- Dr. Tom Fedyszyn, U.S. Naval War College
- ADM (Ret.) Harry Ulrich, Former Commander, US Naval Forces Europe and Allied Joint Forces Command–Naples & Director, Atlantic Council
- BG (Ret.) Mark Kimmitt, Former Assistant Secretary of State for Political-Military Affairs
- Owen J. Doherty, Director of Office of Security, Maritime Administration, Department of Transportation
October 14, 2009
TOM FEDYSZYN: Welcome to panel one, “Strategic Approaches to Maritime Security.” I’m Tom Fedyszyn from the Naval War College. I would like to thank also the Atlantic Council for having us down from Newport, and I would like to commend the organizers of this conference for being able to come up with a catchy alliterative name for the conference that doesn’t defy what we really want to talk about today. We really do want to talk about maritime security and pirates, ports and partnerships are all part of it. There’s probably more to it than that also.
Last week at the International Seapower Symposium in Newport, where Adm. Wisecup – which Adm. Wisecup alluded to, we had the world’s naval leaders there and we talked about this for about three days. However, I thought the most interesting and insightful speech – excepting Adm. Wisecup’s of course – (laughter) – was given by Coast Guard Adm. Thad Allen.
When he talked about maritime security he said, all you’ve got to do is know two things. You’ve got to know about pirates, how they operate, their vulnerabilities, and piratable ships, the way they operate and what you can do to stop piratable ships. And that helped me simply things a little bit in my mind.
I trust we will talk about both pirates and piratable ships but also more than that too. I hope we also have an opportunity to talk about navies and what navies can do in the world of maritime security and that’s where the idea of partnerships comes about, certainly partnerships central to the new Maritime Strategy signed two years ago by the heads of services of the United States of America and very much being signed onto by the international leadership of navies, as we found out last week.
I think we’ll be able to do that very well with a very distinguished panel today, representing all the tools of strategy – military, diplomatic and commercial. And so I encourage you to read their very, very distinguished biographies in your pamphlet. They will make 15-minute presentations and then we will go on with questions and answers after that.
So let me quickly introduce, to my immediate left, Adm. Harry Ulrich, 35 years of seagoing service, retired four-star. His jobs were many, of course in the Navy, but he did serve as the commander of the 6th Fleet as well as the commander of all U.S. naval forces in Europe before his retirement.
To his left, Mr. Mark Kimmitt had a distinguished Army career, retired as a brigadier general, and then continued his public service for the United States by joining the Department of State, in which he held a number of distinguished positions including assistant secretary of state for Political Military Affairs.
And the final speaker will be Mr. Owen Doherty, a Merchant Marine Academy graduate who now serves as the director of the Office of Security at the Maritime Administration.
So without further ado, let me pass the floor to Adm. Ulrich. Sir?
ADM. HARRY ULRICH: Thank you very much. Those who know me already are aware and those who don’t will soon learn that I have a passion for maritime security. I’ve spent many years thinking about it and many years in uniform acting on it, and I’ve seen what works and what doesn’t work.
I’ve talked to military folks, I’ve talked to government officials and commercial shippers both here and abroad, and I have concluded that maritime security is underdeveloped and have some notions on how to improve security in the maritime domain. Let me start by offering a simple definition for maritime security. I define it as reducing the risk that something bad happens to our citizens on or from the sea.
Let me be clear up front. When I speak of citizens I am speaking for all citizens of all nations. This is not because I’m altruistic; it is because I fully understand that maritime security anywhere is maritime insecurity everywhere, and that solutions cannot be found within one’s own borders because it is an international challenge that requires an international solution.
Another way to define maritime security is to describe the null set, or what the risks are when maritime security is lacking. Give a test; nearly everybody here would first respond by listing terrorism, and I don’t dispute that but would argue that risks are much more varied and no less insidious: illegal fishing with its long-term effects; threats to offshore extraction, which is proliferating; illegal immigration; weapons traffic; our favorite, piracy; and of course pollution, to name just a few.
To be sure, few of these that I just listed are new. Indeed, most are ancient and are referred to in such distinguished books as the Bible. But in a globalized world I would argue that these problems have become acute. To be sure, much has been done since 9/11 to bolster maritime security. I applaud all the efforts that have been done in the past few years.
We now have a Container Security Initiative, International Ship and Port Security Initiative, a plethora of maritime domain awareness programs, and many others that I’ve lost track of. Likewise, many a white paper has been penned, and we have the National Security Strategy, the National Strategy for Maritime Security, and the Cooperative Strategy for 21st Century Seapower, to name but a few. They are all well-written and call for action.
These white papers and initiatives are all well-intentioned and necessary, but I have concluded they are not sufficient. More – much more needs to be done. Our actions thus far have been ad hoc and we need a more strategic framework. But before we charge off, I suggest that we pause to discuss some first principles. Let me offer a few, with the caveat that I’m not trying to be prescriptive and my list is not exhaustive, but I offer them for discussion.
The first one: I have learned that in order for something to get done, somebody has got to do it. I’ve also learned that if everybody is in charge, nobody is in charge. And I have observed that I can’t find a person or a properly structured group of people who have the responsibility and authority to move this effort forward.
In short, we are not aligned. I suggest that we organize ourselves post-haste and that we look first on how we do air security in the air domain. I don’t want to offer that they have it exactly right but let’s understand their model as a point of departure. I further have concluded that the Navy, DOD and the intel agencies are the wrong answer on who should lead this undertaking, although I acknowledge they can and should contribute.
Point number two: The United States cannot and should not proceed in isolation. Just the storm predictions, the weather, the H1N1 flu prophylactics, yes, air safety and security, and dare I say financial regulations require international cooperation and protocols; so will the advancement of maritime security. Having said that, the IMO is a forum and not a leader and we need to take the high road by first ratifying the United Nations Convention on the Law of the Sea.
Point three: We will only get this right and it will only be sustainable if we team with commercial stakeholders. We need to be shoulder to shoulder with the maritime industry from the beginning of our discussions, and we need to listen to them. Whatever we create has to be a win-win, and the more I thing about this subject the more I think that this is possible.
Let’s start with the premise that industry wants security and they want efficiency. Let’s also admit so do we. We should strive to make these two concepts – security and efficiency – two sides of the very same coin. Intellectual laziness on the government’s side will only burden industry with the attendant results that costs go up for everyone.
Point four: If you want an initiative to die or make it proceed very, very slowly, then make it really, really expensive. I have listened to too many experts who have leapt to the conclusion that only extraterrestrial solutions, tied together with extravagant networks, will solve the challenge. I strongly disagree.
Point five: We will need some information to bolster maritime security but not all information. We need to determine upfront, what do we need to know and when do we need to know it? Asking for everything will only burden industry and confuse ourselves. We need to stay focused.
In conclusion, having looked at many models on how to blend the above principles into a viable and useful structure, I am leaning towards what I call an international maritime exchange. It is loosely modeled along the lines of a stock or commodity exchange. Think the NASDAQ. A stock exchange has governance, rule sets, enforcement protocols that all come together to build trust. Such an exchange will not eliminate risk but can better manage and quantify risk.
I’m going to stop now and turn this over to my colleagues but hope to come back on that thought in the questions and answers.
MR. FEDYSZYN: Thank you, sir.
BRIG. GEN. MARK KIMMITT: We’ll, let me actually pick up where Adm. Ulrich finished, on this notion of trying to bring it all together, not simply as random pieces but actually as what is fashionably being called these days a whole of government approach.
And rather than try to take on the entire world and the entire maritime space, I want to go to the first issue, which is that of pirates, and possibly give a pretty good case study over the last year of what has happened on the issue of piracy off the coast of Somalia.
