March 2012 Port Bureau News

Port Bureau News March 2012

www.txgulf.org

International Piracy Skiffs, Ladders, RPGs, and Danger off the Horn of Africa USS Pinckney: A Case Study

The Shores of Tripoli The United States’ First Foray into the International Arena—In Defense of Trade

Spotlight on Captain Naval Aranke Executive Ship Management

Captain’s Corner

Respect!

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Port Bureau Staff Bill Diehl Jeannie Angeli David Cooley Al Cusick Cristina Gomez Janette Molina Patrick Seeba

Board of Directors *Tom Marian—Chairman *Dennis Hansell—1st Vice Chair. *Mike Drieu—2nd Vice Chair. *John Taylor—Sec./Treas. *Robert H. Blades *Charles H. Flournoy *Capt. John G. Peterlin III *Capt. Richard Russell *Steve Stewart *Captain Robert Thompson *Len Waterworth *Nathan Wesely Jim Black Ken Burnett Celeste Harris Jason Hayley Kevin Hickey Guy W. Hitt Charlie Jenkins Shareen Larmond Kathy Murray Jerry Nagel Vinny Pilegge Nolan Richardson Lloyd Schwing Tim Studdert Lawrence Waldron Armando Waterland Don Welch

Ahoy, know ye that the idea of writing about pirates did not come from our trip to DC. Piracy is a legitimate concern within our industry; plus it always makes for good conversation.

I’ll let Patrick cover the pirates, while I give you an update on our DC trip: Between our initial contact starting with read-ahead packages until our return the number of RAMP (Realize America’s Maritime Promise, H.R. 104) co-sponsors has increased from 152 to 177. I know we help convince Yo-Ho, Yo-Ho a few. RAMP currently has more cosponsors than any bill in Congress, but even with this widespread support, I don’t sense any urgency to address A Pirate’s Life for Me the dredging issues plaguing our ports.

I felt like our maritime industry is the Rodney Dangerfield of transportation: “We don’t get no respect.” Global trade accounts for roughly 1/3 of our economy, of that, 99.4% of our import/export tonnage and 64.1% of our import/export value is moving through our nation’s ports. The President wants to double our exports by 2015, but without efficient (read: well maintained and dredged) waterways, how are we going to get there?

This trip to Washington, we did something different. Our industry group went and talked with congressional representatives and staff from inland districts. At the same time, the Port of Houston Authority brought Chairman Jim Edmonds, Commissioner Jim Fonteno, new interim CEO, COL Len Waterworth, USA (Ret.) and staff to meet with FEMA (they’re responsible for many federal grant programs including the Port Security Grants which you can read about later in the magazine), the Army Corps, Department of Commerce and our local congressional delegation.

Our industry group focused on inland congressmen spreading the message that 25% of all national port tonnage in the United States passes through Texas ports and that this tonnage is critical to maintaining manufacturing, processing, finishing and retail jobs throughout the United States. People don’t think of Texas as a maritime state, but with a quarter of the tonnage, we are the largest by far and an indispensable segment of American economic power.

Back to respect: I just read that the Maritime Administration (MARAD) was holding scoping meetings on America’s Marine Highway Program at nine ports throughout the U.S., but no Texas port rated a meeting. Arrrrrgh matey: did you hear me correctly? 25% of the country’s tonnage! Most of the inland Congressional members that we met with were interested in learning more about our industry and its importance to our country. Few knew that $3.8 billion worth of goods are moving in and out of U.S. seaports each day. Few knew that seaports support the employment of more than 13 million people in the U.S., which account for $650 billion in personal income. We shared with them that for every $1 billion in exports shipped though seaports, 15,000 U.S. jobs are created.

As an industry we need to do a better job articulating the value of our ports to community residents, business leaders and policymakers. This includes getting them to invest in transportation infrastructure and support programs geared towards attracting business to our ports.

These programs will create jobs, improve our environment and bolster our ability to complete in global markets. The Department of Transportation is where funding and policy decisions are made affecting transportation. But if I bring Rodney back into the conversation he would say: “Gee, if this were Thanksgiving we would not even be at the COVER PHOTO: Arleigh Burke-class destroyer USS Faragut passes by the smoke from a adult table.” MARAD is not even one-half of one percent of disabled pirate skiff. USS Faragut is part of the Department of Transportation’s budget. Arr, someone CTF-151, a multinational task force established to conduct anti-piracy operations in the needs to walk the plank; our voice is not Gulf of Aden. (Photo: US Navy) getting heard.

Lone Star Harbor Safety Committee Elects Officers, Approves Charter

Committee Seeks to Increase Community Involvement in Navigational Safety Issues Representatives of the maritime industry along the western Gulf of Mexico approved a charter, elected officers, formed committees, and approved representatives for membership for the newly created Lone Star Harbor Safety Committee (LSHSC) on February 23, 2012. The Committee’s Charter calls for it to provide a forum for addressing local maritime and navigational safety issues involving the ports of Houston, Galveston, Texas City and Freeport.

The Newly Appointed Harbor Safety Committee

The committee’s initial meeting follows weeks of effort by a scoping committee that conducted several meetings to develop a charter for ratification by representatives of the new LSHSC. The new safety committee is built on a solid foundation of community support and participation.

Thomas P. Marian with Buffalo Marine Services Inc. was elected chairman and presided over the meeting. Captain John G. Peterlin of the Port of Galveston was elected vice chair while Tava Foret, vice president with ACTion Group companies, was elected executive secretary. James Prazak of Tricon Energy, John Salvesen of Odfjell USA and Niels Aalund of the West Gulf Maritime Association also were elected members of the executive committee.

The group voted to create four subcommittees and appointed initial subcommittee members: The Navigation Operations Subcommittee – Captain Christos Sotirelis with Gal-Tex Pilots; Dredging Marine Construction Subcommittee - Mark Coyle and Captain Marcus Woodring of the Port of Houston; Maritime Education and Outreach - Tammy Lobaugh; and the Waterways Optimization Subcommittee - Jim Andrews of G&H Towing.

Industry segments and their representatives in the Lone Star Harbor Safety Committee include: Barge/Tow Boat Operators Barge/Tow Boat Organizations Brazos Pilot’s Association Bulk Liquid Storage Chemical Tank Vessel Owner/ Ops Chemical Terminals Commercial Fishing Vessels Container Ships GalTex Pilot’s Association Harbor Tug Company Houston Pilot’s Association Line Handlers Marine Exchange Marine Salvage/Dredging Ops Maritime Education Rep

Todd Behlke Thomas Marian Captain John Gunning Adib Nasir John Salvesen James Prazak Vacant Thomas Sulkowski Captain Christos Sotirelis James Andrews Captain Robert Thompson John Taylor CAPT William Diehl, USCG (Ret.) Mark Coyle Tammy Lobaugh

Maritime Trade Organization Non-Liquid/Dry Cargo Vessel Ops Non-Liquid Terminal Operators Passenger Vessels Port Freeport Port of Galveston Port of Houston Authority Port of Texas City Recreational Boaters Refineries Shipping Agents Shipyard/Vessel Repair Stevedore/Labor Tank Vessel Owner/Operators

Niels Aalund Ricky Raven Vacant Vacant Al Durel Captain John Peterlin CAPT Marcus Woodring, USCG (Ret.) Jason Hayley Chuck Maricle Artie Myers Robert Lain Richard Bludworth Christopher Gouger Anuj Chopra

Applications for vacant positions on the LSHSC are being accepted. In addition to completing an application, interested industry representative have to provide a one-page resume for consideration.

