Port Security: More Port Security Grant Money Necessary

Monday, June 09, 2003

In early 2002, and again in 2003, the federal government offered rounds of Port Security Grants. They were ostensibly Transportation Security Administration monies administered and meted out jointly by the US Coast Guard and the Maritime Administration (MARAD). There was $93 million in 2002 and about $104 million in 2003. The 2003 grant process is just now being concluded.

The most recent opportunity to submit an application to obtain grant monies (out of the funds allocated for this round) closed on February 27, 2003. The distribution of these funds is expected in May, 2003.

While the 2003 grants have not yet been distributed, various port authorities around the country have been the dominant users of the previous grants, even though individual port facilities have always been eligible for them. Operators of many small and/or independent facilities may still be unaware of how the grant process works.

These grants were intended to provide financial assistance to the nation's ports and various port facilities in order to upgrade the marine security infrastructure. Much of the funding has gone for improving ports' physical plants to achieve the newly desired increase in port security. This has all been in advance of the new Coast Guard Port Security Regulations, slated to be published on or about July 1, 2003, compliance with which will be mandatory.

The most accepted method of establishing grant eligibility to the USCG and MARAD is by demonstrating that the specific modifications for which the grant money is requested will mitigate an established risk under the USCG's recommended guidelines for port facility security, which were published in Navigation and Vessel Inspection Circular (NVIC) 11-02 (available online). In other words, a facility must be able to demonstrate to the USCG that the modifications funded by the requested grant will mitigate a threat exposed under the assessment guidelines published by the USCG.

The Maritime Transportation Security Act (MTSA) of 2002 authorized grants every year for the next six years. Unfortunately, only $15 million in funding was included each year. The funding level can readily be increased by congress (presuming they can find an adequate funding source).

Under the law, industry will then have six months to submit required material to the USCG and the USCG has six months to approve all the plans. Also under the MTSA is the requirement that within six months of publication of the Interim Final Security Regulations (expected on or about July 1, 2003), vessel operators and port facilities that are identified as needing to comply must perform the required Security Assessments, prepare Security Plans, and develop terrorist incident response plans and be in full compliance with approved plans within one year (July, 2004). The MTSA mandates that all operating vessels and facilities have approved plans, have all plant modifications complete, and be operating in accordance with those plans within one year of publication of the Interim Final Regulations.

It goes without saying that physical plant modifications must also be completed prior to July 2004 as well. With so much to accomplish in a relatively abbreviated timeframe, grants awarded beyond the fall of 2003 may be relatively meaningless.

This means is that the really important time for large-scale grants is the last half of 2003, because all actual modifications to port facilities must, according to law, be completed by the July 2004 deadline.

Grant monies will be essential for the survival of the many small facilities that will be required to dramatically upgrade their security to come into compliance with the new standards. Large container operations and chemical plants are probably in near-compliance already, due to self-directed measures intended to protect their operations from pilferage and more organized theft. It is the small, independent facilities that will suffer the greatest negative impact. Some (and possibly many) facility operators are not yet aware that they will have to comply with the new security rules.

With so much emphasis being put on security in the grant process, it becomes vital to ascertain which facilities are eligible for grant money. Basically, the government has put its emphasis on all the facilities to which the new Port Security Regulations apply. This includes all locations where a national security incident can occur.

The Department of Defense has a list of specific facilities explicitly designated as "strategic ports." For the rest of us, the highest priority items on the government's security funding hierarchy are those facilities that deal with vessels that carry Certain Dangerous Cargoes (CDCs):

• Explosives (over 100 metric tons)

• Poisonous gas (over 1 metric ton)

• Ammonium Nitrate (explosive grade) (over 100 metric tons)

• Poisonous material - by inhalation (20 metric tons)

• Radioactive material - highway route controlled

• Bulk liquefied chlorine & bulk liquefied gas that is flammable and/or toxic

• Certain other nasty chemicals: Acetone cyanohydrin; allyl alcohol; chlorosulfonic acid; crotonaldehyde; ethylene chlorohydrin; ethylene dibromide; methacrylonitrile; oleum (fuming sulfuric acid); propylene oxide

Many facilities that do not handle these materials are also captured in the regulations. These include facilities that interface with:

• Inspected vessels that handle dangerous cargo (other than CDCs)

• Foreign flag vessels (regardless of cargo)

• Vessels that carry more than 149 passengers

Part of the problem is that a number of these facilities are not yet cognizant that they will be required to comply with the Coast Guard's security regulations. By the time they know definitively that they are captured by the regulations (July 2003), it is entirely possible that there will only be a very small amount of grant money available each year through 2008.

It seems extremely ironic that there are no federal grant monies for grants for vessel owners and operators. Organizational and physical modifications to vessels (as well as training) must be borne solely by the vessel operators.

It also seems rather strange that nearly $200 million in grant money has been made available over the past two years, and net no facility operator (or port authority, for that matter) knows the full makeup of the new security regulations.

Only Congress can increase the amount of grant money available to industry. There is no question that now is the time to put pressure on Congress to make meaningful amounts of grant money (on the order of several hundred million dollars) available this fall. Grant money that becomes available after July 2004 will not help anyone comply with the impending Port Security Regulations.

Charley Havnen is a Commander USCG Ret. His organization can help you with your vessel construction project, regulatory problems, vessel manning issues, procedure manuals, accident analysis or serve as an expert witness. His organization can do what you can't or don't want to do, and are online at http://www.havnengroup.com. He can also be reached by contacting the Havnen Group in New Orleans: (800) 493-3883 or (504) 394-8933, fax: (504) 394-8869.

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