Owen Doherty and I have been working on this for some time, as well as many other people inside this room. But the fact is, as a bureaucratic case model, understanding where we are today and understanding how we got here today may, in very many ways, answer some of the prescriptions and concerns expressed by Adm. Ulrich, who has got it exactly right for the entire question of maritime awareness.
So with a little bit of tongue in cheek, I’m going to start this off by saying, on the issue of piracy off the coast of Somalia, why bother? It’s just not an important issue if you sort of look at it from a pragmatic, practical point of view.
I mean, take a look at the nature of the problem. There are 2.5 million square miles – there’s 2,300 miles of coastline. There are hundreds of small dhows that are out there fishing every day, any one of which could become a pirate dhow in a matter of seconds.
Fifteen-thousand ships transit the Gulf of Aden every year. And, quite frankly, what people mistake is the notion that somehow this is piracy. It is piracy for about 15 minutes, from the time that they pull the blanket back, demonstrate they have weapons, until they’re on top of a ship and now have a pistol at the head of the captain.
Once that happens, you no longer have a piracy situation; you have a hostage situation, and that’s why many of the prescriptions are ineffective because we continue to confuse a piracy situation with a hostage situation. And anybody that’s spent any time in the military knows those are two very, very distinctly different operations. So why bother?
Also, it’s just not a big problem. Last year, in 2008, there were – only a hundred of the 15,000 ships that transited the Gulf of Aden were taken hostage. Of that, only $30 million was paid in ransom. And, frankly, that’s not a lot of money – $30 million (dollars) for the entire commercial traffic that goes through the Gulf of Aden.
Frankly, that’s about one-third the value of an oil tanker’s cargo; about one-fifth the value of the tanker itself. That’s for the entire – that’s for the entire year of 2008. And if you’re an insurance company and you’re a tanker company, that’s an insurable risk, so why bother? Why are we going through all this effort?
In the case of the Sirius Star, one of the most spectacular takings of all, the ransom paid was only $1.5 million. That’s less than one-half of 1 percent of the value of the cargo. So why bother? We should accept, some would say, that piracy is simply a cost of doing business.
Adding to that, our navies are not particularly fussed over the problem. Frankly, if you were sitting out with Bill Gortney right now in the 5th Fleet, if you take a look at the responsibilities that he has on his to-do list, they’re pretty impressive.
He has to conduct flight operations in Iraq, in Afghanistan. He needs to maintain supremacy of the Persian Gulf. He’s got to deter Iran. He’s got to train navies and naval forces in the region. And so, frankly, on his to-do list, piracy isn’t really all that high. So why bother?
Let me add a couple of other factors. For industry, again, this is an insurable risk. It’s just the cost of doing business – 30 million (dollars) spread out over 15,000 ships? Not bad.
Take a look at diplomacy. Look, we can have all of the fancy agreements like Suppression of Armed Acts on the Seas out there, but if nobody is willing to enforce them; if people aren’t willing to go to the countries and say, why aren’t you enforcing the SUA, why bother? And let’s be quite clear: The Army I come from is not particularly excited about going back in to do land operations in Somalia.
And so you add up all of these facts and you’ve got to come up with a conclusion: Why bother? And that’s sort of the pragmatic view, and I think Adm. Ulrich brought up a larger view. I mean, there are Westphalian principles of international navigation, international jurisprudence, international economics.
To use a term that has become fashionable these days, we cannot allow the area off the coast of Somalia in the Indian Ocean to become another ungoverned space. If it happens there, it’s going to happen elsewhere.
But nonetheless, even those that were arguing first principles about international economics and Westphalian principles were still not able to get this to crest the “why bother” factor, especially in the fall of 2008 where there were a whole lot of other issues facing the National Security Council.
But it was very interesting because in about the space of four months, things changed dramatically on the U.S. side, and it might be helpful to talk about what caused the issue of piracy off the coast of Somalia to go from the “why bother” to “it’s a big deal.”
Three issues: First of all, in the last part of 2008, the attacks on the world food shipments into Mogadishu were becoming untenable, and, quite frankly, ships were unwilling to go into the Port of Mogadishu to deliver humanitarian goods. That’s pretty important.
When the attack on the MV Faina happened on 25 September, while it was only the 26th attack in 2008, you had a Russian captain that died, you had 33 T-72 tanks that nobody knew where they were going. All of a sudden that started cresting the Washington “why bother” approach.
But nonetheless, no matter how much all of this was shown in the press at the end of the day, even though the initial ransom request was for – demand was for 35 million (dollars), they ended up paying 3.2 million (dollars) at the end of it.
The third issue that sort of changed the entire equation was the attack of the S.S. Sirius Star on 15 November. That changed the dynamics a lot as well. This didn’t happen inside the Gulf of Aden, it happened 450 miles off the coast of Kenya: 2.2 million barrels of oil, $300 million, $25 million demand that was eventually paid for much less.
But nonetheless, the combination of humanitarian concerns and economic concerns caused this whole issue to crest the “why bother” state, and that’s why a number of us in this room were working feverishly and in many ways beaverishly in the last part of 2008 at the end of the administration. It put together a comprehensive strategy for the United States.
I never got – I didn’t get involved in this until about this time last year when I was out in Australia and I got a call from the undersecretary that said, hey, come on; we’ve got to quit goofing around on this piracy issue. Let’s get it out of the regional bureau. Let’s get it into Pol-Mil and let’s do something about it.
So as we dug into this in Pol-Mil and we dug into this as a country, it became very interesting to see the role of the National Security Council. They were working on a policy document, “Encountering Piracy off the Horn of Africa: Partnership & Action Plan,” which in many ways is not a bad subset of what I think Adm. Ulrich is proposing.
What it simply said is we’ve got to get serious about this but in five areas. We called it the five-layer cake, and they all had to be done at the same time, simultaneously, and they all had to have some serious emphasis behind it.
The first, if we really wanted to take care of this problem, we had to dispel some notions such as, you can’t stop piracy until you fix Somalia. That’s a multi-decade problem. Our role was to fix the piracy problem. So we knew we had to get the fleet involved, and the fleet came in very, very much.
We needed to improve the amount of naval assets that were on the water. We need to increase the amount of intelligence that flew to the militaries. But, again, as we’ve heard so many times, it can’t simply be a military solution. We also knew that we had to get serious about the SUA and we had to get serious about the capability of capturing pirates, and once you’ve captured pirates, to be able to do something with them.
There was a natural disincentive on the part of the navies. In 2006 there had been a capture of a number of pirates, and because no nation would take them the Navy became the holding cell for the pirates for about nine months. They did not want to get into that position again so we as a government had to have a solution so that if our Navy caught them, this wasn’t just either a catch-and-release program but capture led to prosecution.
Mary Yates talked about some of the financial. It wasn’t simply tracking where the ransoms go; it was also using our financial terrorism networks to try to find out where the money was coming from to finance these groups, as well as where the money went afterwards.
And then, quite frankly, there was a lot of work that needed to be done with the industry because, to my view – and I know Steve is around here somewhere, but there still is a large view within the industry that this is an insurable risk, and the numbers are simple: 35 million (dollars) a year for the entire industry, not bad.
If you tell them to now put either armed guards on their ships, that comes to about a million dollars per team per ship per year. Add that up over 15,000 ships and it just blows the cost of commerce out of the water – no pun intended.
If you talk about putting additional measures on the ships such as non-lethals, high-pressure fire hoses, long-range acoustic devices, sanctuaries inside the bridges, again, all of them can be done but all of them do cost money. And, again, the whole issue of trying to get industry involved in coordinating with the militaries is not something that they’ve typically become accustomed to.
