[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
ASSESSING THE RESILIENCY OF THE NATION'S SUPPLY CHAIN
=======================================================================
HEARING
before the
SUBCOMMITTEE ON BORDER, MARITIME,
AND GLOBAL COUNTERTERRORISM
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 7, 2008
__________
Serial No. 110-111
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
__________
U.S. GOVERNMENT PRINTING OFFICE
42-925 PDF WASHINGTON DC: 2008
---------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�0900012008
COMMITTEE ON HOMELAND SECURITY
Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California Peter T. King, New York
Edward J. Markey, Massachusetts Lamar Smith, Texas
Norman D. Dicks, Washington Christopher Shays, Connecticut
Jane Harman, California Mark E. Souder, Indiana
Peter A. DeFazio, Oregon Tom Davis, Virginia
Nita M. Lowey, New York Daniel E. Lungren, California
Eleanor Holmes Norton, District of Mike Rogers, Alabama
Columbia David G. Reichert, Washington
Zoe Lofgren, California Michael T. McCaul, Texas
Sheila Jackson Lee, Texas Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin Ginny Brown-Waite, Florida
Islands Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina David Davis, Tennessee
James R. Langevin, Rhode Island Paul C. Broun, Georgia
Henry Cuellar, Texas Candice S. Miller, Michigan
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey
Jessica Herrera-Flanigan, Staff Director & General Counsel
Rosaline Cohen, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
______
SUBCOMMITTEE ON BORDER, MARITIME, AND GLOBAL COUNTERTERRORISM
LORETTA SANCHEZ, California, Chairwoman
Jane Harman, California Mark E. Souder, Indiana
Zoe Lofgren, California David G. Reichert, Washington
Sheila Jackson Lee, Texas Michael T. McCaul, Texas
James R. Langevin, Rhode Island Gus M. Bilirakis, Florida
Henry Cuellar, Texas Mike Rogers, Alabama
Al Green, Texas Peter T. King, New York (Ex
Bennie G. Thompson, Mississippi (Ex Officio)
Officio)
Alison Rosso, Director
Denise Krepp, Counsel
Carla Zamudio-Dolan, Clerk
Mandy Bowers, Minority Senior Professional Staff Member
(II)
C O N T E N T S
----------
Page
Statements
The Honorable Loretta Sanchez, a Representative in Congress From
the State of California, and Chairwoman, Subcommittee on
Border, Maritime, and Global Counterterrorism.................. 1
The Honorable Mark E. Souder, a Representative in Congress From
the State of Indiana, and Ranking Member, Subcommittee on
Border, Maritime, and Global Counterterrorism:
Oral Statement................................................. 2
Prepared Statement............................................. 3
Witnesses
Mr. Todd Owen, Executive Director, Cargo and Conveyance Security
Office, Office of Field Operations, U.S. Customs and Border
Protection, Department of Homeland Security:
Oral Statement................................................. 6
Prepared Statement............................................. 8
Rear Admiral James Watson, Director, Prevention Policy for Marine
Safety, Security and Stewardship, U.S. Coast Guard, Department
of Homeland Security:
Oral Statement................................................. 10
Prepared Statement............................................. 12
Mr. Robert W. Kelly, Senior Advisor, The Reform Institute:
Oral Statement................................................. 15
Prepared Statement............................................. 17
Mr. Paul Zimmermann, Director of Operations, Board of
Commissioners, The Port of New Orleans:
Oral Statement................................................. 20
Prepared Statement............................................. 21
For the Record
The American Association of Port Authorities..................... 5
Appendix
Questions From Honorable Loretta Sanchez......................... 39
ASSESSING THE RESILIENCY OF THE NATION'S SUPPLY CHAIN
----------
Wednesday, May 7, 2008
U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Border, Maritime, and Global
Counterterrorism,
Washington, DC.
The subcommittee met, pursuant to call, at 3:19 p.m., in
Room 311, Cannon House Office Building, Hon. Loretta Sanchez
[chairwoman of the subcommittee] presiding.
Present: Representatives Sanchez, Cuellar, and Souder.
Ms. Sanchez. The Subcommittee on Border, Maritime and
Global Counterterrorism will come to order. The committee is
meeting today to receive testimony on ``Assessing the
Resiliency of the Nation's Supply Chain.''
I want to thank our witnesses for staying the extra hour
and 15 minutes and beyond. Just even to begin this, I am so
sorry the other side is playing games, and we are having a good
time running back and forth for votes. So I am told that we
have about an hour if no procedural votes come up. So we will
at least get your testimony in and begin to answer questions,
and I think that that will be good.
So thank you again for being before us. I am looking
forward to receiving your testimony and, of course, to asking
you questions. Today we will be discussing the vulnerabilities
of our Nation's supply chain, the consequences that could be
caused by an incident affecting that supply chain, and how we
can prepare to effectively and efficiently restore the supply
chain after any type of incident.
Ensuring that we have a comprehensive plan that would
assist in recovering and restoring the supply chain after any
attack or disruption is a primary concern to many of us on this
subcommittee. A disruption would bring a halt to goods flows.
We would have to find new ways to move goods in our country. Of
course, it could have an incredible impact on our economy.
I remember back in 2002, I think it was in the summer,
living in southern California, seeing the 10-day shutdown of
the ports up there in LA/Long Beach and seeing just transport
ships all the way down to San Diego waiting to try to unload.
Of course, it cost us between $1 billion and $2 billion a day.
Then to restart, once we opened up the port again, took us, I
think somebody told me, almost 6 months to get back on schedule
as we needed to.
So that is a lot of economic consequences, not only to
someplace like southern California, but that reached all the
way into so many other places, like car manufacturing in
Alabama where they have just-in-time and receive pieces they
need there.
So we need to prepare for that. We want to be prepared to
minimize the potential negative effects. I am aware that the
Department has compiled numerous documents on broad initiatives
and goals, but I am concerned that the level of detail
necessary to establish inherent resiliency has been overlooked.
In order to be successful, recovery plans must be fully fleshed
out, communicated to all stakeholders, practiced frequently,
and funded.
The resiliency effort must be open to input and to feedback
from the private sector, because, of course, as we learned
then, they really are the ones who are moving so much of those
goods, and they need to be in the loop. In addition,
communication with the private sector. We also encourage the
Department to continue communicating regularly with this
subcommittee and with the full committee.
We are very interested in receiving the overdue report
evaluating the capabilities of the SAFE Port Act pilot project
that tested the large-scale radiation scanning of U.S.-bound
containers. Any indication of when we would receive that report
would be greatly appreciated.
Again, I thank the witnesses.
I yield to my ranking member from Indiana, Mr. Souder, for
his opening statement.
Mr. Souder. Thank you, Madam Chair.
The ability of our Nation's supply chain to quickly recover
from a terrorist attack or a natural disaster is critical to
both the national security and economic security of the United
States.
I have the largest manufacturing district in the country,
both percent and actual numbers of manufacturing workers.
Wherever we aren't making something, we are growing in between,
food stuff.
In Fort Wayne, for example, we make everything from
vehicles to orthopedic devices in Warsaw to military contract
things from SonaVoice to all of the aircraft control devices
from BAE for every single military aircraft.
After September 11, 2001, commercial trucks were severely
delayed; that is the GM pick-up plant, which is the largest in
the United States, is the bridge between Windsor and Detroit
due to security concerns. There is about a hundred crossings
per pick-up. This led to a loss of revenue and potentially
would have lost the jobs in my district if we don't keep these
things flowing.
We have time now to work out some of these issues to reduce
delays and facilitate rerouting of trade in the event of an
attack or disaster. For example, in Tacoma, Washington, is the
main rail connection to the entire Midwest, and that port has
incredible complications in trying to figure out how we are
going to manage and do the security of those trains. There are
multiple points you could cut it there or anywhere before it
spreads that are critical to infrastructure.
Los Angeles/Long Beach is the biggest trucking center for
all these parts that are coming to the Midwest to keep all of
our plants going, and that could be done. At one point, in New
Orleans, the largest grain elevator in my district, 100 percent
of the soybeans were going to a harbor in New Orleans to ship
to Asia. That shifted a little bit now because it goes
depending on the trading, but the whole Mississippi River
valley funnels into New Orleans. You can do multiple different
types of choke points, whether it is rail or whether it is
truck or whether it is on the water, inland, that are critical
to keeping the industrial structure moving in the United
States.
To this end, there are three key issues. No. 1 is what
communication protocols exist between DHS and the private
sector in the event of an incident? No. 2, how do training and
exercise programs cover resumption-of-trade issues, and how is
the private sector involved in that? No. 3, what are the roles
and responsibilities for making decisions involving resumption
of trade in DHS and with other levels of government?
Madam Chair, I would like to thank you for holding this
hearing. I believe this is a really important issue. This week,
DHS is operating a Government-wide exercise to test crisis
response capabilities and continuity of operations.
I would like to call to everyone's attention an article
from The Washington Post this morning which provides some
details on the exercise, including that it involves terrorists
sabotaging a tanker vessel on the West Coast. The Coast Guard
and CBP are clearly involved in the planning and preparations
for this exercise, and I hope that it will include a
resumption-of-trade aspect.
I ask unanimous consent that the article from The
Washington Post be inserted into the hearing record.
I appreciate the willingness of Mr. Owen and Admiral Watson
to come here today. It is unfortunate that we couldn't delay
this hearing 1 day or possibly till next week to allow for
these individuals to take part in this exercise and then
include the lessons learned, especially as they relate to
supply-chain resiliency, in the testimony before the committee.
Again, I thank the witnesses for being here, your patience
with our floor procedures.
I yield back the rest of my time and ask for my full
statement and the article to be inserted in the record.
Ms. Sanchez. The gentleman has asked for his full statement
and the article to be inserted.
[The statement of Hon. Souders and the information follow:]
Prepared Statement of the Hon. Mark Souder
May 7, 2008
Thank you Madam Chair. The ability of the Nation's supply chain to
quickly recover from a terrorist attack or natural disaster is critical
to both the national security and economic security of the United
States.
I have the largest manufacturing district in the country. In Fort
Wayne, for example, we make everything from vehicles to orthopedic
devices to military supplies. After September 11, 2001, commercial
trucks were severely delayed at the bridge between Windsor and Detroit
due to security concerns; this led to a loss of revenue and jobs at the
plants in my district. We have time now to work out some of these
issues to reduce delays and facilitate rerouting of trade in the event
of an attack or disaster.
A great deal has been done since then to enhance security in our
ports and throughout the supply chain. There is no doubt that there is
more to be done on the prevention side to implement and enhance on-
going initiatives, as well as a continual vigilance to ensure that the
security measures we have in place are addressing current threats and
trends.
One area where more work is clearly needed is on resiliency and
resumption of trade. While considering the SAFE Port Act of 2006,
Congress recognized that more needed to be done on resiliency planning
and included several legislative mandates:
Requiring Federal Maritime Security Coordinators to identify
salvage equipment capable of restoring trade capacity and
clearing waterways as quickly as possible after an incident;
Requiring the Coast Guard to establish interagency
operational centers to improve communication and coordination
within ports; and
Requiring DHS to develop a system to collect and share risk
information with the private sector related to the security of
the supply chain.
Two other sections required strategic plans for securing the supply
chain and protocols for resuming trade. Both of these were submitted on
July 13, 2007. I would like to express appreciation for the timeliness
of the delivery to Congress; I know that a lot of man hours went into
these documents.
I am looking forward to receiving an update on the implementation
of those specific sections of law. In addition, there are three key
issues that I hope to discuss in today's hearing:
1. What communication protocols exist between DHS and the private
sector in the event of an incident?
2. How do training and exercises programs cover resumption of trade
issues and how is the private sector involved?
3. What are the roles and responsibilities for making decisions
involving resumption of trade within DHS and with other levels
of government?
Madam Chair, I would like to thank you for holding this hearing; I
believe that this is a really important issue. This week, DHS is
operating a governmentwide exercise to test crisis-response
capabilities and continuity of operations.
I would like to call to everyone's attention an article from the
Washington Post this morning which provides some details on the
exercise--including that it involves terrorists sabotaging a tanker
vessel on the west coast. The Coast Guard and CBP are clearly involved
in the planning and preparations for this exercise and I hope that it
will include a resumption of trade aspect. I ask unanimous consent that
the article from the Washington Post be inserted in the hearing record.
I appreciate the willingness of Mr. Owens and Admiral Watson to
come here today. It is unfortunate that we couldn't delay this hearing
1 day or possibly until next week to allow for these individuals to
take part in the exercise and then include the lessons learned,
especially as they relate to supply chain resiliency in their testimony
before the committee.
Again, I thank the witnesses for being here and I yield back my
time.
Appendix 1.--U.S. Tests Response To Set of Calamities
EXECUTIVE BRANCH ``RUNS'' GOVERNMENT FROM OUTSIDE D.C. AS MOCK CRISES
MOUNT
By Mary Beth Sheridan, Washington Post Staff Writer, Wednesday, May 7,
2008
Thousands of key Federal employees are being whisked from the
Washington area by helicopter and car for a 3-day test of their ability
to run the government from remote locations during a disaster.
The exodus, which began yesterday and will continue today, involves
the White House and other parts of the executive branch. Congress and
the judiciary are not part of the exercise, which is being overseen by
the Department of Homeland Security.
Since the late 1990's, every Federal agency has been required to
have a plan to quickly resume operations after a catastrophe. But the
response to the Sept. 11, 2001 terrorist attacks raised doubts about
many agencies' preparations.
This week's ``continuity of government'' drill is one of the
largest by the Federal Government since 9/11, officials said. It is
part of a national 8-day exercise in which officials are responding to
a cascade of nightmarish events. The drill started Thursday, with
terrorists sabotaging a tanker carrying poisonous gas in Washington
State.
Next, suspected nerve gas was accidentally released from a
government stockpile in Oregon. The disaster script also calls for a
devastating Category 4 hurricane to roar up the East Coast toward the
District, where officials will be getting word of a terrorist threat to
the capital.
Officials leaving the Washington area will work from temporary
offices in Virginia, West Virginia and Maryland for periods ranging
from a few hours to 2 days. Others will work from home.
Russ Knocke, a Homeland Security spokesman, said thousands of
employees will take part in the exercise. Plans call for a mandatory
evacuation of the Washington region before ``Hurricane Zoe'' strikes at
1 a.m. Thursday.
Knocke would not say which senior officials are participating.
President Bush will not be working from a remote location, but other
White House officials will, said Scott Stanzel, deputy White House
press secretary.
``I'm not going to be able to detail who those officials are,'' he
said.
The roles of Cabinet secretaries in remote locations will be played
by their underlings in some cases.
