July 23, 2003	Wednesday	Jumadi-ul-Awwal 22, 1424

PARIS, July 22: The Organization for Economic Cooperation and Development (OECD) published here on Tuesday its new report on the subject of maritime travel which claims that “the price of increased maritime security is much lower than the potential cost of a major terror attack.”

The report effectively makes the case for greater US control over international maritime security and seems linked to news reports published early last month according to which the Bush administration had decided to place teams of American inspectors at major seaports around the world, where already they have stationed themselves in such French ports as Le Havre, but also in Muslim nations and other smaller, strategically located foreign ports to prevent terrorists from using cargo containers to smuggle chemical, biological or nuclear weapons into the United States, this according to a New York Times quoting “senior administration officials.”

According to that story, the US inspectors “would be provided with radiation monitors, chemical detectors and other equipment to inspect ‘high risk’ metal cargo containers before they are placed on ships bound for the United States.”

With regard to the cost of undertaking the security measures proposed in the OECD study, they are certainly not symbolic and will mean a major investment by ship operators. That at least is the opinion of Danny Scorpecci of the OECD Transport Division, who notes that “the new maritime security measures to counter the threat of terrorist attacks will require an initial investment by ship operators of at least $1.3 billion, and will increase annual operating costs by $730 million thereafter,” according to estimates in the new OECD report.

However, he notes, the added spending is substantially less than the potential cost of a major terror attack, states the report on “Security in Maritime Transport: Risk Assessment and Economic Impact.” Moreover, some of the additional cost may be offset by savings from increased efficiency.

The world’s maritime transport system, comprising more than 46,000 vessels and nearly 4,000 ports, is open and flexible — attributes that make it vulnerable to terrorist attacks or misuse, concludes the report. It can be used to conceal weapons, or provide logistical support for terror organizations. Because ship ownership is easily concealed, the system can also serve as a source of funds for terrorists.

Cargo shipping is also crucial to global commerce. More than 80 per cent of world trade is transported by sea.

A large, well-coordinated attack could shut down the entire system, as governments implement emergency security measures, says the report. The steps could be drastic, such as the complete closure of ports, or inefficient, such as duplicative and lengthy cargo checks. The cost of such an attack on the US could run as high as $58 billion, according to a simulation by the Conference Board and consultant Booz Allen Hamilton Inc.

Against this backdrop, governments have stepped up security in the maritime transport network, for example by requiring ship and port security plans, as well as alarm systems for most vessels. Most of the measures become effective in July 2004. Additionally, the United States has also developed its own set of maritime security measures, ranging from advance notification of cargo contents for US-bound ships, to pre-screening of high risk cargoes in the port where they are loaded.

To comply with the new rules, ship operators will need to install security equipment and add staff at an estimated cost of at least $1.3 billion. The new equipment and manpower will also increase operating costs by an estimated $730 million every year. Seaports will need to upgrade security as well, however, accurately projecting the cost is more difficult.

These costs may be partly offset by greater efficiency, says the report, as new security measures could have positive side-effects, such as reducing theft, shortening delays and lowering insurance costs.