BCAPable Inc Presentation to OSAC 26 Feb 2015 V2

Effects on Philippine Business

Environment

26 February 2015

Overseas Security Advisory Council – Manila, Philippines

Emerson Electric (Asia) Ltd. ROHQ

SM Cyber West, EDSA corner West Avenue, Quezon City, Philippines

Presented by:

Mar-John P Cruz

BCAPable Inc.

www.bcapableinc.com

Presenter Background


Philippine Economy Overview – Exports and Imports

Philippines Air Freight

Philippines Ocean Freight

Threats in Philippines Supply Chain

What is C-TPAT & TAPA?

Summary


Senior Consultant & Director, BCAPable Inc.

Philippines Country Lead and Resource, Transported Asset Protection Association Asia Pacific (TAPA APAC)

Certified Planner & Implementer ISO 22301, Business Continuity Management Institute Singapore (BCM Institute, Singapore) No. 4067-MBCMI-20150630

Certified Internal Auditor for TAPA Facilities Security Requirements Ver. 2014

Certified Fraud Investigator, Webster University Switzerland, Deutsche Post CFI No. 2009-10016

Certified Fraud Prevention & Investigation Specialist, Asian Anti Counterfeit Association FPIS No. 2009-20016

DMAIC Six Sigma Bronze Level 2010

Certified Security Professional, Philippine Society for Industrial Security, 2002

Member, TAPA APAC FSR volunteer instructors and process improvement committee

US C-TPAT Partnership Validation participant since 2008.

OSAC collaboration since 2003

Philippines Economic Brief


Source: psa.gov.ph


Source: psa.gov.ph

*The aggregate merchandise exports for the year of 2014

registered a 9.0 percent increase to $61.810 billion in 2014 from

$56.698 billion in same period of 2013

Source: psa.gov.ph


OUTBOUND GOODS IN DECEMBER 2014 DECREASE BY 3.2 PERCENT

The Philippines’ export earnings in December 2014 = $4.801 billion, a 3.2

percent decrease from $4.960 billion recorded in December 2013.

The decrease in export sales was brought by the negative growth

performances of four major commodities out of the top ten commodities for

the month and these were: Other Manufactures; Electronic Equipment and

Parts; Woodcrafts and Furniture; and Other Mineral Products (Table 1).

Furthermore, the aggregate merchandise exports for the year of 2014

registered a 9.0 percent increase to $61.810 billion in 2014 from $56.698 billion

in same period of 2013


ELECTRONIC PRODUCTS UP BY 9.9 PERCENT

Electronic Products remained as the country’s top export with total receipts of

$2.377 billion, accounting for 49.5 percent of the total exports revenue in

December 2014.

It increased by 9.9 percent from $2.162 billion registered in December 2013.

Among the major groups of electronic products

Components/Devices (Semiconductors), comprised 35.7 percent of the total

exports and shared the biggest with export earnings worth $1.712 billion and

accelerated by 12.9 percent from $1.517 billion recorded in December 2013.

Source: psa.gov.ph


Source: psa.gov.ph


Source: 2012 mit.edu

Philippines Economic Brief Recovery in exports and expanded private consumption and investment generated gross

domestic product (GDP) growth of 6.0% in the first half of 2014. Government expenditure

decelerated sharply and public construction fell, partly reflecting cautious spending by

government agencies amid concerns over the misuse of government funds.

Slightly stronger economic growth is projected through the rest of this year and in 2015 on

expectations that post-typhoon reconstruction accelerates, government fiscal disbursement

improves, and exports benefit from brighter prospects in the major industrial economies.

Nevertheless, growth forecasts are trimmed since April owing to the unexpectedly low

government spending coupled with higher inflation and associated monetary tightening.

Source: ADB. 2014. Asian Development Outlook 2014 Update. Manila.

Philippines Air Freight

Philippines Air Freight Philippine airfreight forwarders registered a 9.4% increase of cargo in the first half of 2014

with a volume of 23.349 million kilos as compared to 21.352 million kilos in 2013. The increase is reportedly bolstered by consolidations and direct shipments.

Domestic air cargo up by 12.7% in 2013 as compared to 2012 with figures 55.579 million kilograms in 2013 versus 49.549 million kilograms in 2012.

Philippines international airfreight cargo reached 205.243 million kilograms for the first nine months of 2012, both for import and export. For the 1st half of 2013, the volume reached 136.452 million kilograms, a 2.3% increase compared to 2012.

Source: Civil Aeronautics Board

Global air freight volumes in 2014 jumped 4.5%, a significant acceleration from the meagre 1.4% rise recorded in 2013 and after a long period of stagnation.