We knew we had to lead, as Adm. Ulrich said. We knew at the State Department that somebody had to get out front. We felt that that was our responsibility at the State Department. That’s why we’re able to get Secretary Rice to get a new Security Council resolution, the strongest Security Council Resolution against piracy ever, in December of 2008.
It allowed not only for continued prosecution and continued attack against the pirates on water, but also gave us the capability to pursue them on land. The very fact that the nations came together and agreed to that I think is somewhat momentous. The fact that we haven’t done anything about that yet I think remains to be seen.
We also set up the contact group for Somalia, Piracy – actually for Piracy off the Coast of Somalia. I led the first contract group meeting in December. It has not befallen to my successors to carry that on. I think it is making some progress.
And my last act in government was to sign a memorandum of understanding with the Kenyan government, who is now willing to take our captured pirates and prosecute them inside of Kenyan courts, and we to in fact continue to do that, not simply with Kenya but with other countries in the region.
So where are we now? Sadly, I don’t think the numbers have dramatically shifted over the past year. Piracy has gone down a bit off of the coast of Somalia. Some of the patterns would indicate that the pirates have a bit more difficult time doing it than they did last year, but our view is that the administration must remain seized with the issue, as they say, stay serious about it.
I think having Mary Yates and Ron Tuggle at the National Security Council will mean that this thing will continue to be an issue. It is a multiyear problem set. I know that the navies continue to work in the region, but there will come a time when we’ve got to take a look at some regional capacity, not simply international navies floating over.
I remain confident that as long as we can continue, as the admiral mentioned, take charge and actually continue to aggressively pursue this, over time we can be successful in a partnership with other nations, in a partnership with industry, to cause the problem of piracy off the coast of Somalia to be very simple, similar to the piracy off the coast – the Straits of Malacca.
But it’s going to be a multiyear effort and I’m just hoping that we have the strategic patience to hang in there for the next couple of years until this problem is minimized to the point where it is no longer a problem set that requires Atlantic Council meetings like this.
So let me turn it over to Owen, who is, again, as I said, was pretty instrumental throughout the entire last year on this and continues to be, over at the Maritime Administration.
MR. FEDYSZYN: Thank you, General. Owen?
OWEN DOHERTY: Well, thanks, Mark, and it’s good to see you. And I’m kind of humbled here on this panel here that I was fortunate to be one to go over with Mark Kimmitt to London. And I’d like to pick up from there and then I’ll make it a little bit broader, maritime security.
But on the piracy and the importance of industry, we went on over there – I went with the maritime administrator at the time back in January. This is after the events that were already covered there as far as the Sirius Star and later of course with the U.S. flag vessels that were attacked.
But the main thing, though, is – the point I’d like to emphasize is the cooperation with industry. One of the things I saw there – and I was going to school while I was out there – is seeing just the different entities there, the different organizations coming together, including the carriers’ representatives, pretty much all of the main organizations that represented most of the world shipping, including the insurance, including labor, and coming together – it was kind of really a milestone to have that many organizations come together.
And one of the documents that came out of that were best management practices. And there’s 12 organizations that were on the front of that document and it would be unfair not to point out just the work too that was done in cooperation with the military on this also, in particular the Maritime Security Center there in Northwood, coming together with industry, helping to coordinate these.
And from that, you had this get widely distributed out to industry. And that’s a key to some of the successes, at least dealing with the piracy, was the coordination with industry. Now you have this effort going on where you have industry and the areas out there, the MSC(HOA) and other pieces there in Dubai and Bahrain, working together and sharing information.
And that’s the other point is to be able to share information, what is needed. Industry in general is really willing to share information as long as you know what is you’re looking for. And that’s kind of a simple case in piracy as far as, you know, reporting information, but you’ve got this two-way dialogue going on out there and it’s very, very helpful, at least for the safe passage of vessels though that high-risk area.
From a Maritime Administration perspective, one of the areas we’re focused on is the – we’re not a security provider but we are very much involved in training. That’s one of the areas we’re focused on. And we have the U.S. Merchant Marine Academy, work closely with the state maritime academies and union schools.
But there is a worldwide shortage of mariners, and that’s the piece that’s very much concerned internationally with industry is promoting the workforce to go – to take seagoing careers. So that’s the piece behind us where there is a concern as far as the industry perspective is the – you know, people are your most important asset and the relevance there to keep promoting the workforce, but also just the insurance piece of this is very a key area.
And I’ve had several kind of good sidebars here just leading up to this conference where you see some of that with industry working where you have some more transparency as far as where the risks are at, be able to kind of standardize things.
Internationally there has been a lot of good work in that area. There’s still a lot to be done, but I think where you can link the insurance, the risks there where you have – if you do things you’re seeing a benefit from that, and the – I was asked, well, why? I mean, doesn’t it get passed down to the shippers?
Well, not really. I mean, some of that gets passed to the shippers but I think there’s decisions being made including sometimes going around the long way, although it’s more dependent on the cost of fuel. But the focus from the Maritime Administration perspective is looking at it from the Marine Transportation System and the impact of maritime security in general – piracy, other theft – but developing maritime security in a strategic level is what’s key.
I think there’s a lot to be learned from piracy and what’s happened out there and the dialogue that’s taken place out there, both with the navies out there but the industry piece, working together.
It was mentioned before actually a few times how our security and our prosperity are inextricably linked, and that’s the other point I’d like to make is just reemphasize that point. The more we can – security really is protecting, to a large extent, the Marine Transportation System. You know, that’s one reason we’re going through this. We’re very much a – globalization is here to stay; a lot of benefit worldwide for globalization, how that international trade goes up.
We see here how it tracks well with our own gross domestic product, and that tracks up with that. So protecting the transportation system is a key area to emphasize that the – let’s see, I just did some figures. Thirteen percent of our GDP is tied to – let me get this right – the combined value of the foreign trade, imports and exports, represents 13 percent of GDP in – I think that’s 1990, and then nearly 22 percent in 2006.
And it’s projected – although we’re having a downturn now, obviously – but to be 35 percent by year 2020 and maybe as much as 60 percent by 2030. So there’s a direct correlation of our own prosperity but it’s international trade, as both previous speakers had emphasized.
But as far as the training aspect of this, that piece there, working with the industry globally, one thing that we are working on is we just recently signed, the secretary of Transportation, a memorandum of cooperation with the Philippines to share a training experience there regarding piracy, since most of the mariners out there, a large percent of them – I think it’s around 40 percent – are Filipinos. But sharing experience there in the training area will be an added benefit too to improving security.
The last thing just to throw out there too is that when you think about security, you think about the first line of defense, you’ve really got to think about those that are really in the industry, those that are doing the financing, those doing the dock work, those onboard the ships.
You look through that whole supply chain and the ones that are really going to notice things as far as situation awareness, who have a hands-on, who notice anomalies are those in the industry. So I think the more that can be tied into looking at too the business end of the industry and see what’s already being done that can benefit security.
What I mean by that, you have a lot of transparency that’s needed to operate the supply chain, so the more transparency you have – and the supply chain actually has a benefit to security, and if more focus can be asked in those questions of industry, not only do you have better transparency but you know, okay, well, then I need to focus more over here where these gaps are at as opposed to developing security to protect the transportation system.
If you take that first step and really benefit from the transportation system, the information that’s out there and that can improve the efficiency of the transportation system, that can improve the resiliency, isolate a maritime security incident, then you benefit more from that and that helps industry too.
And then to see what the gaps are, what other kind of security measures are going to be put in place, whether it be container scanning or the different things with personnel and a lot of different programs have been put in place between – the TWIC, the Transportation Worker Identification Credential and those type of things. But always keep in context what the impact taken to benefit industry and what the impact will be to industry.