The out-of-town sites used in the exercise will include Mount
Weather, a cold war-era bunker on the border of Loudoun and Clarke
counties that has been used in recent years as an operations center by
the Federal Emergency Management Agency, officials said.
Critics have derided FEMA in recent years for including functions
such as patent processing as an ``essential'' service to be restored
after a catastrophe.
But Paul C. Light, a professor of government at New York
University's Wagner Graduate School of Public Service, applauded
officials for organizing the drill.
``At least they're doing exercises,'' he said. ``It's not enough to
design plans; you have to practice.''
FEMA is running the hurricane part of the exercise. Washington,
Maryland and Virginia officials ``are involved but not playing full-
scale,'' said Chris Geldart, who heads Homeland Security's office for
the National Capital Region.
Most residents won't notice anything unusual during the hurricane
exercise, because much of it is ``tabletop''--involving discussions of
plans rather than deployments of first responders. But hotels a few
hours outside Washington may be unusually full of visitors who are
clearly not tourists.
Ms. Sanchez. Do we have anything else to be inserted at
this point into the record?
I will ask that the memo that was sent to us from the AAPA
be inserted. Without objection, it is so.
[The information follows:]
American Association of Port Authorities
SUPPLY CHAIN SECURITY
A Call for Minimum Standards
While the Department of Homeland Security has attempted to address
supply chain security under the various programs that have been
promulgated by Customs and Border Protection, the reality is that no
internationally agreed upon minimum supply chain security standards
have been published. Without this global baseline, and a method of
either enforcement or rewards, supply chain security is largely a
voluntary notion that his little chance of truly enhancing security.
Through discussions with supply chain participants, and as
demonstrated by real-world security-related demonstration projects, it
has been determined that a framework for minimum mandatory supply chain
security standards that is recognized and accepted worldwide is
necessary in order to begin the complex process of ensuring that goods
moving through the supply chain are not compromised. This framework
would cover five major areas:
1. Verification that a container is free of false compartments;
2. Verification that reasonable care and due diligence have been
used in packing, securing, and manifesting goods;
3. Ensuring that at any point along the route that the cargo has
not been tampered with;
4. Ensuring that the integrity of the information and information
systems associated with the movement of cargo has not been
compromised;
5. Ensuring that accurate data on the shipment is provided to
Customs well in advance of the ship's arrival in the United
States.
To date, the Federal Government's response to supply chain security
has been fragmented among several agencies (e.g., U.S. Coast Guard,
Customs and Border Protection, Domestic Nuclear Detection Office,
Transportation Security Administration, Federal Emergency Management
Administration, U.S. Department of Transportation, etc.), and many of
the programs currently in place feature voluntary participation, such
as the Customs-Trade Partnership Against Terrorism (C-TPAT), or are
internal research efforts looking at applying technology solutions to
mitigate the risks.
Although the benefits of participation in these voluntary programs
have included reduced or priority inspections (the ``Green Lane''
concept), these benefits have not been consistently applied throughout
the trade community. Therefore, there is reduced incentive for supply
chain owners to make investments in complying with voluntary programs
that may provide little return on investment.
Minimum security standards would address several issues that have
already been identified, such as: lack of a standard Risk Assessment
Methodology; disparity among countries on how security devices that may
be installed on ocean containers are treated by customs; the lack of a
global, dedicated frequency band for security devices that use radio
communication as part of their functionality; the lack of provisions
for security in current international standards for container
manufacture; the lack of a standardized, pre-shipment inspection
checklist or other method to ensure that containers are in good repair,
and are the proper dimensions; the lack of an international standard
for minimum identification verification or background checks of
employees who have access to cargo; agreement on the minimum data
elements that should be included in cargo transactions; lack of
standard operating procedures and processes for the encryption and
exchange of data and information as cargo moves through the supply
chain; and the lack of minimum standards for conducting and documenting
the inland dray portion of the supply chain.
Without internationally recognized minimum and enforceable supply
chain security standards, there can be no firm foundation upon which to
build the appropriate business processes, policies, procedures and
technologies that are economically and commercial viable to improve
supply chain security, including the development of acceptable
performance criteria for enforceable third party certification and
program auditing.
Ms. Sanchez. The Chair reminds other members of the
subcommittee that, under committee rules, opening statements
may be submitted for the record.
Now to the testimony. I welcome our first panel of
witnesses.
Our first witness, Mr. Todd Owen, is the executive director
of the Cargo and Conveyance Security Office in the Office of
Field Operations for the U.S. Customs and Border Protection.
Our second witness, Rear Admiral James Watson, is the
director of prevention policy for marine safety, security and
stewardship, U.S. Coast Guard.
Our third witness, Mr. Robert W. Kelly, is senior advisor
at The Reform Institute.
Our last witness, Mr. Paul Zimmermann, is the director of
operations at the Port of New Orleans.
Welcome, all. Without objection, we are going to put your
full statements to be inserted into the record.
I will now ask each witness to summarize his statement for
5 minutes, beginning with Mr. Owen.
STATEMENT OF TODD OWEN, EXECUTIVE DIRECTOR, CARGO AND
CONVEYANCE SECURITY OFFICE, OFFICE OF FIELD OPERATIONS, U.S.
CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY
Mr. Owen. Good afternoon, Chairwoman Sanchez, Ranking
Member Souder. It is an honor to have the opportunity to
testify before you today.
My testimony this afternoon will focus on U.S. Customs and
Border Protection's role in ensuring the continuity of
international trade in the event of an incident occurring in
the maritime environment.
I would be remiss if I did not begin by thanking the almost
50,000 CBP employees for their hard work, dedication and
professionalism they exhibit every day while protecting our
Nation. As America's front-line border agency, U.S. Customs and
Border Protection employees are highly trained professional
personnel, resources, expertise and law enforcement authorities
to meet our twin goals of improving security and facilitating
the flow of legitimate travel and trade.
CBP is responsible for preventing terrorists and terrorist
weapons from entering the United States, apprehending
individuals attempting to enter the United States illegally,
stemming the flow of illegal drugs and other contraband, and
protecting our agriculture and economic interests from harmful
pests and disease.
To this end, CBP has worked to refine a layered and risk-
based approach to enhance the security of goods and people
entering the United States. This layered approach to security
reduces our reliance on any single point or program, extends
our zone of security outward, and facilitates resiliency and
resumption of critical trade after an event of national
significance.
I am pleased to appear before the subcommittee today to
highlight some of the activities related to the above global
supply chain security, which we know we rely on so heavily, not
only for security, but the ability to recover quickly after
disruptive events.
The communication of accurate and timely information
between all stakeholders, whether Federal, State, local or
private sector, is a necessary precondition to facilitate the
quick recovery from unanticipated change or disruption. By
working to ensure that resiliency-building conditions are
deployed within the supply chain, CBP will thereby increase its
capacity to receive, process and act upon commercial and
security information quickly and efficiently, thus mitigating
threats with the least possible disruption to legitimate trade.
CBP is making every effort to work with our partners and
stakeholders to ensure quick and coordinated recovery in the
maritime transportation system. CBP and the U.S. Coast Guard
have developed joint protocols for the expeditious recovery of
trade. These protocols were recently signed by both the CBP
Commissioner and the Commandant of the U.S. Coast Guard, and
they also establish a critical communication link to industry
groups representing trade and carrier interests.
CBP has also developed a formal business-resumption
communication and coordination plan with Canada's border
services agency. These protocols provide for both CBP and CBSA
during instances where precise, accurate and timely
communication is essential. A similar communication
coordination plan with the Government of Mexico is being
finalized.
CBP recognizes that a critical part of post-incident
resumption is identifying methods for communicating reliable,
timely and factual information to the trade community. To this
end, CBP has created a Web-based mechanism, known as the
Unified Business Resumption Messaging, for communicating with
the trade community and has tested it during multiple exercises
with industry representatives. The content of these messages is
tailored to all modes of transportation; provides the trade
community with timely information concerning port operations so
that they may make informed business decisions in a post-
incident environment.
CBP is also becoming more involved in local, regional and
national incident response and recovery exercises. These
exercises are helping CBP personnel establish relationships
with responding agencies and to identify best practices for
multi-agency incident response.
While our efforts in a post-incident resumption of trade
have focused on the processes for interagency cooperation and
with sharing timely information with the trade community, we
recognize that it is impossible to predict every significant
event scenario or the details that will present themselves in
an actual event. Our response to an actual event will depend on
the facts we encounter, and each response will be tailored to
those circumstances.
The initiatives discussed today are only a portion of CBP's
efforts to secure our homeland, and we will continue to provide
our men and women on the front lines with the necessary tools
to help them gain effective control of our Nation's border.
Again, I would like to thank Chairwoman Sanchez and Ranking
Member Souder for the opportunity to present this testimony
today and for your continued support of DHS and CBP. Thank you.
[The statement of Mr. Owen follows:]
Prepared Statement of Todd Owen
May 7, 2008
Chairwoman Sanchez, Ranking Member Souder and distinguished
subcommittee members, my name is Todd Owen and I am the Executive
Director for Cargo and Conveyance Security, Office of Field Operations,
U.S. Customs and Border Protection (CBP). As the Executive Director for
the Cargo and Conveyance Security (CCS) Office since May 2006, I am
directly responsible for all cargo security programs and policies for
CBP. As you may imagine, a variety of programs and efforts fall under
the purview of the Cargo and Conveyance Security office including,
among others: the Container Security Initiative (CSI); the Secure
Freight Initiative (SFI); radiation detection equipment and large scale
imaging equipment, policies, and programs; the Customs-Trade
Partnership Against Terrorism program (C-TPAT); the national Canine
Enforcement Program; cargo enforcement efforts and policies,
coordinated activities with the U.S. Coast Guard and the Transportation
Security Administration; the Cargo Control Office, trade security
policies and programs including in-bond, manifest, and carrier
compliance programs; and the National Targeting Center for Cargo (NTC-
C), located in Northern Virginia.
Prior to my current position with Cargo and Conveyance Security, I
served as the Director of the C-TPAT program from January 2005 through
May 2006. C-TPAT is an important industry-government partnership
program under which companies commit to enhance security measures
within their own infrastructure, thereby enabling CBP to leverage
supply chain security throughout international locations beyond U.S.
regulatory reach. We worked hard during this time to strengthen C-TPAT
by more clearly defining the security measures required of members, by
implementing strong management controls, and by increasing the number
of program personnel, all of which boosted the level of foreign site
assessments performed worldwide. These efforts resulted in the
effective and robust program in place today--a program that is a key
component of our risk-based and layered defense.
It is an honor to have the opportunity to appear before you today.
My testimony this morning focuses on CBP's role of ensuring the
continuity of international trade in the event of an incident occurring
in the maritime environment.
As America's frontline border agency, CBP employs highly trained
and professional personnel, resources, expertise and law enforcement
authorities to meet our twin goals of improving security and
facilitating the flow of legitimate trade and travel. CBP is
responsible for preventing terrorists and terrorist weapons from
entering the United States, apprehending individuals attempting to
enter the United States illegally, stemming the flow of illegal drugs
and other contraband, protecting our agricultural and economic
interests from harmful pests and diseases, protecting American
businesses from theft of their intellectual property, regulating and
facilitating international trade, collecting import duties, and
enforcing United States trade laws.
To this end, DHS has worked continuously to refine a layered and
risk-based approach to enhance the security of the goods and people
entering the United States. This layered approach to security reduces
our reliance on any single point or program that could be compromised,
extends our zone of security outward, and facilitates resiliency and
resumption of critical trade after an event of national significance.
This multi-layered approach includes:
Advanced Information under the 24-Hour Rule and Trade Act of
2002;
Screening the information through the Automated Targeting
System;
Government-industry partnerships such as the Customs Trade
Partnership Against Terrorism (C-TPAT);
Partnerships with the international community such as the
Container Security Initiative (CSI) and the Secure Freight
Initiative (SFI);
Use of Non-Intrusive Inspection technology and mandatory
exams for all high risk shipments.
On a typical day CBP processes more than 1.13 million passengers
and pedestrians; 70,200 truck, rail, and sea containers; 251,000
incoming international air passengers; 74,100 passengers and crew
arriving by ship; 82,800 shipments of goods approved for entry; $88.3
million in fees, duties and tariffs; and makes 70 arrests of criminals
at ports of entry (POE) and 2,402 apprehensions between the POEs per
day. CBP also seizes an average of 7,388 pounds of narcotics, $652,603
worth of fraudulent commercial merchandise, 41 vehicles, 164
agriculture pest, and 4,296 prohibited meat or plant materials each
day.
I am pleased to appear before the subcommittee today to highlight
key accomplishments related to ensuring that the global supply chain
upon which we rely so heavily is not only secure, but also has the
ability to recover quickly after disruptive incident. The communication
of accurate and timely information between all stakeholders--whether
Federal, local, State, or private-sector--is a necessary precondition
to facilitate quick recovery from unanticipated change or disruption.
By working to ensure that resiliency-building conditions are developed
within the supply chain, CBP will thereby increase its capacity to
receive, process, and act upon commercial and security information
quickly and efficiently, thus mitigating threats with the least
possible disruption to legitimate trade.
CBP is making every effort to work with our partners and
stakeholders to ensure quick and coordinated recovery of the maritime
transportation system. The events of Hurricane Katrina revealed the
need to work more cohesively as an agency with a stronger emphasis on
internal and external communication methods. Acting on recommendations
made in the Katrina after-action reports, CBP established the Incident
Management Division within our Office of Intelligence and Operations
Coordination.
In doing this, we have created the CBP Incident Management
Coordination Directive. This policy will ensure all CBP offices are
effective, coordinated, and responsive during and after an incident.
This will also ensure we maintained focused on our primary missions of
preventing terrorists and terrorist weapons; interdicting the flow of
illegal aliens, narcotics, and other contraband; and facilitating
legitimate trade and travel.
On a national level we are getting more involved in Local, Regional
and National Incident Response and Recovery exercises. These exercises
are helping CBP personnel establish relationships with responding
agencies and also identifying better practices for the bigger picture
of Multi-Agency Incident Response.
Homeland Security Presidential Directive 5 (HSPD 5) requires all
Federal agencies to adopt the National Incident Management System
(NIMS) and that State and local agencies adopt NIMS as a condition in
receiving Federal assistance. The NIMS is a national approach to
incident management. It is applicable to all incidents and hazards,
regardless of the size and scope. NIMS provides a flexible framework
for a standardized organizational structure to improve
interoperability. More importantly, it improves coordination and
cooperation between public and private entities.
Within the NIMS structure is the Incident Command System (ICS), a
standard, on-scene, all-hazard incident management concept. Within the
ICS structure a unified command, which is used when multiple agencies
are responsible for an incident that crosses political jurisdictions.
