US embassy cable - 04TEGUCIGALPA401

UNCLAS SECTION 01 OF 05 TEGUCIGALPA 000401 
 
SIPDIS 
 
SENSITIVE 
 
FOR WHA/CEN AND WHA/PPC 
FOR EB/CBA AND EB/TRA 
FOR INL/LP 
 
E.O. 12958: N/A 
TAGS: EINV, BEXP, ECON, ETRD, PGOV, HO 
SUBJECT: Port Security: Honduras on Track to Meet U.S. and IMO 
Requirements 
 
 
1. (SBU) Summary: The Government of Honduras (GOH) is well 
positioned to be in compliance with MTSA and IMO requirements by 
the July 1, 2004 deadline.  The country's chief challenges in 
meeting the requirements set out in the Maritime Transportation 
Security Act of 2002 (MTSA) and in the International Maritime 
Organization (IMO) codes are obtaining the necessary financial 
resources and battling the ingrained ambiance of corruption that 
permeates the country.  With continual Embassy engagement, the GOH 
has come to understand the importance of maritime security and its 
possible economic ramifications, including refusal of entry into 
U.S. waters, if Honduras fails to meet heightened port security 
standards.  A U.S. consulting firm completed a port facility 
security assessment of all Honduran ports late January 2004, and 
the GOH is currently in the process of drafting the port facility 
security plan.  GOH Presidential, political and financial support 
were critical for the expeditious contracting of the assessment 
team and purchase of recommended security equipment.  End summary. 
 
-------------------------------- 
U.S. Law and International Codes 
-------------------------------- 
 
2. (SBU) Puerto Cortes handled over 1,000 vessels traveling to or 
from the U.S. in 2002.  When the news came out that, following the 
events of September 11, 2001, the U.S. was focusing on the need 
for improvement in maritime security, it became clear that port 
security would be a critical issue for Honduras.  However, meeting 
the steep requirements set out in the Maritime Transportation 
Security Act (MTSA) and International Ship and Port Facility 
Security (ISPS) codes pose a very large challenge.  All major 
ports in Honduras are owned and operated by the state-owned 
National Port Authority (ENP).  First, meeting the codes requires 
physical changes, including fences, camera equipment, and 
increased security devices standard at any U.S. port facility, but 
lacking in Honduras because of financial and political 
constraints.  Secondly, the codes require administrative changes 
in the way business is done and the manner in which emergency 
response practices are implemented.  Though the U.S. consultants 
conducting the assessment discovered that the ENP already 
maintained volumes of information on port procedures and 
contingency plans for emergency response, little of this 
information was common knowledge to port security personnel.  Even 
more worrisome, the consultants discovered that many dock 
employees and security personnel have little to no education; some 
were even reading manifests presented to them upside-down, 
pretending to read the inverted document, and confirming that 
everything was acceptable.  Thirdly and perhaps the most difficult 
to overcome is the need to change the culture that allows 
corruption at the ports to flourish. 
 
3. (SBU) Puerto Cortes and San Lorenzo have been centers of 
corruption, pilferage, drug trafficking and alien smuggling for 
years.  While the Embassy and private sector have attempted to 
work with port authorities in the recent past to change these 
endemic problems, little progress was made due to a lack of 
political will and great financial incentive not to change the 
environment.  However, with the imminent onset of the IMO and MTSA 
requirements and repeated Embassy advocacy, GOH and port officials 
finally committed to taking action to address the underlying 
issues related to security at Honduran ports.  This political will 
was driven by the understanding that Honduras' economic stability 
depended on change. 
 
-------------------------- 
What Are The Requirements? 
-------------------------- 
 
