The Dubai Ports World saga continues

U. S. lawmakers are undeterred by the threat of a presidential veto in their opposition to the acquisition of port terminal operations in six American ports by UAE-based Dubai Ports World:

WASHINGTON (AP) — Lawmakers determined to capsize the pending sale of shipping operations at six major U.S. seaports to a state-owned business in the United Arab Emirates said President Bush’s surprise veto threat won’t deter them.

Bush on Tuesday brushed aside objections by leaders in the Senate and House that the $6.8 billion sale could raise risks of terrorism at American ports. In a forceful defense of his administration’s earlier approval of the deal, he pledged to veto any bill Congress might approve to block the agreement.

The sale’s harshest critics were not appeased.

“I will fight harder than ever for this legislation, and if it is vetoed I will fight as hard as I can to override it,” said Rep. Pete King, R-N.Y., chairman of the Homeland Security Committee. King and Democratic Sen. Charles Schumer of New York said they will introduce emergency legislation to suspend the ports deal.

Another Democrat, Sen. Bob Menendez of New Jersey, urged his colleagues to force Bush to wield his veto, which Bush — in his sixth year in office — has never done. “We should really test the resolve of the president on this one because what we’re really doing is securing the safety of our people.”

White House counselor Dan Bartlett said Wednesday the UAE company, Dubai Ports, “is a reputable firm that went through a congressionally approved vetting process.” He said the U.S. has “the necessary safeguards to make sure that the security of our country is in place” and that rejecting the deal would send “a dangerous signal to people overseas that America plays favorites.”

“The president wants this deal to go forward because it was followed by the book and he wants Congress to understand that,” Bartlett said on CBS’ “The Early Show.” He told Fox News Channel that Bush felt strongly that “we need to be adding strategic partners” in the Mideast.

But Sen. Joseph Biden, D-Del., said the bipartisan opposition to the deal indicated “a lack of confidence in the administration” on both sides. “Sure, we have to link up with our Arab friends but … we want to see and those in Congress want to know what … safeguards are built in,” Biden said on ABC’s “Good Morning America.”

Meanwhile a Wall Street Journal editorial has come down in favor of the deal and makes most of the right points:

Yes, some of the 9/11 hijackers were UAE citizens. But then the London subway bombings last year were perpetrated by citizens of Britain, home to the company (P&O) that currently manages the ports that Dubai Ports World would take over. Which tells us three things: First, this work is already being outsourced to “a foreign-based company”; second, discriminating against a Mideast company offers no security guarantees because attacks are sometimes homegrown; and third, Mr. Graham likes to talk first and ask questions later.

Besides, the notion that the Bush Administration is farming out port “security” to hostile Arab nations is alarmist nonsense. Dubai Ports World would be managing the commercial activities of these U.S. ports, not securing them. There’s a difference. Port security falls to Coast Guard and U.S. Customs officials. “Nothing changes with respect to security under the contract,” Defense Secretary Donald Rumsfeld said yesterday. “The Coast Guard is in charge of security, not the corporation.”

They also question the timing and muse aloud that some Congressmen may be carrying water to benefit U. S. firms.

Lileks provides an object lesson on why, when defending the status quo, it’s helpful to know what the status quo is:

As for the trust issue, well, wanting port control to remain in American hands is not a matter of Arabiaphobia, any more than selling Boeing to China means you harbor deep hatred of Asians. Some things ought to be left in local hands.

90% of the leases for port terminal operations on the West Coast of the United States are currently held by foreign-owned companies; 50% of the leases for port terminal operations on the East Coast are currently held by foreign-owned companies. Including all of the port terminal operations in question: DPW would acquire the leases by virtue of acquiring British- i.e. foreign-owned P&O. There would be no change in the foreign ownership of the leases in question. Only who the foreigners in question would be will change.

So either James is defending a non-existent status quo or he’s proposing a really revolutionary change in how ports are managed in the United States. It bears mentioning at this point that the City of Long Beach derives much of its revenues from the leases of port terminal operations at the Port of Long Beach to foreign-owned concerns. How do the advocates for this new approach plan on making up the shortfall?

