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An International Standard for Supply Chain Security Management

An International Standard for Supply Chain Security Management. 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. Ship Classification Society. Non-profit – Self owned – No shareholders.

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An International Standard for Supply Chain Security Management

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  1. An International Standard for Supply Chain Security Management

  2. 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

  3. Ship Classification Society Non-profit – Self owned – No shareholders Established 1864 Independent Foundation

  4. Objective “To safeguard life, property and the environment” DNV provides confidence a.o. by setting standards and verifying compliance

  5. Process Process Process Process Process Rail Rail Rail Rail Rail Oil & Gas Oil & Gas Oil & Gas Oil & Gas Oil & Gas Automotive Automotive Automotive Automotive Automotive Shipping Shipping Shipping Shipping Shipping Main industries

  6. International Network Americas 700 Asia and Australia 1.000 Europe 4,000

  7. 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)

  8. Class Societies’ market share IACS Fleet Development 1965– 2002 ABS LR Mill. Grt. NK DNV BV GL Year Vessels > 100 grt. 50% dual class included Year-end figures

  9. DNV Certification Services Quality Management System Certification Safety Environment • One of the world’s leading Management System Certification bodies • Over 80 accreditations in 21 industrialised countries • More than 8% of the world’s market for management system certificates Product and Personnel Certificates Greenhouse Gas Services EBtrust Training

  10. DNV and Security • Worked with IMO since the “Cole-incident” • Instrumental in developing ISPS code • Adopted December 2002 • In force 30th June 2004 • >150 of DNV’s best maritime auditors trained in security • Appointed RSO by flag-states for > 80% of our fleet

  11. DNV and Security • Ships • Certification to ISPS-code • Ports • Training of PSO’s etc. • Advisory work • …………… but what about the rest of the international supply chain ??????

  12. Security Taskforce 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 Multinationals UN-Counter Terrorism Committee UNODC IAEA UNICRI OPCW OAS APEC EU

  13. What is DNV’s 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 > 250 Mln. Boxes <2% inspected

  14. Export < 2% !! Import Confidence Supply Chain Security 30th June 2004! Factory Port Port Ship Ship Truck Container terminal Container terminal Barge Storage area Container terminal Container terminal ISPS Code Ship Ship Truck Risk of breach Final Destination

  15. 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 (multipleplayers) • 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

  16. Compliance Agreements WCO Data Model UCR Nr Electronic Communic. Supply Chain Security standard Extended Intelligence Risk Management ACI Guidel Accounting Standards Reliable Business Syst. Self Assessment WCO is building the Customs-Business Partnership The complex house of the Trusted Traders

  17. 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

  18. 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”

  19. 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 CTU’s • Transport by • Road • Rail • Inland Waterways • Processing of information • Based on ISO 9000 series (multiple management systems) Functional Requirements Safety ISO Management System Quality Environment Security • Therefore “easy” to implement by industry • Seamless connected to the ISPS-Code

  20. 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.

  21. 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.

  22. 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

  23. 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

  24. 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

  25. The appendices B and C to the code • Appendices are just a suggestion, based on DNV’s 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 NACB’s! (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

  26. Supply Chain Security Factory Port Port Ship Ship Truck Container terminal Container terminal Barge Storage area ISPS Code Container terminal Container terminal Ship Ship Truck ISO Supply Chain Security Standard Risk of breach Final Destination

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