Other LSHSC members include the following primary government representatives: Coast Guard Captain James Whitehead; MARAD Brian Hill; NOAA Alan Bunn; ACOE COL Christopher Sallese; and CPB Leslie Fleming Luczkowski.

The Growing Threat of International Piracy Skiffs, Ladders, RPGs, and Danger Off the Horn of Africa

Photo Credit: Bundeswehr All Photos Courtesy of Photos the United Unless Noted—All Courtesy of Captain Lou Vest, Houston Pilots Association States Navy Unless Otherwise Noted

International shipping finds tens of thousands of vessels per day traversing the globe, moving over 95% of global cargo tonnage and literally keeping the global economy afloat. The United States National Maritime Strategy of 2005 claims that “the safety and economic security of the United States depends on the secure use of the world’s oceans.” However, along the Horn of Africa, the South China Sea, Western India, the Straits of Malacca, West Africa and the Caribbean, a growing scourge is renewing international debate about securing merchant traffic by arming commercial vessels to protect against attack from the sea. Estimates of the costs of piracy range from $7-$12 billion annually and nations like the US have taken to patrolling trade lanes to protect commercial freedom of the seas.

Before 1990, the functional Somali Navy and Coast Guard kept Piracy along the Horn of Africa in check. After civil war ravaged the nation, UNOSOM began to take responsibility for regional maritime security and throughout the 1990’s and first decade of the new millennium, reported incidents of piracy gradually rose until between 2000-2004, they numbered between 350-450 annually. By 2005, shipping lanes were moved to 200 nautical miles off the coast to address the growing issue. While the ensuing years brought a slight dip in activity, by 2009, the United States National Security Council noted that “Piracy off the Horn of Africa is growing in frequency, range, aggression, and severity at an alarming rate.” In 2010, the International Maritime Bureau (IMB) reported that over 1,016 crew members were taken hostage during 48 successful raids, 44 of them the result of attacks by Somali pirates operating from the Mozambique Channel to the Maldives.

Why Piracy?

Though pirates have beleaguered international shipping since commerce first transited the Aegean sea carrying goods between the Phoenicians, Helegas and Cretans over 5,000 years ago, their recent pugnacity in the waters between Africa, India and the Western Pacific can be tied both to the potential profit involved as well as a decreased level of relative risk by Pirates who find themselves given

the option of living in squalid conditions of abject poverty in their home countries—notably Somalia—or taking their chances on the open seas.

When the turn of the millennium noted a tendency for Somali pirates to focus on vessels in the westernmost sector of the Indian Ocean, commercial operators shifted traffic further out to sea, but now, the pirate groups have extended their range to cover more than 2.5 million square miles of ocean while at the same time, began concentrating their efforts on vessels traversing the Gulf of Aden—the narrow straits connecting the Red Sea with the Indian Ocean that see over 20,000 annual commercial transits.

The UN’s special representative to Somalia noted that “poverty, lack of employment, environmental hardship, pitifully low incomes, reduction of resources due to drought and illegal fishing and a volatile security and political situation all contribute to the rise of piracy in Somalia.”

Piracy on the Horn of Africa: Commodore Per Biugum Christensen of A Growing Problem Combined Maritime Forces Task Force 150 reports that Somali pirates generally include a limited number of experienced seamen handling a nearly-unlimited number of soldiers—uneducated peasants who see piracy as an alternative to a cycle of brutal violence and utter destitution ashore. The soldiers, recruited from northern villages such as Xabo and Calulla, team members normally know each other from home and soldiers are predominately drawn from the ranks of young unemployed boys. With a ready supply of weapons, minimal training and draconian discipline, teams are able to coordinate attacks from large motherships using cell phones and AIS information.

Though brutal and not always well trained, pirates operating off the coast of Somalia can be devastatingly effective. A 2011 report from the British research firm Geopolicity describes the outlook of the nearly 3,000 pirates operating off the coast of Somalia: “Pirates who have not been press-ganged into being pirates would appear to be the very essence of rational profit maximizing entrepreneurs.” While the average GDP for a Somali remains steady at about $500/year, ransoms have been rising to an average of $4,000,000 per vessel, though as much as 70% of ransom and collected monies are distributed to land-based sponsors and financiers such as local government officials, provisioners at the pirate’s port of refuge, and money-transfer operators in Somalia including Kaah Express, Hodan Global, Amana Express and Dahabshiil. Still, for a single pirate, earning up to $40,000 for a successful hijacking presents an economic incentive that legitimate work in Somalia cannot match.

What has the increased threat of piracy done to the bottom line for industries dependent on global trade? In November 2010, the Samho Dream, a South Korean oil tanker was released for a record $9.5 million ransom—representing a dramatic increase in payments from the average $150,000 ransoms of 2004-2005. During this period, the length of negotiations during which mariners were held hostage has increased from 55 days to 150. Unfortunately, ransom alone accounts for only half of the direct-costs to a vessel owner when a ship is captured: in addition to the cost of negotiation, trauma counseling and medical care, the vessel is out of service for several months, and upon release, often requires significant repair work.

Adding to the costs associated with holding a captured ship, insurance premiums also have gone up for foreign flagged vessels. Since the Lloyds Market Association’s Joint War Committee declared the Gulf of Aden a War Risk in May 2008, the increased cost of international war

Pirates Board the M/V Faina During a Successful Hijacking

risk premiums have increased from $500/ship to some cases where a ship has paid over $150,000 for a single voyage. In addition, Kidnap and Ransom premiums have increased ten-fold, hull insurance coverage has doubled, and cargo insurance has increased by $25-100 per container. One important distinction—American hull clauses specifically exclude piracy which is covered under the US Maritime War Risk Insurance Program, leaving US marine insurers with a relatively stable marketplace as they have not had to pay ransom for any acts of piracy.

For low-and-slow moving ships, choosing to avoid the Suez Canal and Gulf of Aden altogether and instead steaming south around the Cape of Good Hope is a viable alternative. Companies like Maersk, Odfjell and Frontline have chosen this option—a trip adding up to 2,700 miles and reducing total vessel delivery capacity for the year up to 20%. If just 10% of transits now going through the Gulf of Aden reroute, the direct economic costs (including charter hire and fuel costs) reach over $5.2 billion and remove 300,000 VLCC DWT and 10,000 TEUs of capacity annually from the global market.

How Do Pirates Attack?

One of the most effective deterrents to piracy has nothing to do with preparation or defense: the Horn of Africa experiences two strong monsoon seasons causing severe sea-state fluctuations hampering pirates’ abilities to effectively operate. During the summer monsoon between June and September, and the winter monsoon which ranges December to February, the region is relatively pirate free, but when the weather clears—especially during April and May—well equipped and heavily armed pirates aboard lightweight fiberglass skiffs equipped with outboard motors that can achieve 30+ knots prowl sea-lanes looking for low-freeboard merchant ships. While there is little evidence to suggest pirates have demonstrated the ability to make routine use of sophisticated targeting methodologies, motherImagery from a US Navy Helicopter Flyover Notes ship operators do appear to have mastered a rudimentary understanding of radar a Light Boarding Ladder Aboard a Suspect Boat and AIS and use the tools to identify shipping lanes. Once pirates have found a ship of interest, two or three skiffs attack from multiple directions with small arms, automatic weapons, and rocket-propelled grenades. Using lightweight ladders to climb aboard the vessels, the pirates head for the bridge and attempt to take operational control of the ship.

GHPB Member Executive Ship Management, in a study of fourteen hijackings conducted in late 2009, reports that the average successful pirate attack takes 11 minutes, and generally targets vessels traveling under 15 knots during the daytime.