This ensures the agency leaders are coordinating to ensure that
resources are being used effectively. Each agency assumes their
authority. However, during a significant event, the Secretary of
Homeland Security may designate a local Federal official or pre-
designated regional officials to become the Principle Federal Official
(PFO). The PFO is responsible for coordinating and accounting for all
Federal resources, ensuring each agency brings to the response trained
certified personnel that understand the ICS and NIMS processes, thereby
enhancing the ability to work more effectively together.
The National Response Framework (NRF), which recently replaced the
National Response Plan, is a guide that details how the Nation conducts
all-hazards response, from the smallest incident to the largest
catastrophe. This document establishes a comprehensive, national, all-
hazards approach to domestic incident response. The NRF identifies the
key response principles, as well as the roles and structures that
organize national response.
CBP is conducting comprehensive business resumption planning in the
event of a significant disruption in the flow of trade to ensure
actions are taken to maintain communication and coordination of CBP
processes at our borders with our U.S. Government and foreign
government stakeholders, as well as the trade community. In accordance
with the Security & Prosperity Partnership, Initiative 9.2.7, a
significant amount of planning has been done with Canada Border Service
Agency (CBSA) to address significant disruptions at our shared land
border. CBP and CBSA have developed the overarching planning protocols,
as well as the more detailed Joint CBSA/CBP Business Resumption
Communication and Coordination Plan. This plan is intended to provide
guidance and points of contact for communications between CBP and CBSA
from the field level up to headquarters and the CBP Commissioner and
CBSA President. Both sets of these protocols have been tested at joint
tabletop exercises, with participation from CBP, CBSA, State and local
governments, and members of the trade community.
In accordance with Section 202 of the SAFE Port Act of 2006, the
National Strategy for Maritime Security (NSMS), NSPD-41/HSPD-13, the
National Maritime Transportation Security Plan (NMTSP) and the Maritime
Infrastructure Recovery Plan (MIRP), CBP has been working with U.S.
Coast Guard and has signed CBP/USCG Joint Protocols for the Expeditious
Recovery of Trade. The purpose of these protocols is to establish
national-level processes and procedures by which the Coast Guard, CBP,
and other Federal agencies will have a forum for joint
intergovernmental and joint government/private sector dialogs to
identify and act on important issues to facilitate rapid maritime
transportation system (MTS) recovery and the resumption of commerce at
our borders.
A critical part of business resumption is identifying methods for
communicating reliable, timely, and factual information to the trade
community. CBP has created a web-based mechanism for communicating with
the trade community and has tested it during multiple exercises with
industry representatives (Unified Business Resumption Messaging). The
content of the messages is tailored to all modes of transportation.
This message capability is a direct result of exercises with the trade
community to understand the information needed to make informed
business decisions in a post-event environment.
Our efforts in post-event resumption of trade have been focused on
processes for interagency cooperation and sharing with non-Federal
stakeholders, as well as establishing broad principles for a risk based
approach to cargo security that will function in a pre- and post-event
environment. We recognize, however, that it is impossible to predict
every significant event scenario or the details that will present
themselves in an actual event. Our response to an actual event will
depend on the facts we encounter and each response will be tailored to
reflect these circumstances.
CBP's frontline officers and agents will continue to protect
America from terrorist threats and accomplish our traditional
enforcement missions in immigration, customs, and agriculture, while
balancing the need to facilitate legitimate trade and travel. These
initiatives discussed today are only a portion of CBP's efforts to
secure our homeland, and we will continue to provide our men and women
on the frontlines with the necessary tools to help them gain effective
control of our Nation's borders. I would like to thank Chairwoman
Sanchez, Ranking Member Souder, and the members of the committee, for
the opportunity to present this testimony today, and for your continued
support of DHS and CBP. We will be happy to respond to any questions
that you may have at this time.
Ms. Sanchez. Thank you.
I now recognize Rear Admiral Watson to summarize his
statement for 5 minutes.
STATEMENT OF REAR ADMIRAL JAMES WATSON, DIRECTOR, PREVENTION
POLICY FOR MARINE SAFETY, SECURITY AND STEWARDSHIP, U.S. COAST
GUARD, DEPARTMENT OF HOMELAND SECURITY
Admiral Watson. Good afternoon, Madam Chairwoman,
Representative Souder and distinguished members of the
subcommittee. It is my pleasure to appear before you today to
discuss the Coast Guard's role in supporting resiliency of our
Nation's supply chain and our recent accomplishments with
regard to recovery planning.
Recovery of the marine transportation system and resumption
of commerce following a major incident, natural or manmade,
that significantly impacts the MTS is an important component in
supporting overall resiliency of the Nation's supply chain.
The Coast Guard has a broad, multifaceted jurisdictional
authority and responsibility to ensure the safety and security
of the Nation's marine transportation system. As such, the
Coast Guard is uniquely positioned to lead marine
transportation system recovery efforts and, to date, has made
significant progress toward improving the Nation's preparedness
posture in support of Department of Homeland Security strategic
goals.
The resumption of commerce requires the Coast Guard to
coordinate with multiple Federal and State agencies to mitigate
the impacts to the United States economy resulting from a
significant marine transportation system disruption. Likewise,
the private sector plays a critical role in marine
transportation system recovery. Industry possesses both the
best information on inbound and outbound cargoes and day-to-day
capabilities within the transportation mode to identify
transportation and cargo-processing alternatives. These
partnerships require prescribed communication procedures and
pre-identified responsibilities to achieve the objective of
restoring functionality to the damaged marine transportation
system infrastructure.
The Maritime Infrastructure Recovery Plan established a
comprehensive approach to recovery from a transportation
security incident. It provides a framework that clearly defines
the roles for Government agencies, including the Coast Guard.
The Maritime Infrastructure Recovery Plan also recognizes that
the private sector plays a key role in the successful operation
and management of the marine transportation system. The vast
majority of marine transportation infrastructure assets are
privately owned and operated. The decision to repair, replace
or rebuild private physical assets following a catastrophic
event is a private-sector decision.
The Coast Guard, in concert with other Government agencies,
plays a vital role in facilitating the marine transportation
system recovery and restoration of the trade. This is a
accomplished through close interagency coordination,
facilitation of Government to private-sector communications,
and by fulfilling our captain-of-the-port responsibilities,
including managing aids to navigation and ensuring key
waterways and Federal channels remain viable for shipping
traffic.
Drawing on lessons learned from Hurricane Katrina, a
maritime recovery and restoration task force report,
recommendations from a 2006 maritime recovery symposium that
was held and the SAFE Port Act, Coast Guard partnered with
Customs and Border Protection to develop the joint protocols
for expeditious recovery of trade. These protocols were signed
by both the Commandant and the Commissioner of Customs and
Border Protection in January.
The protocols established a communications process at the
national level and describe how the Coast Guard and CBP will
communicate and coordinate with other Federal agencies and the
maritime industry following an event causing a major disruption
to the maritime transportation system.
The protocols support HSPD-13 and the protection of the
national economy and national defense, as well as support of
the SAFE Port Act mandate to develop protocols for resumption
of trade in the event of a transportation disruption. The Coast
Guard also continues aggressively to reach out to members of
industry and ensure they understand their commitment to
improving the recovery process.
These protocols establish a critical communication link to
industry groups representing trade and carrier interest.
Following an event causing national impact, the Coast Guard and
CBP will coordinate closely with these stakeholder groups to
communicate marine transportation system status and critical
restrictions, and ascertain the industry's intentions with
regard to potential cargo diversion. This communication
protocol allows Coast Guard and CBP to temporarily relocate or
augment existing resources to a particular port as necessary.
The Coast Guard released the Coast Guard-wide guidance
establishing marine transportation recovery units as a
component of local incident command structure just recently.
The guidance calls for Coast Guard field units to replicate the
national coordination process at the port level. Local units
have been receiving training on implementing and establishing
local coordination and communication procedures.
In further effort to enhance resiliency of the supply
chain, the Coast Guard promoted resiliency projects as part of
FEMA's Port Security Grant Program for fiscal year 2007 and
2008. These grant funds enabled the port areas to designate and
implement strategies to build local redundancy and strengthen
interdependencies.
Thank you for the opportunity to testify today. I would be
happy to answer questions.
[The statement of Admiral Watson follows:]
Prepared Statement of Rear Admiral James Watson
May 7, 2008
Good afternoon, Madam Chairwoman and distinguished members of the
subcommittee. It is a pleasure to appear before you today to discuss
the Coast Guard's role in supporting resiliency of our Nation's supply
chain and our recent accomplishments with regard to recovery planning.
Recovery of the Marine Transportation System (MTS) and the
resumption of commerce following a major incident, natural or man-made
that significantly impacts the MTS is an important component in
supporting overall resiliency of the Nation's supply chain. The Coast
Guard has broad, multi-faceted jurisdictional authority and
responsibility to ensure the safety and security of the Nation's MTS.
As such, the Coast Guard is uniquely positioned to coordinate MTS
recovery efforts and to date has made significant progress towards
improving this Nation's preparedness posture in support of Department
of Homeland Security (DHS) strategic goals for recovery.
The Marine Transportation System (MTS) consists of ports, waterways
and inter-modal landside connections which accommodate the movement of
freight, military goods and passengers. The MTS is a vital public-
private partnership that makes up an essential component of the
Nation's transportation network. It links water and surface
transportation (rail and highway) and enables America to globally
connect. Stakeholders in the MTS include governmental agencies,
waterfront facilities, commercial and recreational vessels, vehicles
and system users, such as importers and exporters.
The resumption of commerce requires the Coast Guard to coordinate
with multiple Federal and State agencies in cooperative efforts to
mitigate the impacts to the U.S. economy resulting from a significant
MTS disruption. Likewise, the private sector plays a critical role in
MTS recovery. Industry possesses both the best information on inbound
and outbound cargoes and day-to-day capabilities within the
transportation modes to identify transportation and cargo processing
alternatives. These partnerships require prescribed communications
procedures and pre-identified responsibilities to achieve the objective
of restoring functionality to damaged MTS.
BACKGROUND
The concept of Recovery of the MTS following a significant event in
the maritime sector is not new and is grounded in previous doctrine
such as the National Contingency Plan (NCP). The NCP served to inform
recent security-focused recovery efforts required by the Maritime
Transportation Security Act of 2002 (MTSA), and MTS recovery concepts
were further reinforced during the responses to Hurricanes Katrina and
Rita in 2005. MTSA requires the National Maritime Transportation
Security Plan (NMTSP) address the restoration of commerce following a
security incident in the maritime transportation sector. Recovery in
this context was further identified as an area of emphasis in National
Security Presidential Directive (NSPD-41), Homeland Security
Presidential Directive (HSPD-13), and National Strategy for Maritime
Security. One of the national level plans that resulted from these
strategy documents is the Maritime Infrastructure Recovery Plan (MIRP).
The MIRP established a comprehensive approach to recovery from a
transportation security incident with a focus on marine transportation
capabilities. It provides a framework with clearly defined roles for
government agencies (including the Coast Guard) and the private sector
to facilitate resumption of passenger and cargo flow to minimize
negative impacts on the U.S. economy following a major event.
However, the MIRP also recognizes that the private sector plays a
key role in the successful operation and management of the MTS as the
vast majority of maritime transportation infrastructure assets are
privately owned and operated. The decision to repair, replace, or
rebuild private physical assets following a catastrophic event is a
private sector decision. As such, the Coast Guard, in concert with
other governmental agencies, plays a vital role in facilitating MTS
recovery and restoration of trade. This is accomplished through close
inter-agency coordination, facilitation of government to private sector
communications, and by fulfilling its Captain of the Port
responsibilities including managing aids to navigation systems and
ensuring key waterways and Federal channels remain viable for shipping
traffic.
Following Hurricane Katrina, the Coast Guard chartered a Maritime
Recovery and Restoration Task Force (MR\2\TF) in order to develop a
greater understanding of the MTS recovery and restoration process and
to better inform future planning considerations. The Task Force issued
a report that more clearly defined recovery expectations, set
objectives and offered recommendations to improve the recovery and
restoration posture. Recommendations included incorporating MTS
Recovery concepts into response plans such as the Maritime
Infrastructure Recovery Plan (MIRP), local Area Maritime Security Plans
(AMSP), and Continuity of Operations Plans (COOP) to ensure
interagency/industry focus on MTS recovery. The Task Force also
recommended the development of essential elements of information and
key measures for each level of the response organization to gauge
recovery status, and highlight the need to link MTS recovery and
restoration with critical infrastructure protection.
In August 2006, the Coast Guard sponsored a National Maritime
Recovery Symposium (NMRS) to initiate national-level discussions
regarding the implications of port closures or restrictions, as well as
actions required to facilitate the resumption of commerce following a
national transportation security incident (TSI) in the maritime sector.
The symposium was attended by more than 160 invited government, private
maritime sector and inter-modal transportation executives to identify
and compile strategic critical requirements for national maritime
recovery planning. The symposium identified six major needs to enable
recovery of he MTS and resumption of trade:
An integrated government/industry recovery management
organization;
An integrated government/industry national communications
system for recovery;
A national logistics support plan for cargo diversion;
An integrated government/industry business continuity
planning system;
Government awareness of cargo flows and inter-modal
connectivity; and
Federal funding mechanisms to support local, State and
national recovery preparedness.
The Security and Accountability For Every Port (SAFE Port) Act of
2006 established a requirement for DHS to develop a strategic plan to
enhance the security of the international supply chain in which the
Coast Guard played an integral role in the development of the section
on Maritime Recovery. Section 202 of the SAFE Port Act further required
the development of protocols for the expeditious resumption on trade,
which formed the basis for the Joint MTS Recovery protocols recently
developed by the Coast Guard and U.S. Customs and Border Protection
(CBP).
ACCOMPLISHMENTS
Drawing upon lessons learned from Hurricane Katrina, key findings
of the MR\2\TF report, recommendations generated within NMRS, and SAFE
Port Act mandates, the Coast Guard partnered with CBP to develop the
Joint protocols for MTS Recovery and the Expeditious Resumption of
Trade. These protocols were recently signed by both the Commandant of
the Coast Guard and the Commissioner of Customs and Border Protection.
The protocols establish a communications process at the national
level and describe how the Coast Guard and Customs and Border
Protection will communicate and coordinate with other Federal agencies
and the maritime industry following an event causing a major disruption
to the MTS to facilitate recovery and the resumption of trade. The
protocols support NSPD-41/HSPD-13 and the protection of the national
economy and national defense as well as support the SAFE Port Act of
2006 mandate to develop protocols for the resumption of trade in the
event of a transportation disruption. The Coast Guard also continues to
aggressively reach out to members of industry to ensure that they
understand our commitment to improving the recovery process.