I think I’ll end there.
MR. FEDYSZYN: Thank you very much. I’d like to thank the entire panel for not only three excellent presentations but for presentations from different perspectives. I think what they have done has really opened up the field now that we can talk about the various strategic approaches to maritime security because you just heard three different approaches, all very valid.
So let’s open out the question period right now. Quick ground rules. I’d appreciate it if you’d identify yourself and direct your question. And otherwise we’ve got about 50 minutes left for an interesting Q&A session.
Please. Yes, sir. Second row.
Q: My name is Osman Seminter. I’m a Somali-American. I have investments in East Africa and I’m one of the people who are affected by this pirate situation. Also I advise the U.S. government and Somali government on matters of security.
I feel that the panel here, they have good points, but I feel also there is a real issue; that is where are the pirates coming from? There is an issue related to tribalism, clanism, and also related to what I call fundamentalist groups like Shabaab or Dar al-Islam.
The funds they have received – the pirates – so far, the ransoms, they’re over $80 million, according to our numbers. And also, they’re holding right now over 200 hostages and 22 ships. That’s not minor stuff. It’s a lot and it’s growing. This was a little bit less than last year because the water on the, you know, Red Sea was very high season and the season starts now and I’m sure they will hijack more ships next six months.
But my problem with this view from the United States or for the Europeans is that the bottom line is to really tackle the villages, the districts, the regions that are affected by these pirates. These pirates have become now much stronger in the regional authority called Puntland in Northeast Somalia because now they have money, they have weapons and they have equipment.
Now they are to the point they can find out when the ship leaves Antwerp, Rotterdam, and they know where they are targeting. So they are very organized now. So what I am saying is here, I think there is a need – perspective from Somalia intelligentsia side – to advise the panel or to advise whoever is doing the research. Thank you.
BRIG. GEN. KIMMITT: May I? First of all, I agree with you entirely. There was always a bit of a tension inside the interagency on the issue of piracy. It is clear that piracy is a symptom of a larger problem. It is no doubt that piracy solutions that we are talking about here are symptomatic relief for the problem but it doesn’t cure the larger issue of Somalia.
I think the United States government has a pretty aggressive program right now with regards to Somalia, but, as I said, it could take some period of time. I focused – and we parsed the problem set down to the symptomatic relief of the piracy problem so that that at least could be diminished in the near term or the relatively near term while the larger problem of Somalia could be tackled by the U.S. government, by the international community over the long term.
Our view was if we tried to do them in parallel, we’d have piracy problems for decades. So our first operating assertion was, let’s take care of the symptoms and try to cure the disease over the long term.
MR. DOHERTY: And if I could just – and you’re absolutely right, and just – because I’ve been though a lot of these piracy conferences. And actually we have an interagency call – I had it this morning – every week, on Wednesday morning, we have a call with the interagency on piracy.
And, you know, I think the focus has been really for the safe passage of vessels through the Gulf of Aden and operating as far as the work being done, at least with the Maritime Administration and the interagency, recognizing that, you know, that’s kind of not in our core competency as far as dealing with the land-side issues but recognizing that there is – that’s being worked on, but separate from the issue as far as working with the vessels that are transiting the area and the different areas there as far as the judicial piece, what’s being done with the navies and all.
But I guess this goes back to, you know, the partnerships too with the countries and working things together globally also. But I guess my point is, I guess, you’re right, that we’re dealing with the symptom but that was kind of like the first step right now in dealing with, okay, how do we prevent the pirates from getting on board these vessels?
MR. FEDYSZYN: Next. Sir?
Q: Thank you. Jon Glassman, Northrop Grumman, to Gen. Kimmitt, Adm. Ulrich and perhaps even Adm. Wisecup. Passing to a problem that certainly is not trivial – that’s the Strait of Hormuz – since things are heating up with Iran, much talk about the mining of the Strait of Hormuz, do you think some of the models of naval cooperation that have been pioneered off East Africa could be taken to the Gulf Area?
I’m particularly thinking about the president’s trip to China. Should we be trying to develop an international naval cooperation including China to maintain the security of transit through the Straits of Hormuz?
MR. FEDYSZYN: Sir?
BRIG. GEN. KIMMITT: Yeah. Yes. (Pause.) (Laughter.) I think it’s self-evident. I mean, should you love your family? Yeah, you should. Okay. Should you cooperate at sea? I believe you should.
Q: Who should take ownership and how should this be done?
BRIG. GEN. KIMMITT: Oh, I think it’s happening. It happens all the time. There’s CTF-150, 151, 197, 234. It just happens. It has to happen back in the capitals, but once the capitals decide to do it, Navy guys can pick it up and fix it. That’s not what – we do that all the time. It’s not hard.
So whether there is willingness in the capitals to do it is where you should direct your question. We know how to do it and we do it on a daily basis.
MR. FEDYSZYN: Sir, have you got a comment on that question?
ADM. ULRICH: No.
MR. FEDYSZYN: Okay? Any other panelist would like to comment on that?
MR. DOHERTY: I’m with him.
(Laughter, cross talk.)
BRIG. GEN. KIMMITT: You have a bright future.
MR. FEDYSZYN: Any other questions?
Q: Thank you very much for being with us today. I have a question about the ownership issue more broadly.
Ambassador Yates began by talking about sort of the earlier discussion we had this year where she noted how her head hurt from the complexity of it, and part of what she outlined were the number – the range of diverse actors within the interagency involved in various elements of this. Obviously through her questions, her presence, the NSC has demonstrated an interest – a priority in this issue, but it’s also clear that the NSC is not an operational body.
So I wanted to get your perspectives from – given the perch that you’ve had, Gen. Kimmitt, Mark, leading these efforts at the State Department; Adm. Ulrich of having led the implementation of this on the Navy side; Owen at Maritime Administration.
As a U.S. government, how do we organize the interagency? Where is it best – where are we best situated – who is best situated to take the lead in organizing these efforts? How do they cooperate together?
I know we’ve had some conversations about this but I wanted to try to draw this out because it seems to be one of the key problems of how to actually move forward on implementing some policies, who owns it.
ADM. ULRICH: Yeah, let me take a bite of the apple. Let’s not talk maritime security because it hurts our head, because we say it’s complicated. Is it that complicated? Compared to what? Let’s take – let’s just go somewhere else and then come back to maritime security so we can have an intelligent discussion.
Are you pretty happy with air security? I believe we are. I mean, I came up here; I took my shoes off. Must be pretty good. We are pretty good at air security. When I was a NATO commander over in Europe, I was responsible for air maritime security in the – south of the Alps. And so soon after I took over I went down and looked at the air guys, and they were tracking, at the time, some 7,000 things to fly in the air.
They knew where they all were, where they were going, where they came from, what they were carrying. And they made sure they were on the right track, and they called in and did all that phone conversations they were supposed to have. I said, this is pretty good. And about twice a month they launched fighters because one of the airplanes was not behaving correctly and usually it was just an administrative foul-up. I didn’t shoot down any airplanes while I was there.
Then I went down to see the maritime guys and I said, let me see your picture. How many ships are you tracking? Sixty-four was the answer. I’ll never forget it. Well, how many ships are out there? I have no idea. And it occurred to me that airplanes are really, really small and go really, really fast in three dimensions. Ships are very, very big. They go very, very slow, and in rare cases only in two dimensions. (Laughter.) And if we could do this in the air, why couldn’t we do it at sea?
