Port Security: Honduras on Track to Meet U.S. and IMO

UNCLAS SECTION 01 OF 05 TEGUCIGALPA 000401

SIPDIS

SENSITIVE

FOR WHA/CEN AND WHA/PPC
FOR EB/CBA AND EB/TRA
FOR INL/LP

E.O. 12958: N/A
TAGS: EINV BEXP ECON ETRD PGOV HO
SUBJECT: Port Security: Honduras on Track to Meet U.S. and IMO
Requirements



1. (SBU) Summary: The Government of Honduras (GOH) is well
positioned to be in compliance with MTSA and IMO requirements by
the July 1, 2004 deadline. The country's chief challenges in
meeting the requirements set out in the Maritime Transportation
Security Act of 2002 (MTSA) and in the International Maritime
Organization (IMO) codes are obtaining the necessary financial
resources and battling the ingrained ambiance of corruption that
permeates the country. With continual Embassy engagement, the GOH
has come to understand the importance of maritime security and its
possible economic ramifications, including refusal of entry into
U.S. waters, if Honduras fails to meet heightened port security
standards. A U.S. consulting firm completed a port facility
security assessment of all Honduran ports late January 2004, and
the GOH is currently in the process of drafting the port facility
security plan. GOH Presidential, political and financial support
were critical for the expeditious contracting of the assessment
team and purchase of recommended security equipment. End summary.

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U.S. Law and International Codes
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2. (SBU) Puerto Cortes handled over 1,000 vessels traveling to or
from the U.S. in 2002. When the news came out that, following the
events of September 11, 2001, the U.S. was focusing on the need
for improvement in maritime security, it became clear that port
security would be a critical issue for Honduras. However, meeting
the steep requirements set out in the Maritime Transportation
Security Act (MTSA) and International Ship and Port Facility
Security (ISPS) codes pose a very large challenge. All major
ports in Honduras are owned and operated by the state-owned
National Port Authority (ENP). First, meeting the codes requires
physical changes, including fences, camera equipment, and
increased security devices standard at any U.S. port facility, but
lacking in Honduras because of financial and political
constraints. Secondly, the codes require administrative changes
in the way business is done and the manner in which emergency
response practices are implemented. Though the U.S. consultants
conducting the assessment discovered that the ENP already
maintained volumes of information on port procedures and
contingency plans for emergency response, little of this
information was common knowledge to port security personnel. Even
more worrisome, the consultants discovered that many dock
employees and security personnel have little to no education; some
were even reading manifests presented to them upside-down,
pretending to read the inverted document, and confirming that
everything was acceptable. Thirdly and perhaps the most difficult
to overcome is the need to change the culture that allows
corruption at the ports to flourish.


3. (SBU) Puerto Cortes and San Lorenzo have been centers of
corruption, pilferage, drug trafficking and alien smuggling for
years. While the Embassy and private sector have attempted to
work with port authorities in the recent past to change these
endemic problems, little progress was made due to a lack of
political will and great financial incentive not to change the
environment. However, with the imminent onset of the IMO and MTSA
requirements and repeated Embassy advocacy, GOH and port officials
finally committed to taking action to address the underlying
issues related to security at Honduran ports. This political will
was driven by the understanding that Honduras' economic stability
depended on change.

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What Are The Requirements?
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4. (SBU) The IMO, within the framework of the SOLAS convention,
established the ISPS codes. These codes are very detailed and lay
out specifically what every signatory country must do. Basically,
there are two parts to the code - vessel security and port
facility security. Each of these two requires an assessment and a
plan. The assessment is essentially a risk analysis, an
evaluation of the perceived threat to installations and
infrastructure, identifying potential vulnerabilities and laying
out the consequences of the potential incidents calculated, such
as chemical spills or a perimeter breach. While this may seem
simple, an assessment requires a very in-depth analysis, including
detailing everything from port facilities, cargo facilities, power
plants, water supplies, bridges, railways, and roadways and how to
protect them from threats such as vandalism, arson, hijacking,
tampering and pilferage, stowaways, smuggling of weapons, using
vessels themselves as a weapon, blockages of entrances, and
threats of nuclear, biological and chemical attacks. Once the
assessment is completed, host government officials are then
responsible for drafting and certification of a port facility
security plan. The plan should indicate operation and physical
security measures to ensure that the port is always able to
operate at the minimum security standards required (MARSEC 1).
The plan must also indicate additional, intensified measures the
port facility can take to move to and operate at heightened
security levels 2 and 3, if required by a security incident or
threat.