“From ESM’s experience, attacks are successfully thwarted by a crew who is well-trained and confidently follows their well laid out contingency plans, joining naval convoys, activating the emergency communication plan, and being in a position to muster assistance from various international naval patrol forces.” While the first Maersk Alabama hijacking took place at over 18 knots, the case was an outlier and took place during extremely calm seas. Currently, the current success rate for hijacking and boarding attempts stands at approximately 10-33%.

For vessels which have been hijacked, the US Navy, in conjunction with the European Union Naval Force (EU NAVFOR) has published guidance on how crew members can survive the attacks and long-term captivity.

Both organizations stress that piracy is a business and that most pirates recognize that unneces-

Pirates Aboard the M/V Faina Demonstrate Hostage Welfare to the United States Navy During Negotiations

Vessels from Combined Task Force 150 assemble in formation. For a case study of coalition operations from the USS Pinckney, Turn the Page

sary harm or injury to crew members is counterproductive. Pirates generally attack vessels to capture a vessel, loot through available equipment, belongings, or valuables, and then ransom the crew. This process results in a protracted captivity for sailors who are encouraged to reassure pirates that they will not be a cause of concern and negotiate/maintain the best possible living conditions aboard. While reports of prisoner abuse are common, law enforcement officials encourage sailors to cooperate with all reasonable pirate demands to lessen the risk of violence while avoiding potential hazards such as drug abuse (the drug Khat, an amphetamine-like stimulant, is extremely prevalent among Somalis) and attempting to interfere with disputes between captors.

Response and Interdiction In 2002, multinational coalitions of vessels Combined Task Forces 150 and 151 began patrolling the Horn of Africa under the flag of German Admiral Gottfried Hoch. Previously a part of US CENTCOM, the task force is dedicated to engaging the pirates, perform visit, board search and seizure (VBSS) evolutions aboard suspect vessels, protecting key infrastructure, deterring and disrupting piracy, and providing humanitarian assistance in addition to conducting combat operations. Over the past ten years, commanders from France, the Netherlands, Pakistan, Canada, Australia and the UK have led the force which is currently composed of vessels from Canada, Denmark, France, Germany, the UK and the US. Focused on deterring and disrupting Somali pirate attacks on leisure boats and commercial shipping, the task force was able to keep the number of ships successfully captured off the coast of Somalia to 4 in 2011, though frequency of contact is on the rise: during a two month period, the Task Force encountered 177 pirates, 97 rifles, and 17 RPG launchers over fourteen skiffs.

While Naval forces patrol the region, the United States has begun requiring US flagged ships travelling in “hazardous waters� to maintain armed guards aboard. The Netherlands and Thailand have announced that they will allow an armed military presence on board merchant ships, and countries like Germany and India are looking at addressing their policies regarding weapons on board. In October 2011, Italy announced plans to use Italian Marines to guard merchant shipping.

Best Practices—From the International Maritime Organization As incidents off the Horn of Africa infensify, the desire to proactively respond is being addressed by the IMO’s Working Group on Maritime Security and Piracy. In September 2011, the group issued three statements of interim guidance, addressed to ship owners, operators and masters, as well as flag, port control and coastal states, addressing the use of force and armed personnel aboard merchant ships responding to piracy on the high seas. These guidelines stand in addition to best practices which offer clear processes and procedures to follow when encountering a possible act of piracy on the high seas.

Specifically, best practices, when under attack, suggest: · · ·

· · · · ·

Increase speed to at least 18 knots to open the distance to the Closest Point of Approach; this will also increase the ship’s wake an make it more difficult for an attack skiff to secure alongside Steer a straight course; but if an attack skiff approaches alongside, slight helm action can create additional wake wash Activate the Ships Emergency Communication Plan o Sound the emergency alarm and make a ‘Pirate Attack’ announcement. o Report the attack immediately and maintain communication with UKMTO (+971 505 523 215) - even if part of a convoy. o Activate the Ship Security Alert System (SSAS), alerting your Company Security Officer and Flag State. o Make a ‘Mayday’ call on VHF Ch. 16 (and backup Ch. 08, which is monitored by naval units) o Send a distress message via the Digital Selective Calling system (DSC) and Inmarsat-C, as applicable o Ensure that the Automatic Identification System (AIS) is switched ON All crew, except those required on the bridge or in the engine room, should muster at the Safe Muster Point/Citadel so that the crew are given as much ballistic protection as possible should the pirates get close enough to use weapons Where possible, alter course away from the approaching skiffs, and/or Motherships. When sea conditions allow, consider altering course to increase an approaching skiffs exposure to wind/waves.

Activate water spray and other appropriate self-defensive measures Ensure that all external doors and, where possible, internal public rooms and cabins, are fully secured.

In addition to the emergency alarms and announcements for the benefit of the vessel’s crew sound the ship’s whistle / foghorn continuously to demonstrate to any potential attacker that the ship is aware of the attack and is reacting to it.

A potential attack can be chaotic. While armed guards can offer increased deterrence, armed guards can also increase the risk of a violent outcome. For example, take the case of the M/V Enrice Lexie, who had onboard six armed Italian Marines as protection as the vessel traversed pirate infested waters. The vessel was passing offshore southwest India when a small boat was observed apparently approaching the ship. The timeline of events that occurred next are a major point of contention between Italy and India, but as a result, two Italian Marines are in custody in Kochi, India for the murder of two Indian fishermen aboard the fishing vessel. Could other measures have been undertaken to deter a pirate attack?

A review of the published reports regarding this incident does not display clear evidence about whether any of the proactive, yet not overtly threatening actions, recommended by the IMO ever occurred. For example, it is not apparent that the UKMTO was ever notified, there is no apparent record of a MAYDAY call, and no indication of whistle/foghorn activity, increased speed, or any other evasive action on the part of the M/V Enrica Lexie.—D. Cooley, GHPB

German Marine Sailors Board a Suspected Pirate Skiff (Photo: Bundeswehr)

The International Maritime Organization released interim (non-binding) guidance on the employment of armed security contractors on ships transiting the coast of Somalia, the Gulf of Aden and the Indian Ocean in mid2011. In addition to laying out recommendations to assist in identifying “reliable, professional providers of armed security”, the IMO reminded vessel owners/operators that the jurisdiction, laws and regulations imposed by a vessel’s registered flag state apply to the security personnel aboard, as well as any coastwise regulations and require-

ments as vessel pulls into port.

For vessels which hire security personnel to carry firearms aboard, disembarking to go ashore becomes a tricky business: many nations, including shipping hubs such as Rotterdam and Singapore do not allow weapons—either at all, or with-

Task Force 150: A Case Study—USS Pinckney Disrupts Piracy GULF OF ADEN - Guided-missile destroyer USS Pinckney (DDG 91), assigned to Combined Task Force (CTF) 151, disrupted a group of suspected pirates close to the Internationally Recommended Transit Corridor (IRTC), south of Yemen, Dec. 19, 2011.

The Merchant Shipping Industry Best Management Practices Version 4 encourages merchant vessels to register with the United Kingdom Maritime Trade Organization (UKMTO) while transiting areas known to be high risk for piracy. At approximately 8:40 a.m., the Motor Vessel Nordic Apollo reported to UKMTO that they were under attack and been fired upon by pirates from a skiff. Having registered their route with UKMTO in accordance with BMPv4, Nordic Apollo’s position was relayed to counter-piracy forces operating in the region.

At approximately 11:00 a.m., the M/V Heather, operating 30 nautical miles from Nordic Apollo, reported suspicious activity by a skiff. Pakistan Navy Rear Adm. Kaleem Shaukat, CTF 151’s commander, authorized Pinckney to investigate.