4. (SBU) The IMO, within the framework of the SOLAS convention, 
established the ISPS codes.  These codes are very detailed and lay 
out specifically what every signatory country must do.  Basically, 
there are two parts to the code - vessel security and port 
facility security.  Each of these two requires an assessment and a 
plan.  The assessment is essentially a risk analysis, an 
evaluation of the perceived threat to installations and 
infrastructure, identifying potential vulnerabilities and laying 
out the consequences of the potential incidents calculated, such 
as chemical spills or a perimeter breach.  While this may seem 
simple, an assessment requires a very in-depth analysis, including 
detailing everything from port facilities, cargo facilities, power 
plants, water supplies, bridges, railways, and roadways and how to 
protect them from threats such as vandalism, arson, hijacking, 
tampering and pilferage, stowaways, smuggling of weapons, using 
vessels themselves as a weapon, blockages of entrances, and 
threats of nuclear, biological and chemical attacks.  Once the 
assessment is completed, host government officials are then 
responsible for drafting and certification of a port facility 
security plan.  The plan should indicate operation and physical 
security measures to ensure that the port is always able to 
operate at the minimum security standards required (MARSEC 1). 
The plan must also indicate additional, intensified measures the 
port facility can take to move to and operate at heightened 
security levels 2 and 3, if required by a security incident or 
threat. 
 
5. (SBU) Post understands that U.S. inspections of foreign ports 
and shipping lines will be modeled on the Transportation Security 
Administration's (TSA) periodic security reviews of foreign 
airports and airlines.  If a port fails to be certified by the 
U.S. Coast Guard (USCG), no ships originating from or 
transshipping through that port will be allowed to enter U.S. 
waters until the vessel has been secured at a certified port 
facility.  For Honduras, temporary decertification of a principal 
port such as Puerto Cortes would mean massive economic costs, 
particularly for textile, fruit and non-traditional agricultural 
product exporters.  Long-term decertification would be disastrous 
to Honduras' economy, as it would eliminate any incentives for 
additional foreign investment in Honduras.  Decertification would 
also negatively affect El Salvadoran and Nicaraguan exports 
transported through Honduras. 
 
--------------------------------------------- 
Encouraging Compliance and GOH Political Will 
--------------------------------------------- 
 
6. (SBU) In order to learn as much as possible about new port 
security requirements both for entry into the US and international 
standards, country team members attended port security training 
sessions in San Pedro Sula in April 2003, researched International 
Maritime Organization (IMO) ISPS codes on vessel and port security 
and studied the US Congress' Maritime Transportation Security Act 
(MTSA).  Embassy Officers then provided a presentation to key 
advisors of President Maduro in June 2003 to brief GOH officials 
on the importance of acting quickly in order to meet MTSA and IMO 
requirements by July 1, 2004.  At the presentation were members 
from President Maduro's team on State Modernization, Port 
Authority representatives, private sector representatives, members 
of the shipping lines' association (AHCORENA) and a representative 
from the Chamber of Commerce of Cortes.  Copies of this briefing 
were passed to the WHA/CEN desk as well as to Pol and Econoffs 
throughout the region via email for their information / use. 
Please contact post Econoff Nicholle Urdaneta at 
urdanetanm@state.gov if additional copies are desired. 
 
7. (SBU) The GOH immediately realized how important it would be 
for Honduran ports, and Puerto Cortes especially, to comply with 
IMO and MTSA port security requirements before the July 1 
deadline.  The GOH requested a World Bank-funded project to draft 
the terms of reference to contract a recognized security 
organization (RSO) to perform a diagnostic port security 
assessment.  Because of the tight deadline, in August 2003, 
President Maduro declared a national emergency on the state of 
security at Honduran ports.  By doing so, the port authority could 
then put the assessment out for bid using a short list of 
recognized port security companies.  In the same manner, until the 
emergency ends (the July 1, 2004 deadline), the port authority may 
use streamlined procurement procedures to purchase equipment, 
contract out bids for smaller projects, and do whatever is 
necessary to bring Honduras' ports into compliance. 
 
8. (SBU) Working under a tight deadline and demanding schedule 
imposed by the ENP, the selected U.S. consultants (U.S. Protection 
Services and American Defense Services) completed the evaluation 
of Honduras' ports and provided the GOH with the IMO required port 
facility assessment by the end of January 2004.  The company also 
provided a detailed set of recommendations for meeting port 
certification requirements.  As the team provided initial 
recommendations during the assessment phase, the port authority 
acted proactively to immediately purchase items such as patrol 
vehicles, ATV 4-wheelers, and alarm systems.  It also moved 
forward on installation of camera and X-ray equipment as well as 
improved infrastructure such as fencing, lighting systems, and new 
roadways instead of waiting for the final report and losing 
valuable time.  The National Congress approved the port 
authority's budget in early December, allowing the port to spend 
up to 56 million Lempira (USD 3.1 million) on port security 
projects.  The GOH understands that this amount may not be 
sufficient and is looking for additional means of funding. 
 