The protocols also establish a critical communications link to
industry groups representing trade & carrier interests. Following an
event causing national impact, the Coast Guard and Customs and Border
Protection will coordinate closely with these stakeholder groups to
communicate MTS status and critical restrictions as well as ascertain
industry's intentions with regard to potential cargo diversions. This
communication protocol allows Coast Guard and Customs and Border
Protection to temporarily reallocate or augment existing resources to a
particular port as necessary.
By following the MTS Recovery Protocols, the Coast Guard, Customs
and Border Protection, and other Federal agencies, informed with
pertinent and timely information from affected stakeholders, will
communicate more effectively, resulting in a more expeditious MTS
recovery that mitigates the detrimental effects of a disruption in
trade.
Incident command actions associated with response or recovery to
domestic incidents which impact the ability of cargo and vessels to
move through the supply chain will be carried out in accordance with
National Incident Management System (NIMS) principles. NIMS was
mandated in HSPD-5 to provide for interoperability and compatibility
among Federal, State, and local capabilities, and includes a core set
of concepts such as the incident command system, unified command,
incident information reporting, etc. The NMTSP and the MIRP describe
how recovery management is carried out at the various levels, and
reflects the organizational constructs detailed in the National
Response Framework, as well as the use of the Incident Command System
(ICS) and unified command procedures.
The Coast Guard recently released Coast Guard-wide guidance
establishing Marine Transportation Recovery Units (MTSRU) as a
component of the Incident Command structure. The guidance calls for
Coast Guard field units to replicate the national coordination process
at the port level. Local units have received training on implementation
and establishing local coordination and communication procedures.
In an effort to boost preparation in the ports and ease the
financial burden of stakeholders, the Coast Guard promoted resiliency
projects as a part of FEMA's Port Security Grant Program for fiscal
year 2007. The funds enabled the ports to design and implement
strategies to build redundancy and strengthen interdependencies.
The Coast Guard recently issued updated guidance for a nationwide
5-year update to AMSP. This guidance includes substantial new material
to guide all-hazard-compatible port-level planning to facilitate MTS
recovery and for preparation of Salvage Response Plans to guide
incident management planning for removal of obstructions to navigation
to support expeditious resumption of commerce pursuant to the SAFE Port
Act. These materials were specifically designed to align with the DHS
Strategy to Enhance International Supply Chain Security and the Customs
and Border Protection--CG protocols for the resumption of commerce.
The AMSP provides guidance for the Captain of the Port (COTP)
pertaining to MTS recovery and the reopening of ports. Inclusion of
this checklist in the AMSP fulfills one of the requirements of the SAFE
Port Act to incorporate recovery planning within each of our existing
contingency plans. As such, each plan must include not only procedures
to facilitate the recovery of the MTS after a Transportation Security
Incident, but also a process for addressing measures for reopening
ports, and affected waterways, or linkages to other port plans that
address recovery. Generally, measures for reopening the port will take
into consideration the use of resources to locate, mark and remedy any
channel obstructions. Provisions must also be made for verifying the
functionality of Aids to Navigation and navigational depths within the
channels.
CONCLUSION
The Coast Guard understands the economic impacts presented by
disruptions to the MTS. While the Coast Guard is required to uphold
regulatory requirements, all due consideration is given to ensuring the
facilitation of commerce throughout our coastal ports and inland
waterways. The COTP uses regulatory authority, such as restricting or
redirecting the flow of vessel traffic, to implement safety and
security measures as necessary to reduce risk to the port navigation
system and other MTS infrastructure taking into consideration the
effects of these measures on commerce. As time permits and the
situation dictates, the COTP will consult with port partners and
stakeholders using coordination structures such as the Area Maritime
Security Conference and harbor safety committees.
Thank you for the opportunity to testify before you today. I would
be happy to answer any questions you may have.
Ms. Sanchez. Thank you, Admiral.
I now recognize Mr. Kelly to summarize his statement for 5
minutes.
STATEMENT OF ROBERT W. KELLY, SENIOR ADVISOR, THE REFORM
INSTITUTE
Mr. Kelly. Thank you, Chairwoman Sanchez and Ranking Member
Souder, for inviting me to testify today.
For the past year, The Reform Institute has been promoting
the need for greater focus on building resiliency across every
industry, institution and infrastructure component of the
Nation. Resiliency is that notion that an entity can experience
a catastrophic event and nevertheless bounce back and return to
a state of near-normalcy as quickly as possible. Perhaps
nowhere is the need for building resiliency more compelling
than as it pertains to the global supply chain.
Over the course of the past few decades, the way by which
raw material suppliers, manufacturers, wholesalers, retailers
and end-users both deliver and receive tangibles has undergone
sweeping changes. Technology has created the capability for
each of these players to both send and receive needed inventory
just in time. This has yielded great savings and achieved
remarkable efficiencies. However, it has created a global
system that is extremely vulnerable to disruption, irrespective
of whether the source of that disruption is natural or manmade.
The reasons are pretty straightforward. The U.S. industry
relies on the ability to obtain parts, components and finished
goods from around the world on a continuous, uninterrupted
basis. It matters very little what type of industry we are
talking about; very few are able to continue to operate
nominally following a major disruption. Only relatively small
amounts of critical inventory are now stored in warehouses. The
supply chain itself has become the warehouse.
Now, this quest for greater efficiency has generated lower
prices and more product choices for consumers, but has also
yielded over-stretched, single-source supply chains that lack
the redundancy robustness to withstand a disruptive event. In
this pursuit of leaner supply chains, too little attention has
been paid by many firms to ensure the continuity of their
operations in the event of a disruption in the supply chain.
The fact that many employers aren't prepared for such a
contingency means that a catastrophe that shuts down the global
supply chain even briefly could wreak economic havoc.
The West Coast dock strike of 2002 that you referred to
earlier, Madam Chairwoman, illustrates this point. The strike
shut down the West Coast ports for a mere 10 days, yet the
effect on the U.S. economy has been estimated upwards of $15
billion. It took several months to recover from this
catastrophe, and yet this strike was a planned, widely
publicized, anticipated and peaceful event. One can only
imagine the economic consequences of an unanticipated incident.
The current focus of DHS is heavily weighted toward
prevention and enforcement, with little emphasis on building
resilience. As much as it pains me to admit it, I think that
the time has come for all of us to concede the fact that
certain catastrophic events are inevitable. We can no more
guarantee our security from the acts of a determined terrorist
organization than we can prevent a natural disaster. However,
what we can influence is how we react to these events and how
we build a Nation whose institutions can absorb a catastrophic
blow regardless of its origin and to bounce back rapidly.
The Institute's symposium on Building a Resilient Nation
that was held recently in New York illustrated what many
private-sector leaders are already doing to build resiliency
within their own companies and industry sectors. There is much
that the public sector can learn from these leaders.
DHS and its operating agencies, such as Coast Guard and
Customs and Border Patrol, have accomplished much in the few
years since its creation. However, there is much work that
remains to be done.
First, there is a vital role for DHS to play the
cheerleader in reminding industry of the fact that building
resiliency is very much in their own self-interest. If the
first principle of being in business is to stay in business,
building resilient organizations is what every business owes to
its employees, its shareholders, its customers and its
suppliers.
Second, DHS needs to function as a key resource for U.S.
industry and other institutions as they endeavor to become more
resilient.
Third, DHS should serve as a clearinghouse for best
practices in crafting business-continuity plans for all types
of industry.
Fourth, DHS should play a leading role in organizing and
conducting exercises that allow the corporate sector to test
their continuity plans and revise them accordingly.
DHS also needs to assume greater responsibility in
hardening our supply chain. Greater emphasis needs to be placed
on new technologies involving smart containers and the
development of electronic cargo manifest that contains far
richer and more reliable data than is currently used to target
suspect containers that relies on unreliable carrier-supplied
manifest data.
More attention also needs to be paid to the deployment of
container screening technology that can detect shielded
material, which is the most reliable signature of an RDD or
dirty bomb, the destructive impact of which on our supply chain
would be catastrophic.
Finally, Congress has an important role in helping change
the dialogue in the area of homeland security from one that all
too often focuses on preventing what may often be unpreventable
while failing to address preparing for the inevitable.
America's greatest resource is a well-informed, well-prepared
citizenry that has been conditioned to the realities of the
uncertain times that we live in. Congress can serve as the
catalyst for refocusing our national priorities on building
resiliency within every component of our critical
infrastructure, every institution and our vital supply chain,
and help achieve the worthy goal of building a resilient
Nation.
I would be happy to take any questions that you may have.
Thank you.
[The statement of Mr. Kelly follows:]
Prepared Statement of Robert W. Kelly
May 7, 2008
Chairwoman Sanchez, Ranking Member Souder, thank you for the
opportunity to appear before the subcommittee to discuss the vital
topic of ``Assessing the Resiliency of the Nation's Supply Chain.'' I
also applaud Chairman Thompson for addressing resilience within the
Homeland Security Committee by making May ``Resilience Month.''
The focus on resilience is a welcomed development at a critical
time. Awareness of the importance of resilience to our security and
economy must be encouraged throughout the Nation. Such awareness must
be followed by action that is informed by and complements innovative
efforts that are already underway in the private sector.
The Reform Institute is a non-partisan, non-profit public policy
organization dedicated to strengthening the foundations of our
democracy and building a resilient society. The Institute is committed
to promoting and facilitating a national dialog on resilience.
Simply stated, resilience is the ability to rapidly respond to and
recover from a catastrophic event. It is imperative that resilience
become a national priority. It must be given status equal to, and
viewed in the same light as risk prevention is in our homeland security
policy. Confronting the resilience challenge will provide the
Department of Homeland Security with the overarching vision that it has
lacked since its inception. Such a concept can also unify the disparate
agencies within the Department and energize its mission.
The current myopic focus on prevention ignores reality and
discourages essential efforts toward preparedness. The fact is that not
every catastrophic event can be prevented. As painful as it is to
admit, we can no more prevent a determined terrorist from achieving an
isolated victory than we can prevent a hurricane or earthquake. What we
can control, however, is how we prepare for catastrophic events and how
we react when the sad eventuality occurs. Making resilience a priority
will ensure that we are adequately prepared for the next Hurricane
Katrina or terrorist attack and that such an incident does not severely
disrupt vital economic and social activity in this country.
While government authorities have paid scant attention to
resilience to this point, key actors within the private sector have
embraced the concept. As part of the McCormick Tribune Foundation's
Conference Series, the Reform Institute hosted in March of this year a
national symposium on Building a Resilient Nation: Enhancing Security,
Ensuring a Strong Economy in New York City that brought together
corporate leaders and industry experts to discuss the importance of
resilience to our national and economic security. Representatives from
major sectors of the economy provided inspiring examples of their
efforts to improve the ability of their firms to continue operating in
the face of a crisis. They also offered a frank assessment of the
enormous challenges that remain.
The public sector must learn from the progress made by these
private sector leaders and foster the further development of such
initiatives. Government agencies such as the DHS have a critical role
to play as facilitators of private sector efforts toward resilience.
The uninterrupted operation of U.S. businesses and the flow of goods
and material through the global supply chain are vital to our national
security and our viability as a global power. Supporting businesses in
developing and exercising their continuity plans is one of the crucial
roles that government can play.
There is a vital role for DHS to play as the Nation's cheerleader
reminding industry of the fact that building resilience is very much in
their own self-interest. DHS needs to function as a key resource for
U.S. industry and other institutions as they endeavor to become more
resilient. The Department should serve as a clearinghouse for best
practices in crafting business continuity plans by industry. There is
also a major need for DHS to play a leading role in organizing and
conducting exercises that allow the corporate sector to test their
continuity plans and revise them accordingly. Developing continuity of
operations plans and then allowing them to languish on the shelf would
lead to a false sense of security perhaps more dangerous than having no
plans at all. A regular schedule of joint public-private exercises will
allow firms to enhance their response and continuity plans and will
also bolster the working relationship between government and corporate
officials who will have to cooperate closely in times of crisis in
order to ensure a speedy and orderly return to regular operations.
The government has a particular role to play in assisting small-
and medium-sized firms in strengthening their resilience; entities that
lack the resources to properly accomplish the task on their own. These
businesses are the backbone of our economy and are the most vulnerable.
Even a relatively short disruption in operations could cause these
firms to shut down.
Effective public-private partnerships will require better
communication between agencies such as DHS and private firms. DHS must
directly engage businesses and make them an integral part of the
decisionmaking process, instead of simply handing down directives with
little input. There must also be an improved flow of information
between the public and private sectors. Employers can more adequately
prepare for possible contingencies when they have better information
regarding the potential threats and risks to their business. Reliable
lines of communication must also be established in the case of
emergency so that government authorities can effectively coordinate
with businesses on response and continuity efforts.
Considering that some 85 percent of our critical infrastructure is
in the hands of the private sector, extensive public-private
partnership is an absolute necessity in order to strengthen the
Nation's resilience. The Nation's aging infrastructure represents a
serious vulnerability that must be addressed. Our infrastructure and
supply chain are potential terrorist targets because they are so
essential to the Nation's economic vitality.
The need for enhanced resilience and increased public-private
partnership is no more evident than as it pertains to the supply chain.
The highly efficient and deeply integrated global supply chain is the
heart and soul of our economy. However, our acute reliance on the
``just-in-time'' delivery of goods made possible by supply chain
innovations leaves our economy severely vulnerable to a disruption
caused by either a natural or man-made disaster.
Innovations in shipping and the opening of new markets due to
globalization have resulted in goods moving from one end of the globe
to another in a relative blink of an eye. The remarkable breadth and
efficiency of the global supply chain has transformed commerce.
Retailers and distributors have largely forgone the storing of
merchandise in warehouses and instead rely on the continuous ``just-in-
time'' delivery of goods. The quest for greater efficiency has
generated lower prices and more product choices for consumers, but also
has yielded over-stretched, single-source supply chains that lack the
redundancy and robustness to withstand adequately a disruptive event,
such as a natural disaster, industrial accident, or terrorist attack.
In the pursuit of leaner supply chains, too little attention has
been paid by firms to ensure the continuity of their operations in the
event of a disruption in their supply chain. The fact that many
employers are unprepared for such a contingency means that a
catastrophe that shuts down the global supply chain even briefly could
bring economic activity to a virtual halt and cause damage to our
economy in the near and long terms.
The West Coast dock strike of 2002 illustrates this point. This
strike shut down West Coast ports for 10 days. The cost of the strike
to the U.S. economy was estimated at $15 billion. It took many firms
several months to recover from the disruption to their supply chains
caused by the strike. The strike was a planned, anticipated and
peaceful event. One can only imagine the economic consequences of an
unexpected incident that causes all U.S. ports to shut down for a
period of time.
Developing comprehensive continuity strategies must become an
imperative for all ventures that rely on the global supply chain.