Nordic Apollo confirmed the pirate attack, but stated they no longer had sight of the skiff. In response to the distress call, Pinckney made best speed to the area, issued a radio warning to other vessels in the vicinity, and launched its MH-60R helicopter. The helicopter crew successfully tracked and located the skiff, observing nine suspected pirates and pirate paraphernalia on board, including several ladders, weapons and fuel containers. The suspected pirates were seen attempting to cover their weapons with blankets and throwing the ladders overboard as Pinckney closed their position.

Intercepted by the helicopter and Pinckney, the skiff stopped and the suspected pirates threw their weapons, identified as five AK-47 rifles, one rocket propelled grenade (RPG) launcher and three RPG rounds, overboard. Pinckney was given authorization to conduct a boarding using their visit, board, search and seizure (VBSS) team and once aboard, the VBSS team confirmed there were nine suspected pirates, one grappling hook, 36 barrels of fuel, a 75hp and a 45hp outboard engine. The VBSS team scuttled one outboard motor, they left the skiff with enough fuel and water to return back to shore.

Cmdr. Matthew M. McGonigle, Pinckney’s commanding officer, praised the crew for their efforts, saying: “My crew responded in an exceptional reaction time and with complete professionalism. With the helicopter in the air, acting in conjunction with the ship, we were able to have full coverage of the situation and stop them carrying out any further illegal activities.

The operation was carried out in accordance with our pre-rehearsed responses to such an event and I am very proud of the Pinckney’s crew and all those involved.”

Piracy is a threat to the security of all nations and requires an international solution. The presence of Coalition Navy vessels in the region demonstrates a commitment to regional security and stability. To continue to counter and deter piracy successfully, Coalition efforts must be complimented by proactive measures by commercial shippers, regional governments, and the international community.

A VBSS from guided missile destroyer USS Pinckney approached a suspected pirate after the M/V Nordic Apollo reported attack by pirates.

Pinckney is assigned to Combined Task Force 151, a multi-national, mission-based task force working under Combined Maritime Forces, to conduct counter-piracy operations in the Southern Red Sea, Gulf of Aden, Somali Basin, Arabian Sea, and Indian Ocean.—ENS E. Kandt, USS Pinckney

out extensive permitting requirements. Armed teams tasked to protect mariners have developed a quick workaround to ensure that their employees are not in violation of weapons statutes: just dump the weapons at sea in international waters.

The efforts to ensure compliance with local regulations have added at least one unintended headache to security efforts. Thomas Damsgaard of the Houston Maritime Arbitrators Association references one case where "another ship reported observing personnel dumping weapons overboard and called local (Sri Lanka) authorities control inspectors, thinking that they were sinking the weapons in order to be picked up by

Water-Damaged Kalashnikov Rifle (Photo: Bundeswehr)

smugglers. In fact, the dumping is standard procedure for security personnel, because weapons were not allowed to be taken ashore".

Weapons only add to the murky waters of jurisdiction on the high seas: in midFebruary, two Indian nationals were killed when Italian Marines on a security detachment protecting the Enrica Lexie fired on a fishing vessel. The Italian newspaper La Repubblica quoted the Lexie’s master as saying that the Marines fired warning shots into the water after the fishing vessel refused to heed warnings not to approach. After the Enrica Lexie The M/V Enrica Lexie (AP Photo) was escorted back to the Indian port of Kochi, a police team went aboard to arrest the Marines under the observation of Italian General Consul Giampaolo Cutillo, and the two nations are involved in a major diplomatic dispute over prosecution rights to the Italian sailors. As Italy’s deputy foreign minister traveled to India to negotiate the Marines’ release, he noted that “the incident occurred in international waters on an Italian-flagged ship” - placing jurisdiction over the security party in Italian hands, however the Indian position is that “This action was taken within our exclusive economic zone, and the Italian vessel just scooted off like a hit-and-run after the operation which makes it the plain and simple murder of Indian fishermen”, according to Admiral Sushil Kumar, former CNO of the Indian Navy.

Endgame Once captured, the issue of what to do with suspected pirates is a complicated one. In years past, coalition vessels were satisfied with leaving them on Somali beaches, though in some cases, have resulted in pirates coming before judges in India, Yeman, Thailand and the United States. In one case, a US Federal District Court judge ruled that piracy was defined under US law as “Robbery at Sea”, and did not necessarily extend to attack or attempt.

Sailors of the German Marine Search and Sink a Boat Laden with Explosives (Photo Credit: Bundeswehr)

At Shimo la Tewa prison in Mombasa, Kenya, the government

opened a new high-security courtroom to handle piracy problems, and the United Nations, through the United Nations Office on Drugs and Crime (UNODC) CounterPiracy Program has facilitated a review of the Kenya’s legal frameworks, prison facilities, and environment suitable for trying piracy cases. Efforts to establish international agreements regarding piracy under the United Nations continue and in February 2012, UNODC Executive Director Yury Fedotov briefed the Security Council on work that the Counter-Piracy Program is doing to provide support to East African countries willing to prosecute piracy. At the same time, he warned: "Piracy money is also being reinvested into criminal activities that are not limited to piracy. Drugs, weapons and alcohol smuggling, as well as human trafficking, also benefit from the proceeds of piracy‌ To make our efforts more effective, we need broader international support beyond this region. This is the most efficient way to sever the arteries that sustain piracy".

Currently 1,116 Somali men in 20 countries around the world and 668 in East Africa face criminal proceedings. In the Puntland, a facility including a court, farm and prison with 500 person capacity is being constructed to allow convicted pirates to serve their sentences while ensuring that prison conditions meet with established international standards.

Moving Forward Over the course of 439 incidents in 2011, 8 merchant crew members were killed, and 802 were taken hostage as pirates carried out 176 boardings and 45 successful hijackings. As of 29 February 2012, already 62 attacks have resulted in 6 hijackings since the beginning of the year and Somali pirates are currently holding twelve ships with 177 hostages. While the majority of incidents occurred off the coast of Somalia, piracy off the coasts Indonesia, South-East Asia, and Nigeria also persist, International groups and gatherings address different ways to defend and deter piracy, but until the root causes are addressed that lead men to foment terror and commit acts of plunder on the high seas, sailors everywhere will need to maintain vigilant watch against incursion and stand prepared to protect their ship and crew. -P. Seeba, GHPB

Pirates Detained by EUNAVFOR

“To the Shores of Tripoli”

America’s First International Conflict—Defending Trade Against the Barbary Pirates Scourge of the Med

In the late 1700’s, the newly formed United States of America was deeply entrenched in conflict over secure trade routes through the Mediterranean. Pirates from Morocco, Algeria, and other states along the Barbary Coast routinely took American vessels and crews prisoner— starting with the 300-ton Brigantine Betsey in 1784. The Barbary Pirates were scions of powerful naval forces wielded by the Ottoman Turks during the Crusades and received their name from Khair “Barbarossa” (Red Beard) al Din who captured Algiers in 1510 for the Sultan of Constantinople.

By 1801, annual ransom payments paid by the United States to the Barbary Pirates for protecting and recovering merchantmen captured by Barbary corsairs exceeded $1,000,000 (10-20% of gross national revenue). When newly elected President Thomas Jefferson received a demand from Yussif Karamanli, Pasha of Tripoli for $225,000, he refused and the Pasha quickly responded by cutting down the flagstaff of the US consulate in Tripoli, signaling a declaration of war. Soon, the Tripolino navy, joined by the governments of Morocco, Algiers and Tunis, began seizing American ships.