------------ 
CSI and BASC 
------------ 
 
9. (SBU) GOH officials and private sector companies also expressed 
significant interest in participating in the Container Security 
Initiative (CSI) program.  Initially, there was some confusion on 
the part of the Hondurans, who thought CSI meant port 
certification, but now understand that CSI may play an important 
role in the overall security program but is not, in itself, port 
security.  Though Honduras' Puerto Cortes was not included on the 
U.S.' initial list of ports for the CSI program, Minister of 
Industry and Trade, Norman Garcia, continues to advocate heavily 
for inclusion.  Post understands that Honduras does not yet meet 
the basic security requirements to be considered for the program, 
but requests Washington agencies consider Puerto Cortes in its 
next CSI phase because of its significant port security progress. 
The GOH is taking port security very seriously and is dedicated to 
improving security standards along with modernization efforts. 
 
10. (SBU) Since the beginning, private sector companies such as 
Sarah Lee and Seaboard Marine approached the Embassy with concerns 
that Honduras would not meet heightened security standards.  These 
companies were watching the MTSA legislation move through the U.S. 
Congress and signed by the President.  The companies began to work 
together to advocate for improvements in port security at 
Honduras' ports and requested the Embassy take a more proactive 
role with the GOH to assure the government's awareness of the 
possible consequences.  Likewise, private sector representatives 
have expressed interest in participating in public/private 
organizations such as the Customs-Trade Partnership 
Against Terrorism (C-TPAT) and the Business Anti-Smuggling 
Coalition (BASC).  EmbOffs provided some general information on 
the BASC program, but would welcome any additional guidance and 
contact information the department may have available on either 
program as well as the new Operation Safe Commerce program. 
 
----------------------------------- 
Key Findings of the Port Assessment 
----------------------------------- 
 
11. (SBU) Not surprisingly, security force competency and 
compliance was one of the main concerns identified in the 
evaluation process.  Honduran ports are currently protected by a 
unionized security guard force whose members are largely 
uneducated (only 18 percent can read and write), unmotivated and 
physically unfit (over 50 percent of the security workforce is 
over the age of 52).  Security guards have been observed sitting 
at entrance gates and politely opening the fence so pedestrians 
and vehicles may enter and exit the port, but without checking 
identification, doing any sort of vehicle search, or asking any 
questions.  Some guards, possibly many, are involved in illegal 
smuggling and pilferage activities.  Port officials are working 
closely with the Office of the Presidency, the Ministry of Labor, 
the Ministry of Security and the Armed Forces to find a solution 
to this weakness.  It will most likely include a transition phase, 
including a severance pay buy-out of many of the guards.  The 
assessment revealed that the port authority already housed most of 
the needed security policies, day-to-day procedures and emergency 
response plans Honduras needs to be in compliance with ISPS codes. 
According to the U.S. consultants, the problem is that the 
workforce and security personnel are either unaware of these 
documents, disregard them, or simply cannot read them. 
 
12. (SBU) Other key problem areas included a wall-high stack of 
ammonium nitrate of unknown origin, barrels leaking chemicals, 
dockworkers reading and clearing manifests upside-down, ships 
arriving without manifests or manifests missing cargo, and 
hazardous material arriving unbeknownst to the port captain. 
 
------------------------- 
Next Steps and Challenges 
------------------------- 
 
13. (SBU) Now that the assessment of Honduran ports is complete, 
the ENP is moving forward to execute its plan for procurement, 
procedure changes, and workforce issues.  The port authority 
reports it has only spent 8-10 million lempira (USD 562,000) of 
the 56 million authorized by Congress.  Port officials also noted 
they believe they will have enough money to complete the 
recommended upgrades.  The only high dollar ticket items left to 
purchase are four airport-style x-ray machines, 8 cameras and the 
construction of a new entry / exit building.  The GOH selected 
Dennis Chinchilla to be Honduras' official Port Security Officer, 
overseeing Honduras' port security program for all ports.  Mr. 
Chinchilla is a well-known and respected member of the Merchant 
Marine and is well qualified for the position. 
 
