Press release

Det Norske Veritas (DNV) presented last week its final study on the impacts of possible European legislation to improve transport security to a group of stakeholders in Brussels. The report, which was prepared for the European Commission, recommends a large number of measures that government and business will have to take to reduce the likelihood and possible effects of terrorist acts involving transport and to increase supply chain security.

Many of the suggested measures amongst which “standardised sealing of cargo, screening of personnel, risk-awareness programmes and strict compliance of the measures by (police) checks” will affect business logistics processes and in some cases raise their costs radically. It is proposed by DNV to allow business to adopt these measures on a voluntary basis until 2009 and to make Regulation subsequently compulsory.

Physical checking of goods transport within the European market may rise to 10% of the total flow of goods. Companies will be expected to make major investments in security systems. According to the report, these investments could easily be as high as 50,000 euro for small companies with an additional 40,000 euro annually for system maintenance.

ESC believes that implementation of these recommendations will mean a death blow to the Lisbon strategy. ESC is however reinforced by the announcement from the Commission that its own proposal, which is in the final stage of preparation, will consist of voluntary measures only and that the DNV report should not be regarded as a formal impact assessment.

ESC fears that highly prescriptive new security measures for all operators would lead to a breakdown of the supply chain. Yet, an increasing number of companies are establishing their own security management standards, not only to protect their own operations and brand image, but also as a tool for selection of their supply chain subcontractors. The ESC is therefore against a regime in which extra security measures would become compulsory for shippers. Those shippers that consider it commercially interes ing to invest in supply chain security should be attracted to a voluntary scheme, whereby incentives for investing in security need to be evident. I

ndustry however strongly fears that a failure to achieve these objectives would lead to increased costs for business industry, paralyse supply chains and jeopardize the Lisbon agenda.

For further information contact: Nicolette van der Jagt, Secretary General of the ESC - Brussels 00 322 230 2113