During the President’s first State of the Union address, he informed Congress: “To this state of general peace with which we have been blessed, one only exception exists. Tripoli, the least considerable of the Barbary States, had come forward with demands unfounded either in right or in compact, and had permitted itself to denounce war. The style of the demand admitted but one answer: I sent a squadron of frigates into the Mediterranean.“ Barbary Pirates—John Betham-Dinsdale

President Jefferson’s squadron of five frigates and sloops to Tripoli under the command of Commodore Richard Dale— a former First Lieutenant who fought under John Paul Jones when the Bonhomme Richard defeated the HMS Serapis—and the American naval presence ensured that between 1801-1802, commerce was able to continue unhindered. The group returned to Virginia for supplies and medical care for the crew after two years of bitterly fought running gunboat skirmishes, and in September 1803, Captain Edward Preble was sent to resume America’s blockade of the Barbary Coast.

Catch and Release Not two months after American warships began sailing between Morocco and Tripoli, the frigate USS Philadelphia, patrolling Tripoli Harbor with the schooner Vixen, ran aground on a sandbar in pursuit of a vessel running the blockade. Captain William Bainbridge and his crew spent hours trying to lighten and move the ship by throwing guns, equipment and supplies overboard—even going as far as cutting off the foremast—as enemy gunboats approached. Listing to port so heavily that her remaining broadside canon could not fire on the Tripolinos, Captain Bainbridge surrendered his ship and crew to avoid their wholesale slaughter. The Philadelphia crew of over 300 men spent the next two years as prisoners of war, forced to work building fortifications to protect the citadel of Tripoli from American assault.

With the Philadelphia anchored protecting Tripoli harbor and a fleet of gunboats, the Tripolinos became bolder with their excursions, so in December 1803, LT Stephen Decatur, commander of the USS Enterprise—a 12 gun schooner— captured and took commend of a small enemy ketch renaming her the Intrepid.

Together with Commodore Preble, Decatur planned a daring raid to either recapture or torch the Philadelphia and deny her use to the enemy.

On 16 February, using the captured Intrepid which posed as a merchant vessel flying British colors, Decatur sailed with 80 Marines under tempestuous weather conditions into Tripoli harbor. With two enemy cruisers on the Philadelphia’s starboard quarter and gunboats on her starboard bow, Decatur and his crew managed to get close enough that they made fast to the Philadelphia’s forechains before the mercenary crew of Turks realized what was occurring.

LT Decatur was the first man aboard the Philadelphia, followed by a young midshipman, Mr. Charles Morris and his crew of boarders soon followed. The mercenaries, still shocked at the audacity of the assault, didn’t begin to resist until most of Decatur’s crew was aboard. The hand-to-hand fighting was over in minutes with twenty dead Turks, and the rest driven off.

The single American casualty, an American Sailor named Reuben James, who had already suffered wounds to both hands positioned himself between his Commanding Officer and a lunging pirate with a saber, saving the LT and suffering wounds that would eventually force him from the Navy.

The ship recaptured, the Americans quickly realized that she was unseaworthy, so began setting combustibles to burn her where she lay. Decatur and his men lit the fires and reboarded the Intrepid for their speed run out of Tripoli harbor, while the Philadelphia—now adrift and floating towards the town—began to burn. As fires reached the ship’s canon and ordinance, rounds began exploding and landing in the town, creating further chaos and delivering the fight to the enemy.

The successful raid raised eyebrows, including those of Pope The USS Philadelphia aflame in Tripoli Harbor Pius VII who claimed that Decatur has “done more to humble the antiChristian barbarians on the African coast than all the European states had done for a long period of time” and Admiral Horatio Nelson, in admiration, called the attack “the most bold and daring act of the age”.

The Marines March on Derna

By July 1804 however, progress had stalled. Commodore Edward Preble attacked with a series of inconclusive naval battles including an attempt by Captain Richard Somers to drive the Intrepid, packed with explosives, back into Tripoli harbor as a fireship to destroy the enemy fleet. Unfortunately, though loaded with 100 barrels of powder, 150

shells, and a fifteen minute fuse, the Tripolinos fired on her from shore batteries as she approached her target and the Intrepid was destroyed in an explosive conflagration killing all aboard. Thirteen sailors washed ashore the next day and were dragged through the streets in a display of defiance by the locals.

Looking to gain momentum and needing to score a decisive victory to convince the Pasha to press for peace, William Eaton, the American Naval Agent to the Barbary States contacted the Pasha’s brother, Hamet Karamanli who was exiled to Egypt at the time. With 1LT Presley O’Bannon and a force of eight US Marines, about 500 mercenaries began their 500 mile march west towards Derne—one of the Pasha’s eastern-most cities and seat of one of the wealthiest The Capture of Derna provinces of Tripoli.

Though beleaguered by desert conditions and threatened by a growing split between the divided Islamic and Christian assault force during the fifty day trek, as soon as they neared the city, with Eaton himself armed and part of the fighting contingent, LT O’Bannon and his Marines led an attack against the harbor fortress and nearly 4,000 enemy infantry and cavalry. Taken by surprise, the defenders quickly fled their fortified positions, and Arab cavalry under Hamat met them in the city while the USS Argus, Nautilus and Hornet provided shore bombardment.

By nightfall, the city was under American control with only two Marine casualties and Hamat was installed in the governor’s palace, where he presented LT O’Bannon with a Mamaluke sword—a part of the Marine Corps officer dress uniform to this day.

Over the next several months, the Pasha of Tripoli sent troops to retake the citadel but each time, the American-led defense held.

Realizing that his brother, with a secure base in Derna, now threatened to move on Tripoli itself, Pasha Yussif sued for peace. On 10 June 1805, a Treaty of Peace and Amity was signed

by American Consul to Algiers Tobias Lear and the Pasha agreeing to a prisoner exchange, the cessation of hostilities, and a payment of $60,000 for damages and the expulsion of Hamet from Tripoli.

While Lieutenants O’Bannon and Decatur, as well Commodores Preble and Bainbridge were welcomed home to the United States as heroes, the terms of the treaty proved to be a double-edged sword. For the first time, the United States had a treaty with a Barbary State that did not include the payment of tribute, however with no provisions for future dispute resolution, when the United States and Britain fought in 1812, the Pirates once again began ransacking US merchant ships until the second Barbary war in 1815 and subsequent general peace in Europe ended the reign of the Ottoman-backed pirates for good. –P. Seeba, GHPB

(top-left:) Charles Montgomery, ILA #1351 and Darlene Ruiz, MSC (top-middle:) Steve Huffman, G&H Towing; and Captain Larry Wheatley, Houston Pilots (top-right:) Capt. Steve Nerheim, USCG VTS; Charles King, Buffalo Marine; and Capt. Anuj Chopra, Anglo-Eastern (upperleft:) Bob Lain, Moran-Gulf; Jerry Crooks and Capt. Tim Downs, Shell (upper-middle:) Steve Stewart, Gulf Winds and Jim McNutt, Comerica Bank (upper-right:) Kevin Hickey, Houston Fuel Oil Terminal, and Don Welch, Midpoint Partners (mid-left:) Capt John Peterlin, Port of Galveston and Jason Hayley, Port of Texas City (mid-middle:) Dennis Hansell, Suderman & Young Towing Co. and David Halbert, Houston Mooring Co. (mid-right:) Jim McGee and Dean Corgey, Seafarer’s International Union (midlower-left:) Tom Kornegay, Kornegay & Co. and Clyde Fitzgerald, SA/GC District ILA (mid-lower-middle:) Marie McDermott, Economic Alliance Houston Port Region, and Diane Filkins, Tristar Freight (mid-lower-right:) Warner Welch, Houston VTS; Steve Huffmann, and Capt.