5. (SBU) Post understands that U.S. inspections of foreign ports
and shipping lines will be modeled on the Transportation Security
Administration's (TSA) periodic security reviews of foreign
airports and airlines. If a port fails to be certified by the
U.S. Coast Guard (USCG),no ships originating from or
transshipping through that port will be allowed to enter U.S.
waters until the vessel has been secured at a certified port
facility. For Honduras, temporary decertification of a principal
port such as Puerto Cortes would mean massive economic costs,
particularly for textile, fruit and non-traditional agricultural
product exporters. Long-term decertification would be disastrous
to Honduras' economy, as it would eliminate any incentives for
additional foreign investment in Honduras. Decertification would
also negatively affect El Salvadoran and Nicaraguan exports
transported through Honduras.

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Encouraging Compliance and GOH Political Will
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6. (SBU) In order to learn as much as possible about new port
security requirements both for entry into the US and international
standards, country team members attended port security training
sessions in San Pedro Sula in April 2003, researched International
Maritime Organization (IMO) ISPS codes on vessel and port security
and studied the US Congress' Maritime Transportation Security Act
(MTSA). Embassy Officers then provided a presentation to key
advisors of President Maduro in June 2003 to brief GOH officials
on the importance of acting quickly in order to meet MTSA and IMO
requirements by July 1, 2004. At the presentation were members
from President Maduro's team on State Modernization, Port
Authority representatives, private sector representatives, members
of the shipping lines' association (AHCORENA) and a representative
from the Chamber of Commerce of Cortes. Copies of this briefing
were passed to the WHA/CEN desk as well as to Pol and Econoffs
throughout the region via email for their information / use.
Please contact post Econoff Nicholle Urdaneta at
urdanetanm@state.gov if additional copies are desired.


7. (SBU) The GOH immediately realized how important it would be
for Honduran ports, and Puerto Cortes especially, to comply with
IMO and MTSA port security requirements before the July 1
deadline. The GOH requested a World Bank-funded project to draft
the terms of reference to contract a recognized security
organization (RSO) to perform a diagnostic port security
assessment. Because of the tight deadline, in August 2003,
President Maduro declared a national emergency on the state of
security at Honduran ports. By doing so, the port authority could
then put the assessment out for bid using a short list of
recognized port security companies. In the same manner, until the
emergency ends (the July 1, 2004 deadline),the port authority may
use streamlined procurement procedures to purchase equipment,
contract out bids for smaller projects, and do whatever is
necessary to bring Honduras' ports into compliance.


8. (SBU) Working under a tight deadline and demanding schedule
imposed by the ENP, the selected U.S. consultants (U.S. Protection
Services and American Defense Services) completed the evaluation
of Honduras' ports and provided the GOH with the IMO required port
facility assessment by the end of January 2004. The company also
provided a detailed set of recommendations for meeting port
certification requirements. As the team provided initial
recommendations during the assessment phase, the port authority
acted proactively to immediately purchase items such as patrol
vehicles, ATV 4-wheelers, and alarm systems. It also moved
forward on installation of camera and X-ray equipment as well as
improved infrastructure such as fencing, lighting systems, and new
roadways instead of waiting for the final report and losing
valuable time. The National Congress approved the port
authority's budget in early December, allowing the port to spend
up to 56 million Lempira (USD 3.1 million) on port security
projects. The GOH understands that this amount may not be
sufficient and is looking for additional means of funding.