So I said, let me go talk to the air guys and figure out how they do it. Do you know how they do it? No, and you don’t care. It just happens. Nothing flies across our borders or in Europe or in most places of the world without knowledge that it’s going to happen.
And all this information is shared openly. The radars and the sensors that the NATO air guys that work for me were using were commercial. They came from the airports and wherever else and they were sharing the information. They knew who the pilots were. They knew when the tires were changed. They knew everything. And it happened in a very open and collegial way. Here in the United States, who’s in charge of air security? Who had to go testify on the Hill after 9/11?
Now, let’s just switch back. That’s pretty good. It works fine. Much more complicated in the air, I might add – of course you’ve got to take your shoes off – (laughter) – than it is in the maritime industry. Who’s in charge? As I mentioned in my remarks, there are 27 agencies, U.S. government agencies, that think they’re in charge. Everybody’s in charge. Nobody’s in charge.
I would also argue that this happens – the governments are involved but this happens at the industry level because airplanes that are flying that want to land at Reagan Airport don’t want to wait around to land. When it’s their slot time, they want to get in there. They don’t want to be help up flying in a pattern saying, did you take all the shoes off of all the passengers before they got aboard? Does the pilot have the right license? Has the airplane been inspected? This guy is flying around up there. They don’t like to do that.
So all this is happening in the background. There’s protocols in place. There’s understandings. And it happens. And there is very little government intervention, you know, when there is an anomaly.
I’m offering that the same thing that we do in the air happens at sea – exactly the same. There will be some minor variations but they’re – the procedures, the policies, the approach, the transparency, the trust all have to happen in the maritime domain if you want maritime security. It’s not that hard. We just have to make the mental model and get on with it.
I would argue that having watched this for a while, the government – the U.S. government coming in and dictating all of this down to the very minute details is a bad idea – a very bad idea. That’s why I say it’s kind of like a stock exchange. A stock exchange is everybody that wants to participate in the stock exchange have to come together have to share information, have to abide by the rule sets, have to provide, you know – maintain the membership so they can trade.
The same thing at sea. The industry that wants to trade with our country, the United States – and I think it’s a global issue so I’m just going to use the United States as an example – that want to bring their flag ships in to our big ports – very vulnerable ports – have to abide by some protocols. And these protocols – we have some in place now – they’re inadequate. We need to figure out what we need to know and when we need to know it.
I’ll stop there.
MR. FEDYSZYN: Gen., a comment?
BRIG. GEN. KIMMITT: I’d simply say, on the issue of the development of the policy and the execution for encountering piracy off of the coast of Somalia, it was really one of the more pleasant exercises that I saw in government because it really was a small team that worked very, very well together.
Theresa Whelan over at the Department of Defense, Sean Connaughton and Owen over at MARAD, Stew Levy’s people over at the Department of Treasury, Juan Zarate at the National Security Council – I think – we got a lot done because, number one, there weren’t a lot of rice bowls that were being broken, and, number two, there weren’t a lot of big egos involved. Ron Tuggle’s people down at the Joint Staff were a pleasure to work with as well.
Once everybody realized that we had a way forward that made a lot of sense and everybody had different levels of responsibility, it seemed to move along relatively quickly. It went to, as Adm. Ulrich said, this naval principle of UNIDIR. I mean, everybody knew what needed to be done, and as long as there was a good, solid policy that everybody agreed to – particularly when the president signed it; that helped – people just made it happen.
And I think, again, it comes down to people knew what their jobs were. There weren’t any rice bowls, and everybody checked their egos at the door.
MR. FEDYSZYN: Owen?
MR. DOHERTY: Just one comment, just to pick up on the air transportation. And it’s an honor to actually meet Adm. Ulrich finally because he was instrumental in the development of a vessel-tracking system using – it’s called Maritime Safety and Security Information System.
But what it did was in the Mediterranean it provided a much better picture of the vessels and expanded to a global program. But in doing that – you know, I went over with members of the Office of Global Maritime Situation Awareness – some are who are here today – to take a look at the air side and how they do it on the air side.
And what really stood out to me – there was a program called – it still is – collaborative decision-making – where not only is it providing security but it’s actually helping the efficiency of the transportation system, keeping aircraft on the ground before taking off so they know that where they’re flying to, they’re not going to be doing circles – weather changes, you know.
And that’s where I go back to making it beneficial. You know, you have to set regulations to get everybody to play by the same rules, and there’s a place for that, but the benefit of the transparency, the vessel tracking, or whether it be an airplane or a surface vessel, there is benefits to the transportation system, and that should be taken into consideration because then you’re getting, you know, that ownership and you make it more efficient.
And also, when an incident happens, you’ve got a better – more resiliency. The more situation awareness you have, or the right situation awareness you have, the better we are able to globally respond to an incident.
MR. FEDYSZYN: Thank you. First Ken Huffman.
Q: I don’t know if microphones are required, but – Ken Huffman from CNA. Back to Adm. Ulrich’s latest response – and I agree with you entirely that this international maritime information exchange is probably the way to go.
The U.S. should not necessarily be in charge of this, but I think there is a responsibility of the U.S. to take a leadership role in developing a concept that we sell to the international community that we not dictate every last aspect of how that’s to be implemented, but also that we ought to use the venues of existing international organizations, not only the U.N. but regional organizations through NATO, for example.
We now have a – theoretically a cooperative France who might join us since they’ve now rejoined the international – the military aspects of NATO. So they had objected to the earlier proposition of a maritime partnership – global maritime partnership through NATO.
So my comments are not necessarily questions, but I think not only do we have a problem in who’s going to lead within the U.S. government, but we have a problem that we need to lead it in the world stage, from an international standpoint. So it’s more of a comment than a question.
ADM. ULRICH: Yeah, let me just comment on NATO. I, at one time, wrongly assumed that NATO had a role in this. I was wrong. NATO is a military alliance. This has to be done at the civilian level, at the commercial level. It needs to have some guidance and there has to be some coaching and direction from governments everywhere. But it should be done at the commercial level.
To go back to what Owen said is we need to make this win-win. The commercial industry wants to do this to make it more efficient; the E-ZPass system. But this has to be done not at the military level but at the at least civilian and likely commercial level in cooperating.
MR. FEDYSZYN: And one row behind. Yes, sir.
Q: How are you, sir?
ADM. ULRICH: Ducky. (Laughter.)
MR. FEDYSZYN: Microphone.
Q: Guy Thomas, S&T advisor for the Office of Global Maritime Situational Awareness. And when 9/11 happened, 13 days after 9/11, convened a – at the direction of the president, we convened a series of war games at the Naval War College to look at this problem.
Our recommendations at the end of it were exactly what you just said. We have recognized we need to do this. How do we move beyond this? What organization takes the lead at this point and moves out – takes charge and moves out?
I’d like to have your opinion on that.
ADM. ULRICH: The Department of Transportation.
Q: Home –
ADM. ULRICH: The Department of Transportation.
Q: Department of Transportation? Great. I suggest we move on. (Laughter.) Let’s get it done.
MR. FEDYSZYN: Maybe Owen would like to comment on that.
(Laughter, cross talk.)
MR. FEDYSZYN: Oh, all the way in the back.
Q: Hi, I’m Gary Gilbert of Hutchison Port Holdings. About 18 months ago, Deputy Secretary Jackson of DHS tried to stand up the GTX, which was Global Trade Exchange, which sounds very, very similar to what you’re speaking of, Admiral, and the bureaucracy crushed it.
And that was going to be participated by a number of people, in particular ourselves. Forty percent of what comes to the United States comes from one of our ports. We’re in 49 different ports in 26 countries. Nobody is accepting our information. We’ve offered it for the last seven years. And I think the situation needs to be leadership to stand it up, and we need target.