Recommendations for bolstering business resilience in regard to the
global supply chain were provided in the recent Reform Institute white
paper, Chain of Perils: Hardening the Global Supply Chain and
Strengthening America's Resilience.
DHS can and must assume significant responsibility in hardening the
global supply chain in order to deter terrorists from targeting it in
order to derail our economy. Supporting and promoting the
implementation of innovative technologies such as ``smart'' containers
and advanced container screening should be a priority for DHS. A
significant deficiency is the fact that a National Intelligence
Estimate focusing on supply chain vulnerabilities has yet to be done.
This needs to be fixed right now.
The current patchwork of government initiatives falls well short of
securing the supply chain. Under the Container Security Initiative
(CSI), less than 1 percent of cargo containers are inspected prior to
arriving at U.S. ports. CSI depends on cargo manifest lists provided by
the carriers to target containers for inspection. However, manifests
often provide little data on the origin and nature of the cargo. What
data is provided can be unreliable and unverifiable.
Determined terrorists could exploit gaps in the security patchwork
by placing a dirty bomb inside a cargo container prior to its loading
at a foreign port and detonating it at a U.S. port or within our
intermodal transportation system. On top of the loss of life and damage
caused by the bomb, such an action would call into question the
security of the entire supply chain. The likely government response
would be to shut down U.S. ports as authorities searched for more bombs
in the pipeline.
Closing American ports would set off a ripple effect throughout the
global economy. The United States has no contingency plan for restoring
the intermodal transportation system in the event of a nationwide
closure of seaports for a number of days. Approximately 95 percent of
global commerce is carried at sea with a significant amount borne in
cargo containers. At any given time, about 60 percent of the world's
merchant fleet is at sea. Given this fact, it takes little imagination
to consider the massive back-up of ships and ``boxes'' that even a
minor shutdown would engender. Businesses that depend heavily on
``just-in-time'' delivery of goods and supplies would quickly run out
of merchandise and material. Firms that are ill-prepared for such
circumstances could possibly face having to lay-off employees or even
shut down operations. This ripple effect, combined with fears of more
attacks, would likely roil the markets.
The economic impact of such a scenario could be devastating and
long-lasting, depending on how long the ports were closed and the
resilience of American companies and our citizenry. The possibility of
such a scenario occurring underscores the need for intensifying our
efforts to harden the global supply chain and enhance the resilience of
U.S. industry across all sectors.
These are not easy tasks by any means. Building greater resilience
will require significant commitment and investment on the part of
individual firms. However, these firms should view such expenditures as
necessary for ensuring the long-term viability of the enterprise. They
must also recognize that developing resiliency in an uncertain world
will provide them with an advantage over competitors who are not
prepared. By assisting businesses in pooling resources and sharing best
practices and other vital information, public authorities can play an
important role in facilitating this transformation.
Hardening the global supply chain will also necessitate significant
public-private collaboration. Such cooperation will have to be on an
international scale since shippers at foreign ports are a key part of
the equation. Private firms and DHS must work closely together to
establish an efficient yet effective process for screening cargo
containers.
Although there are no easy solutions, the path has been cleared
somewhat by pioneering firms that have led the way in promoting and
implementing resilience. DHS must embrace public-private collaboration
to implement innovative new systems and programs already being
initiated by the private sector and exercise effective leadership to
shepherd these changes through.
The Reform Institute is ready and willing to help encourage public-
private partnerships toward resilience. Thank you again for this
opportunity. I look forward to any questions you may have.
Ms. Sanchez. I thank you.
I now recognize Mr. Zimmermann for his statement for 5
minutes.
STATEMENT OF PAUL ZIMMERMANN, DIRECTOR OF OPERATIONS, BOARD OF
COMMISSIONERS, THE PORT OF NEW ORLEANS
Mr. Zimmermann. Chairwoman Sanchez, Ranking Member Souder,
thank you for the opportunity to speak this afternoon.
The lower Mississippi River is one of the most significant
waterways in the United States. Over 6,500 ships per year
transit the five port authorities comprising the lower
Mississippi River, carrying over 485 million tons of cargo,
nearly 25 percent of our Nation's waterborne commerce.
To have the Mississippi River closed for any duration of
time would be problematic for our Nation's economy. To have it
closed for an extended period of time would be catastrophic. We
simply must ensure that it is protected and that it can recover
quickly from any event, natural or manmade.
In terms of protection, from 2002 through 2005, the
Department of Homeland Security provided the Port of New
Orleans with nearly $6 million in port security grants to be
used for lighting, fencing, barriers, detection cameras, mobile
command center, and a river patrol vessel. These grants did not
require matching funds.
In 2005, the Port of New Orleans joined its sister ports on
the lower Mississippi River and created the Lower Mississippi
Port-Wide Strategic Security Council. In recognition of its
economic significance, the mission of this five-port council is
to help ensure that the ports in the lower Mississippi River
become the safest and most protected maritime complex in the
United States.
In 2006 and 2007, this council received grants of nearly
$30 million. These funds were utilized for various vessel
tracking, surveillance, communications and training projects.
These grants, unlike prior-year grants, required a 25 percent
matching contribution. This required match, along with the
corresponding operational and maintenance costs, presents
significant financial hardships and could result in projects
not being undertaken. We strongly encourage that this matching
requirement be eliminated from future port security grants and
that operational and maintenance costs be included.
The sheer volume of maritime traffic, combined with
numerous targets of interest, make the lower Mississippi River
particularly vulnerable to U.S.S. Cole types of attack. The
United States Coast Guard does an excellent job of vessel
inspection and aids to navigation management on the lower
Mississippi River. I would like to recognize Captain Lincoln
Stroh, U.S. Coast Guard Captain of the Port, Sector New
Orleans, for his efforts. Captain Stroh strongly emphasizes the
need for a collaborative approach to keeping our port safe and
takes a strong leadership role in that regard.
I will comment, however, that the Coast Guard is severely
hamstrung in the Port of New Orleans area, as they simply do
not have enough assets on the water to provide an adequate
level of deterrence, interdiction, surveillance and presence on
the Mississippi River.
From a disaster recovery perspective, Hurricane Katrina
provided the Port of New Orleans, and indeed all of our
neighbors on the U.S. Gulf Coast, with the unique, though
unfortunate, opportunity to learn the value of preparing ahead
for a return to business after a devastating event. It is said
that every cloud has a silver lining. While the Port of New
Orleans recovered fairly quickly after Katrina, the events that
took place contributing to its recovery were basically
reactionary, with an emphasis on mere survival.
For the purpose of this hearing, the who, how, when and
where of activities after the storm were not as important as
the resulting plan formulated to guide our recovery from future
events. Our organization now has in place plans to address
command and control, personnel, financial, operational,
communications and risk management issues in the event of
another disaster. The need for such a plan is indeed what every
organization should come to realize is the silver lining coming
from Katrina.
In a large-scale recovery effort, it is essential that each
and every organization involved be virtually self-sustaining
from the onset of the incident. A realistic disaster recovery
plan must be in place, exercised and funded.
A port is comprised of numerous service providers, public
and private--river pilots, tug boat operators, longshoremen,
truck drivers, regulatory agencies, fuel providers, et cetera--
all playing a role in keeping a port operational. Each element
should have its own organizational recovery plan in place.
From an overall protection and recovery standpoint, a great
deal has been done on our Nation's mightiest river. However, a
great deal remains to be undertaken.
In the war on terrorism and in terms of maintaining
international trade resiliency, our concern must never fall
victim to complacency. The Port of New Orleans has learned a
great lesson from Hurricane Katrina. We learned the value of
the Mississippi River to our Nation, we learned the value of
human life, and we learned the value of human resolve. All must
be protected.
In that regard, we stand ready to assist this subcommittee
in any way we can.
[The statement of Mr. Zimmermann follows:]
Prepared Statement of Paul J. Zimmermann
May 7, 2008
The lower Mississippi River is one of the most significant
waterways in the United States. Over 6,500 ships per year transit the
five port authorities comprising the lower Mississippi River--the ports
of Plaquemines, St. Bernard, New Orleans, South Louisiana and Baton
Rouge--carrying over 485 million tons of cargo--nearly 25 percent of
our Nation's waterborne commerce. To have the Mississippi River closed
for any duration of time would be problematic for our Nation's economy.
To have it closed for an extended period of time would be catastrophic.
We simply must ensure that it is protected and that it can recover
quickly from any event, natural or manmade.
In terms of protection, from 2002 through 2005 the Department of
Homeland Security provided the Port of New Orleans $5.7 million Port
Security Grants. These funds were used for lighting, fencing, barriers,
metal detectors, cameras, a mobile command center and a river patrol
vessel. These grants did not require matching funds.
In 2005, the Port of New Orleans joined its sister ports in forming
the Lower Mississippi River Portwide Strategic Security Council. In
recognition of its economic significance, the mission of this five-port
Council is to help ensure that the ports on the lower Mississippi River
become the safest and most protected maritime complex in the United
States.
In 2006 and 2007 the Council received grants totally nearly $30
million. These funds are to be utilized for various vessel tracking,
surveillance, communications and training projects. The 2006 and 2007
Port Security Grants, unlike prior year's grants, require a 25 percent
matching contribution. This required match, along with corresponding
operational and maintenance costs, present significant financial
hardships and could result in projects not being undertaken. We
strongly encourage that this matching requirement be eliminated from
future Port Security Grants and that operational and maintenance costs
be included.
The sheer volume of maritime traffic combined with numerous targets
of interest makes the lower Mississippi River particularly vulnerable
to a U.S.S. Cole-type of attack. The United States Coast Guard does an
excellent job of vessel inspections and aids to navigation management
on the Mississippi River and I would like to recognize Capt. Lincoln
Stroh, U.S. Coast Guard Captain of the Port, Sector New Orleans for his
efforts. Capt. Stroh strongly emphasizes the need for a collaborative
approach to keeping our ports safe and takes a strong leadership role
in that regard. I will comment, however, that the Coast Guard is
severely hamstrung in the Port of New Orleans area as they do not have
enough assets on the water to provide an appropriate level of
deterrence, interdiction, surveillance and presence on the Mississippi
River.
From a disaster recovery perspective, Hurricane Katrina provided
the Port of New Orleans, and indeed all of neighbors on the U.S. Gulf
Coast, with a unique, though unfortunate, opportunity to learn the
value of preparing ahead for the return to business after a devastating
event.
It is said that every cloud has a silver lining. While the Port of
New Orleans recovered fairly quickly after Katrina, the events that
took place contributing to its recovery were basically reactionary with
an emphasis on mere survival. For the purposes of this hearing, the
who, how, when and where of activities after the storm are not as
important as the resulting plan formulated to guide our recovery from
future events. Our organization now has plans in place to address
command and control, personnel, financial, operational, communications
and risk management issues in the event of a disaster. (Components of
this plan are attached.) The need for such a plan is indeed what every
organization should come to realize is the silver lining coming from
Katrina.
In a large-scale recovery effort it is essential that each and
every organization involved be virtually self-sustaining from the onset
of the incident. A realistic disaster recovery plan must be in place,
exercised and funded. A port is comprised of numerous service
providers--public and private. River pilots, tugboat operators,
longshoreman, truck drivers, regulatory agencies, fuel providers, etc.
all play a role in keeping a port operational. Each element should have
its own organizational recovery plan in place. To the extent possible I
would suggest that all Federal, State and municipal agencies develop
its own local disaster recovery plan.
From an overall protection and recovery standpoint, a great deal
has been done on our Nation's mightiest river. However, a great deal
remains to be undertaken. In the war on terrorism, and in terms of
maintaining international trade resiliency, all concerned on must never
fall victim to complacency.
The Port of New Orleans learned great lessons from Hurricane
Katrina. We learned the value of the Mississippi River to our Nation,
we learned the value of human life and we learned the value of human
resolve--all must be protected. In that regard we stand ready to assist
this subcommittee in anyway we can.
board of commissioners of the port of new orleans
Elements of Disaster Recovery Plan
Possible Events: Fire, earthquake, flood, terrorist event,
hurricane, power blackout, nuclear disaster, computer virus,
bridge collapse.
Employee Information: Where will they go in event of
evacuation? Contact names, numbers, email.
Facility Assessment: Procedures to insure facilities are
inspected and deemed safe for occupancy or use after event.
Communications: Cell phones, satellite phones, VHF radios,
interoperable UHF radios, internal and external capabilities,
maintain contact with service providers, law enforcement and
regulatory agencies.
Satellite Office: Pre-arranged hotel with housing and office
accommodations for pre-determined senior staff. Proceed
directly to hotel in case of an event.
Incident Command: Pre-determined staff in charge at event
site, administration office and satellite office.
Harbor Police Department: Provide safety and security to
port facilities and local community.
Financial Services: Provide out-of-area banking services for
employees, direct deposit, checking, accounts receivable/
payable. Key financial data stored offsite and accessible from
remote location.
Daily Communications: Staff conference call at pre-
determined time.
Website Updates: Pre-determine who does it and who provides
update information.
Departmental Functions: Each department knows their
respective role. Example: Maintenance--initial facility
assessment, repairs; Marketing--communicate with customers;
Media--pre-determined spokesperson.
Risk Management: Understand insurances and claims process
beforehand, communicate with insurers, FEMA.
Housing: MARAD.
Ms. Sanchez. Thank you, Mr. Zimmermann.
I thank all the witnesses for their testimony.
I will remind each member that he or she will have 5
minutes to question the panel. I now recognize myself for a few
questions.
In his testimony, Mr. Owen referenced the development of
the National Incident Management System and the National
Response Framework that outlined the procedures for managing
and responding to all-hazard incidents. I believe that in order
to successfully recover from incidents, there must be
coordination between the private and the public sectors of the
supply chain. I have been concerned because I have been hearing
from people that non-Federal and private-sector stakeholders
frequently only learn about incidents on CNN.
So I would like to know--and this is for any and all of
you--how do the National Incident Management System and the
National Response Framework involve non-Federal and private-
sector stakeholders to ensure that they are fully informed and
that the affected systems can bounce back quickly?
Maybe we will start with Mr. Owen.
Mr. Owen. Thank you, Chairwoman.
What U.S. Customs and Border Protection has done, based on
the experiences we had with some tabletop exercises with
Canada, is that we also recognized that we needed a more real-
time accurate communication tool to get word out to the trade
community as to what ports of entry are closed, what
alternative ports of entry are open for service, extended
service. What we felt was important was to get the information
into the hands of the trade community so that they could self-
adjust. We also needed a feedback mechanism for them to tell us
where the anticipation and the trade was going to go, so that
we could then send our resources to meet that need.
To that end, we did develop a unified business messaging
system, which the trade community can sign up for, and it
provides them real-time information as to what activities are
suspended at particular points of entry. We had opportunity to
use this on the land border on the Tecate with the fires last
summer. We were able to quickly inform the trade community as
to the status of the Port of Tecate, as well as what
neighboring ports of entry were open. So that is one mechanism
that we have.
