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An International Standard for Supply Chain
Security Management
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1. What is DNV 2. Why did we do what we
did 3. What did we do sofar 4. What will
happen next 5. What else needs to happen
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Ship Classification Society
Established 1864
Independent Foundation
Non-profit Self owned No shareholders
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Objective
To safeguard life, property and the
environment

DNV provides confidence
a.o. by setting standards and verifying
compliance
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Main industries

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International Network
Americas 700
Asia and Australia 1.000
Europe 4,000
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Maritime Industry
16 of world fleet
Recognised
and competing on Quality
Authorised by 130 national maritime
authorities
Lowest Port State detention rate of all class
societies
Leading in IMO on the Human Factor (ISM
ISPS)
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Class Societies market share
IACS Fleet Development 1965 2002
ABS
LR
Mill. Grt.
NK
DNV
BV
GL
Year
Vessels gt 100 grt. 50 dual class
included Year-end figures
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DNV Certification Services
Quality
Management System Certification
Safety
Environment
One of the worlds leading Management System
Certification bodies Over 80 accreditations in
21 industrialised countries More than 8 of
the worlds market for management system
certificates
Product and Personnel Certificates
Greenhouse Gas Services
EBtrust
Training
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DNV and Security

• Worked with IMO since the Cole-incident
• Instrumental in developing ISPS code
• Adopted December 2002
• In force 30th June 2004
• gt150 of DNVs best maritime auditors trained in
  security
• Appointed RSO by flag-states for gt 80 of our
  fleet

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DNV and Security

• Ships
• Certification to ISPS-code
• Ports
• Training of PSOs etc.
• Advisory work
• but what about the rest of the
  international supply chain ??????

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Supply Chain Current Initiatives

• US ? (unilateral)
• CT-PAT
• BASC
• Container Security Initiative
• 24hrs Advanced Manifest Regulation etc.
• G7 ? WCO
• Secure supply chain
• Facilitate world trade
• IMO ? WCO
• Efficiency and security of multi-modal cargo

UN-Counter Terrorism Committee
UNODC
IAEA
UNICRI
OPCW
OAS
APEC
EU
? Multinationals
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What is DNVs concern?

• All these initiatives will lead to proliferation
• Formal initiatives will take too long time
• By July 2004 ISPS will be the only
  internationally implemented security management
  standard
• Loss of motivation could turn the ISPS-code from
  a meaningful tool into an expense-only
• In case of security breach our clients will be
  held liable and ships will be detained
• Not enough capacity to reveal security breach
  before departure

gt 250 Mln. Boxes
lt2 inspected
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Supply Chain Security
30th June 2004!
Factory
Port
Ship
Port
Ship
Truck
Container terminal
Container terminal
Barge
Storage area
Container terminal
Container terminal
ISPS Code
Ship
Ship
Truck
Risk of breach
Final Destination
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How to speed-up the process?

• Customs need increased trusted trader agreements
  (capacity?)
• Move from bi-lateral to multi-lateral acceptance
  (time?)
• Evolving trade unions result in more supply
  chains without custom intervention (multiple
  players)
• Confidence in supply chain partners requires
  verification (multiple assessments) of security
  management systems
• Therefore trade is in need of
• International security standards for each step in
  the chain
• A certification scheme as risk-assessment tool
  for customs c.s
• An quality standard for certification bodies

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WCO is building the Customs-Business Partnership
The complex house of the Trusted Traders
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Why shall Customs Support a Security Code?

• A security Management Code needs support from
  Customs
• It shall cover all existing guidelines and
  security requirements
• US C-TPAT
• US BASC
• Swedish Stair-Sec
• Canadian CSA
• WCO requirements
• A certified secure supply chain shall get a
  green lane through customs
• Customs can focus on non-trusted traders

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Why shall industry support a Security Standard?

• Increasing number of large industrial players
  develop(ed) their own standard
• To reduce direct losses
• To protect their reputation
• To select their suppliers
• Increasingly security threats need not to pass
  customs
• Increasing of trade unions (EU, APEC, GOST??)
• After implementation of ISPS terrorist will
  purchase in the region of target

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A Draft Supply Chain Security Code

• Developed by DNV in consultation with SE and NL
  Customs
• A generic security management standard
• For closed cargo transportation units.
• Only four basic processes in the supply chain
• Loading (stuffing, consolidating, sealing)
• Storage of cargo / closed CTUs
• Transport by
• Road
• Rail
• Inland Waterways
• Processing of information
• Based on ISO 9000 series (multiple management
  systems)

ISO Management System
Functional Requirements
Quality
Environment
Safety
Security

• Therefore easy to implement by industry
• Seamless connected to the ISPS-Code

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Why a seamless connection with the ISPS Code

• One supply chain!
• 3 security levels
• L1 Normal mode of operation (lowest hurdle for
  trade)
• L2 Increased security due to general terrorist
  threat
• L3 High Security due to specific and targeted
  terrorist threat
• Basic requirements (industry to find own
  solutions) for
• Procedural security
• Human Resources Security
• Physical Security
• Access Controls
• Non-prescriptive i.e. operators shall analyse
  own risk.

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Our Definition of Security

• Physical Security absence of danger that the
  characteristics of cargo in a secure area or a
  CTU are illegally changed including measures
  taken to guard against sabotage, escape , attack,
  or other crime. This danger includes i.a.
• infiltration with weapons or any other dangerous
  substances and devices intended to harm people,
  property or the environment and which are not
  authorized,
• infiltration with other unauthorised cargo or
  passengers or
• theft of, or damage to cargo
• Information Security absence of danger that
  information in a document (paper or electronic)
  is accessed, distributed or changed without
  proper authorization including measures taken to
  guard against espionage, sabotage or other crime.

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The code and its appendices Status

• Supply Chain Security Code 1st hearing round
• Appendix A Pending Pilots
• Guidelines and check lists
• Appendix B Draft ready
• Requirements to certification Bodies
• Appendix C Draft ready
• Requirements to Auditors

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Securing Robustness of the standard

• To assure robustness of the standard
• Assure industry involvement and backing
• Cooperation with UN-ECE through ITPWG of
  UN/CEFACT
• A high-level conference in November to harmonize
  standardization initiatives (UN, WCO, IMO, etc.)
  13th 14th November
• Involve industry representatives!
• Take fast-track to make it ISO-standards (2004?)
• Pilot Projects
• Test applicability of standards in different
  business and cultural settings
• Test validity of certification procedures
• Reveal development needs with customs and/or
  industries
• in different business environments and cultures

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Why certification to an ISO Standard?

• Transparent communications
• Underpin trust and confidence between
  partners in the supply chain
• Facilitate mutual acceptance of secure
  traders
• One world wide level playing field for all
  players in the supply chain
• Avoid multiple assessments
• A clear and concise reference in contractual
  agreements
• A risk-assessment tool for authorities and
  industry
• A tool to select suppliers/sub-contractors

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The appendices B and C to the code

• Appendices are just a suggestion, based on DNVs
  best experience
• Multi-lateral acceptance between customs require
  a level playing field
• Who will be the custodian of the standard (and
  its appendices)??
• Who will be accrediting certification bodies?
• Supra national, i.e. not NACBs! (developing
  countries!)
• A new task for WCO?
• A separate body, established by the parties
  supporting the code?

Appendix B Requirements to certification Bodies
Appendix C Requirements to Auditors
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Supply Chain Security
Factory
Port
Ship
Port
Ship
Truck
Container terminal
Container terminal
Barge
Storage area
Container terminal
Container terminal
ISPS Code
Ship
Ship
Truck
ISO Supply Chain Security Standard
Risk of breach
Final Destination
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