in foreign ports.
- Develop and use of ICT enabled and secure containers
Maritime SecurityContainer Security Initiative 10.
- Participants are expected to:
- Conducta comprehensive self-assessment of supply chain security using the C-TPAT security guidelinesjointly developed by U.S. Customs and the trade community.
- The guidelines encompass:
- Procedural Security ,Physical Security ,
- Personnel Security ,Education and Training ,
- Access Controls ,Manifest Procedures , and
Maritime SecurityCustoms-Trade Partnership Against Terrorism 11. Buyer Trans Security Initiatives across Supply Chains Maritime Trans Producer Composition Decomposition Customs (Port) Customs (Port) ISPS CSI C-TPAT 12.
- An industrial dispute (late 2002) impacting 29 US West Coast ports involved > 200 ships.
- A total of 300,000 containers remained unloaded and rail and other inter-modal shipments were delayed across large sections of the transport network.
- Resulting in filled warehouses, freezers and grain elevators on both sides of the Pacific Ocean, costly mid-ocean diversions of maritime traffic to other ports and businesses, laid-off workers and/or reduced production.
- Estimated loss from this disruption on Hong Kong, Malaysia and Singapore alone was estimated to be as high as 1.1 % of nominal GDP.
Supply Chain Impacts Reduced Continuity 13.
- Up to 152,508 jobs are in some way related to the Seaway;
- 192 million tonnes of cargo moving on the US side of the great lakes seaway system in the previous calendar year (2000);
- USD$1.3 billion of purchases were made by firms providing transportation services and cargo handling services in the great lakes region (supporting approx. 26,757indirect j obs)
SCI Regional Economies A 2001 EIS covering the St. Lawrence Seaway and related waterways, ports and their inter-modal connections, vessels, vehicles and system users demonstrated the importance of an efficient maritime trading system on regional competitiveness. 14.
- USD$3.4 billion of business revenues generated for firms providing transportation and cargo handling services - on the U.S. side of the great lakes seaway system (excluding the value of the commodities moved);
- The generation of USD$1.3 billion in federal, state and local tax revenue (2000);
- USD$1.3 billion spent on purchases for a range of service-related deliverables (i.e. diesel fuel, utilities, maintenance and repair services) by firms providing the cargo handling and transportation services.
SCT- Economic Impacts-St. Lawrence Seaway 15. A systems approach to understanding incident causation examines relationships between all aspects of events and provides a means to look more deeply at why the events occurred by focusing on theinteractions among system components .Such an approach takes a broader view of what went wrong with the systems operation or organisation thus contributing to an incident. The emphasis differs to that of industrial/occupational safety models (unsafe acts or conditions) and reliability engineering emphasising failure events and the direct relationships among these events. A FrameworkSystemic & Organisational Vulnerability 16.
- Crisis Proneorganisations
- Cultural beliefs about invulnerability
- Non-existent or ineffective internal control mechanisms
- Senior managers not trained in decision making under crisis situations
- Contingency planning inadequate or non-existent
- Accidents in highly complex systems
- OftenWarning signsexisted
Empirical Findings Systemic & Organisational Vulnerability 17. Smart C. & Vertinsky, I. (1977)
- Rigidity in thinking - Restricted expectation about contingencies and their consequences- Inflexibility in considering alternative options & choices for mitigation
- Lack of Decision Readiness Key decision makers not practiced in emergency decision making
- Information Distortion Attenuation and filtering of information to key decision makers
Systemic & Organisational Vulnerability Application of the Concept Organisational Complexity 18. Network Complexity The Globalised Economy
- Transport SystemsRoad, Rail, Air, Maritime
- System of SystemsSupply Chains
Systemic & Organisational Vulnerability 19. Decision making in Crises( Assumptions) They will be impacted by the presence of: - Uncertainty / Ignorance - High Decision Stakes - Extreme Systems Compl