Now, this is about the first time that I’ve seen a maritime conference on maritime security in the longest time. We’re all talking about border security. So your call to action is significant and I believe industry, I know ourselves, is ready to play.
ADM. ULRICH: I agree. As I said, I’ve gone abroad and I’ve gone around the United States and talked to the industry folks and, you know, the answer I get is, okay, I’m ready to do what you say needs to be done. You know, what’s the e-mail address I need to send all this stuff to? And we don’t have that.
So we’re going to have – if you like this maritime security conference, there’s going to be plenty more because we’re not going to go anywhere until we find somebody to pin the rose on. In order for something to get done, somebody’s got to do it.
BRIG. GEN. KIMMITT: May I just throw one contrary view in this? First of all, I agree with many of the points that have been made, but this notion that we can sort of depend on the private sector alone to solve this problem with light public/private partnership, the fact remains is as we worked with industry it became very clear that the incentive basis was that of profit-seeking, number one, profit-maximization; number two, the economic free-rider effect of using government public goods such as navies to bear many of the costs that are not imputed into the costs of the industry.
I mean, industry – for the micro case of piracy off the coast of Somalia, the true costs to piracy are not $35 million a year, which is the ransom that is paid by the insurance companies and by the industry. The true costs are far more than that.
If we were to actually impute the costs of what it takes to pay for CTF-150 and have the industry bear that cost or demand regulatory action upon the industry to tighten up their ships rather than do it voluntarily, that would run cross-current to this notion of a strong common set of objectives between the government and industry.
At the end of the day, there are issues that need to be dealt with by industry. Industry right now enjoys the free-rider effect it takes from demanding and gaining security on the high seas from governments, which they justify, we pay that in our corporate taxes.
But I think when you really start getting down to the hard questions of dollars and cents, particularly in a recession period when international trade has gone down considerably in the shipping industry, is not seeing record profits, I think you’re going to find it much harder when you start putting numbers on pieces of paper to get that collegiality and that commonality of views that is being embraced and being suggested in here.
ADM. ULRICH: Yeah, let me comment. There is big difference between piracy and what I’m talking about. Right now I’m talking about the security of our maritime domain out to 200 miles, okay? So let’s just focus on that now.
BRIG. GEN. KIMMITT: Okay.
ADM. ULRICH: And here is the rule set: In order for you to bring your flag ship into my maritime exclusive zone or my port, you’ve got to follow these rules.
BRIG. GEN. KIMMITT: And that’s exactly what we attempted to impose on industry. For example, there was going to be an inspection regime at the southern portion of the Gulf of Suez – of the Suez Canal, and try to put some other inspection regimes so that in fact low and slow ships that were most vulnerable to being hijacked inside the Gulf of Aden, industry was able to, quite frankly, make sure that that was neither imposed nor embraced.
They said, this is the responsibility of the governments to do this out to 200 miles. We, in fact, are seeking your responsibility to provide us security at a relatively low cost to the industry.
ADM. ULRICH: Except the difference is that – I’m talking about the Exclusive Economic Zone of the United States.
BRIG. GEN. KIMMITT: Hmm. I thought we were talking in an international context.
ADM. ULRICH: We are, but, again, if you want to take your ship down to the Gulf of Somalia, I’m fine with you doing that. Have a good time. Don’t call if you have a problem if you’re not – if we haven’t – you haven’t gone through the protocols that we have recommended for you.
BRIG. GEN. KIMMITT: Admiral, I agree with you. We are putting American soldiers at risk right now because the industry is not willing to embrace those requirements that we’ve imposed. American soldiers, sailors on the ships, you know, they are putting themselves at risk because of the high risk that low and slow ships are not willing to self-protect through that region. I think we’re in violent agreement on this issue.
ADM. ULRICH: Okay.
MR. FEDYSZYN: Ma’am, in the green.
Q: Good afternoon. My name is –
MR. FEDYSZYN: Microphone please.
BRIG. GEN. KIMMITT: Behind you.
MR. FEDYSZYN: Behind you.
Q: Good afternoon. My name is Doris Haywood and my question has to do with maritime security. This time I would like to talk a little bit more about the other side of Africa, if you will; that is, the western side, where I think the issue is not so much ungoverned spaces but under-governed spaces. There’s quite a bit of problems there with acts that would be termed piracy on the high seas but that are occurring within the territorial limits of countries there.
And also just in general the lack of maritime governance overall on the continent, whether you’re actually talking about on the waters or in the ports, yet at the same time there is, within the U.S., so many different priorities that actual funding, if you will, or resources to support those efforts are somewhat limited.
So I would like your thoughts on how the U.S. and others can support the development of maritime frameworks, given all of the competing priorities in the region that will ultimately go towards making the maritime environment over there safe overall. Thank you.
BRIG. GEN. KIMMITT: I think you should have been here for Kip Ward’s briefing when he came back and talked from AFRICOM. I think that was the centerpiece of Gen. Ward’s focus as he briefed the Atlantic Council on his strategy for security assistance and commercial assistance to the African continent and all the challenges that he is having in that regard and the progress that he is making in that regard.
And he specifically noted the west coast of Africa as one of those areas where he is trying to work with those militaries and those governments in the region to try to enhance their maritime capabilities in brown, green and blue water.
ADM. ULRICH: Yeah, I was involved in that while on active duty. It was the – we refer to it as the Africa Partnership Station. You may have heard about that. And what we did – in fact, Phil Green is sitting here. He was the guy that actually did it – is that we went down and visited the countries that welcomed us, did an assessment, where they were on the sliding scale of security, where their gaps were or what they needed.
Sat down with them, talked to them about how they may, you know, obtain the capacity and capability they needed. We brought our European partners down. We brought NGOs down. We brought a lot of people down.
That doesn’t mean that we, the United States, have to provide that. We do not go out and provide maritime security to – well, how many nations are there? I don’t know, a hundred, 200.
MR. : There’s a lot.
BRIG. GEN. KIMMITT: A hundred and fifty-nine.
ADM. ULRICH: A hundred and fifty-nine nations. That’s not what we do. If you ask us we’ll give you, you know, an opinion, and sometimes we’ll give you aid, but that’s, you know, determined by the Congress and the State Department and what have you.
But it’s the individual countries – if you’re going to be sovereign, the individual countries have to make the effort to meet the international standards. So there’s a lot of work being done down there. There’s a lot of investment being done down there, not only by the United States but the European Union and other sovereign countries, and that’s the way it should work.
So you know, I’m quite content that it’s proceeding along the natural process – a long and natural rhythm.
MR. FEDYSZYN: Ma’am, at the end of the row.
Q: Good afternoon. I’m Melissa Henton. I’m with the Center for Naval Analyses. The previous question essentially covered most of what I wanted to discuss with you, and that is the difficulty with the limited FMF budgets, the small amount that we are trying to grow for 1206 type funding.
Our desire to grow capacity in a lot of these places around the world with such limited resources coming from the United States government, what role, if any, is there for industry to play in providing subject matter expertise for building legal capacity and other sources that might be able to buy some, Admiral, AIS stations? And, generally, what are your thoughts for increasing the amount of money that might be available?
ADM. ULRICH: Well, I think, again, industry wisely invests its money, and the way they do that is if there’s a port where they want to ship stuff out of, they’ll make sure that port is secure. They’ll do what they have to do. They’ll look to the U.S. government, other governments to fund it, but they’ll make sure it’s pretty secure.