This was largely due to the uptick in world trade in the second half of 2014, said the International Air Transport Association (IATA).

Asia-Pacific's freight grew 5.4% in 2014, pushed by the increasing import demand in addition to continuing manufacturing strength.

Asia Pacific carriers grew 6.3%, continuing the acceleration of recent months. Emerging Asia trade volumes have expanded volumes solidly in June and July.

Source: IATA

Philippines Ocean Freight

Threats in the Philippines Supply Chain

External

Internal

Natural

Man Made


Internal

External

Natural

Man Made


Internal


External


Natural


Man Made


Impact:

Multi-million U$D industry revenue lost

Thousand jobs lost

Multi-billion Pesos wage lost

Billions of Pesos tax revenue lost

C-TPAT is a US Customs & Border Protection (CBP/Homeland Security) certification program designed to protect the entire supply chain, from the initial movement of the cargo until it is delivered to the end user.

Partnering with the trade community to increase supply chain security.

C-TPAT is the largest government-private sector partnership to emerge from the terrorist attacks on September 11, 2001.

C-TPAT was launched in November 2001 with seven major importers who also saw the need for the focus on supply chain security.

The guiding principles for C-TPAT have been enhanced supply chain security, partnership, and a voluntary program.

Begun in November 2001 with just seven major importers as members, as of June 2011, the partnership has grown.

Today, more than 10,000 certified partners of the trade community have been accepted into the program.

These 10,000‐plus companies account for over 50 percent (by value) of what is imported into the United States.

C‐TPAT members are considered low‐risk and are therefore less likely to be

examined. This designation is based on a company's past compliance history, security profile, and the validation of a sample international supply chain.

CBP has numerous Mutual Recognition Arrangements with other countries to create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade.

C‐TPAT signed its first Mutual Recognition Arrangement with New Zealand in June 2007, and since that time has signed similar arrangements with South Korea, Japan, Jordan, Canada, the EU, Taiwan, Israel, Mexico, and Singapore.

C-TPAT Security Criteria

Business Partner Requirements

Documentation that they are a C-TPAT member.

Non-C-TPAT member, written or electronic confirmation meeting C-TPAT security criteria.

Container Security

Written sealing procedures (PAS ISO 17712 seal).

Seven-point inspection of container prior to loading / upon receipt.

Container Storage - secure locations, preventing unauthorized entry into container or storage area.

Physical Access Controls

Visitor procedures (including deliveries and mail) – Logbooks, visitor badges, escorted access.

Employment Procedures – Identification system.


Personnel Security

Procedures must be in place to screen prospective employees and to periodically

check current personnel (Background, employment history).

Personnel termination procedures must be in place to remove access.

Procedural Security

Document processing – accurate, complete & safeguarded.

Manifesting procedures – accurate and timely.

Security Training and Awareness

A threat and security awareness program should be established for all employees.

Employees must be made aware of the procedures the company has in place to

address a situation and how to report it.


Physical Security

Cargo handling and storage facilities must have physical barriers that guard

against unauthorized access.

Information Technology Security

Anti-virus software/ Firewalls.

IT security policies, procedures and standards must be in place and provided to

employees in the form of training.

Business Partners

Outsourced or third party vendors of organizations are likewise vetted to ensure

compliance to the standards and parameters set forth by the CBP. Importers must

have written and verifiable processes for the selection of business partners

including manufacturers, product suppliers and vendors

C-TPAT Tier Levels

Applicant - A company that has submitted their security profile and signed their

agreement (online).

Tier One –The company has been vetted, the profile has been reviewed along with

the company’s importation history and approved by the SCSS. This company is

now a C-TPAT member and assigned with a Status Verification Interface (SVI)

number. Certified importers will have fewer cargo inspections related to security at

the border, and are eligible for FAST lane crossings.

Tier Two – A certified company that has undergone their validation and has met minimum security criteria. Results in even fewer examinations than tier one

members.

Tier Three – A certified company that has been validated and has exceeded

minimum security criteria and have adopted “security best practices” as defined

by CBP. Precursor for “Green Lane” border crossings which virtually minimize, if not,

eliminate examinations.

To prevent the utilization of

the global supply chain by

extremist groups and

organized crime in

introducing WMD and

contraband into the United

States and its territories

The Transported Asset Protection Association (TAPA), a non-profit organization, is a

unique forum that unites global manufacturers, logistics providers, freight carriers,

law enforcement agencies, and other stakeholders with the common aim of

reducing losses from international supply chains.

