WASHINGTON, DC—Homeland Security and Governmental Affairs Committee Chairman Susan Collins has introduced a resolution disapproving of the deal that would enable Dubai Ports World (DPW) to purchase Peninsular & Oriental (P & O) without an additional national security review and Congressional consultation. The Senator’s resolution directs the Committee on Foreign Investment in the United States (CFIUS) to conduct a 45-day investigation to ensure that the sale will not have an adverse effect on national security and to brief Members of Congress on the findings of the investigation before the transaction is allowed to proceed.
Senator Collins said that this recent incident has revealed shortcomings in the CFUIS process, which is required by law to conduct a 45-day investigation in such cases. The Committee, however, did not conduct the investigation as required.
In addition, Senator Collins pointed out that this matter has highlighted the critical importance of port security to our nation. Last November, she joined with Senator Patty Murray (D-WA) in introducing the “GreenLane Maritime Cargo Security Act,” which would provide $835 million annually for programs and initiatives to better secure our nation’s ports.
Representative Jane Harman (D-CA) has introduced a similar resolution in the U.S. House of Representatives.
Following is Senator Collins floor statement on her resolution:
Mr. President, I rise to introduce a joint resolution disapproving the conclusion of the Committee on Foreign Investment in the United States (CFIUS) to allow Dubai Ports World (DP World) to take over certain port operations in the United States. My colleague and good friend, Congresswoman Jane Harman, will be introducing this resolution in the House of Representatives.
This resolution would do the following: (1) disapprove the CFIUS review of the transaction; (2) direct the CFIUS to conduct a 45-day investigation in order to ensure that the sale will not have an adverse effect on national security; and (3) direct CFIUS to brief Members of Congress on the findings of its investigation before the transaction is allowed to proceed if the Committee maintains that it should go forth.
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The pending sale raises potential maritime security concerns. The sale would transfer control of Peninsular & Oriental (P&O) Ports North America to DP World, a foreign government-owned entity. P&O Ports has extensive terminal and stevedoring operations along the eastern seaboard and on the Gulf coast. It encompasses not only terminal facility leases in six major U.S. ports, as has been reported widely in the media, but also stevedoring and terminal operations in a total of twenty-one U.S. ports, including in my home state in Portland, Maine.
We have long acknowledged the vulnerability of our ports - both as a potential target and as a conduit through which terrorists, their weapons or other contraband may enter the U.S. Coming from a state with three international cargo ports, I am keenly aware of the importance of our seaports to our national economy and to the communities in which they are located. In addition to our ports' economic significance, the link between maritime security and our national security is evident.
The attacks of 9/11 have forced us to reassess and rebuild our entire approach to security. Against an enemy determined to cause maximum harm to both the American people and the American economy, we are building a structure that, in great part, relies upon private-public partnerships. Nowhere is this more apparent than in our ports - where terminal operators, longshoremen, port authorities, importers, carriers, and others have worked with the United States Coast Guard, Customs and Border Protection, and state and local law enforcement to put security plans in place.
The foreign government in question, that owns DP World, is the government of Dubai, part of the United Arab Emirates (UAE). While UAE is an ally in the war on terrorism, it also has been used as a base of terrorist operations and financing. In fact, the 9/11 Commission reported that UAE was “both a valued counterterrorism ally of the United States and a persistent counterterrorism problem.” The attacks of 9/11 were planned in part in the UAE, and much of the financing for those operations was funneled through the UAE banking system. The facts warrant a thorough 45-day investigation by CFIUS, not a cursory review.
Mr. President, this incident has revealed significant shortcomings in the CFIUS process. It is not adequately transparent and does not provide for sufficient oversight reporting to appropriate Committees and the leadership of Congress. The Exon-Florio provision of the Defense Production Act gives the President the authority to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the U.S. Through Executive Order, the President established the CFIUS to review transactions pursuant to Exon-Florio and make a recommendation regarding the exercise of his authority. It may be appropriate for the reviews, which may involve proprietary data and classified information, to be held confidential. However, once a decision has been reached by the CFIUS, it is wholly appropriate, and even necessary, that Members of Congress be briefed on the findings of the review and the basis for the decision.
Mr. President, I am truly troubled by the review process that was followed with respect to this purchase. The more I learn, the more questions are raised. The law requires a 45-day investigation in cases where an acquirer is controlled by a foreign government, as in the case of DP World, and the acquisition could affect the national security of the U.S. However, the CFIUS did not conduct an investigation, as the plain language of the statute would demand.
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I am pleased that, in a recent development, the Administration has agreed to undertake a 45-day investigation as a result of discussions with DP World and Congressional leadership. Perhaps its recommendation, once briefed to Congress, will allay concerns that have been raised. Perhaps the national security implications, apparent on the face of the deal, will be adequately addressed through a more rigorous process. Given the remaining uncertainties, however, I felt it was important to proceed with the introduction of this resolution, in conjunction with my colleague in the House, Congresswoman Harman.
The silver lining of recent events is that they have served to highlight the critical importance of port security to our nation. Last November, Senator Murray and I introduced the GreenLane Maritime Cargo Security Act of 2005. This comprehensive legislation authorizes $835 million annually for programs and initiatives to better secure our nation's ports.
It would help build a coordinated approach to maritime and port security across all levels of government and with our overseas trading partners, improving our nation’s security as it expedites trade with those governments and businesses that join in this goal.
The bill addresses the problem of uncoordinated supply-chain security efforts, directing the Secretary of Homeland Security to develop a strategic plan to enhance security for all modes of transportation by which containers arrive in, depart from, or move through seaports of the United States. The strategic plan also must include protocols for the resumption of trade in the case of an incident.
This legislation recognizes that America's ports, large and small, are our partners in keeping our nation safe and our economy strong.
Mr. President, I seek my colleagues support both for this resolution and for the GreenLane bill. Thank you.