Nerheim (lower-left) Commissioner Elyse Lanier, PHA, and CAPT James Whitehead, USCG (lower-middle:) Attendees grab lunch at the Commerce Club (lower-right:) Capt. Diehl thanks the CC Sponsors and Capt. Thompson (bottom-left:) The Commerce Club meets at Brady’s Landing. (bottom-right:) Captain Robert Thompson, Houston Pilots Association addresses the Commerce Club

FY 2012 Preparedness Grants

$1.38 Billion in DHS Grants Available

In February, the Department of Homeland Security, through FEMA, announced the availability of federal grants worth over $1.38 billion.

Selected Available Grant Programs: Homeland Security Grant Program (HSGP) The HSGP is designed to help strengthen the nation against risks associated with acts of terrorism and other catastrophic events.

HSGP will provide grant funding to assist state and local governments in obtaining resources required to support the National Preparedness Goal’s (NPG’s) associated mission areas and core capabilities. The HSGP’s component programs include:



State Homeland Security Program (SHSP): The SHSP provides $294,000,000 to support the implementation of state Homeland Security Strategies to address the identified planning, organization, equipment, training, and exercise needs to prevent, protect against, mitigate, respond to, and recover from terrorism and other catastrophic events.

SHSP also provides funding to implement initiatives in the State Preparedness Report.



Urban Areas Security Initiative (UASI): The UASI program provides $490,376,000 to address the unique planning, organization, equipment, training, and exercise needs of high-threat, high-density urban areas, and assists them in building an enhanced and sustainable capacity to prevent, protect against, mitigate, respond to, and recover from acts of terrorism.



Operation Stonegarden (OPSG). The OPSG program provides $46,600,000 to enhance cooperation and coordination among local, tribal, territorial, state, and federal law enforcement agencies in a joint mission to secure the United States’ borders along routes of ingress from international borders to include travel corridors in States bordering Mexico and Canada, as well as States and territories with international water borders.

Although no longer funded as discrete grant programs, all activities and costs allowed under the FY 2010 Buffer Zone Protection Program (BZPP), FY 2010 Interoperable Emergency Communications Grant Program (IECGP), FY 2011 Citizen Corps Program (CCP), FY 2011 Driver’s License Security Grant Program (DLSGP), and FY 2011 Metropolitan Medical Response System (MMRS) are allowable activities and costs under the FY 2012 Homeland Security Grant Program (HSGP).

Emergency Management Performance Grants (EMPG) Program The EMPG Program provides $339,500,000 to assist state, local, and tribal governments in preparing for all hazards.

The program will provide grant funding to assist state emergency management agencies in obtaining the resources required to support the NPG’s associated mission areas and core capabilities while the federal government, provides necessary direction, coordination, guidance, and assistance, so that a comprehensive emergency preparedness system exists for all hazards.

Nonprofit Security Grant Program (NSGP) The NSGP provides $10,000,000 in funding for target hardening and other physical security enhancements and activities to nonprofits that are at high risk of a terrorist attack and are located within one of the UASI-eligible urban areas.

Port Security Grant Program (PSGP) The PSGP provides $97,500,000 for transportation infrastructure security activities to implement Area Maritime Transportation Security Plans and facility security plans among port authorities, facility operators, and state and local government agencies required to provide port security services. The program

Available Funds for Selection Regions SHSP

Texas

$15,820,512

UASI

Houston Area

$23,936,523

EMPG

Texas

$19,104,010

PSGP

Nation-Wide Tier I Ports

$58,500,000

will support increased port-wide risk management; enhance domain awareness; conduct training and exercises; expand of port recovery and resiliency capabilities; further capabilities to prevent, detect, respond to, and recover from attacks involving improvised explosive devices (IEDs) and other non-conventional weapons; and competitively award grant funding to assist ports in obtaining the resources required to support the NPG’s associated mission areas and core capabilities.

Key Changes in the 2012 PSGP: 

DHS has removed the Semi-Annual Assistance Progress Report reporting requirement in lieu of the SF-Performance Progress report to report on progress towards implementing program-specific performance measures.



Scope expansion: maintenance and sustainment. Grant allows the support of equipment that has been previously purchased with both federal and other sources of funding so long as direct linkage can be provided to one of the core capabilities within the NPG.



Funding will be competitively awarded within the port groupings. 

The fiduciary agent process will not be used for FY 2012; eligible applicants will apply directly to FEMA. 

Applicants will be required to provide a cost match: 50% for private sector applicants, 25% for public sector.

Transit Security Grant Program (TSGP) The TSGP provides $87,500,000 to the nation’s high-threat urban areas for enhancement of security measures at critical transit infrastructure including bus, ferry, and rail systems. The purpose of the FY 2012 TSGP is to create a sustainable, risk-based effort to protect critical surface transportation infrastructure and the traveling public from acts of terrorism, increase the resilience of transit infrastructure, and competitively award grant funding to assist transit agencies in obtaining the resources required to support the NPG’s associated mission areas and core capabilities.

While detailed guidance and application instructions for all grant programs can be found at http://www.fema.gov/grants, Eligible applicants must begin the application process by submitting SF 424 through the Grants.gov portal, accessible on the Internet at http://www.grants.gov. This information will allow FEMA to begin conducting eligibility reviews of applicants—a process which will occur before the actual grant deadline, so while the completed applications for all grant programs are not due until 11:59 EDT on 4 May 2012, the SF 424 submissions need to be in by 27 April.

If this is your first time applying for a grant and you require assistance in registering, go to https://portal.fema.gov to fill out a new user registration.

Port Security Grants 101 A. Robert Degen, Esq—The Law Office of A. Robert Degen As counsel to the Maritime Exchange for the Delaware River and Bay, I am often asked to review, interpret, and provide recommendations on how Port Security Grant Program (PSGP) subrecipients spend the federal dollars they receive. These decisions are made more difficult for both the sub-recipients and the Maritime Exchange given the murky nature of so many of the laws, regulations and policies which govern the Program.

Following is a discussion of some of our most frequently-asked questions, and we hope the information will be of assistance to those who receive federal PSGP grant funds. Maintaining compliance with program requirements is certainly in our region’s best interest.

Background In the wake of the September 11 attacks, among the many new worries for Americans was the increased concern over the safety and security of our nation’s seaports and critical infrastructure. As a result, Congress passed the Maritime Transportation Security Act of 2002 to strengthen the nation’s critical infrastructure against the risks associated with potential terrorist attacks.

Included among its many provisions, the Act required development of Area Maritime Security Plans that would provide details of ports’ critical resources and measures and procedures to deter and respond to a possible terrorist attack. It further required owners and operators of vessels and facilities to submit security plans which set out specific measures to be taken for deterring and responding to terrorist incidents.

A key component of the Act was the establishment of the PSGP to fund or partially fund anti-terrorist measures and improvements to critical infrastructure made by port authorities, vessel/facility operators, first responders, and state and local governments in connection with implementing the areawide and site-specific security plans. The PSGP is aimed at implementing the objectives addressed in a series of post-9/11 laws, strategy documents, plans, Executive Orders and Presidential Directives. At the port level, a series of plans and analytical products such as the Maritime Security Risk Analysis Model (MSRAM) are used in support of the national strategies to prevent and respond to transportation incidents.

Between 2002 and 2007, the PSGP was administered by the Federal Emergency Management Agency. However, in 2006, in response to the Dubai Ports World controversy, Congress passed the Security and Accountability for Every (SAFE) Port Act which authorized additional funding to enhance port security in the form of risk-based grants which resulted in the 2007 Supplemental PSGP. Under this grant, FEMA for the first time required certain ports, designated as Tier I and Tier II ports, to identify a single entity, known as the Fiduciary Agent, to apply for grant funding on behalf of the port area and to manage the grant process. The Fiduciary Agent for the Houston region has been Harris County though the recently released FY 2012 guidance removes the fiduciary agent process altogether.