Founded in 1997, TAPA has three regions across the globe namely Asia, Europe, the

Middle East and Africa and the Americas The Association has over 700+ members

include many of the world’s leading manufacturing brands as well as their logistics

and transport providers with combined annual sales of over US$900 billion.

TAPA has developed Facility Security Requirements (FSR) for the Supply Chain,

which includes warehouse security, Truck Security Requirements (TSR) for road

transportation, Air Cargo (TACSS) and Food & Drugs security (FDFSR).

As a worldwide coalition of manufacturers, shippers, carriers, insurers, service

providers, law enforcement and government agencies, TAPA includes every type of

company or organization facing the problem of cargo crime within the

transportation supply chain.

Progressive companies now recognize security departments and professionals as

important business partners and security advisors.

Today's security professionals can gain invaluable knowledge through TAPA

participation which can lead to reduced losses, smoother supply chain operation,

increased customer convenience and satisfaction, stronger market penetration

through reduced “gray market” activity, and protection of brand integrity.

TAPA is moving quickly and effectively, promoting a worldwide security standard,

sharing crime intelligence with its members and law enforcement partners and

launching practical initiatives.

The Incident Information Service (IIS) is a database of freight crimes occurring

against the industry and TAPA members.

The database stores incidents such as crimes of hijacking, robbery, warehouse

burglary, fraud, theft from facilities and thefts from and of the vehicle & load.

Profile of Members

The purpose of TAPA is to address the ongoing security threats that are common to the

Supply Chain. Transported Asset Protection Association is an association of companies:

Manufacturers logistics procurement

Security/logistics professionals from high value shipment companies

Freight services industry companies

Insurance Companies

Organizations & associations that support TAPA aims

Law Enforcement Agencies

Government Agencies

How can TAPA help Your Business?

The Association’s Security Requirements are recognized globally as the industry

standard for cargo facility and transport security.

TAPA’s Incident Information Service (IIS) constantly captures and shares data,

enabling you to use the latest cargo crime intelligence to avoid incident ‘hotspots’,

protect your goods in transit and, if required, to report and trace stolen property.

TAPA regularly consults at the highest level of relevant government departments

and with law enforcement agencies to support the requirements of its members in

their campaign to reduce crime

Conferences in the Asia region bring together over 150 security specialists to listen

to presentations on the latest solutions in the fight against crime, to share best

practice and to network with like-minded companies.

Quarterly newsletter communication, lobby groups and working parties

How can TAPA help Your Business?

If you manufacture or provide transport and logistics services for high value

products, TAPA membership should be critical to the success of your business,

safeguarding your goods, ensuring customer orders are fulfilled and protecting your

business reputation and financial performance.

TAPA statistics prove that its members are measurably reducing cargo crime

compared to the rest of the industry.

Membership Benefits

Conferences and seminars learning about supply chain security & compliance

Access to the TAPA Cargo Crime database

IIS Real Time Cargo Crime Alerts

Publicity of your companies security programme through TAPA's various media

forums

Government & Industry Lobby Groups

Certification Benefits

Increased security of your facilities, warehousing, handling and transport

Increased customer satisfaction by meeting customer’s security expectations for

their products

Reduced insurance liability exposure to your company

Transfer of risk to LSP’s and subcontractors to ensure compliance

Increased business with companies that include TAPA certification requirements

in contracts

Increased security and safety of your employees as well as your stakeholders

Certification Benefits

TAPA certification demonstrates conformance to many of the WCO Customs Security

Programs such as:

US C-TPAT requirements (C-TPAT); TAPA Standards regarded as “BKM” or Best

Known Method

Authorized Economic Operator (AEO),

Singapore Secure Trade Partnership (STP);

and Air Cargo Security (AVSEC) programmes throughout the world.

The TAPA certification shows the on-going commitment of companies to the

importance of security and compliance in the industry.

TAPA certified sites are independently audited by approved audit bodies.

TAPA Members are regarded as leaders in Supply Chain Security.

TAPA Facilities Security Requirements (FSR)

The definition of the Facility Security Requirements (FSR) designed for Warehouse

Security is to;

Establish and ensure the safe and secure in-transit storage and warehousing of any

TAPA members' assets throughout the world. This can apply to both a

manufacturing facility and /or warehouse.

Specifies the minimum acceptable standards for security throughout the supply

chain and the methods to be used in maintaining those standards.

Outlines the process and specification for suppliers to attain TAPA certification for

their facilities and transit operations.

Established by security professionals to address the nature by which products and

materials are handled, warehoused and transported as they move throughout the

world.

The FSR specifies the minimum acceptable security standards for assets travelling

throughout the supply chain and the methods to be used in maintaining those

standards.