We also have another mechanism through the joint protocols
with the Coast Guard. That deals with the reach-back we have to
what is known as the carrier support group. We have a carrier
support group made up of groups such as the World Shipping
Council, the International Association of Independent Tank
Owners, the Cruise Line International Association. The purpose
of that association is for, again, for us to, in real time,
provide them information onto the status of a port, what
facilities may be impacted, and receive feedback from them as
to where they will be redirecting their vessels or their cargo
so that CBP personnel, Coast Guard personnel can make the
proper adjustments.
So those are two relatively two new communication tools
that we have that are intended to provide more real-time
information back to the trade community.
Ms. Sanchez. Anybody else?
Mr. Kelly. Madam Chairwoman, I just might want to add that
I think where there might be an area of great emphasis for the
Department would be in being more active in providing a role to
provide support to any of the businesses that are reliant upon
this global fragile supply chain and helping them build very
important business-continuity plans.
Based upon the symposium that we had in New York back in
March, we heard from many of the leading members of industry as
to how they are developing business-continuity plans. But my
sense is that this is not widespread and that there are many
parts of American industry that are reliant upon this fragile
global supply chain, where they could look to the Department
for the Department to become a clearinghouse, a center for
providing information to these businesses as to how you write a
business-continuity plan, what are the types of things you
should be thinking about, why you should exercise these
continuity plans, how you exercise the plans and so forth.
I think that would go a long way in helping bridge the gap
between the public and the private sector.
Ms. Sanchez. Mr. Owen or Admiral Watson, do we do that now?
Do we provide that type of help to manufacturers, let's say,
that are outside of a--I mean, I am thinking back to the issue
of maybe a car manufacturing plant somewhere, who has something
on some ship coming in through Louisiana.
Do we work with them? Or is that available? Or are they on
their own to try to figure this out ahead of time?
Admiral Watson. Yes, ma'am, maybe I could address that.
We primarily, as Mr. Owen said, we have these protocols,
and we work through their associations. Really every business
sector has a national association. Our protocols are focused on
communications with those associations in an actual event.
I think what we need to work on are the exercises and the
preplanning and assistance that I think that the DHS agencies
should be doing before an event. The mechanism that we would
have primarily to do that is through our various sectors.
You know, I think Mr. Zimmermann mentioned Captain Stroh
down in New Orleans. You have the example out on the West Coast
that was in The Washington Post. We have exercises that are
going on on a routine base. These companies are typically
notified of these things, either through their participation on
the local area maritime transportation security committees or
through information that is disseminated to them through their
association, their trade associations and so on. We are
starting to get participation in our exercises.
The council that Mr. Zimmermann mentioned I think is a
pretty good example. We have a similar organization in Houston.
We are planning exercises across different port areas to
exercise this recovery scenario where what is happening in one
port might affect another. And, of course, national-level
organizations, industry will be affected if any port that they
use is impacted by a disruption.
So we will continue doing those exercises and expect that
they will respond accordingly.
Ms. Sanchez. When you do these exercises and you talk to
the associations, the associations are responsible for trying
to drum up business from the membership to come over and work
through some of these?
How successful have you been in getting participation from
area manufacturers or large employers who would be highly
affected by goods movement being stopped?
Admiral Watson. Well, the protocols were just signed in
January, and so we are just now starting our set of annual
exercises.
But some of these outreach efforts and some of the
protocols were active at the local or regional level within the
maritime before they became national. In some of those
regional-level exercises, we have seen some of the big retail
distribution companies, like Wal-Mart and so on, actually
participate in some of the exercises.
So, you know, I think we have anecdotal information right
now, but I think it is part of our strategy and our plan to
involve those companies.
The carriers--those would be the shipping lines, the World
Shipping Council, the American Waterways Operators and so on--
they have always been involved in all the types of exercises
that we hold at the port level, whether for environmental
scenarios or hurricane scenarios. So this is fairly routine for
them.
Ms. Sanchez. Mr. Zimmermann, as a local port authority type
of a person--and this is always such an interesting thing,
because of course we have the Federal Government, we have the
State government--at least in the ports that I have in my
arena, the LA/Long Beach one, we have the local port authority,
and we have the shippers, and we have people who are using the
shippers to move goods.
Would you say that our Department of Homeland Security--
because we are really reviewing, what is the Department of
Homeland Security doing--do they have those connections going
up and down, and have they really gotten something into place
to ensure that if something like Katrina would happen again or
some sort of stoppage would happen that those ships out there
would be able to get their goods to an alternate port or to
some other terminal in the port in order to move those goods to
where they are needed?
As somebody who represents a local port authority, do you
think the coordination is there from the Department of Homeland
Security? Do you think they have done enough? Do you think they
are just getting off the starting blocks to work on it? What
would you suggest from the angle that you are looking at this?
Mr. Zimmermann. Well, the correct answer is probably a
combination of all of the above. As a parochial-thinking port
authority, we don't want cargo to go to another port; we want
to develop our port quickly and recover and keep the cargo
there.
I think it is important to note that I have been using the
term ``collaborative'' more and more over the last several
years since Katrina and since 9/11. There are certainly
organizations--Joint Terrorism Task Force, area maritime
security councils--all of which are designed to share
communication. Originally, it started primarily with regulatory
agencies; now including trade organizations and private-sector
shipping folks.
So, in terms of communication from DHS, to and from DHS for
that matter, as well as all of the Federal, State, local
service providers, I think communications has drastically
improved.
DHS, I think, has done a wonderful job. I am extremely
concerned, as I mentioned in my comments, port security grants,
as well-intentioned as they are, and they certainly do serve a
purpose, they are indeed placing a financial burden on port
authorities. A 25 percent matching requirement, as well as the
underlying operational and maintenance expenses on assets do
present a financial burden. Although American Association of
Port Authorities has not come out with a comment on that, I
think that will be coming shortly.
So, in that regard, I think that is an issue from port
authorities with DHS. But in terms of communications, I think,
by and large, they have done a very good job.
Ms. Sanchez. Let me just finish up, because I know that my
colleague has various questions he wants to ask.
I guess what I am asking is, as I look at--I am more
familiar with the port in my backyard, Long Beach/Los Angeles.
I know that one person in the Coast Guard basically controls
whether he is going to shut down the port or not.
So, if he does that to you as a port authority, I mean, you
just posed a very interesting counter to that, that you want to
try to get up and get it open and get the business through as
fast as you can. So, considering you have, sort of, your own
interest, he has an interest of what is safe, what can I open,
do you think that if something happened at your port today and
your presiding captain from the Coast Guard said, ``I have to
shut down the port,'' are there plans in place?
Do you feel confident that people who need the goods that
are waiting on those ships that are coming in will know who to
call? Will the phone be answered? Will they get some direction
about, ``I am sorry, the port is down for the next 10 days''?
You have, I don't know, flowers that are going to rot on that
ship if you don't get them unloaded in the next 2 days, ``Use
such-and-such alternate port, and you have been cleared to go
up there''?
I mean, that is what I imagine. If I am a business person,
I am looking for a solution to, ``I have to get my flowers off
the ship.''
Mr. Zimmermann. I understand. We have learned from Katrina
the importance of communicating with our customer base. In
fact, in our business-disruption plan, we have assigned one of
our divisions within the port authority, their primary role is
to interface with customers.
A good example is we were receiving calls literally 6
months, if not longer, after Katrina, saying we understand that
the city of New Orleans is still under water and nobody is
living there and commerce has completely stopped--all of which,
of course, was incorrect. But the point there is getting
communication out to the business community is imperative.
Another example of that is, and I was telling Mr. Kelly,
that, shortly after Katrina, we received a call from the
Chairman of the Federal Reserve Bank, Mr. Greenspan. I happened
to pick up the phone and talk to him. His first question was,
is the port up and running? We received calls weekly
thereafter. That was the time period when grain was getting
ready to move down the lower Mississippi River.
So, certainly, I think, by and large, the entire Nation
recognizes the importance of keeping our port system working. I
think that we have learned from a commercial, perhaps a
somewhat self-motivating commercial standpoint that it is
absolutely imperative to keep our commercial customers informed
of what is happening.
So do we have a plan in place to do that? Yes. How
extensively can we perform that? I am not quite sure I can
answer that right now.
Ms. Sanchez. Thank you. I will get back to that question
probably in the next round, but I would like to give my ranking
member--I am sorry I took so much time, but go ahead, please.
Mr. Souder. Mr. Zimmermann, I believe it is in your
testimony, you have elements of a disaster recovery plan?
Mr. Zimmermann. Yes, sir.
Mr. Souder. Does DHS collect these type of things? Do you
have any kind of model format of what port authorities can do?
Do you talk to the different port authorities to collect this?
Who at DHS would coordinate information-sharing?
Admiral Watson. In a port area, what we have is that Area
Maritime Security Committee. The committee has an area maritime
security plan, which is the area plan. It would include the
participation of the port, the port operations people, as well
as all of the State and local agencies and so on.
Mr. Souder. I am sorry, that is not quite my question. At
Charleston, I believe we have a project in there, because
Defense is so much in, they have kind of a separate thing
going, and then in another port authority they have this kind
of plan.
What Mr. Kelly recommended and what was partly discussed
here is, should you be a clearinghouse where, as different
ports evolve, they can get different ideas from each other? If
so, where would that be? Do you have anything like that now?
Where, if we came in as an oversight committee and said,
``We would like to see the disaster plans for every major port
in the United States, what are the best practices, which ones
seem to have weaknesses, which ones are advantages and we would
like to look at that,'' would there be a place?
Admiral Watson. No, sir, we don't have a repository for all
those disaster plans from all those different companies.
Where we share best practices is in our committees and in--
we have a National Harbor Safety Committee meeting annually. I
mean, we have lots of venues to share best practices, but we
don't collect the plans or have a staff that is looking through
all those to, you know, share best practices.
Mr. Souder. It seems to me--I spent most of my career, and
particularly the early part of the career, working narcotics
heavily, which had interaction with many of you and your
agencies. Contraband is contraband, people smugglers are people
smugglers, and they go through ports and all that type of
thing.
In narcotics, over the years, what I watched is, in dealing
with that, they have evolved further, and Homeland Security is
just tracing behind much of things, like whether it is an EPIC
center or how we work with local law enforcement on
information-sharing. Many of the things that Homeland Security
is trying to do are things that we have done in narcotics. What
kind of equipment is purchased at the local level? We developed
a clearinghouse for the different agencies where they could
review and say, ``This is the kind of radio you can get.'' We
tried to do best practices where we had clearinghouses. We
formed in treatment and so on, that type of thing.
It seems in Homeland Security we are substantially behind
that. I will ask Mr. Zimmermann, when you drafted this, where
did you get your ideas from?
Mr. Zimmermann. Well, quite frankly, this was based on in-
house knowledge and a little bit of flying by the seat of our
pants.
In response to your question, I think it is a case of the
American Association of Port Authorities is in its infancy
right now of putting together a best-practices-type scenario
regarding disaster recovery plans.
I think the next step, looking at disaster recovery from a
micro level, at a local level, is that, as I mentioned in my
testimony, a port is comprised of numerous private-sector
service organizations, and really a port is only as good as
every one of those. This summer we will be having an open house
at the Port of New Orleans to encourage all of the service
providers to discuss their own individual disaster recovery
plans. That will also include the local agencies.
I feel fairly confident that most entities in the
transportation chain have some sort of disaster recovery plan.
But we have not, to my knowledge, actually shared them with one
another on a micro level, on a local level. I think that is
probably the next step.
Mr. Souder. Yeah, because, I mean, I have never been in a
place that didn't show the plans and didn't have a whole dog-
and-pony show with the plan.
I mean, it is just like at our border crossings. For years,
we had all kinds of things developing, and they just didn't
talk to each other. If you crossed at one place, we didn't know
you crossed over here.
Part of the question is, how is this evolving when you
have--I mean, we have the Internet. This isn't hard. I mean,
you can basically take some computer college guy and get this
stuff together and have a clearinghouse.
This leads me to another, kind of, pet concern I have in
watching the exercises. That, particularly when you get into
emergency responders, particularly when you get into volunteer
emergency responders or even blended in different services,
people don't stay in the same position for their whole career.
They move inside the departments. So we go through these
exercises. Since terrorist attacks don't occur every week, in
fact they don't occur every year thankfully, in fact maybe a
decade, and then it is one place in the United States, you may
never see one in your whole career. By the time you go through
a 30-year career, you may have gone through one exercise but
had 10 posts since then.
Are we doing anything--I remember when my youngest son, who
is now 20, was doing SimCity stuff. I talked to different
troops going to Iraq who are still saying that, in training,
some of the video games they are playing are more sophisticated
than the training they are getting from our military. That some
of this kind of stuff doesn't all require--you have the actual
things to make sure your simulations are working.
Are we looking at how, when a new person comes into a fire
department, when a new person comes into the police, when you
transfer somebody over, when somebody who is doing this in a
port gets transferred over here, that there is a simulation
they can work through, and particularly with younger people, a
model that they are most comfortable with, and are we
interacting?
It is like we are, kind of, acting like everything has to
be done verbally, that our big innovation is, rather than
flying everybody to a city for a meeting, they are doing it
through teleconferencing. But there has to be some real
breakthrough potentials in training using this type of a
format.
I raise this in different formats because there just
doesn't seem to be much, kind of, creative programming of how
to do this in our different agencies.
Anybody have any thoughts with this? Is anything being done
in Homeland Security? Do you have anything similar in ports?
Have you seen that in your associations?
By the way, the military is starting to do more of it in
their training for overseas. I saw training at Camp Atterbury
in Indiana where they were starting to use a game that was
almost as sophisticated as my 12-year-old son was doing, but I
think they have upgraded steadily.
Admiral Watson. Sir, I will try to answer your question.
I don't know of anything as sophisticated as, you know,
some of the SimCity or whatever, those kinds of gaming, that we
have ever seen for something like a seaport. But we are
starting to use online training. We are sharing that across
agencies. We are putting things online so that they can be
accessed by the public without waiting for a physical exercise.
You know, I think that there is still some value in the
local area--I guess Mr. Zimmermann would call this the micro
area--for people to actually see each other face-to-face. I
mean, we have found that when real incidents occur at that
local port level, the last thing that you would want is for
people to just be meeting each other.
So, you know, we have really focused, I guess purposefully,
on these uses of our time and energy to actually have people
meet each other.
Mr. Souder. I am really fundamentally calling into question
that. That is a part of it, but it has to be slot X rather than
person X.
I have a degree in business and a master's degree in
business and working in the private sector; this is a changing
field. It is so infrequent, that the faces are going to change.