It’s interesting to note that genuine authorities on the subject aren’t nearly as concerned as many people seem to be about this deal. The Squiggler notes that Helen Delich Bentley, a former Congressman who represented the district containing the Baltimore port (one of the ports in question) and currently a consultant for the Baltimore Port Authority and a recognized expert in the fields of port operations and security, is unconcerned about the deal:

The critical point is that Dubai Ports World won’t be running the port of Baltimore, or any other U.S. port for that matter. What it would be doing, as ex-Rep. Helen Delich Bentley (R-MD), a respected expert on Maritime matters, explained in a Feb. 18th letter, to the “Baltimore Sun,” is hiring the longshoremen to load and unload the cargo from the vessels. The Maryland Port Authority, an agency of the state, she underscored, would continue to “run the port of Baltimore’s public terminals and be the spokesman for the port in general.” Bentley added that this transaction only means that the “UAE’s Dubai Ports World will be the firm bidding competitively for contracts to handle cargo coming off or loading on to ships in the six ports where P&O Ports has contracts. Baltimore is one of those ports.”

(2) It is also important to emphasize that the vast majority of the cargo handling in the six U.S. ports mentioned above is done by union labor, who are locally based workers. They are card carrying members of the International Longshorman’s Association (AFL-CIO), which is headquartered in New York City. This is the same union, (Local 829 ILA), that this writer belonged to, in Baltimore, back in the late 1950s. The idea that the longshoremen will somehow not be able to do the same kind of highly professional stevedoring work for Dubai, which they did for the P&O company, and other stevedoring companies before them, just doesn’t fly. For the ILA member, it will be just another day’s work on the docks, irrespective of who’s doing the hiring. [MORE HERE]


Port Administration runs region’s port

The Sun’s headline “UAE firm to run 6 U.S. ports” (Feb. 12) is misleading with regard to the purchase of a British company, Peninsular and Oriental Steam Navigation Co., commonly referred to as P&O Ports, which did become the property of Dubai Ports World (DPW) of the United Arab Emirates on Feb. 13.The story states that P&O “runs Baltimore’s public terminals.” That’s not true.

P&O Ports is a stevedoring company that has competitively bid contracts with the Maryland Port Commission to perform certain duties at its public terminals in the port of Baltimore.

A stevedore company is one that hires longshoremen to load and unload cargo from ships.

Therefore, that corporate transaction means that UAE’s Dubai Ports World will be the firm bidding competitively for contracts to handle the containers and other cargoes coming off or loading on to ships in the six ports where P&O Ports has contracts. Baltimore is one of these ports.

The Maryland Port Administration will continue to “run” the port of Baltimore’s public terminals and be the spokesman for the port in general.

The private terminal operators will continue to run their terminals.

Helen Delich Bentley

Blogger John Cross, who had first-hand experience of the UAE during his military services notes:

The United Arab Emirates are an ally of ours. I was in both Abu Dhabi and Dubai, and the governments there are exceedingly friendly to the United States. The U.A.E. helped when the USS Samuel B. Roberts was damaged by Iranian mines in 1988, and was the target of an attempted Iranian attack during Operation Praying Mantis. The ship was patched up at the U.A.E., before they took her back home to Newport.

Also, they are a moderate government, and occupy a strategic position at the Straits of Hormuz.

And, yes, I see the logic in being distrustful of this nation….it is rational to be mistrustful of nations whose banks helped fund the 9-11 attack and Wahabbism. I cannot argue against that point. However, we need to make allies in the region…that is probably part of the point of the Administration wants to make….we can’t exclude moderate Arab nations economically. To do so would invite the same problems that face other Arab nations (underemployment, lack of socio-economic mobility, etc.)….we need to stay engaged economically and politically with them. We need to maintain the ‘trust’ factor with the allied governments, and especially the more moderate ones, such as Qatar, Bahrain, Kuwait, and the UAE.

The UAE have no WMD’s. They are not an aggressor nation, and they sit in the middle of the Iranian/Saudi region. If they have proven to be a valuable ally in the past, and if they passed what I am sure had to be a rigorous vetting (especially since they are an Arab nation, and this is post-9-11), then I think this is being overblown.