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CSI and BASC
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9. (SBU) GOH officials and private sector companies also expressed
significant interest in participating in the Container Security
Initiative (CSI) program. Initially, there was some confusion on
the part of the Hondurans, who thought CSI meant port
certification, but now understand that CSI may play an important
role in the overall security program but is not, in itself, port
security. Though Honduras' Puerto Cortes was not included on the
U.S.' initial list of ports for the CSI program, Minister of
Industry and Trade, Norman Garcia, continues to advocate heavily
for inclusion. Post understands that Honduras does not yet meet
the basic security requirements to be considered for the program,
but requests Washington agencies consider Puerto Cortes in its
next CSI phase because of its significant port security progress.
The GOH is taking port security very seriously and is dedicated to
improving security standards along with modernization efforts.


10. (SBU) Since the beginning, private sector companies such as
Sarah Lee and Seaboard Marine approached the Embassy with concerns
that Honduras would not meet heightened security standards. These
companies were watching the MTSA legislation move through the U.S.
Congress and signed by the President. The companies began to work
together to advocate for improvements in port security at
Honduras' ports and requested the Embassy take a more proactive
role with the GOH to assure the government's awareness of the
possible consequences. Likewise, private sector representatives
have expressed interest in participating in public/private
organizations such as the Customs-Trade Partnership
Against Terrorism (C-TPAT) and the Business Anti-Smuggling
Coalition (BASC). EmbOffs provided some general information on
the BASC program, but would welcome any additional guidance and
contact information the department may have available on either
program as well as the new Operation Safe Commerce program.

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Key Findings of the Port Assessment
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11. (SBU) Not surprisingly, security force competency and
compliance was one of the main concerns identified in the
evaluation process. Honduran ports are currently protected by a
unionized security guard force whose members are largely
uneducated (only 18 percent can read and write),unmotivated and
physically unfit (over 50 percent of the security workforce is
over the age of 52). Security guards have been observed sitting
at entrance gates and politely opening the fence so pedestrians
and vehicles may enter and exit the port, but without checking
identification, doing any sort of vehicle search, or asking any
questions. Some guards, possibly many, are involved in illegal
smuggling and pilferage activities. Port officials are working
closely with the Office of the Presidency, the Ministry of Labor,
the Ministry of Security and the Armed Forces to find a solution
to this weakness. It will most likely include a transition phase,
including a severance pay buy-out of many of the guards. The
assessment revealed that the port authority already housed most of
the needed security policies, day-to-day procedures and emergency
response plans Honduras needs to be in compliance with ISPS codes.
According to the U.S. consultants, the problem is that the
workforce and security personnel are either unaware of these
documents, disregard them, or simply cannot read them.


12. (SBU) Other key problem areas included a wall-high stack of
ammonium nitrate of unknown origin, barrels leaking chemicals,
dockworkers reading and clearing manifests upside-down, ships
arriving without manifests or manifests missing cargo, and
hazardous material arriving unbeknownst to the port captain.

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Next Steps and Challenges
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13. (SBU) Now that the assessment of Honduran ports is complete,
the ENP is moving forward to execute its plan for procurement,
procedure changes, and workforce issues. The port authority
reports it has only spent 8-10 million lempira (USD 562,000) of
the 56 million authorized by Congress. Port officials also noted
they believe they will have enough money to complete the
recommended upgrades. The only high dollar ticket items left to
purchase are four airport-style x-ray machines, 8 cameras and the
construction of a new entry / exit building. The GOH selected
Dennis Chinchilla to be Honduras' official Port Security Officer,
overseeing Honduras' port security program for all ports. Mr.
Chinchilla is a well-known and respected member of the Merchant
Marine and is well qualified for the position.