In addition, the FSR outlines the processes and specifications for Suppliers to attain

TAPA certification for their facilities and transit operations.

It is the intention of TAPA members to select Suppliers which meet or exceed TAPA

certification requirements. Successful implementation of the FSR is dependent

upon Suppliers, TAPA Certified Auditors and Buyer working in concert to accurately

interpret, adopt and audit against these requirements.

TAPA Facilities Security Requirements (FSR)FSR Focus areas are:

1. Perimeter Security

2. CCTV Systems

3. Protective Lighting

4. Perimeter Alarm Detection

5. Perimeter Windows & Other Openings

6. Access Control to Office Areas and Office Entrances

7. Facility Dock / Warehouse; Access Control between Office and Dock / Warehouse

8. Limited Access to Dock Areas

9. High Value Storage Areas

10. All External Dock & Warehouse Doors Secured

11. Intrusion Detection

12. Security Systems

13. Intruder Alarm Systems

14. Electronic Access Control Systems

15. Security Procedures

TAPA Trucking Security Requirements (TSR)TRUCK SECURITY REQUIREMENTS (TSR) – 2012 Cargo crime is one of the biggest supply chain challenges for manufacturers of high value, high risk products and their logistics service providers.

TSR has been established by security professionals to address the nature by which products and materials are transported by road. The TSR specifies the minimum acceptable security standards for assets traveling throughout the supply chain and the methods to be used in maintaining those standards.

The TSR outlines the processes and specifications for Suppliers to attain TAPA compliance to the TSR on their transport operations. It is the intention of TAPA members to select Suppliers which meet or exceed TAPA TSR compliance requirements. Successful implementation of the TSR is dependent upon Suppliers and Buyers working in concert to accurately interpret, adopt and audit against these requirements.

TAPA members need reputable Telematics partners to provide professional & technically qualified systems to monitor trucks & trailers carrying high value targeted theft (HVTT) cargo. It is imperative that the system & software meets the minimum specifications and provides accurate information and data to an appropriate Control Centre.

Any failure to provide these minimum specifications could result in the control measures being compromised and increase the chances of a theft occurring.


TSR Focus areas are:

1. Management Support & Responsibilities Protocols

2. Vetting & Termination Procedures

3. Training Protocols

4. Tracking & Tracing Protocols

5. Enroute Protocols

6. Physical Security

7. Tracking Technology

8. Security Procedures

9. Employment Criteria

10.Drivers Security Training

11.Freight Handover Process

12.LSP Self Assessment

SUMMARY

C-TPAT is driven by the US government partnering with the global industry

stakeholders while TAPA is driven by industry professionals and private organizations

partnering with governments and regulatory bodies around the world

C-TPAT aims to prevent the introduction of WMD and contraband into the US and

its territories through the supply chain while TAPA prevents crimes associated in the

global supply chain.

C-TPAT protects the integrity of the supply chain by preventing the “introduction”

of WMD and contraband “into the freight”.

TAPA protects the integrity of the supply chain by preventing theft or freight items

being diverted, stolen and /or hijacked whether in facilities or while in transit.

C-TPAT is validated by US CBP SCSS while TAPA Certifications are performed by

approved independent audit bodies.

Both TAPA and C-TPAT are location or site specific in certifications and validations.

Both TAPA and C-TPAT have security certification and validation levels

Both TAPA and C-TPAT requirements and standards are being incorporated into global contracts.

Both TAPA and C-TPAT aim to protect the global supply chain.

TAPA complements C-TPAT by way of preventing international crime organizations from raising illicit funds which may fuel extremist groups.

Both C-TPAT and TAPA have corresponding “penalties” and sanctions for non-observance of parameters. C-TPAT can suspend status membership with corresponding fines. TAPA through the result of shadow audits can withdraw facility certifications for non-conformance.

Both C-TPAT and TAPA are risk based with structural similarities.

Both C-TPAT and TAPA require initiative champions or appointed persons responsible for driving the programs.

The TAPA FSR and C-TPAT are two of the most notable supply chain security standards utilized around the world.

Philippine Economy to move forward by having security & resiliency programs

compliant with global standards

The local application of TAPA, C-TPAT and other globally recognized programs can

make the Philippines more competitive in the Asian and Global Market through a

securely managed and resilient supply chain

Both TAPA & C-TPAT contribute to the compliance of organizations aiming to

implement Business Continuity Management Systems.

THANK YOU!

BCAPable Inc Presentation to OSAC 26 Feb 2015 V2

Documents

Transcript of BCAPable Inc Presentation to OSAC 26 Feb 2015 V2