China eyes U.S. ports: concerns are being raised about the involvement in a Pentagon-funded port-security program of a company linked to the Chinese Communist Party leadership

Insight on the News, Nov 26, 2002 by J. Michael Waller

The Smart and Secure Trade-lanes (SST) system, driven by shipping, port services and communications companies with the support of Sen. Patty Murray (D-Wash.), is supposed to improve supply-chain and transportation-container security. More than 80 percent of U.S. imports arrive daily in 17,000 shipping containers at 361 Atlantic and Pacific seaports, many of which are near major population centers. SST, a corporate statement says, "aims to enhance the safety, security and efficiency of cargo containers and their contents moving through the global supply chain into U.S. ports." It is a security system designed to "demonstrate the principles of the U.S. Customs Container Security Initiative (CSI), Customs-Trade Partnership Against Terrorism (C-TPAT) and the U.S. Department of Transportation Security Agency's (TSA) maritime security initiatives, such as Operation Safe Commerce."

According to the security manufacturer Savi Technology of Sunnyvale, Calif., SST is designed to deploy hardware and software for automated tracking, inspection, detection, security and auditing of shipping containers from foreign freight terminals to U.S. ports. Port operators can monitor the security of each container, verify that it was loaded in a secure facility and decrease the possibility of tampering with the container and its contents.

The system is patterned on the Pentagon's Total Asset Visibility (TAV) network deployed worldwide. TAV tracks all U.S. military land and sea shipments, ranging from food to weapons, from the factory to the war zone. Retired Army Gen. John Coburn, who led implementation of the TAV network for the Pentagon, now is with the new commercial SST venture. "We're all motivated by a desire to make sure world commerce remains secure and free of threats," Coburn says. "The ports and shippers are demanding realistic solutions that can be tested today and adapted and built upon in the future. This is the one solution that's been proven to work and will provide a real-life model that both government and industry can leverage and learn from in order to rapidly build an international system for cargo security."

Savi Technology, a wireless automatic ID pioneer, developed the system with federal support through the Defense Advanced Research Projects Agency (DARPA) and private investments. According to the Wall Street Journal, one-half of Savi's $40 million in revenue this year is expected to come from the Pentagon.

"This is a model for how our nation can improve port security," said Sen. Murray at the little-noticed July news conference unveiling SST As chairman of the Senate Appropriations subcommittee on Transportation, responsible for writing the budget of the Coast Guard and the new TSA, Murray claims she has been "the leading voice in Congress to improve port security." She inserted a $28 million earmark in the appropriations bill to test the system.

The funds are for "a pilot project to push the American border back, so Customs [Service] officials would be in a foreign port taking a manifest of what goes into those containers, then securely locking them down and tracking them as they went into a U.S. port," Murray spokesman Todd Webster tells INSIGHT.

So far, so good. But alarm bells are sounding about the involvement in SST of Hong Kong-based Hutchison Whampoa. Advocates say that Hutchison Whampoa is the world's largest seaport owner and administrator, with a history beginning in the 19th century when the firm was founded by the British. With partners PSA and P&O Ports, Hutchison Whampoa handles 70 percent of the world's container traffic. In a statement to INSIGHT, the company says it is a purely commercial enterprise and rejects allegations that it might be influenced by the Chinese government.

But those familiar with Hutchison Whampoa's ties to the Chinese military are concerned. "This is a conflict of interest for a non-U.S. company," says Al Santoli, a congressional national-security consultant and director of the Asia Pacific Initiative of the American Foreign Policy Council. Santoli is troubled that Tacoma, Wash., is an initial U.S. port for the program testing.

"The Chinese have been working hard to get into the ports near Seattle. They are among our most vital commercial ports and are home to key U.S. military bases." Those bases are the home port of the USS Carl Vinson aircraft-carrier battle group at Bremerton and a strategic ballistic-missile submarine base in Bangor. "It's a major site for espionage for our rivals and adversaries," he says. "It's absolutely mind-boggling that our national-security leaders would even consider a contract with a company that would at the very least have a questionable national-security status as Hutchison Whampoa."

Sen. Murray defends Hutchison Whampoa's involvement in the pilot program. "They are one of the largest port operators in the world," says Webster. "To ignore Hutchison Whampoa is to ignore some of the largest port facilities in the world that send millions of containers to the United States every year." The company, he says, is not receiving U.S. tax dollars earmarked for the project.