Critics Unload on Port Deal
An Arab company's bid to take over management of cargo terminals at half a dozen U.S. ports has become a rallying point for critics seeking tougher port security and greater scrutiny of foreign investment.
But trade and security experts said criticism of the deal involving government-owned Dubai Ports World was misguided because the U.S. government, not terminal operators, was responsible for security at the ports. In addition, they said, foreign companies already control a large share of the U.S. cargohandling business.
The target of congressional critics is Dubai Ports World's $6.8-billion deal to purchase Britain's Peninsular & Oriental Steam Navigation Co., which runs cargo operations in New York; Newark, N.J.; Philadelphia; Baltimore; Miami; and New Orleans. They said the Bush administration failed to investigate the deal and should have reported its findings to Congress.
Port security -- An article in Thursday's Section A on security fears raised by Dubai Ports World's bid to buy Peninsular & Oriental Steam Navigation Co. incorrectly said the Arab company would be taking over the operation of cargo terminals at six U.S. ports. The Port of New York and New Jersey was incorrectly listed as two separate ports. At the Port of New York and New Jersey, P&O operates a cargo terminal in Newark, N.J., and a cruise ship terminal in Manhattan. P&O operates cargo terminals at four other ports on the East and Gulf coasts.
Detractors say the government of Dubai, one of the seven emirates that make up the United Arab Emirates, deserves greater scrutiny because of its connections to some of the terrorists involved in the Sept. 11 attacks. Dubai Ports World will be the third-largest port operator in the world if its purchase of Peninsular & Oriental Steam Navigation Co. is completed.
But trade and security specialists said U.S. criticism was unjustified, given Dubai's support for the Bush administration's anti-terrorism campaign and its close connections to the U.S. military. Dubai is a primary staging base for the U.S. Navy in the Persian Gulf.
They emphasized that the globalized nature of the shipping industry meant that it was dominated by foreign companies that would play an essential role in helping the U.S. secure shipping containers and ports, particularly overseas, where the U.S. has minimal oversight.
"The fear-mongering is that a bunch of Middle Easterners are going to come over and work on the docks, and nothing is farther than the truth," said Robert Bonner, a former commissioner of U.S. Customs and Border Protection.
President Bush has threatened to veto any attempts to block Dubai Ports World's acquisition, which was approved by a panel of U.S. officials charged with reviewing whether transactions by foreign companies might compromise national security. At a White House briefing Wednesday, administration spokesman Scott McClellan said the transaction wouldn't raise the terrorism threat in any way.