14. (SBU) Mr. Chinchilla's office will also be responsible for 
certifying all vessel security plans. Note: Honduras is a country 
of open registry and has a flagship fleet of over 1,600 vessels. 
This number was well over 3,000 vessels, but in recent years more 
than 1,500 were removed from the register for failure to pay 
taxes. End note.  The GOH is planning to allow ship classification 
societies such as the American Bureau of Shipping (ABS) to perform 
the individual vessel assessments and draft vessel security plans. 
The Merchant Marines will then certify the plans presented.  For 
registering ships, only those vessels falling within the size 
range of ISPS codes (over 500 tons) are working on preparing the 
registry information for the continuous synopsis record.  Merchant 
Marine officials did state, however, that the GOH is working on 
updating Honduran Maritime Law to require all flagship vessels, 
regardless of size, to present the same in-depth registry 
information. 
 
--------------------------- 
Background on Puerto Cortes 
--------------------------- 
 
15. (SBU) Puerto Cortes is both the largest port in Honduras and 
the largest port on the Caribbean coast of Central America.  It 
provides port services to companies from Honduras, Guatemala, El 
Salvador, and Nicaragua.  It serves as a distribution and 
manufacturing site for the surrounding agricultural regions from 
which more than 1,800,000 containers on more than 1,700 ships in 
2002 were transported.  Puerto Cortes can currently dock up to ten 
ocean-going vessels at a time with three cranes available. 
Expansion, modernization, and privatization projects for Puerto 
Cortes are currently being studied.  Implementation of the 
privatization plan is expected in 2004 - 2005.  Although more than 
1,000 ships traveled to or from the United States, Puerto Cortes 
also services vessels going to or from Europe, Africa, and South 
America.  Puerto Cortes handled approximately 5 million metric 
tons of cargo in 2002.  Projections for 2004 reach over 7 million 
metric tons for Puerto Cortes alone and 8 million in the other 
ports combined (San Lorenzo, Castillo, and Lempira).  Puerto 
Cortes reported revenues of approximately USD 81.4 million in 
2002.  The destination of 98 percent of its exports, almost 1.4 
metric tons, was to the U.S., including Florida, Louisiana, Texas, 
Mississippi and Delaware.  Almost 63 percent of Puerto Cortes' 
imports, 3.6 million metric tons, originated from the U.S. 
 
--------------------------- 
Background on MTSA and ISPS 
--------------------------- 
 
16. (U) The U.S. Congress passed the Maritime Transportation 
Security Act of 2002 (MTSA), which the President signed into law 
November 25, 2002.  In it, the MTSA established requirements for 
U.S. ports and security agencies such as the US Coast Guard and 
the Secretary of Transportation.  In section 70108 of the MTSA, 
the U.S. Congress addressed foreign ports, requiring that the 
Secretary of Transportation assess the effectiveness of 
 
SIPDIS 
antiterrorism measures maintained at any foreign port from which 
foreign vessels depart on a voyage to the United States.  In 
December 2002, the International Maritime Organization (IMO) 
established a new International Ship and Port Facility Security 
code (ISPS code) that identifies measures to which every signatory 
country of the Safety of Life at Seas (SOLAS) convention, 
including Honduras, pledges to adhere.  The MTSA required all U.S. 
ports be certified by the USCG no later than December 31, 2003 and 
grandfathered international ports' readiness date to match that 
determined by the IMO standard of July 1, 2004.  If a foreign port 
does not meet these requirements, the Secretary of Transportation 
may prescribe specific conditions of entry into the United States, 
may deny entry into the U.S., and is required to provide public 
notice to passengers of the ineffective counter-terrorism measures 
of that country. 
 
------- 
Comment 
------- 
 
17. (SBU) The Embassy considers port security in Honduras to be a 
top U.S. national security priority for counter-terrorism, anti- 
trafficking, anti-smuggling, and counter-narcotics efforts.  As 
noted, it is also a Honduran national and economic security issue. 
Embassy advocacy and IMO and MTSA requirements appear to have 
succeeded in helping the GOH understand the urgency and gravity of 
port security to its national well-being.  With the President's 
declaration of a national emergency on the state of port security, 
the support of the National Congress allocating the funding, the 
willingness and dedication of National Port Authority officials, 
and the interest of the private sector, Honduras is definitely on 
the right path to being able to certify its ports as required by 
U.S. laws and IMO code.  End Comment. 
 
PALMER