The Grant Process For each round of funding, the Department of Homeland Security establishes PSGP priorities and guidelines governing the types of projects that will be allowed. Once funding is announced, a timeline is set for applicants to submit grant applications which detail the scope of the projects, projected costs, timeline for implementation and the manner in which the project addresses priorities established by DHS and the Sector. The grant applications are submitted to the AMSC where they are evaluated and scored based on a number of factors, including how well they address the DHS priorities and the regional plans. Once projects are selected and approved by the AMSC managing board and the Captain of the Port, the application to FEMA is prepared and submitted.

The Attached Strings Because the PSGP projects are funded at least in part with federal funds, they come with strings attached to reflect the federal government’s social and economic policies. By accepting federal funding, recipients agree to be bound by a host of public policy requirements. Some of the laws that the PSGP requires that all grantees comply with include: · Federal Civil rights laws and regulations including the Civil Rights Acts of 1964 and 1968; Title IX of the Equal Oppor-

· · · · · · · ·

tunity in Education Act; the Age Discrimination Act of 1975 and the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973; Byrd Anti-Lobbying Amendments which prohibit use of federal funds to pay for any effort to influence a federal agency or congress in connection with a federal grant; Drug Free Workplace Act of 1988 under which a recipient must maintain a drug-free work place; Refrain from contracting with anyone debarred or suspended from doing business with the federal government; The Federal Water Pollution and Clean Air Acts National Environmental Policy Act; Contract Work Hours and Safety Standards Act Copeland Anti-Kickback Act prohibiting contractors from requiring employees to give up any part of their compensation Equal Employment Opportunity laws

The above list is not exhaustive, but it reflects some of the principal requirements. While not applicable to all grants, recipients of grants used to fund construction projects must also comply with the Davis Bacon Act and the Buy American Act. Needless to say, it isn’t possible to provide a briefing on all these Acts in a newsletter article, but here’s a summary of some of the key components of the PSGP that have generated a number of questions among recipients in this region.

Davis Bacon Act For any PSGP funded construction projects in excess of $2,000, recipients must pay “mechanics and laborers” at least the local prevailing wage for the type of project as determined by the U.S. Department of Labor including fringe benefits and time and a half for work in excess of 40 hours per week. The employment categories included are broad, covering all of the trades but generally excluding executives, managerial and clerical personnel. In addition, workers are to be paid at least weekly and the employer is required to maintain payroll records, certified by the employer, that include detailed information about each worker such as identity, work classification, wage rate, daily and weekly hours worked, deductions and actual wages paid.

In addition, the employer is required to post a notice at the work site that includes a copy of the prevailing wage determination and which indicates that it is a Davis Bacon work site, advises employees of their rights and provides Department of Labor contact information. Construction project includes improvements of all types as distinguished from manufacturing, providing materials, servicing or maintenance work.

Buy American Act The Buy American Act (BAA) essentially requires that all purchases by the federal government above the micro purchase threshold of $2,500 for public use be a product of the U.S. except when waived under certain trade agreements. There are four exceptions: 1. When it would be inconsistent with the public interest to require a U.S. made product; 2. When the product will be used outside the U.S.; 3. When the product is not manufactured in the U.S. in reasonable quantities; and 4. When the lowest-cost U.S. product is unreasonably expensive (i.e. exceeds the lowest foreign bid by 6% or 12% if the U.S. bidder is a small business). Although purchasing using federal grant funds is not considered direct purchasing for a public purpose covered by the BAA, the enabling legislation for the PSGP requires grant recipients to comply with the Stafford Act, which in turn applies the Act to construction projects funded by the PSGP. Thus sub-grantees should assure that any materials used for construction projects are either allowed by a trade agreement or are U.S. manufactured.

Procurement FEMA does not specify what type of procurement method is to be used when purchasing goods or services with PSGP funds. Rather, recipients are required to use their own procurement methods so long as they conform to Federal law. The goal of any procurement policy is to provide to the maximum extent possible full, open and free competition. That generally means a request for proposals or invitation to bid must be made available to widest practical number of prospective bidders through a sealed bid or similar process. Moreover, the solicitation cannot specify a brand name or state a geographic preference.

In cases where the procurement does not exceed the small purchase threshold of $100,000, it is permissible to get a number of price or rate quotations from qualified sources.

Procurement through a noncompetitive process may be permitted in those cases where the item is available from only a single supplier, an emergency or other public exigency exists so that a full and open procurement is not feasible or, when only a single response is received to a solicitation from multiple sources.

Timely Spending More recently, we’ve been hearing a lot from FEMA about concerns with slow draw downs throughout the U.S. Of all open grants, for example, four ports have spent less than 10% of the funds awarded; and no port has spent more than 55% of its PSGP allocation. Presumably as a result of the slow draw-downs, FEMA as reduced the performance period for FY 2012 from 36 months to 24. However, they have increased the matching requirement to 50% for private sector and 25% for public sector grantees. Most recently, for FY 2010 and 2011, there was no match requirement. Congress is looking at the slow spending numbers, and the amount of money returned to the program as it makes funding decisions.

As we go to press, funding for the FY 2012 PSGP was just recently announced. Although the President’s budget sought significant funding for Homeland Security Grant programs, Congress appropriated only $97 million for the PSGP; this is well under half of what it has been in previous years. In this era of spending cuts, the port community can be grateful that funds have been made available at all.

A. Robert Degen is an AV rated attorney with 38 years experience in the practice of law. Bob represents business, educational institutions and individuals in local and national matters including nonimmigrant and immigrant visa matters, I-9 training and auditing, and much more. Bob is also Solicitor to the Maritime Exchange for the Delaware River and Bay where he provides general advice as well as counseling on the management of FEMA grants under the PSGP. Bob also represents mariners in USCG suspension and revocation proceedings. To get in touch with Bob, email him at adegen@degenlaw.com.

This publication is printed with the kind assistance of the Maritime Exchange for the Delaware River and Bay.

Port Watch Tom Marian—Buffalo Marine Service

Let’s Try This Again—2011 All Over Again?

An armada of tankers, dash of confidence and a rather strong energy market has cut through the fog of uncertainly to indicate a positive start to 2012 – a start that was somewhat reminiscent of 2011. A year ago, Texas ports were up 3.5% across the board, a tad below this year’s 4% month-to-month increase. On the other hand, January 2011 posted nearly 5% better arrival numbers than 2012. In one respect, that stands to reason as the back half of 2011 was far softer than the first 6 months. Consequently, an aggressive start to the shipping year in 2011 could not sustain itself as vessel arrivals and energy consumption softened through the fall. Logically, the same pattern could repeat itself but there are some interesting differences which may point to a more positive horizon.

Houston’s 6.5% increase in vessel arrivals for the month was comprised of a mix of vessels that sets up 2012 differently than 2011. First, nearly every category was up with the major exception of tank vessels which was flat. This particular category typically constitutes up to 40% of the total arrivals for Houston. The majority of the remaining vessel categories were quite solid. Specifically, bulk and general cargo vessel arrivals were up 4% and 18% respectively; containers ships eked up 2%; LPG posted a respectful 10% gain; the port saw 3 more car carriers in January (i.e., 10) than in December; and last - but certainly not least - chemical tankers were up 8.5%. Remarkably, with respect to this last category, in terms of raw numbers, it was 10 higher than 2011’s best month with 125 chemical arrivals calling upon the Bayou City.

