Posted on Sun, Jan. 26, 2003

BY DALE K. DuPONT
ddupont@herald.com

Kenneth Gale Hawkes wrote the book on maritime security. That was in 1989.

''I said it was critical then, and I couldn't get anyone to listen to me,'' said Hawkes, a Miami-based maritime security expert, lawyer and special consultant to the International Maritime Organization.

Now, people are listening, not only to Hawkes, author of Maritime Security, but also to others, especially since the IMO passed regulations last month requiring security plans on most commercial vessels by July 2004. Chartered yachts may need security plans as well.

''The whole maritime industry worldwide is in turmoil,'' Hawkes said. With piracy on the increase and the ever-present threat of terrorism, the new regulations put pressure on ship owners and insurers. ''The litigation possibilities are just astronomical,'' he said.

The issue is a hot topic in South Florida, home to two major seaports that handle commercial and cruise ships, a large yachting community and carry a growing corps of maritime security consultants.

Miami and Port Everglades are among the top U.S. ports in dollar value of imports. Miami is No. 16 with $9.1 billion, and the Broward port -- a major petroleum hub -- is No. 20 with $5.8 billion of the $540.5 billion total, according to 2000 statistics from the American Association of Port Authorities.

A lot of attention has focused on airport security. But intelligence officials recently have found reasons to worry about what's going on at sea. Just before New Year's, it was reported that the United States had identified about 15 cargo freighters around the world believed to be controlled by Al Qaeda or that could be used by the terrorist network to carry operatives, bombs, money or commodities.

''It is a frightening prospect in this day and age of weapons of mass destruction and terrorists'' that vessels are arriving from ports which have virtually no security, said Kim Petersen, chief executive of SeaSecure, a Fort Lauderdale-based maritime security consulting firm. He's also executive director of the Maritime Security Council, whose members include major commercial and cruise lines as well as ports.

DEEP-WATER PORTS

Petersen is the first senior advisor of maritime and port security for the Florida Seaport Transportation and Economic Development Council. And if it's any consolation, he says Florida is the only state where each of its deep-water ports has approved security plans in place.

Now, everyone else has to get on board. Under the new code, vessels must have security plans and a ship security officer.

''This is taking many companies by surprise,'' Petersen said. Much of the maritime community still doesn't understand the consequences. Ships that don't meet the requirements can be prohibited from entering certain ports, or held for closer scrutiny.

The rules apply to 60,000 ships -- not counting yachts -- and 20,000 port facilities worldwide, Hawkes said.

Forty percent of all cargo that's moved around the world comes to the United States, he said. ``So we've got this huge stick.''

As for who will enforce the new rules, Petersen said: ''That's somewhat problematic.'' Each government will be responsible. What probably will happen is a U.S.-led effort to assess how well ports are complying.

Such a program would be analogous to the Federal Aviation Administration's routine safety assessments of authorities in countries with airlines that serve the United States. Low rankings mean that flights are under more surveillance, and airlines can change or expand service only with certain restrictions.

Shippers already have increased reporting requirements. Four days before reaching U.S. ports, they must give information about their crew, cargo and port calls. But new rules bring new challenges.

CALL FOR HELP

''The supply chain is designed to get goods to market as rapidly as possible,'' said Hans Hickler, chief executive of APL Logistics, an arm of Singapore-based container carrier APL. ``All those in world trade need to think about how to use the systems we have in place to provide greater security . . . while not causing undue delays to the flow of goods.''

Hawkes also sees ''tremendous insurance ramifications,'' which haven't been fully sorted out. ``We're right on the cusp.''

Piracy ''is in fact an issue that is very real and has implications of more than $1 billion in losses annually,'' Petersen said.

Piracy often happens in conjunction with criminal conspirators who work where the vessels are loaded, so they know what's on the ships and where they're headed.

And modern pirates are armed with sophisticated weapons. ''They're not swashbucklers swinging from the halyards,'' Petersen said.

With piracy and stolen goods, insurers will pay the owner of the cargo and then turn around and sue the ship owner. But if a port gets blown up, cargo insured for $500,000 may end up costing $10 billion in damages, Hawkes suggests.

When litigation starts flying hot and fast, questions will be raised about negligent security, he said.

In the late '80s, when the United States announced zero tolerance for importing illicit drugs, ship owners were fined $500 for every ounce of marijuana and $1,000 for cocaine and heroin. Major shippers were hit with fines in excess of $100 million, Hawkes said.

''The whole industry went into an uproar,'' said Hawkes, a Marine Corps veteran who was trained in counterinsurgency.

Marine underwriters are working with the IMO and with their individual customers, said Rich DeSimone, global marine president for The St. Paul Cos. and head of the International Union of Marine Insurance.

''We have to be responsible in how we write business,'' he said. Underwriters are being more strict in terms of who they'll cover, carefully assessing older tonnage and how well crews are trained.

Rates that were low for a number of years have climbed 30 percent to 40 percent in the past year, DeSimone said. ``Most markets around the world produced underwriting losses.''

''We're all in favor of anything that helps safety and security -- whatever is done to lower the risk,'' said Bill Roversi, vice president of Royal Marine Insurance Group in Miami.

One intriguing question is whether the new rules include chartered yachts. Chartering is one way yacht owners can afford a vessel. They buy it and lease it for others to play in the Caribbean or elsewhere.

''I think there's a legal issue there,'' Hawkes said. If you charter a 50-foot yacht and have a captain, then the regulations may well apply to the vessels and any marina that services them.

''If a boat gets pirated, you don't want to get yourself shot,'' he said. ``Most charter vessels haven't got the faintest idea about security, so they don't have the faintest idea what their liabilities are.''

The yachting community is keenly aware of the problem.

SEMINARS FOR CREWS

''In recent months, a lot of seminars for crews have been given by security companies,'' said LeAnn Pliske, charter agent with The Sacks Group, a Fort Lauderdale yacht brokerage and charter marketing firm. ``Our clients always have a question on security issues.''

They want to know if each ship is training its crew and how safe they'll be on board.

These are big questions for people forking over $15,000 and more for a week on a 60- to 80-foot yacht.

Luxury yacht builder Palmer Johnson just started a yacht and corporate security division based in Fort Lauderdale. It supplies security systems and provides referrals to consultants and security training firms.

''There's more interest both in hardware and in training,'' said Phil Friedman, Palmer Johnson chief executive.

What's new on board? ''We're not really talking about that,'' Friedman said.

More and more boats have complete alarm systems, said Mark Fry, president of International Yachtmaster Training, in Fort Lauderdale. They have infrared beams and pressure pads under carpets to detect intruders.

''These boats are not going to places where security is a threat,'' Fry said.

But they're still concerned about security.

''We're getting more calls from managers of boats,'' said Patrick Estebe, a former French marine captain and the owner of AffAirAction, a security consulting firm in Fort Lauderdale.

Estebe calls his approach ``security training for the mind. If you are conditioned with fear, you go nowhere.''