We, the burden is on us in the government, if you will, or the international government writ large, to figure out what the definition of security is. What do you have to do to be secure? What do you have to do to fly your airline into Dulles Airport? We know that. If you own an airline and you want to fly it into the United States, you could figure it out real simply what you need to do to comply to land that airplane at Dulles Airport or Mexico City or Paris or – name a place. And if you don’t comply, you don’t get to play, or fly.
And the same thing has to be done. This is what I mentioned. What do we need to know and when do we need to know it? What are the standards? Some of this has been done but it hasn’t been done – enough of it hasn’t been done, and it hasn’t been done from soup to nuts, from alpha to omega. And it hasn’t been done in the international regime as much as it should have.
So again I go back to – whatever you say, port, or where do we have to invest in maritime security or – you know, I go back to airports. If the United States wants to fly into an airport in Africa and there’s a really good need for that, we’ll fix the airport. We’ll make sure it’s up to standards. If a company wants to fly their airplanes into that airport, they’ll figure it out and make the airports secure for air traffic. Let that process work. Let that process work in the maritime domain.
MR. FEDYSZYN: Questions? Yes, ma’am.
Q: Daisy Khalifa with Seapower Magazine. You mentioned earlier, Adm. Ulrich, the Law of the Sea. And my question is, there is so much agreement about the law of the sea, yet it has yet to be ratified. We have yet to join the convention. And I just have a few questions, and perhaps you could provide some background.
How can a case be made for the U.S. to join the convention, to ratify the LW of the Sea? And is there a sense of urgency with regard to the risks that the U.S. might suffer globally? And then the other one is, within the administration and with the State Department now, is there a sense of urgency at all to ratify? Is it a priority?
We periodically, you know, circle back to this subject and then go away from it, and it’s been lingering for years and years and years. So just a few questions on some background and where it stands.
ADM. ULRICH: I don’t know. Thank you. I truly don’t. I mean, I read what you read. Actually, I read what you write. (Laughter.)
Q: What about the risks, somewhere where the U.S. might – if we’re not – you know, people say – you know, even the secretary of state said – during her hearings she stated something like, well, we can’t, quote, “get into certain meetings.” We don’t get meetings; we don’t get – because there is certain access that –
ADM. ULRICH: Yeah, the treaty was written to improve maritime security and maritime governance. And I for one am standing up here and there’s others that have been in government or will be in government that demand the same thing. It’s kind of hard to try to take the lead, to try to talk about this when you haven’t signed the treaty that you wrote, all right? So I don’t get it.
So I’ve looked at the objections that people have. I do not agree with those objections. I think that they’re – they confuse me. And a lot of people – two or three administrations have tried to push the ratifications through of different parties and haven’t been able to do it.
I mentioned in my remarks I think it needs to be signed. It needs to be signed soon. We’ve lived a long and useful life so far without it being signed, but I think that if we’re going to take the high road on this we ought to sign it.
MR. FEDYSZYN: Admiral, if I could use my prerogative here, I’d like to address this one to you. On behalf of a number of representatives at last week’s International Seapower Symposium in the European group, in which the applauded the AIS, the Automated Identification System, however felt that its weak suit was the ability to spoof it. You could lie. You could turn it off. You could incompletely put your cargo. Basically, is there a way that we can police the use of AIS, if we can get it installed in as many places as we would like it installed?
ADM. ULRICH: Yes to all the above. There are some technical things you can do. There are some procedural things you can do. But I don’t get all that worked up about spoofing yet, all right, because remember what you’re trying to do. You’re trying to look for anomalies. The analysis that I use – if you turn it off, for instance. Well, you can turn your lights off on Route 95 at night driving north, but you’re going to attract a lot of attention by doing that.
And so, the mere fact that you’re not following the prescribed protocols brings attention to yourself. And somebody here in some company will come up with a better mousetrap, a better AIS that’s less spoofable, and that will happen, but I’m not too worried about that, yeah. I love it when people try to spoof the AIS because with the MSSIS system, it plops up, it starts flashing red and we have something to go do this morning. (Laughter.)
MR. DOHERTY: I just want to expand on one thing, too, and I’m in total agreement, but also is the use of 21st century tools. And I want to just go back to one thing on the airlines, that we’re all familiar with, going online and seeing the cargo piece, in this case passengers.
You know, it wasn’t – I think it was American Airlines had the Saver system that they developed, or they used, and you can go on now and book yourself on an airline, see what’s out there. I go back to the fact that if you do it where it’s a transportation benefit, now you’re much more efficient. You as a passenger, a prospective passenger, you can find out where you can find an open seat on a plane.
We don’t have that in the maritime – and let’s go back. A comment was made about the Global Trade Exchange. Using something like that, tools aren’t – you know, there’s no silver bullet, but having more transparency on not just the vessels but the cargo, where it’s going to benefit the transportation system and industry will, you know, be behind that, you know, it takes a lot of doing. There’s a lot of fragmentation out there.
But my point is, if you can do it for reasons that are going to improve the efficiencies, it will go a lot further. And that was kind of my main point early on there. Take advantage of the industry piece to this, and what may be helpful to benefit our prosperity, transportation globally, and focus on that piece and then see where the other gaps are.
But there’s, you know, some tools out there, too, I believe, to improve maritime security and make significant steps. MSSIS is certainly one and it provides that partnership, which is one of the more important things about MSSIS. Now you’re improving – you’re getting that dialogue with countries that you may not already – you may not otherwise have, and helping out third world countries and all. Now they know what’s outside.
But, you know, take it a step further. Look at it as global trade. It’s not so much the vessels as the cargo getting from A to B and then the value that cargo increases when it goes from whatever port – coming in the U.S., you know, those shoes out in India or China or something, and they get to the U.S. It’s the value of the transportation system that needs to be focused on.
MR. FEDYSZYN: Yes, sir, on the fourth row. Yes, sir? Mike please?
Q: I’m Ken Yates of Jefferson Waterman, and, no, I’m not related, but she did follow me on a posting when I was in the Foreign Service.
A question that I have is on the maritime registries. It seems to me that some of the discussion so far is based on information that they would either have or should have but they don’t seem to appear. And the control of those ship registries seems to be kind of wavering.
I mean, Panama or Aruba, Liberia are all flag countries, and they ask for the information for the providers that have come along but it doesn’t seem to be organized very well. It’s a commercial operation. It’s done for profit. There is no governmental control on – or international control that I can see on IMO or something else that could be used.
What are the opinions of the panel on how the international ship registries might be used, or at least a platform developed there to get some order and some information that’s standardized?
ADM. ULRICH: Do you want to take it?
MR. DOHERTY: I would say flag U.S. (Laughter.) And I say that kind of tongue in cheek, but I think that, in fairness, the main international registries are doing a part. I mean, I see that in terms of the piracy, where they’re taking a part – and we talk a lot to the different open registries, or flags of convenience.
But there is a responsibility there that needs to be challenged. I mean, you need to bring something to the table as far as – I realize piracy is kind of a microcosm – you know, it’s a small example but it’s a good one, and looking at that, that, yeah, you don’t have a navy necessarily to protect your flag. What else can you bring to the table and what else are your responsibilities as far as –
They all signed a – I should say the main ones signed an agreement not too long ago, the New York declaration, it was called, and others have signed up since too, but where they were saying, okay, we’re committing to the best practices, taking responsibility, committing to ISPS, and they all fall under the International Maritime Organization so, you know, they need to be complying with the International ship and port security code and the other international regulations out there.
So there is a piece there but, you know, you raised a good point. And as far as the Maritime Administration perspective, we’re trying to promote the U.S. flag vessels and the U.S. flag, so that’s one of our kind of – on another note there is – you know, we like to see vessels be U.S. flag.