If you don't have a model that works and you are depending on
person to person, yes, that helps--an informal structure in any
disaster is going to be important as a formal structure.
But if you don't have a basis--I believe in Katrina that,
when we first went in, it was just before Commandant Allen got
down there and General Honore, I think, was in the group in
Iraq from here that went in in the beginning. There was chaos.
That people couldn't talk to each other, people were arguing,
no, this is State, this is Federal. The Governor and the
Federal Government got in an argument in front of us about who
was in charge. That there is only a certain amount of face-to-
face. There has to be a structure that goes past the
individuals. Katrina was a good example of that challenge.
That the Coast Guard partly worked because you had a more
traditional military structure, that it didn't depend on
whether you had person-to-person. When the person here said, do
something, the next person said, ``Okay,'' and he said, ``Do
this,'' and they said, ``Okay.''
And that how you do this can't--you know, the boat guys go,
look, this is my neighborhood, I am going to go rescue my
neighborhood, I didn't like the order I got. That is part of
the challenge when you work with volunteers. But there has to
be some kind of a structure.
One other thing I just want to mention here is that--well,
two things. When we think of the traditional disruption, I
think it is just good to put it in the record, that I was
stunned to know that the largest employer in my district are
direct sellers: Avon; Discovery Toys, where my wife works; I
have two staffers that do Mary Kay. Thirty-thousand-plus
people, they were stunned at the shutdown in Long Beach/Los
Angeles because they had no product. That was, ironically, the
No. 1 group of people. We think of other sectors.
Also in Katrina, just to show you the little--by about
Tuesday, the head of Steel Dynamics called me and said, you
have to get this Canadian hydrogen plant open. Two hydrogen
plants are down in the Gulf. I said, well, what does that have
to do with steel? He said, well, we use just a little bit of
hydrogen, but we have put the three big auto companies on
warning that the steel isn't going to come, and they are going
to have to shut down within 4 days if you can't get the
Canadian hydrogen plant open. They have put a notice out to all
the parts people that they are going to shut down. It only was
just a tiny percent of hydrogen.
Then I called a friend in the Canadian parliament, which
isn't the way we should really be handling disasters, and he
said, ``Well, you shut it down because of the trade thing.'' So
I called Rob Portman and said, ``Open it up.'' He said, ``Well,
you always complain about dumping.'' I said, ``Forget dumping,
open up''--you know, see if the Canadians will get it going,
because we are just about to shut down a whole bunch in the
retailing.
This kind of stuff just can't be, oh, we had the meeting,
we are working on it, and so on. If something happens like
this, it has so many angles that we don't even understand that
just ripple through that can lead to tens of thousands of jobs
because one little chemical didn't come through.
That is why I think we really have to have some different
types of approaches. It needs to accelerate information-
sharing. We really need to get this stuff online with access
with best practices, and not kind of everybody freelancing. We
all live in fear about the incident in New York where the
cross-jurisdictions, which supposedly we worked out and it
wasn't radioactive material, but eight different agencies were
struggling with it before we sent the boat back out to sea.
The question here is that if there is a port attack, do we
really know if it came in by boat? Are we going to argue that,
well, no, it was a land attack; oh, well, there was a land
attack and a boat attack, this must be Coast Guard, this must
be CBP; no, this is Department of Transportation because I
think they hit the rail; oh, maybe it is the air because there
was somebody who came in by airplane who got there; oh, no, it
is the local port authority, I think the shipping company is in
charge of this.
This is what we worry about. There needs to be even more an
aggressive thing. If we need to do some consolidation at our
end, we need to see what we need to do legislatively.
Thanks.
Ms. Sanchez. I agree. I think it goes back to the question
I was asking Mr. Zimmermann; how confident are you that if
something happens everybody knows--you know, that a company
knows where it stands in line and how it is going to get its
goods. Or will it? Because, you know, maybe flowers aren't as
important as some munitions that is coming in on a ship that
was further back in the pecking order.
So I think we have the same concern. The concern is, who is
in charge? When does that spring into action? Does everybody
know who is in charge and what their role is, and where are
they in the pecking order as to when we are going to get to
them and what they are going to get to do with their goods?
Ms. Sanchez. I mean, this is the question we are asking. I
think, when I look at--and every port is different. That is
what I have learned. Every port is different. But I am not so
confident that if something would happen in my backyard that
people really would know how to spring into action and who is
in charge and what goods are going to get through and what is
not going to get through.
I guess added to that is: What role do the workers on the
dock have? Do they know what their role is? Who tells them what
to do if something is happening? Are we training them up for
that?
I mean, what about all of these dockhands who are the
first--they are probably at the incident. You know, do they
know what to do? Are we training them to know what to do? What
role do they play?
Can anybody here answer that?
Mr. Zimmermann. Chairwoman Sanchez, I would like to respond
to that, if you don't mind.
One of the things that concerns me is that most
organizations, if not all organizations, have some sort of
recovery plan in place. We say that this organization is going
to do this, this organization is going to do that, and this is
how we are going to respond.
What concerns me is looking behind that plan, meaning you
say that your people are going to do this and do that, but
suppose these people aren't there; suppose these people can't
communicate; suppose these people don't have a home to live in.
That is why I keep referring to the micro aspect of disaster
recovery, and I will use New Orleans for an example.
I think it is imperative--and, quite frankly, we have not
done this yet, and we should and we will--we need to get to
each component of the port--service providers and go across the
board--and get a little bit into, how exactly are you going to
do what you say you are going to do? Use the regulatory
agencies, Coast Guard, for an example. Locally, in New Orleans,
well, if your guys can't get to where they are supposed to be,
how do you respond to that?
So, in other words, I think we have to look behind what
everybody says they are going to do and determine exactly how
they are going to do it. That is an element that I think is--I
won't say it is missing. I just would say that we have not
gotten there yet.
Ms. Sanchez. Gentlemen, do any of you have an answer to my
question or some inkling of who is really taking care of this?
I would assume it should be the Department of Homeland
Security.
Mr. Souder. Can I ask a variation of that?
Ms. Sanchez. Yes.
Mr. Souder. Does it depend on where the attack hits and who
it is from, as to who is in charge?
That is what I was kind of suggesting in mine, which is
that, if it comes to the water, it is the Coast Guard; if it
comes to the land, it is CBP; if it is in a certain part of the
harbor, it becomes the Port Authority; if it is on somebody's
company land--does who is in charge depend on who hit and where
it hit?
Admiral Watson. I don't think the vector makes as much
difference as the impacted entity. If it is in the port or if
it is in the waterway or if it involves a vessel, that is
clearly in the responsibility area of the Coast Guard captain
of the port.
Mr. Souder. Okay. Since it is not likely to be that clear--
--
Admiral Watson. But if you consider what is impacted, and
then it could have been a plane out of the sky; it could have
been an underwater whatever.
Mr. Souder. Because most of the ports I think of are--here
is the water, so the ports are certainly going to be impacted,
most likely, but it may have spread up and may have blocked the
rail or it may have taken out a bridge that is rail. It may, in
fact, then maybe hit one of the cranes. You may have a
terrorist running around on the ground who did it.
So now who is in charge? It hit multiple vectors.
Admiral Watson. Well, one of the things we haven't touched
on is the National Response Framework, the framework that the
Federal Government has created, and it uses the ICS system, the
national incident management system. We have put a lot of
effort into making sure that everyone who should be involved in
these disasters gets the basic training at least.
We are seeing that that has been happening. It necessarily
involves the Federal agencies involved, which would include
people that have responsibility beyond the port, as well as all
of the port response agencies, the port facility owners and
operators, the port security people and so on, the State
police. That is the structure that really allows us to cross
broader areas than just our local jurisdictions, for instance,
the Coast Guard and the maritime.
We actually use that for hurricanes, for example. We send
someone in the Coast Guard typically up to a State emergency
operations center where a State will be managing the effect of
a hurricane. I am just speaking from experience here. In the
State of Florida, where I was stationed, we have a lot of
hurricanes. They are dealing with problems inland, offshore, in
the rivers, you name it.
So we are plugged in there just to deal with the maritime
issues, but we are using that same framework to manage that in
the case of a hurricane, underneath the overall leadership
typically of the Governor, unless it gets really out of
control. The opposite might be true if the situation is a
purely maritime situation, where the Federal Government
maintains the overall control but may need the support of the
State and locals and, of course, the industry.
We have integrated this recovery concept into our
contingency plans, and that is what I mentioned in my
statement, that we are going to have a series of exercises. We
are going to learn those lessons from the exercises and,
hopefully, from the best practices. As we bring different
people from different industry segments or different companies,
we can share those best practices as we see them through this
exercise process.
Mr. Kelly. Madam Chairwoman, if I may.
Ms. Sanchez. Absolutely.
Mr. Kelly. We have been talking a lot today about an event
taking place in a port and also about port disaster plans.
If an event takes place in a port, the ramifications of the
event are going to go far beyond the port. If I am a
manufacturer in, say, Fort Wayne, Indiana, or Orange County,
California, and I am relying upon the fragile global supply
chain from materials to come in from all parts of the globe in
order for me to make my product, furthermore, I also have to
rely upon it to get my product to market.
I think there is a role for the Department in reminding
folks like me, if I am a manufacturer, that it is in my vital
interest that I develop a continuity-of-operations plan, a
business continuity plan, for my business. By the way, this is
what it looks like; here are half a dozen examples; and these
are the 12 things you should be thinking about when you are
developing a continuity-of-operations plan. Oh, by the way, you
need to exercise your continuity-of-operations plan. The worst
thing in the world is to have one, put it on the shelf, and be
lulled into this false sense of security that, if something bad
happens, you pull it off the shelf and respond. You need to be
able to test it, exercise it and determine where its
deficiencies are.
I think there is a great role for the Department in acting
as the national clearinghouse, a focal point for alerting
industry, particularly the manufacturing sector, which has to
look both upstream in the supply chain and downstream in the
supply chain so they can build continuity-of-operations plans
so they can survive an event that happens in a port or happens
anywhere else in the supply chain.
Ms. Sanchez. Thank you, Mr. Kelly.
We have been joined by my colleague, Mr. Cuellar from
Texas, and I think that he has some questions to ask.
I will recognize you for 5 minutes.
Mr. Cuellar. Madam Chair, thank you. I am sorry, I was with
Small Business, talking about digital TV transition and the
impact of February 17, 2009.
My question has to do with what steps--and I don't know; I
came in at the very end--but the impact that happens when you
have the supply chain.
That is, let's say you have--and I will talk about my
area--you have something coming in from Monterrey, going
through Laredo and then going off into the Midwest somewhere,
and how that disruption will have an impact, because it does
have an impact. Then also, not only talking about that, but on
your rules and regulations and how that affects the supply
chain that we have.
Do you all do any sort of economic impact when you all
implement your rules and regulations relating to this? Because
I know that, when we think about Homeland Security, we usually
say it is more of an enforcement--at least that is the
impression that we get from our business folks who we
represent--that you are more law enforcement-minded or mission.
But do you all take any sort of consideration on the work
that you do? What is your thought process when you go through
that consideration, especially the small-business people?
Anybody?
Do you see what I am saying? You have to do law
enforcement, and I don't have a problem with that; I will
support you. But the question is, do you all look at the impact
that it has?
If there is a bad apple, I understand there is a bad apple,
but if there is somebody who is trying to comply, how do you
address especially the small-business person involved in this
supply chain?
Admiral Watson. Yes, I think what the question is, is do we
take into consideration small business when we make regulations
that are going to impact the supply-chain businesses.
Certainly, we do through the Administrative Procedures Act and
through the regulatory process.
Now, once the regulation is in place and the enforcement is
ongoing, you do wind up with people who are impacted,
potentially due to, I would hope, minor disruptions of the law
enforcement activities taking place. I mean, this could be a
Customs inspector; it could be a Coast Guard inspector. That is
part of what we have to do to be doing our job on the border or
with regard to whatever laws are involved.
Those kinds of things are--you know, we really can only
minimize those interruptions to businesses so much. We always
have an appeal process if the business feels during those
activities that we have really not done a good job of either
targeting or doing the law enforcement activity. We are very
conscious of those appeals and to those oftentimes good
recommendations that businesses have in ways we can improve the
way we do law enforcement.
Mr. Cuellar. Yesterday, we had another meeting in the Small
Business Committee, and they invited all of the different
associations, from the trucking association to, you know, name
the industry. They were talking about Homeland Security and how
it impacts. I mean, we had at least 15 to 20 associations--
business associations, national business. All of them had a
complaint about Homeland. I was doing my best to defend
Homeland, but, I mean, apparently, there is an issue with a lot
of the national associations that feel that--we are not talking
about somebody who is trying to smuggle in drugs or anything
like that. We are talking about trying to comply with some of
the rules and regulations and the impact that it has. Because,
yesterday, what we heard was that they are saying there is no,
really, consideration by Homeland Security, as an agency, on
businesses.
Maybe this is another time, that maybe we need to follow
up, since they are calling us for votes. But I would like for
you all to just think about the impact that it has on
businesses, not the strict enforcement, but the regulations and
the compliance. I guess it is more the compliance nature of it.
I would love to follow up with you all on that.
Another motion to adjourn. I am finished, Madam Chair.
Ms. Sanchez. Gentlemen, we have a vote on the floor. I
think we will go for another 10 minutes if we have questions,
and then we will adjourn the committee, because who knows what
kind of games are playing out on the floor. I think it is not
the only vote we are going to have.
Do you have any further questions, I would ask my ranking
member? I will give him some time to ask.
Mr. Souder. I am still frustrated with the chain-of-command
question, if I can follow up a little bit more on that.
Is there a place in your incident planning, which is one of
the big questions in Katrina, where a scale is triggered--I
mean, because what happened in Katrina is the Governor had to
ask, and the Governor didn't want to lose control over local
Guard, and we had all of these kind of questions--where a scale
of incident triggers the Federal authority to override?
Admiral Watson. I didn't come prepared to talk in detail
about that scenario, sir. But I can pretty assuredly say that
the system whereby the State, in that case, is the requesting
authority for Federal agencies. I don't know that there is a
trigger that automatically has the Federal Government come and
take over a situation in a State.
Mr. Souder. We have a whole level of frustration. We are
talking about the buses being blocked by a local sheriff on a
bridge. We have a problem right now with, quite frankly, some
of the border control, where an eagle pass, a mayor isn't
letting the Federal Government implement, because we don't have
the same land control along the border in Texas that we have in
Arizona and California.
At what point does national interest trump local? The
American people, when they see somebody hungry or something
happening, don't really care about a jurisdictional fight. Now,
I am a conservative Republican, and I believe that authorities
should stay local as long as possible. But there has to be some
trigger here where we say, look, this scale has exceeded a
certain point.
