RESPONSE TO 100% SCANNING REQUIREMENT

UNCLAS SECTION 01 OF 03 MUSCAT 000900

SIPDIS

SIPDIS

USDOE/NNSA FOR WKILMARTIN, MBEDKE
DEPARTMENT OF HOMELAND SECURITY FOR AWYSOCKI, THORTON

E.O. 12958: N/A
TAGS: ETRD EWWT AMGT PTER MU
SUBJECT: RESPONSE TO 100% SCANNING REQUIREMENT

REF: A. STATE 119837


B. 06 MUSCAT 1646

C. MUSCAT 387


1. (SBU) Summary: Contacts at Port of Salalah expressed
concern that new scanning requirements for maritime cargo
under the USG's 9/11 Act will negatively affect trade at the
port. They mentioned specifically that scanning 100% of
U.S.-bound cargo for radioactive material and components of
weapons of mass destruction (WMD) could lower productivity,
and - if not mandated worldwide - hurt Salalah's ability to
compete with other ports in the region. Contacts also
claimed that Royal Oman Police (ROP) Customs is not ready to
effectively manage implementation of the 100% mandate, which
could place a considerable additional burden on port
operations. End summary.


2. (SBU) Poloff met recently with representatives of the
international shipping line AP Moller/Maersk (APM) and Port
of Salalah to gauge their reaction to the new U.S. law
requiring 100% scanning of U.S.-bound cargo in foreign ports
(ref A). Port of Salalah is Oman's biggest port and one of
the busiest transshipment hubs in the world (ref B). Port of
Salalah already is participating in the Department of
Homeland Security's (DHS) Container Security Initiative (CSI)
and the Department of Energy's (DOE) Megaports program. The
port also is involved in the Secure Freight Initiative (SFI),
a pilot program designed to assess the feasibility of the
100% scanning requirement. While reiterating their
commitment to these programs and their readiness to comply
with U.S. security measures, the representatives raised their
concerns that the 100% scanning requirement presents a number
of challenges that could eventually disrupt the flow of
maritime cargo through the port.

- - - - - - - - -
Lost Productivity
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3. (SBU) The officials commented that the 100% scanning
requirement - as opposed to risk-based screening of U.S.-
bound cargo currently conducted under CSI - imposes a
particularly difficult burden on transshipment ports, where
scanning could interfere with the fast-paced nature of the
transshipment business. They specifically stated that the
mobile non-intrusive inspection (NII) units that the USG
plans to install through SFI on the quay at the Port of
Salalah likely will not be able to accommodate the volume of
traffic at the port without affecting productivity. For
instance, they said, the port assigns seven trucks to each
crane dockside, unloading and transporting containers from
the ship to the stacks at a rate of five containers per hour.
Under SFI's proposed scanning procedures, each truck will
convey its container through a NII unit, and when a
U.S.-bound container triggers an alarm, the truck will head
to secondary for further scanning and alarm adjudication.
The procedure will take time, the representative of the port
opined; when an alarm removes the truck and its driver from
operation, his productivity drops from 35 to 30 moves per
hour. This loss in productivity could cause ships to stay
longer at port or, in the worst case scenario, for containers
to miss their onward connection.


4. (SBU) In addition, by placing the mobile NII units on the
quay where space is tight and traffic heavy, the heavy use of
the machines needed to meet the 100% mandate raises the risk
of costly damage to both the units and trucks. The
representative of the port admitted that his drivers have a
high accident rate as it is. If they end up damaging a
mobile unit, he said, he would have to redirect traffic,
which would increase the volume of containers running through
the remaining units and result in time consuming and
expensive bottlenecks. Ultimately, he and the
representatives of the line worried that the available
scanning technology is not yet advanced enough to meet both
the needs of U.S. security and transshipment ports. They
recommended, therefore, that the U.S. consider alternatives
to 100% scanning until the appropriate technology is
developed and tested.