ADM. ULRICH: What you’re refereeing to are protocols that are in place that are loose and goosey, to say the least. And so the exchange system that I proposed needs to look at those rule sets, and others, and agree upon what they need to be, not what they are.
And then it goes back into – remember what an exchange is is that an exchange has all the information out there, the information that you need or the exchange thinks it needs to have trust and honesty in trading.
And then, now that that body of information is out there, buyers, brokers, Merrill Lynchs, Chuck Schwabs, they take that information and they massage it and they divide it by the square root of two or whatever they do, and then they make a buy, sell or trade decision – recommendation. That’s what they do, right?
So same thing. Information is out there. Any country can say, I take the information in, massage it the way I want, and then I make a let them enter, deny entry or hold decision for ships that are trying to come in the U.S. ports or in – quite frankly, I would say, to our EEZ Same thing.
Different countries will do it different ways, but if you want to participate in that exchange, all the information has to be out there that needs to be out there and it has to be valid. And if you put information out there and it’s not valid, then you’re throwing off the exchange. And in this case, if you’re off the exchange and I can’t make a determination on enter, deny, or hold, then you don’t commit.
So it’s pretty – you know, and we do it in the air. Air planes come into Dulles; we know what flag they are. We know a lot more things about them than we do the ships that come in. And so we just need to tighten up the rules if we feel they’re inadequate.
MR. FEDYSZYN: Yes, ma,am, in the front.
Q: Grace Cruz from the East-West Center in Washington. My question is directed at Mr. Kimmitt.
You mentioned that there was – with time and cooperation we can bring the piracy issue in the Gulf of Aden down to the extent that it is in the Straits of Malacca. I was wondering if you would be willing to elaborate on what steps have been taken to combat piracy in Southeast Asia and if there’s any lessons we can take away from that for our military – I’m sorry, our maritime security throughout other regions. Thank you.
BRIG. GEN. KIMMITT: Yeah, very quickly, what I would say is that there were a lot of similarities that were embraced in his policy, but what’s different about the Straits of Malacca is you have, quite frankly, sovereign nations that came together willing to make a strong effort to cause the problem to go away. You don’t have that off the coast of Somalia because the situation with the inside of Somalia.
I think that what has been done on the water is necessary but what will be sufficient is more work that needs to be done on the land side as well, whether it’s from a federated Somalia or whether it’s from a united Somalia because, as was mentioned earlier in the conversation, we are only treating the symptoms. What happened in the Straits of Malacca was an attack on the core issues of piracy.
What is happening right now in the Gulf of Aden off the coast of Africa is still a symptomatic solution that will not be further brought down until we can make progress, both on the water and on the land.
MR. FEDYSZYN: Microphone please. Please. Here’s the mike.
Q: In the Strait of Malacca, Lloyd’s implemented the war insurance, and that, according to open source, was what prompted the countries around the Strait of Malacca to take the issue seriously and implement regulations. But Lloyd’s also declared the Gulf of Aden as a war zone and upped the insurance, but it doesn’t seem to be affecting that and I think it’s because it was, as you said, there is no regulation.
ADM. ULRICH: I mean, piracy is, quite frankly, an economic issue.
MR. DOHERTY: I would just add too, yeah, I think you’ve heard of their exclusion zones for insurance, and the – one thing that – and I don’t mind just mentioning some organizations here that I see, as far as helping address at least out in the Gulf of Aden, actually globally, is where you have – one of the organizations, BIMCO, one of the larger organizations, teamed with Aegis and created a program where I think – that they’re trying to get standardized.
And I think just an example of an initiative that makes sense, where you’re looking at it from a standpoint of – they work with Lloyd’s Aegis does, on the exclusion zones, but you’re sharing that information – now, this is the risk – on how we’re going to score your vessel for that risk. And if you do things to your vessel, you can change your score.
But where you have a standard set up where you get participation – and what happens with that? Well, you can get a better feel whether or not you’re paying a justified amount of insurance. Maybe you’re getting a great deal; maybe you’re not. But where the insurance industry benefits from it for the visibility there –
I mean, right now I think you have – the International Maritime Bureau is out there and they keep track of the piracy. And insurance companies mainly work, from historical purposes, from – and I’m not an expert but just from talking to others in the business, they’re looking at historically how many hijackings where there or piracy acts or stowaways and those type of things.
But if you have standard for industry that they can benefit from, they go, okay, well, let me see, if I do this to my vessel, how that’s going to impact my score. But something like that from a – and it gets down to where you’re looking more so at what the implications there – or the relationship between what I do, where I go –
And you need to go to certain areas too, I mean, in some cases. In other cases you can avoid the area too. But I think that’s something where you have that type of relationship where there’s more transparency between the ship operators and the insurance carriers.
BRIG. GEN. KIMMITT: And I would just simply argue that it goes back to what Adm. Ulrich said; it’s an economical problem. And as long as we have economic distortions, as we see right now, where industry is not bearing the true costs of the piracy problem, we will continue to have the situation only incrementally improving over the years.
But if the total cost of piracy to the industry is roughly 30 (million dollars) to $40 million a year, and to the insurance industry, if that’s all that they are required to bear on their income statements and their balance sheets, there is no incentive on their part to improve this.
If you can’t improve this 15-minute problem, which is within 15 minutes you can have somebody inside your bridge holding a gun against your head; if that’s not a problem to you that you can insure away for $35 million a year, or whatever the cost of insurance is, then that is going to work against truly solving this.
I would argue if the true societal cost of piracy – which is primarily the government costs that are imputed by the cost of putting CTF-150, which probably runs in the order of about a billion dollars a year – if that was put onto the industry I think you’d see industry taking more of an active measure for self-protection of their own ships, which, in my personal view, they’re woefully insufficient at this point.
ADM. ULRICH: And going back to economics, consider the economics of the pirate. Right now it’s a lucrative business. In fact, I’d go be a pirate if I didn’t get seasick, all right? (Laughter.) But you’ve got to look at – that’s how you’re going to stop it. Figure out how to make it uneconomical for them.
MR. FEDYSZYN: Okay, I regret we have time for just one more question, and the question – from here? Yes?
Q: So I agree that – I really like your proposal to set up standards in the United States Maritime Exclusion Zone, and I think that having transparency and information of course is the first step, but what do you do after that? What are the standards? How do you strike that balance between security and then economic feasibility for the industry?
ADM. ULRICH: I believe that they’re – as I said, they’re two sides of the same coin, all right? I think – and I think that you talked about it too, Owen – is that if you made it more efficient, it becomes more secure. So they’re not mutually exclusive. I used to think so. I don’t think so anymore. The more I get into it, I study other models, I believe that you can’t have efficiency unless you have the byproduct of security.
And we’re interested in security in this discussion, but it gives you efficiency too. And if you do come across, you know, something that the government wants to do that makes the industry inefficient, you need to have a serious debate about that to figure out if you really need that information or that rule set, and then you can focus the debate on those particular issues.
MR. FEDYSZYN: At this time I would like to thank everyone for their questions, outstanding questions, but mostly I’d like to thank our panelists for fantastic presentations – (applause) – and turn it back over to Derek.
DEREK REVERON: Oh, thank you, Tom. Thank you, panel one.
This afternoon we’ll have a chance to engage some members from industry in the next two panels and we’ll definitely talk about partnership right after we have a short snack available. But please return at 1:00. Adm. Lemmons is here, and so we’ll hear about the U.S. effort and others’ efforts to build those partnerships.
I will also remind everyone as well that the discussions will be posted as podcasts both to the Atlantic Council site and the Naval War College site likely by the end of the day, as well as transcripts of the discussions.
So thank you, and please join us for a snack.
Transcript by Federal News Service, Washington, D.C.