And make no mistake: the discussion of the deal itself and, especially, its agonistic tone is undercutting the soft power component of the War on Terror. An Emirati blogger comments:

Whatever uneducated Barbarians seem to be existent in some small measure in the US Government, their insecurity is worrying.

It seems that everyones been talking about this DP World Thing. Lets make sure to make more people aware of what the UAE is. This is again due to an international ignorance of the UAE. When you travel or when you go abroad, try to inform a few people about the UAE, that it is not a barbarian desert dwelling, that it does not support terrorists, that it is a peaceful country which has stood by everyone that needed them.

There’s lots more. Read the whole thing. Here’s how Beirut Spring sees it:

In a nutshell, a British company P&O, which used to run six American ports, was bought up by another company, DP World, which runs ports all over the world. The company is one of the world’s largest ports operators and is expected to run the American ports more efficiently than their predecessors. But there’s a problem: DP World is based in Dubai, which is –horrors!- an Arab city.

Never mind Dubai is one of the world’s fastest growing economies and best managed cities with the lowest crime rate in the world. Never mind that all the ports DP World runs are certified by the International Security Port System. Never mind that DP World has satisfied all the necessary regulatory approvals for the deal to be passed. All that matters to the American congressmen, who want to block the deal, is that two of the September 11 highjackers come from the United Arab Emirates.

Politicians from both sides of the spectrum are joining this nonsense. Of course, they are entitled to scrutinize the deal before approving it, but it is very telling that they are making a public fuss out of it, to get cheap political support from security-obsessed constituencies.

One of the commenters to that post notes:

What do you guys expect? We want to fly airplanes into their cities? Okay, but then we have to face such consequences. Personally, I think we deserve it. Although Dubai Ports World specifically is innocent, as a whole, we have to realize that are violent behavior (think cartoon portests as an example) is going to backfire on us eventually. I live in America, and from what I am watching, i’m telling you there is no way they are going to let this deal go through.

Another responds: “All Americans are definitely anti-Arab. You nailed it.”.

Let’s examine Joe Biden’s observation above a little more closely:

“Sure, we have to link up with our Arab friends but … we want to see and those in Congress want to know what … safeguards are built in…”

The procedure for vetting established by Congress has been followed (as every administration official commenting on the subject has noted). If the participation of the largest port operator in one of the most pro-U. S. countries in the Middle East isn’t welcome, which “Arab friends” are?

UPDATE: Dafydd ab Hugh has a modest proposal for allowing the acquisition to go through, observes that practically everybody that actually knows anything about the issue is unconcerned about the acquisition, and remarks:

Bluntly put, there are very good reasons to go ahead with this deal — but also some very real security concerns that must be dealt with.

I agree with that completely and his proposal is precisely the sort of thing I’m talking about when I’ve written that the risks should be mitigated by managing them rather than legislating against them.

ANOTHER UPDATE: A wink of the Eye to Dan Drezner for pointing out this excellent backgrounder on the UAE purchase of American port facilities from the Council on Foreign Relations. The CFR handles the issue by the numbers and makes very similar arguments to the ones I’ve been making.

YET ANOTHER UPDATE: I’m not particularly surprised that Thomas Barnett has come down on the same side of the ports issue as I have:

After lecturing the Europeans over the cartoon flap, it’s awfully weird to watch the paranoia, racism, and pure political nonsense at work on the proposed purchase of a British port-managing firm by a Dubai corporation.

The message we send on this is clear: if you’re Arab, you’re immediately untrustworthy. Dubai seeks to become the Singapore of the Middle East, and watching that rather progressive model of capitalism + Islam reach out for this strand of connectivity in a venue it knows all too well (shipping) makes perfect sense, just like CNOOC reaching for UNOCAL last summer.

Is it the pretense of these “hawks” that America somehow “secures” itself in a globalized world, not being able to trust any others in this process?

This thing is so overblown on so many levels as to be truly, madly, deeply stupid as a political football. Shame on any presidential types for grabbing this one and running with it. Our goal in the GWOT is to connect the Middle East faster than the jihadists can disconnect it, so again, what do we say here to the people of Dubai,who have–believe it or not–done plenty to aid our efforts in the region at great personal risk to their national security?