Which leads me to a second question, that in emergency
response, we have been debating back and forth, have been
moving that--do you have, in effect, like, a national emergency
response team that moves, or do we have them regionally
trained?
Because when we start to look at FEMA--I was just talking
to the head of our State Homeland Security Legislative
Committee, and one of the things that we run into is, if we
have a major incident in any city in Indiana, we don't have
enough beds. There is no way you can train for a major
incident. A major incident will just overwhelm your local
system.
So you are going to have to have--and plus, we were talking
about--I was over on the Mississippi side--and it was a great
theory, and I have certainly read all of this in New Orleans,
it was a great theory, but guess what? They had their families
to worry about. They don't have any tax revenue. Their county
government place got knocked out. They don't have any
computers.
The question is: Like we are starting to do in emergency
disaster response, in the economic response, in the supply
line, are we going to have, at the very least, informational
regional teams that, if a bridge goes out, we know where bridge
engineers are and people who can come in from the outside and
fix it? Do we have access to other ports within 500 miles that,
if the longshoremen who aren't part of a company scatter,
somebody can come in when we are restarting while they are
trying to get their own families in shape? If there is
something that occurs in the physical part of the port, that
there people with certain expertise who are working with the
different things that can come in, in a regional way, to handle
a scale.
Because most of the training that I see or most of the
plans that I see are all local people talking to local people.
It will overwhelm the local system if it is a major hit.
Admiral Watson. These protocols for expeditious recovery of
trade, that is their intention, is that we recognize that a
local port is going to be affected, it is going to be knocked
out, and that things are going to have to adjust to get the
goods and services to the hinterlands now that that one port is
knocked out. You need to have a means of communication; you
need to coordinate the Federal and State agencies. You need to
not tell business how they are going to do it, but you need to
support their telling the Government agencies how they are
going to do it.
Mr. Souder. So, if somebody blows up a couple of dikes in
the Mississippi River and there is also another catastrophe
around with lots of deaths, do we know where we would go to
bring engineers in and repair places within 1,000 to 2,000
miles to get them down there to get it back open?
Admiral Watson. We don't have a list like that of
engineers, but we have communications with these associations
and throughout the Federal Government, so that we would put out
a call for those engineers.
Mr. Souder. For example, a call went out on Katrina to the
Indiana National Guard. It takes even an organized organization
like that--they have to get the people in. Then they had to
plan the gas route all the way down so they didn't wipe out the
gas in each city as they came. It took them about 3\1/2\ days
to move, because when you are working with organizations that
have to pull it together, you are talking 3, 7, 10 days, even
in an organized unit.
The reason I raise the question about SWAT teams and so on
is because we had this discussion, how much water are we going
to hold back for the future to get it out faster. Sometimes you
have to work in 72 hours or in just-in-time delivery. Having
everybody put together a voluntary chain takes a week or 2
weeks. We will be bankrupt.
Some of this scale, the question is, can there be something
that is a fast response? I don't know what it is called, but
that is what we are trying to do in emergency management. The
question is, can it be done in getting the infrastructure up
and running?
Now, some of these things just take a while. Sault Ste.
Marie loses a lock, you are not going to replace it in 6 days.
I mean, other things can be, if we were trained to do so.
Admiral Watson. Right. Yeah, I think if you put your finger
on the issue, is that a large part of what we are talking about
here today is owned by the private sector. Do they have these
recovery plans? I think the answer is, well, they do, but one
entity does not know what the other entity's plan is and that--
--
Mr. Souder. Does CBP do any of this in your----
Mr. Owen. Within CBP, we have for our mobile inspection
assets. We can quickly deploy additional officers through our
air assets. We have mobile, nonintrusive inspection equipment,
the imaging machines that you see. We have mobile radiation
portal monitors. We can quickly adjust our resources to meet a
change in the flow of trade.
The broader question as to infrastructure changes and
things like that, CBP is just not in that type of capacity. But
if a port of entry were to be closed and the trade were to move
to a neighboring port, if it was a smaller location where we
did not have those types of assets, we are in a position to
quickly, through our air branch and through the mobile
inspection technology, quickly deploy to meet that need in the
trade.
Mr. Souder. Mr. Zimmermann, is there anybody who you would
call? Who would you call?
Mr. Zimmermann. Well, part of the answer is there does
exist Area Maritime Security Councils, which are headed jointly
by the Coast Guard and FBI. They have, as part of the council,
numerous regulatory agencies--Federal, State, local--and some
commercial trade organizations and so forth. They are designed
to take a--and here is that word again--a collaborative
approach to responding.
So I think that is probably the organization that you are
referring to. How effective would that be in dealing with the
commercial aspect of an event? I am not quite sure. But from a
pure regulatory response, that is the purpose of the Area
Maritime Security Councils.
Mr. Souder. Madam Chair, I know we share a lot of the--when
the Cabinet members came in after Katrina, and Secretary
Chertoff was trying to--it was like having to bang this out of
HHS, bang this out of HUD, hope you could get a phone
connection and get people on the phone at the same time--I am
not denigrating. The first time through every disaster is hard.
But we have now been through 9/11, we have been through
Katrina, and we are seeing more of where the holes are. I just
wanted to raise these points, because I think, personally, that
it is a big hole.
Ms. Sanchez. I would agree. I think that this, as we
discussed, warrants that we go back and discuss it some more
and figure out what kind of direction we need to give to the
Department. Maybe we need to really see who in the Department
has this going or is responsible for this, as well as some
other reports and things that are missing.
I have a lot of other questions, but we do have a vote on
the floor, so I will submit those in writing to you and hope
that you get back to us with answers fairly quickly. I mean
that, because this Department, in particular, has a sense of
not getting back to us in writing.
I will also remind the rest of the members that they can
submit questions in writing.
You may receive some, and we would hope that you would
answer them and get them back to us quickly.
With that, the meeting is adjourned. Thank you so much to
the witnesses once again.
[Whereupon, at 4:40 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Questions From Hon. Loretta Sanchez for Mr. Todd Owen, Executive
Director, Cargo and Conveyance Security Office, Office of Field
Operations, U.S. Customs and Border Protection, Department of Homeland
Security
May 7, 2008
Question 1. What is the status of the Secure Freight Initiative
report? This report was due April 13 and it is my understanding from
staff that the Department has refused to provide information on when
the report will be completed.
Answer. Response was not provided at the time of publication.
Question 2. It is my understanding that more often than not, the
private sector is notified via CNN of a port or terminal closure. Why
has CBP failed to develop an adequate communications system?
Answer. Response was not provided at the time of publication.
Question 3. It has been almost 7 years since 9/11 and according to
your written statement CBP is now conducting comprehensive business
resumption planning. Why has it taken 7 years to start this planning?
Answer. Response was not provided at the time of publication.
Question 4. According to your written testimony, Customs and Border
Protection and the Coast Guard recently signed Joint Protocols for the
Expeditious Recovery of Trade. Why has it taken so long for the
Department to develop these protocols?
Answer. Response was not provided at the time of publication.
Question 5. In your written testimony, you state that ``our
response to an actual event will depend on the facts we encounter and
each response will be tailored to reflect these circumstances.'' Given
the fact that you only just signed the Joint Protocols and are
currently conducting comprehensive business resumption planning, what
assurances can you give the committee that your response will be
adequate and responsive to the needs of the business community?
Answer. Response was not provided at the time of publication.
Question 6. In your written testimony, you reference the
Department's multi-layered approach to security. This approach did not
include container security devices, which are mandated by the SAFE Port
Act and the 9/11 Act. What assurances can you give the committee that
the Department is going implement the container security device
requirement?
Answer. Response was not provided at the time of publication.
Question 7. The Container Security Initiative (CSI) program depends
on foreign governments to inspect containers before they are loaded on
ships bound for the United States. How does CBP systematically ensure
that these foreign countries have the systems and people capable of
detecting and identifying WMD?
Answer. Response was not provided at the time of publication.
Question 8. One aspect of the CSI program is for our CBP personnel
to observe foreign countries' processes for inspecting containers. How
often do CBP personnel actually participate in or witness these
inspections of high-risk cargo bound for the United States? Aren't
there some CSI countries where our CBP personnel do not observe the
inspections?
Answer. Response was not provided at the time of publication.
Question 9. One perceived benefit for foreign countries
participating in CSI is that their containers will not be inspected
again when they arrive in the United States. How many containers
inspected at CSI ports are re-inspected upon arrival at domestic
seaports?
Answer. Response was not provided at the time of publication.
Question 10. A container inspected at a CSI port is unlikely to be
inspected again in the United States. What technical standards does CBP
have for foreign inspection equipment used at CSI seaports to examine
high-risk U.S.-bound containers and how do these standards compare to
technical standards used for inspection equipment at domestic seaports?
Answer. Response was not provided at the time of publication.
Question 11. As noted, the CSI program depends on foreign
governments to inspect containers before they are loaded on ships bound
for the United States. Does CBP systematically review or examine the
inspections practices or training of host government customs services
that conduct inspections of high-risk U.S.-bound containers? If not,
how do we know they are qualified?
Answer. Response was not provided at the time of publication.
Questions From Hon. Loretta Sanchez for Rear Admiral James Watson,
Director, Prevention Policy for Marine Safety, Security and
Stewardship, U.S. Coast Guard, Department of Homeland Security
Question 1. In reading through some recent Port Security Exercises
reports, I was surprised to learn there are still problems with
communication and information sharing. What steps has the Coast Guard
taken to improve communication with maritime stakeholders?
Answer. Response was not provided at the time of publication.
Question 2. It is my understanding that more often than not, the
private sector is notified via CNN of a port or terminal closure. Why
has the Coast Guard failed to develop an adequate communications
system?
Answer. Response was not provided at the time of publication.
Question 3. It is my understanding that many maritime stakeholders
are unfamiliar with the Homeport website. What steps have you taken to
improve visibility of this program?
Answer. Response was not provided at the time of publication.
Question 4. While much planning has been done related to increasing
security and preventing terrorist attacks, relatively little attention
has been paid to resiliency issues. Resiliency would be needed not just
for terrorist attacks, but for natural disasters or any other situation
that could close down a port. To what extent does the Maritime
Infrastructure Recovery Plan address this need? Isn't it written at too
high a level to be useful to a given port in planning and implementing
resiliency measures?
Answer. Response was not provided at the time of publication.
Question 5. The Coast Guard guidance on Area Maritime Security
Plans was contained in a Navigation and Vessel Inspection Circular
(NVIC) and contained a common template for developing such plans. This
guidance required that plans--which were to be completed by July 2004--
contain priorities for recovery operations. However, recent GAO work on
protecting energy tankers and implementation of the SAFE Port Act,
noted that Area Maritime Security Plans lacked specific information on
recovery and had not been updated to reflect the national-level
guidance in the MIRP. What is the schedule for updating the Area
Maritime Security Plans to incorporate more recovery issues?
Answer. Response was not provided at the time of publication.
Question 6. The Maritime Infrastructure Recovery Plan (MIRP) noted
that the Coast Guard and Area Maritime Security Plans provide little
guidance on port-level recovery issues. In addition, the SAFE Port Act
specifically required that Area Maritime Security Plans include salvage
equipment able to restore operational trade capacity. Have Area
Maritime Security Plans now incorporated salvage information to help
ports clear waterways as quickly as possible?
Answer. Response was not provided at the time of publication.
Questions From Hon. Loretta Sanchez for Mr. Robert W. Kelly, Senior
Advisor, The Reform Institute
Question 1. Why do you think that the Department of Homeland
Security has failed to focus on the resiliency of the Nation's supply
chain?
Answer. Response was not provided at the time of publication.
Question 2. What role do you think that the Department of Homeland
Security should have with regards to resiliency?
Answer. Response was not provided at the time of publication.
Question 3. What lessons learned from the 2002 West Coast port
strike and Hurricane Katrina should the Department of Homeland Security
apply to improving the resiliency of the Nation's supply chain?
Answer. Response was not provided at the time of publication.
Question 4. How would you describe the current level of
communication between the Department of Homeland Security and the
private sector? What steps should be taken to improve this
communication?
Answer. Response was not provided at the time of publication.
Question 5. What is your assessment of the Department of Homeland
Security's cargo security initiatives?
Answer. Response was not provided at the time of publication.
Question 6. What is your assessment of the various maritime
security plans that the Department of Homeland Security has developed
in the past 5 years?
Answer. Response was not provided at the time of publication.
Questions From Hon. Loretta Sanchez for Mr. Paul Zimmermann, Director
of Operations, Board of Commissioners, The Port of New Orleans
Question 1. In your written statement you state that events that
took place contributing to the recovery of the Port of New Orleans were
basically reactionary, with an emphasis on mere survival. Please
elaborate.
Answer. Response was not provided at the time of publication.
Question 2. What measures could the Port of New Orleans have taken
before Hurricane Katrina hit that would have improved the resiliency of
the Port?
Answer. Response was not provided at the time of publication.
Question 3. What measures could the Coast Guard and Customs and
Border Protection have taken before Hurricane Katrina hit that would
have improved the resiliency of the Port?
Answer. Response was not provided at the time of publication.
Question 4. It has been 7 years since the attacks of 9/11 and 3
years since Hurricane Katrina hit landfall. What more should be done to
protect the Mississippi River, a river which carries nearly 25 percent
of the Nation's waterborne commerce?
Answer. Response was not provided at the time of publication.
Question 5. What are some the lessons learned from Hurricane
Katrina that can be used to improve the resilience of the Nation's
supply chain?
Answer. Response was not provided at the time of publication.
Question 6. In addition to damage to the Port, there was also
significant damage to the infrastructure leading to the Port. How did
this damage impact the ability of the Port to come back on line?
Answer. Response was not provided at the time of publication.
Question 7a. The movement of cargo is dependent upon the men and
women who work on the ports. In the aftermath of the storm, it was
difficult to locate and communicate with these men and women. They had
lost their houses and with the phone lines down, they had lost the
ability to communicate to the outside world.
Did all of your workers return?
Answer. Response was not provided at the time of publication.
Question 7b. How did you locate them?
Answer. Response was not provided at the time of publication.
Question 7c. Where were they housed?
Answer. Response was not provided at the time of publication.
Question 7d. How did you pay them?
Answer. Response was not provided at the time of publication.
Question 8a. In your written statement you state that the Coast
Guard is severely hamstrung in the Port of New Orleans area as they do
not have enough assets on the water to provide an appropriate level of
deterrence, interdiction, surveillance and presence on the Mississippi
River.
How has the lack of resources impacted the Port of New Orleans'
ability to improve the security of the port?
Answer. Response was not provided at the time of publication.
Question 8b. What additional assets does the Coast Guard need?
Answer. Response was not provided at the time of publication.