ECONOMIC GROWTH, THE SECURITY IMPLICATIONS

1. ECONOMIC GROWTH, THE SECURITY IMPLICATIONS Anton Edmunds Executive Director & CEO Caribbean Central American Action Washington, DC 12th Annual AmCham T&T HSSE Conference September 15 -18 2008 Port of Spain, Trinidad

2. THE REGION: A CLOSED LOOP

3. THE CARIBBEAN & MARITIME TRADE • With its geographic proximity, the region should hold an inherent competitive advantage in the speed of delivery of goods; • Despite trade facilitation setbacks, the region has become a recognized major player in terms of water-borne traffic; • The Caribbean is a major transshipment point for goods from South America, Asia and elsewhere to the United States. There are over 12,000,000 TEU’s that are off-loaded and transited through the Caribbean yearly; • Trade with the US is significant with 60 % of exports and 37% of imports traded with that country; • Opportunities abound for container switching, double/triple handling and diversion through a number of ports in the region, particularly the smaller ports; • Region sees well over 3,000,000 cruise passengers a year.

4. SECURITY REALITIES • Strategic and economic ties that have developed over time and increased volume of trade make the Caribbean a soft target for illegal activities originating from within and outside the region; • A result of UN and US mandates on maritime security, notably the ISPS and MTSA codes, all countries in the region were prompted by 2004 to conduct assessments of their security and create plans to mitigate against threats; • CARICOM leaders at the 15th inter-sessional meeting of Heads of Government in St. Kitts and Nevis on March 2004, acknowledged the need of the region to meet the requirements of ISPS and MTSA. Committed their political will to the issue; • All Caribbean ports met initial compliance but many of the smaller economies in the region lack the resources necessary to sustain the level of security necessary; • Some key ports that have embarked on significant security initiatives include Jamaica, Freeport in The Bahamas, Point Lisas in Trinidad and Caucedo in the Dominican Republic; • They are large port locations/major transshipment hubs.

5. CURRENT PROGRAMS US sponsored programs that exist but are unfortunately not regional in scope, leaving most countries out of the loop. C-TPAT • Calls upon importing businesses and service providers to establish policies to enhance their own security practices and those of business partners involved in the supply chain. • Once policies are in effect, imports by these businesses would be given expedited processing at ports of entry. Validated members would have fewer shipments stopped, but this has been offset by an increased overall inspection rate. • Jury still out on value to industry, contrary to advocates that sell this as the answer to the region Americas Counter Smuggling Initiative • Priority undertaking by Customs and Border Protection (CBP) under C-TPAT that is designed to counter the smuggling of drugs and terror in commercial cargo. • Since February 1998, CBP officers have been detailed overseas to assist exporters, carriers, manufacturers and other businesses. Working with BASC companies in Colombia, Costa Rica, Ecuador, Mexico, Panama, Peru, Venezuela, Jamaica and the Dominican Republic.

6. CURRENT PROGRAMS (cont,) The Megaports Initiative • In cooperation with foreign governments, Megaports representatives determine the most effective placement of radiation equipment for each seaport. Currently operational in region in Bahamas. • While gate traffic can easily be scanned, transshipped containers present significant challenges. Difficult to track the route from a shipment’s origin to its final destination. There is often not just one shipping line involved, but a shipment will take numerous routes with multiple manifests; goods can be re-manifested at ports en route and there may be more than one point of origin. Container Screening Initiative: • CSI proposes a security regime to ensure all containers that pose a potential risk for terrorism are identified and inspected at foreign ports before they are placed on vessels destined for the United Sates. CBP has stationed multidisciplinary teams to work together with our host foreign government counterparts. CSI currently agreed to 49 customs authorities, including: Buenos Aires, Argentina; Puerto Cortes, Honduras; Caucedo, Dominican Republic; Kingston, Jamaica; Freeport, The Bahamas. • CSI may be unrealistic for all countries especially small countries in the region. Other Programs – OAS, CCAA • Quite country specific i.e. Barbados, OECS, Haiti.

7. NEW CHALLENGES • With the recent passage of HR-1, the scan all legislation; there is concern that the region will be further split into the “haves and have-nots”. • Those who can trade internationally and those who cannot.

8. SPECIFIC TO TRINIDAD & TOBAGO • Trinidad and Tobago has experienced significant growth in the last few years; • Includes the export of energy and related products to the US and the world; • Increased trade with the rest of the region, notably the smaller eastern Caribbean economies; • You have also become a significant transshipment hub; • All what makes you an economic engine of the region, makes you part of the security problem or a key in developing regional solutions; • Regional because for island nations there is no way to distance yourselves from your neighbors;

9. ISSUES & SOLUTIONS • Missing however is a shared understanding that economic growth is in jeopardy if we do not continue to fulfill ever changing U.S. and international security requirements; • We will need to support a minimum security standard in the Caribbean, possibly based on ISPS and MTSA requirements; The Caribbean and Trinidad & Tobago must champion an initiative that: • Creates regional standards based on minimum requirements that can be implemented by all ports; • Assesses true compliance and maintenance of security programs including empty container screening programs; • Implement or request minimum requirements in fencing, lighting, access control regulations/methodology; • Set standards in training to insure that all service providers deliver consistent training. Currently a wide variety of vendors sell programs.

10. PUBLIC/PRIVATE SECTOR PARTNERSHIPS • Tendency by those in security to believe that success is totally up to them; • Private sector sometimes less than aware of the serious international ramifications of their country’s non compliance until too late; Success Story – Haiti • 8 ports open to international trade, with trading partners concerned with lack of standards across the island; • Trade flows moved from facility to facility, creating internal cost issues related to transporting goods over land; • Private sector shut out of the dialogue, forced to react to changes versus plan for them, resulting in increased inefficiency, costs and unsecure trade

11. PUBLIC/PRIVATE SECTOR PARTNERSHIPS, con’t Solution: creation of a public-private sector alliance. • Address strained relationship between the groups; • Began process of not only dialogue but training for key private sector leadership; • Critical was education on the impact of non-compliance, weak border control on trade and what this means to employment, profits and continued access to major markets; • Impact on the broader economy; • Result: the private sector taking the lead in advocating for the legislative changes that was needed, pressing for the ratification of international agreements that the government had signed and assisting in border control efforts.

12. THE CHALLENGE • For Trinidad & Tobago is vessels coming and going from Europe, Asia, the United States, Latin America and your smaller neighbors; • Many whom may struggle with their own security compliance, the responsibility will be yours to police the regional trading area;   • Realize that the security threats to the region directly impact the economic well being of your country and trading partners; • Need to see port and customs security as the “front door” to the security of the supply chain; • Need for reduction in the institutional barriers that impact the border security issues within and throughout the region.

13. KEY STEPS • A critical assessment of your compliance and maintenance of security programs that enable yours and other Caribbean ports to achieve and maintain compliance; • This as part of a national plan; • Develop a baseline understanding of port security conditions within the countries of CARICOM; • This part of a regional plan. COLLECTIVE RESPONSIBILITY & APPROACH