This is something I harp on in BFA: either we reward countries tying to make the journey from Gap to Core or we stop pretending we’re in this GWOT for anything other than our own profiteering–political or otherwise.

The biggest joke? This labeling of the contract as somehow putting the company in question in charge of our port security, when it’s only about managing commercial activities. The Coast Guard runs security for our ports–always has and always will. This is misrepresentation of the worst sort, and it’s why I argue against a strategic communications strategy with the Gap: our own politicians screw up that sort of effort on a daily basis. Better to police our own loose lips than seek any singular voice abroad.

People act responsibly when you give them responsibility. Dubai has earned that trust. Either we’re true to our word or let’s just go Tom Friedman’s ‘cut-them-off-at-the-gas” proposal and tell the entire Islamic world that we accept Osama bin Laden’s offer of civilizational apartheid.

I’m with Bush on this one. He’s showing some serious maturity on a subject about which too many in Congress are acting childishly.

I also agree completely with James Joyner’s point:

Still, is is likely the case that such a company is an easier target for infiltration by our enemies. Increased scrutiny is warranted. Hysteria, however, is not.

10 comments… add one
  • Yeah, ’cause it’s not like the UAE royals have ever lunched with Osama bin Laden, or anything. Oh, wait…

  • Kevin

    This deal is BAD for America, it should be stopped. If Bush does not stop this deal he should be kicked out of office, this is way worst then anything Clinton ever did. This is the ONLY bill Bush said he will veto, there is something going on behind the picture and AMERICA needs to wake up!!! The Republicans will lose the elections in Congress if this deal is allowed to go through.

  • Thanks for the information. My husband was looking for this.

  • LJ Seman

    I keep hearing that we are sending a signal of mistrust to the Mideast because we don’t want Dubai owning our ports. The media hysteria sounds like we are disturbed only because it is Dubai. I think the truth is that most Americans never knew that other countries owned our ports. I think we are stunned by that new information to begin with and since we are more security conscious than our president, it seems, we are not comfortable with the owners coming from a part of the world that has painted a bullseye on our backs. Dubai may be our friend…the problem is most of us know nothing about them. We only know they might unwittingly make it easier for those who hate us to enter the country undetected.
    It’s a sorry thing, beginning to end. Dubai might want to consider that the country is still stinging from 9/11 and not take it personally.

  • A lot of what you’ve just noted is true, LJ Seman. However, the disinvestment by U. S. companies in port terminal operations wasn’t a secret (I can show you a whole list of newspaper articles) and it isn’t new (it goes back for decades). Some of the changes in ownership have taken place since September, 2001. The American people just hasn’t been interested.

    IMO what this story reflects is a rather cynical and harmful (and successful) ploy by American politicians to appear to care about security when in reality they couldn’t care less. This ploy has operated at the expense of prudent policy.

  • Burke Hudson

    I still don’t see why the UAE (and DP World) is under such suspicion, when our own port security (by our own people) is so shoddy. Nobody even seems to want to look at the fact that any questionable material gets on the ships from WHERE THEY ORIGINATE, and the company running the port is, in really simple terms, just pointing and saying “park here” and “park over there”. And why is it that when we hear ‘Arab’, we freak? Dubai wired around 100 million dollars directly for Katrina relief efforts, while the remaining 26 million total from other countries was mostly PLEDGED. Then there’s that little point of the U.S. parking 540 or so military ships , and an additional 54 warships there in Dubai last year. Not to say how many thousands of our military personnel take their down-time there.
    I wonder what repercussions will arise from this defunct deal? Boeing’s contract with Dubai was for over 9 billion dollars last year, and that’s just naming one. Let’s hope that the people of Dubai have more class and intelligence in the way they treat our country going forward.

  • Burke, it’s because our own port security is so shoddy that members of the U. S. Senate have made such an issue of the acquisition. It’s a colossal act of misdirection: if they make enough noise about DPW perhaps we won’t notice how little they’ve done over the last five years about it.

Leave a Comment