Supply Chain Security Compliance Programs and Third Party Support

Transcription

1 Supply Chain Security Compliance Programs and Third Party Support presented to the The 1st National Conference on SAFE TRADE & AEO International Security Initiatives and their Impact on Philippine Trade Manila Daine Eisold Vice President, Supply Chain Security Cotecna, Inc. May 2008 May-08/p.1

2 Partners in Protection Pillar Two Customs to Business Partnership Each Customs administration will establish a partnership with the private sector in order to involve it in ensuring the safety and security of the international trade supply chain. The main focus of this pillar is the creation of an international system for identifying private businesses that offer a high degree of security guarantees in respect of their role in the supply chain. These business partners should receive tangible benefits in such partnerships in the form of expedited processing and other measures. * Partnership means there will be involvement of both parties to meet the shared goals Develops new requirements for the business sector to understand and participate in security Establishes new roles for Customs agencies to cooperate with, educate and work together with private sector for Security purposes * Pillar Two SAFE Framework May-08/p.2

3 Trends in Supply Chain Security Compliance National Compliance Programs Regional Compliance Programs Industry Lead Compliance Programs Individual Company Compliance Programs Trade Association Lead Compliance Programs Program Driven Compliance Programs 100% Air Cargo Scanning Requirement Requirement Exceeds Govt Capacity Requirement Pushed to Public Sector Govt Requirement for oversight New Compliance Program Certified Cargo Screening Program (CCSP) Third Party Assessments / Audits / Validation Mutual Recognition May-08/p.3

4 Landscape of Growing Voluntary Compliance Programs WCO EU Sweden Australia New Zealand USA Canada Latin America Tech Mfg Trade Assns SAFE EU AEO StairSec ACP SEP C-TPAT PIP BASC TAPA Self Gen World Community Regional National Industry Industry - ISO May-08/p.4

5 Where Compliance Programs Fit In Layered System United States CBP Example Advance Information Under 24 Hour Rule, Trade Act of 2002 National Targeting Center Advanced Targeting System Customs Trade Partnership Against Terrorism (C-TPAT) Container Security Initiative (CSI) Use of Non-Intrusive Inspection Technology and Mandatory Exams for All High Risk Shipments Automated Commercial Environment establish a partnership with the private sector in order to involve it in ensuring the safety and security of the international trade supply chain. May-08/p.5

6 Selling Voluntary Compliance Programs Most important question Why invest? Quantifiable return on investment (ROI) Many studies conducted Hard to quantify benefit of deterrence Indirect benefits more palpable cost_survey.ctt/ctpat_cost_survey.pdf May-08/p.6

7 Motivation for Joining C-TPAT May-08/p.7

8 Positive Response Value Added Difficult to measure deterrence, but US CBP other valuable benefits and aspects can be quantified. May-08/p.8

9 Private Sector Perspective Benefits & Value What should the private sector expect from participation in Compliance Programs? - Overcoming newness - Accepting the requirements Negative perceptions Additional cost No value added Bureaucratic Partnership concept Direct and indirect benefits Security Safety Reputation Competitive advantage Facilitation Transparency Efficiency Reliability / predictability Economy Reduced insurance rates Post-incident Head-of-the-line May-08/p.9

10 How Will Compliance Programs Be Managed? Issues Global nature of trade global requirement millions of participants National Security purpose government responsibility Value proposition Government bandwidth and budget Voluntary vs. regulatory Moving Forward Several different models same basic goal High degree of overlap between models Mutual recognition initiatives Private sector buy-in Government - Third Party initiatives May-08/p.10

11 Third Party Validators Third party validator : any manner of outside (non-customs) entity that is employed to assist a Customs administration in the accomplishment of security risk assessment reviews and related validation procedures... - Concept of Third Party use is well established within governments worldwide - How can Third Parties can add value? Bandwidth capacity to meet demand (force multiplier) Responsiveness Economy outsourcing this mission can be cost effective Technical expertise Security is a new mission for many Oversight easier to manage than to operate Process Integrity may preclude conflicts, improve impartiality Economy may cost more up front, but more effective in long term Strengthens Partnership with private sector May-08/p.11

12 Private Sector Perspective Why would the private sector support the use of a third party? - Overcoming newness - Accepting the requirement Not within core competency Responsiveness Expertise and experience Multiple standards capability (C-TPAT, ISO 28000, AEO concurrently e.g.) Impartiality Flexibility Educational capacity Preparatory services pre-assessments, coaching Follow on services deficiency management Additional supply chain security services Offset / subsidy May-08/p.12

13 Third Party Qualifications Integrity Experience and qualifications Industry involvement Government vetting Network Bandwidth Flexibility Recognized as an important tool by the WCO, Third Party support programs are a new concept being applied to evolving supply chain security programs. Growing pains, learning curves abound in both the public and private sectors. Cotecna is proud to be one of the trusted Partners in Protection to Customs agencies worldwide! May-08/p.13

14 Thank You! 0 Supporting Global Trade with nearly 100 Offices in 80 Countries with over 4000 Employees and Agents May-08/p.14

15 Contact information COSEC US / Cotecna, Inc.: Tel: The Flour Mill Building 1000 Potomac Street NW Washington, DC Mr. Daine Eisold, VP Supply Chain Security daine.eisold@cotecnausa.com Mobile: For further information please COSEC at cosec@cotecnausa.com May-08/p.15