Sunday, March 05, 2006

Any Port in a Storm

The Democrat opposition to the Dubai Ports World acquition of the Peninsular and Oriental Steam Navigation Company seems to be fairly principled. The principle is: Whatever Bush Does is Wrong. OK, I get that.

Harder to understand is the opposition by many Republicans and Conservative pundits. Perhaps it is fueled by rhetoric like this:

Our Government is selling control of six major U.S. Ports to a company owned by the United Arab Emirates.

See more at Stop the Port Deal.

There are several problems in just the above statement:
  1. The government is not selling anything. The stockholders of P&O authorized the sale of their container shipping operations to Dubai Ports World.
  2. Nobody is selling control of the ports. The Coast Guard retains authority over port security, just like they did when P&O owned the shipping operation. The local Port Authority of each port retains control of the operations.
  3. Only five of the ports in question are U.S. ports. The complete list follows: Vancouver, Newark (If you count New York and New Jersey separately, you get six. But it is the Port of Newark), Philadelphia, Baltimore, New Orleans, Miami.

I can understand some of the confusion because the players seem intermingled. If you follow the links I provide here, you will see what I mean. A principal subsidiary of P&O is P&O Ports. According to their web site,

P&O Ports is the container terminal operator and stevedore of choice for many shipping lines and marine consortia.

They, in turn have port operations around the world. If you click on the North America symbol, you will see the six ports that are part of the deal. The head of the division is Robert Woods. Note from his biography:
In 1971 he joined P&O General Cargo Division and transferred to Overseas Containers Limited (later P&O Containers Limited) in 1980, heading the Company's Gulf headquarters in Dubai. Returning to the United Kingdom in 1984 he was appointed General Manager of the Far East Trade. Two years later he became Trade Director of the Australia / New Zealand Service. In 1989 he was appointed Joint Managing Director and a year later became sole Managing Director of P&O Containers Limited.
In January 2004 he became Chief Executive of P&O Steam Navigation Company, retaining direct executive responsibility for P&O Ports and at the same time relinquishing his position as Group Managing Director of P&O Nedlloyd Container Line. He is Chairman of Tilbury Container Service (TCS) and Southampton Container Terminal (SCT).

Note that he headed P&O's Gulf headquarters in Dubai. Also note that Dubai is not a country. The United Arab Emirates (UAE) is a country, of which Dubai is an emirate (administrative division), along with Abu Zaby (Abu Dhabi), 'Ajman, Al Fujayrah, Ash Shariqah (Sharjah), Ra's al Khaymah, and Umm al Qaywayn. The Capitol of UAE is Abu Dhabi.

Now it gets a little confusing, because there is a P&O Ports North America that shows a number of ports on the Eastern seaboard of the US. At first I wondered about that, then I noticed that five of the six above ports are listed (in fact, there are separate dots for New York and New Jersey). However, P&O has a joint venture called Port Newark Container Terminal (PNCT). P&O has merged with A.P. Moeller-Maersk (a Danish company) as part of a reorganization which led to the sale of the terminal operations. If you visit the Dubai Ports World home page and wait long enough, you will see a Maersk container being processed.

Some of the criticism of the deal cites the UAE failure to recognize Israel. This is strange, in light of the fact that an Israeli company, Zim Integrated Shipping Services Ltd, has said they have good relationships with Ports World.

WASHINGTON (CNN) -- The chairman of Israel's largest shipping firm has strongly backed a deal that would give a United Arab Emirates-based shipping company control of several U.S. port terminals, while another GOP leader expressed strong opposition.
"During our long association with DP World, we have not experienced a single security issue in these ports or in any of the terminals operated by DP World," Ofer said in a letter written February 22. "We are proud to be associated with DP World and look forward to working with them into the future."

So it would seem that the one country in the region that would know about terrorist ties has no problem with the deal. The "strongly backed" link above connects to a letter written to Senator Hillary Clinton by the CEO of Zim, Idan Ofer. In the letter he stresses security:
“As an Israeli company, security is of the utmost importance to us and we require rigorous security measures from terminal operators in every country in which we operate, but especially in Arab countries. And we are very comfortable calling at DP World's Dubai ports.”

So, if the Israeli's have no problem with security, why would we?

No comments: