Facilitating Trade in a Secure Environment

Geneva, Nov 13-14

Security Management Standard for the Global Supply Chain

Peter.Mackenbach@dnv.comDNV Rotterdam

What is DNV?

Since 1864 a classification Society (One of the big 4)

A non-profit, self owned foundation To safeguard life, property and the

environment Through standard setting, verification and

certification One of the largest international management-

system c certification bodies World-wide present ~ 6000 employees

DNV and Security

Worked with IMO since the “Cole-incident” Instrumental in developing ISPS code

o Adopted December 2002o In force 30th June 2004

>150 of DNV’s best maritime auditors trained in security

Appointed RSO by flag-states for > 80% of our fleeto Certification of ships to the ISPS –Codeo Advisory and training to ports

……….. But what about the rest of the supply chain??

Current Initiatives

US (unilateral)o CT-PATo BASCo Container Security Initiative o 24hrs Advanced Manifest Regulation etc.

G7 WCOo Secure supply chaino Facilitate world trade

IMO WCOo Efficiency and security of multi-modal cargo

Security Taskforce

UN-Counter Terrorism Committee UNODC IAEA UNICRI OPCW OAS APEC EU Multinationals

WCO Security Taskforce

SelfSelfAssessmentAssessment

Reliable Reliable Business Syst.Business Syst.

AccountingAccountingStandardsStandards

ACIACIGuidelGuidel

RiskRiskManagementManagement

ExtendedExtendedIntelligenceIntelligence

High LevelHigh LevelGuidelinesGuidelines

High LevelHigh LevelGuidelinesGuidelines

ElectronicElectronicCommunic.Communic.

UCRUCRNrNr

WCOWCOData ModelData Model

Compliance Compliance AgreementsAgreements

Aim at Customs – Business Partnership

Including PhysicalSecurity

What was our Concern?

Trusted Trader = Bilateral Agreem. = InefficientISPS will be enforced as per end of June 2004This shifts Customs Security Focus to ExportsCustoms Revenue Focus remains on ImportsSufficient Capacity?Liability of Ship Owners!!Disappearing Borders ▬►other Policing

OrganisationsSub-suppliers subject to Proliferated StandardsAnd Subjected to Multiple Assessments by Multi

Nationals

> 250 Mln. Boxes <2% inspected

What should be the Answer?

A Trusted Trader is a Secure Trader + + + + + +

Customs and Multi Nationals need to have Confidence in their Supply Chain Partners

Importing Customs need to have Confidence in Exporting Customs.

Confidence through Certification has proven to provide a Level Playing Field

Certification is a proven Legislative InstrumentCertification is a proven Commercial

InstrumentNo Certification when there is no Standard!!

How such Standard would fit in WCO’s work

SelfSelfAssessmentAssessment

Reliable Reliable Business Syst.Business Syst.

AccountingAccountingStandardsStandards

ACIACIGuidelGuidel

RiskRiskManagementManagement

ExtendedExtendedIntelligenceIntelligence

High LevelHigh LevelGuidelinesGuidelines

Industries Supply Chain Industries Supply Chain Security standardSecurity standard

ElectronicElectronicCommunic.Communic.

UCRUCRNrNr

WCOWCOData ModelData Model

Compliance Compliance AgreementsAgreements

Why Customs Support?

A security Management Code needs support from Customs

It shall cover all existing guidelines and security requirementso US C-TPATo US BASCo Swedish Stair-Seco Canadian CSAo WCO Framework Requirements

A certified secure supply chain shall get a “green lane” through customs

Customs shall perform spot-checks and focus on non-trusted traders

Why Industry Support?

Increasing number of large industrial players develop(ed) their own “standard”o To reduce direct losseso To protect their reputationo To select their suppliers

Increasingly security threats need not to pass customso Increasing of trade unions (EU, APEC,

GOST??)o After implementation of ISPS terrorist will

“purchase” in the region they target

A Draft Standard Developed by DNV in consultation with SE and NL

Customs and after discussions with UN-ECE A generic security management standard For closed cargo transportation units. Only four basic processes in the supply chain

o Loading (stuffing, consolidating, sealing)o Storage of cargo / closed CTU’so Transport by

Road Rail Inland Waterways

o Processing of information Based on ISO 9000 series (multiple management systems)

Includes also theft and damage of cargo as security risks

ISO Management SystemFunctional RequirementsQualitySecurity

o Therefore “easy” to implement by industry

“Connected” to the ISPS Code

One supply chain! 3 security levels:

o L1 Normal mode of operation (lowest hurdle for trade)o L2 Increased security due to general terrorist threato L3 High Security due to specific and targeted terrorist

threat

Basic requirements (industry to find own solutions) for:o Procedural securityo Human Resources Securityo Physical Securityo Access Controls

Non-prescriptive i.e. operators shall analyse own risk.

What’s next?

Draft Standard has gone through 1st preliminary hearing

Draft was discussed at last ITWPG-TBG 15 meeting A Team of Specialists needs to be established with

relevant Regulators and Industry Representatives Assure that the Standard covers Industries and

Customs Needs Assure that the Standard enhances Trade

Facilitation Assure that the standard is open to all and owned

by no one Test through Pilots As fast as possible an ISO-standard

What remains to be done?

An Accreditation Standard to create a level playing field for certification bodies (Customs and Independent Third Parties)

An Accreditation Body that continuously monitors the quality of Certification Bodieso Not National but Multinationalo A new task for WCO?o Or a new to establish body?

Certification to ISO Standards(a selection in random order) Creates transparency in communications Underpins trust and confidence between

partners in the supply chain Facilitates mutual acceptance of “secure

traders” Creates one world wide, level playing field

for all actors in the supply chain Avoids multiple assessments Provides a clear and concise reference in

contractual agreements Can be used as a risk-assessment tool by

authorities and industry Is a tool to select suppliers/sub-

contractors