Most of the remaining Texas ports also enjoyed a solid January. The port of Sabine saw 12.5% additional arrivals.

The port of Texas City also greeted the first month of the year with a monthly gain of 6.5%. Thus, these two particular ports which are weighted heavily in the petrochemical categories reflected a somewhat bullish position in the energy sector. Finally, also on the positive side of the ledger, Corpus Christi experienced a far better January 2012 with a 4% monthly rise as compared to last year’s 12% slump. What of our two other mid-size Lone Star ports? Unfortunately, both Freeport and Galveston did not enjoy the same positive results as its sister ports tallying a substantial 16% drop and 8% monthly decline respectively. Last but not least, blue water’s less glamorous relative – inland tows – edged up 3.5% for the month. Most notable is the fact that the 11,226 Houston Ship Channel monthly tow count would have been the 2nd highest number in 2011.

Taken together, the types of vessels and numbers reflect both a positive offset to a rather poor 4th quarter in the previous year and – more importantly – a mix of commodities that point towards more solid manufacturing growth.

Better yet, aside from the realities of a persistent fog season, the simultaneous need to meet consumer demands with the aggressive development of regional shale gas fields has literally fueled activity throughout Texas ports. This is what has distinguished the onset of 2012 from 2011 and, hopefully, this will bode well for the entire year rather than a mere portion of one.— Tom Marian, Buffalo Marine Service.

Spotlight on Captain Naval Aranke Executive Ship Management Born in Bombay India, Captain Naval Aranke had family in the shipping industry and family in the medical industry, but on hearing that India’s equivalent of the Merchant Marine Academy required only one year of training before he could get to the open sea, he jumped at the chance. “I had an idea in my head that there would be less reading and studying involved before we got to operate the machines… well, that was corrected quickly.”

At the Naval Maritime Academy (T.S. Rajendra), Captain Aranke spent a hard year learning everything he could about the ships before spending the next thirty-six months at sea. “It was longer than you see now certainly; when I think about how difficult it can be to retain good sailors… two and a half years at sea is a long time.”

With his third-mate’s license earned, he climbed aboard the Vishva Ajay, a break-bulk/ container carrier for a year, and then spent more than a quarter-century sailing with the Shipping Corporation of India and foreign-flagged ships, mostly on tankers. “I liked tankers—oil tankers, product tankers, crude tankers, whatever was there.

The pay was good, and I thought it was a pretty specialized trade. You know, where we were then, we told ourselves that to sail tankers, we were some pretty smart guys, so there was a bit of peer pressure there.”

In 1986, Captain Aranke received his Master’s license and by 1990, he received command of his first vessel, the Rio Tigris, a 4,550 DWT bitumen (asphalt) tanker built fifteen years previously at the Lindenau shipyards in Kiel, Germany. “She used to load in Venezuela and discharge on the windward Caribbean islands. There weren’t the tank-cleaning requirements you have on some of the product or crude tankers. That was a tremendously enjoyable liner service.”

By 1998, Captain Aranke decided that he wanted to be able to spend more time ashore with is family, so he joined Executive Ship Management. One of the first chemical tanker masters of the company, he began in Singapore where he spent four years working on vessels providing liner services to the US gulf.

After realizing that he spent too much time on an airplane and wanted to be able to offer better customer service to his North American customers, Captain Aranke moved to Houston in 2002 to open the company’s US subsidiary, Executive Shipping Services (USA), Inc. Bringing his twenty years of sailing experience and shore work as a superintendent and quality assurance manager, he is now better able to deal with last-minute questions, issues and technical challenges arising from working with Executive Ship Management’s fleets operating in the Western Hemisphere.

On his thirty years in the shipping industry, Captain Aranke reflects: “Technology is changing so fast—what I was doing at sea 20 years ago isn’t good enough any more, and I’m a dinosaur if I don’t keep up because we on the shore have to be able to lead by example. The gauging systems, navigation systems—the bridge is completely electronic today, - the quality of the ships, the tools that sailors have today is very good, much better then what I remember, but they need to know how to use them. It’s a wonderful challenge, and keeps me learning every day.”

“I love my job. The calls—the way we get to resolve issues to everyone’s satisfaction, both from the regulatory and technical side: my job is to keep the ships going which is a day-and-night change from ten years ago. The pace of regulatory and technological change means that you have to be hands-on 24-7 just to do an “okay” job… and “okay” isn’t good enough.”

As a professional dealing with crewing, Captain Aranke agrees that one difficulty facing the entire industry is crew retention. “It’s a big challenge to get sailors out to sea, and once they’re there, it’s a challenge to get them to stay out at sea.” As retention declines, shore-side managers like ESM engage more in the training programs so that new sailors are as prepared as possible to meet the challenges of the open sea.

When he finds time out of the office, Captain Aranke enjoys relaxing with music and spending time with his family; his wife Medinee is a classical Indian dancer and instructor, and they have two children, sons Mayank and Nishant.

A one-stop management service headquartered in Singapore offering all aspects of cost-effective ship management, Executive Ship Management offers a wide range of services to the vessel principle including technical management (support and operation, maintenance and repair, and specialized services), crew management (selection, training, evaluation and certification), commercial management (including agency and chartering), and additional services such as New-Build supervision, insurance, survey and inspection services, and more.

ESM is proud to stand as a combination of traditional values of trust, sincerity, integrity, hard work and fair business practices together with a modern technology oriented management system.

80 Broad Street, Monrovia, Liberia During the Cold War, the US needed a place to register vessels to neutrally traverse international waters and the Liberian Registry, founded in 1949 with US support, was a natural fit. Like Panama, whose new and fledging shipping registry received a dramatic increase in customers when, upon the advent of prohibition, the US government allowed vessel owners who wanted to run booze-cruises to shift flag-states, Liberia is a flag of convenience and though the registry’s operational headquarters is in Virginia, one of the world’s most common addresses on registration paperwork is 80 Broad Street in Monrovia.

“The Liberian Registry includes over 3,700 ships of more than 121 million gross tons representing 11% of the world’s ocean-going fleet. Liberian-flagged vessels carry more than one-third of the oil imported to the United States. Liberia’s laws and regulations are regularly updated to become more efficient [and] reviewed in an effort to make Liberia still more attractive to the shipowner.”

Why does a nation smaller than Ohio hold legal jurisdiction to just over a tenth of the globe’s merchant fleet? Though the Liberian Registry advertises a strong commitment to first-class customer service and significant investments in computer and communications technologies, the reasoning is most likely much simpler. By selecting a flag of convenience—registering a vessel —a ship-owner is deciding where to pay annual fees and taxes, whose laws will apply during incidents at sea, and perhaps most importantly to the cost structure: what manning requirements will apply to her operation.

With the relatively high cost of crew from US and Western European nations, sailors from East Asia and Eastern Europe appear increasingly attractive to companies looking to control costs. Some Western nations offer subsidies and tax deductions to attempt to help companies control costs; Germany, for example, offers 9,400€-16,700€ annually for each EU seafarer, however manning requirements may still tip the economic scales in favor of lower cost registries. A 2011 MARAD report showed average crew costs for a US flag vessel to be between $11,000-$14,000 per day while foreign flag costs ranged from $2,000-$3,000. The potential $4,000,000 swing per year on crew costs alone, seems to ensure that 80 Broad Street will be the address of record for merchant vessels for years to come.

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Commerce Club Luncheon

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2012 Annual Maritime Dinner

13 September Commerce Club Luncheon 11 October

Greater Houston Coffee Association Annual Luncheon

5 November

GHPB Captain’s Cup Golf Tournament

8 November

Houston Ship Channel Security District Annual Luncheon

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