Saturday, February 25, 2006

DP World - gov't vs private ownership

The Port Deal

I'm mentioned in a couple of post responses that I was actually more comfortable with the UAE being gov't owned than privately held.

Brant over at
Strange Women Lying in Ponds comes in with his particular brand of expertise (maritime lawyer) on the subject. And I believe it's worthy of passing on enmasse.

And even though I am, in part, a maritime lawyer who deals with cruise lines, stevedoring companies, port agents, the Coast Guard, U.S. Customs, etc., on a regular basis (and hold a security pass to a major local port), even I do not feel terribly much qualified to pronounce judgment on this situation. So I have to wonder how suddenly everybody and his grandmother has become an expert on port operations.

I can say that I have never heard anybody express concern for port security based on who the management company happened to be a given point in time. And I can add with some degree of certainty that the "owner" of a given port (for the Port of Miami, the owner is Miami-Dade County) can fire the management company upon the expiration of the management contract. There could be something to the suggestion that a management company could be in a position to acquire intimate knowledge of port security operations, but I doubt that such knowledge would be anything that could not be obtained through very basic intelligence work (much of it available via open resources).

For example, someone could establish a front company for providing goods or services to one or more of the cruise lines, and by that route could obtain port passes and knowledge of security operations through its employees (as long as they could pass the County's background security check). There are all kinds of small companies that serve the port and which have employees going into secure areas on a regular basis.

It would even be easier to crew a cargo ship or cruise ship with Islamist informants or sympathizers. Crew manning agencies are located in just about every Third-World country you can think of, including Islamist hot-spots like Pakistan, the Philippines, Nigeria, etc. My former firm arrested a vessel shortly after 9/11 that turned out to be owned by the government of Egypt (no better or worse an ally than the UAE) and had an all-Egyptian crew. No word on whether any of them were al Qaida sympathizers, but it wouldn't be a stretch if some were. And this was a vessel that sat docked at the Port of Miami for several days on a regular basis.

The upshot is that a port can be targeted in numerous ways, but doing it through a state-owned management company would probably be among the more problematic ways to do it. Most painfully obvious is the fact that any infiltration of port security through the management company would be immediately traced back to the state-owned management company, and therefore the state (in this case, the UAE) would lack any plausible deniability (remember that term?) if anything were to go "boom."

Brant says he hopes to post more on this, and has contacts with some of the legal team that has filed a counter lawsuit in Miami to halt the ports sale. I personally can't wait to read his ensuing stuff, and have added him as a bookmark!


Ros said...

Interesting and informative again.
As I struggle to work out exactly what is the game over DP World I have reflected on past wars on the Australian wharves. Late nineties the Howard government took on the Maritime Union, along with an indigenous terminal company, Patrick. If my memory serves me correctly P&O stood aside and let Patrick do the running and take the pain. Indeed a perception was that P&O was happy to do the deals with the wharfies for inflated numbers, inflated salaries, job’s actually inherited and appalling inefficiencies. They simply passed the cost onto Australian business and consumers. Anyway Patrick and the federal government won. But during the course of the war Dubai got involved. There was a plan to train “scabs” in Dubai to replace the embedded wharfies of the Maritime Union. The union attacked along with assistance from the ITWF and the longshoremen of the US. Australian maritime union has a long standing and close relationship with your fellows. Cynics might say joined at the hip by common interest in corruption. There is also a fellow, Harry Bridges, who we are told is a hero in the US union movement and he was an Australian.

Any way the threats frightened the UAE (Dubai) and the training contract was cancelled. This was the sort of statements then from the Maritime Union

Then from the union (1997)
(Dubai)It is both a free-trade zone and an industrial free-for-all where foreign workers predominate and trade unions so intolerable that deportation awaits those who dare to organise one.

And from a leading Labour politician Australia then. The Labour party here has an obsession with never forgetting and never forgiving. And are proud of their history of hate.

"Labor's foreign affairs spokesman, Mr Laurie Brereton, said yesterday that moves to suspend the training had followed his lobbying of the UAE Ambassador.
He gave the impression of having warned the UAE Government of a "potentially adverse consequences" if it continued to support the training."'

And a current Maritime Union statement.

"Meanwhile reports that Dubai's state-owned ports operator DP World - the same operator that provided a training ground for Patrick's industrial mercenaries in the prelude to the war on the waterfront - caused disquiet in union circles when news broke that is was bidding for P&O. Acceptance of the $5.6 bid was confirmed on November 30 and MUA officials met with the new owners on December 1,”"

Just a story about a fight over the wharfs (has become one of the labour and union seminal moments) in Australia, coincidental I am sure.

But I find this interesting in light of this current incomprehensible attack on itself by some sectors of the US,

Teamsters web site “Light Focuses on Strikebreaker Scheme February 24, 2006”

“All Americans, including U.S. port workers, have strong reasons to raise concerns about the deal:
· At the port of Dubai and throughout the United Arab Emirates (UAE), unions are outlawed;

· In 1997, Dubai agreed to train Australian mercenaries to be strikebreakers;

· Drayage drivers in the US have been systematically denied union representation through deregulation and employer opposition;

· The port workers in Australia, with the assistance of the Teamsters and the International Transport Workers Federation, were able to thwart strikebreaker training in Dubai, but concerns remain about the proposed port takeover.
The debacle in Australia sheds even more light on the ludicrous plan in the United States to sell port operations to Dubai Ports World.
We cannot allow a company, based in such an oppressive, anti-union nation to operate our vulnerable ports.”

MataHarley said...

What FABULOUS insight, ros! And explains much of the furor, altho not done under the "protectionist" label, using fears of security as a scapegoat.

But it appears DP World acquiesced to your Aussie union demands, and backed down in your historical account.

Considering that Australia has more ports coming under DP World mgmt with this merger, what's going on with this same fight down under now? Do I take it that the non-union argument is now old news and is no longer an issue? We don't hear anything like what the US is doing.

As an aside, Stewart Baker (our Dept of Homeland Security) mentioned to one of the Congress members that P&O was a US registered corporation (assuming only for the US assets). I haven't been able to confirm this since I don't have access to date of filing, and corporation statuses in each state.

But such a status would then require the company do do business according to US laws, and contracts must be in compliance to the same. I am truly under the impression that the American dockworkers' jobs are protected as much as can be.

DP World cannot get around our unions either, so I can't figure their hysteria. But I'm really missing something here, it seems.

Your comments and further insight is very much appreciated.