14. (SBU) Mr. Chinchilla's office will also be responsible for
certifying all vessel security plans. Note: Honduras is a country
of open registry and has a flagship fleet of over 1,600 vessels.
This number was well over 3,000 vessels, but in recent years more
than 1,500 were removed from the register for failure to pay
taxes. End note. The GOH is planning to allow ship classification
societies such as the American Bureau of Shipping (ABS) to perform
the individual vessel assessments and draft vessel security plans.
The Merchant Marines will then certify the plans presented. For
registering ships, only those vessels falling within the size
range of ISPS codes (over 500 tons) are working on preparing the
registry information for the continuous synopsis record. Merchant
Marine officials did state, however, that the GOH is working on
updating Honduran Maritime Law to require all flagship vessels,
regardless of size, to present the same in-depth registry
information.

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Background on Puerto Cortes
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15. (SBU) Puerto Cortes is both the largest port in Honduras and
the largest port on the Caribbean coast of Central America. It
provides port services to companies from Honduras, Guatemala, El
Salvador, and Nicaragua. It serves as a distribution and
manufacturing site for the surrounding agricultural regions from
which more than 1,800,000 containers on more than 1,700 ships in
2002 were transported. Puerto Cortes can currently dock up to ten
ocean-going vessels at a time with three cranes available.
Expansion, modernization, and privatization projects for Puerto
Cortes are currently being studied. Implementation of the
privatization plan is expected in 2004 - 2005. Although more than
1,000 ships traveled to or from the United States, Puerto Cortes
also services vessels going to or from Europe, Africa, and South
America. Puerto Cortes handled approximately 5 million metric
tons of cargo in 2002. Projections for 2004 reach over 7 million
metric tons for Puerto Cortes alone and 8 million in the other
ports combined (San Lorenzo, Castillo, and Lempira). Puerto
Cortes reported revenues of approximately USD 81.4 million in

2002. The destination of 98 percent of its exports, almost 1.4
metric tons, was to the U.S., including Florida, Louisiana, Texas,
Mississippi and Delaware. Almost 63 percent of Puerto Cortes'
imports, 3.6 million metric tons, originated from the U.S.

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Background on MTSA and ISPS
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16. (U) The U.S. Congress passed the Maritime Transportation
Security Act of 2002 (MTSA),which the President signed into law
November 25, 2002. In it, the MTSA established requirements for
U.S. ports and security agencies such as the US Coast Guard and
the Secretary of Transportation. In section 70108 of the MTSA,
the U.S. Congress addressed foreign ports, requiring that the
Secretary of Transportation assess the effectiveness of

SIPDIS
antiterrorism measures maintained at any foreign port from which
foreign vessels depart on a voyage to the United States. In
December 2002, the International Maritime Organization (IMO)
established a new International Ship and Port Facility Security
code (ISPS code) that identifies measures to which every signatory
country of the Safety of Life at Seas (SOLAS) convention,
including Honduras, pledges to adhere. The MTSA required all U.S.
ports be certified by the USCG no later than December 31, 2003 and
grandfathered international ports' readiness date to match that
determined by the IMO standard of July 1, 2004. If a foreign port
does not meet these requirements, the Secretary of Transportation
may prescribe specific conditions of entry into the United States,
may deny entry into the U.S., and is required to provide public
notice to passengers of the ineffective counter-terrorism measures
of that country.

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Comment
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17. (SBU) The Embassy considers port security in Honduras to be a
top U.S. national security priority for counter-terrorism, anti-
trafficking, anti-smuggling, and counter-narcotics efforts. As
noted, it is also a Honduran national and economic security issue.
Embassy advocacy and IMO and MTSA requirements appear to have
succeeded in helping the GOH understand the urgency and gravity of
port security to its national well-being. With the President's
declaration of a national emergency on the state of port security,
the support of the National Congress allocating the funding, the
willingness and dedication of National Port Authority officials,
and the interest of the private sector, Honduras is definitely on
the right path to being able to certify its ports as required by
U.S. laws and IMO code. End Comment.

PALMER