- - - - - - -
Unfair Burden
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5. (SBU) The port and shipping representatives further stated
that the new U.S. law is ambiguous as to whether it requires
scanning of U.S.-bound cargo at the last port before entry

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into the U.S. or at all ports of transit and load. Unless
the USG mandates full compliance with the scanning
requirement in all ports, particularly transshipment ports -
and ensures sufficient financial resources to implement it -
then those ports that agree to participate will end up losing
business in a highly competitive industry, they warned. U.S.
law may create a free rider problem, in which major
transshipment hubs like Salalah end up shouldering most of
the burden for U.S. trade security.


6. (SBU) They outlined a scenario in which low-volume
import/export ports that lack the resources or will to assume
the upfront investments in scanning equipment may end up
shifting the responsibility for compliance onto Salalah. The
port, therefore, could risk becoming a "scanning hub," which
would drag down productivity even further. In another
scenario, shippers that have had their cargo scanned at a
port of load may choose to bypass Salalah in favor of a
regional competitor where ships will not face the prospect of
delays due to scanning. (Note: The representative of Port of
Salalah mentioned a rumor that the Port of Jebel Ali in Dubai
refused U.S. requests to scan transshipment cargo, agreeing
only to scan import/export traffic. End note.)


7. (SBU) In order to avoid these problems, contacts
recommended that the U.S. consider mandating scanning of
U.S.-bound cargo at ports of load only, where it is
relatively cheap and easy to control what is loaded onto a
ship. They predicted that by focusing on ports of load, the
U.S. could fulfill the 100% scanning requirement at a much
lower cost to international partners and the USG.

- - - - - - - - -
Lack of Readiness
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8. (SBU) The representatives also raised their concern that
the government of Oman simply will not be ready to implement
the 100% requirement. Other contacts in and out of
government likewise contend that Royal Oman Police (ROP)
Customs, which will bear responsibility for scanning
U.S.-bound containers and adjudicating alarms, lacks the
human resource capacity to handle it (ref C). Customs
officials have told poloff that the ROP's pace of recruitment
and training may not be sufficient to keep up with normal
Customs responsibilities, let alone the increasing demands of
U.S. security initiatives. The resource strain could become
particularly acute at Port of Salalah, contacts tell poloff,
which is undergoing rapid expansion and expects to more than
double its annual volume of container traffic over the next
five years.


9. (SBU) Contacts also worry that Customs personnel will not
be able to accurately or quickly adjudicate alarms, despite
ongoing training through DOE's Megaports program. Port
officials commented that Customs' bureaucratic and top-down
approach to decision making may strip inspectors of the
ability to make on the spot decisions and quickly clear
containers that are not of special concern. Even responding
to a minimal rate of naturally recurring alarms - alarms
triggered by radiation emissions from such innocuous products
as bathroom tile and cat litter - could put a heavy and
perhaps unsustainable strain on resources.


10. (SBU) Finally, APM and port officials flagged the fact
that although the port and ROP Customs are scheduled to begin
increased scanning of U.S.-bound cargo in January 2008 under
the SFI pilot program, Oman still has not developed the
capacity to respond if scanning indicates that radioactive
material of special concern may indeed be present. They
argued that the Omani government, USG and the port first
should focus on developing a response protocol for handling
and containing potentially dangerous cargo before scanning
begins. The lack of such a protocol, they warned, could
result in confusion when Customs is unable to clear an alarm
immediately, as well as indefinite disruption of Port
activities.


11. (SBU) Comment: There is a general consensus that the
U.S. is rushing to implement enhanced security procedures
without fully considering the possible negative ramifications
on international commerce. Oman in particular is worried
that the 100% scanning requirement could end up being a
competitive liability for its biggest port, exactly at a time
when Oman hopes to expand maritime trade. Contacts inform us
that the Ministry of Commerce and Industry, which initially
had not gotten involved in issues related to CSI, Megaports

MUSCAT 00000900 003 OF 003


or SFI, is beginning to take notice, and raising red flags
about the 100% scanning requirement's effect on trade. Post
intends to work closely with DHS and DOE to alleviate these
concerns, explain changes to U.S. law, and establish
mechanisms for collaboration with Omani government and
private sector officials to implement the law successfully.
GRAPPO