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now operational in Singapore, Hong Kong, Japan, Koreaand Malaysia.
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Combating Terrorism in the Transport Sector – Economic Costs and Benefits

The Japanese Ministry of Land, Infrastructure and Transport is set to introduce
anti-terrorist legislation that will prevent foreign ships from entering Japanese ports
unless they have a security crew on board and can provide identification (World
Bank, 2003).

Hong Kong’s customs authorities have created a terrorist response system, acquiring
mobile x-ray machines and a radiation detector to scan cargo, and are strengthening
their intelligence capabilities with more staff and equipment (World Bank, 2003).
Costs of new maritime security measures
The costs of compliance with the ISPS code introduced by the IMO are a cost of doing business
in an environment with heightened terrorist risk.
To comply with these new rules to improve maritime security, ship operators will need to
install security equipment at an estimated establishment cost of at least US$1.3 billion and
ongoing operating costs of around US$730 million a year. Seaports also will need to upgrade
security at a further cost, likely to be as large if not larger than the additional cost faced by ship
operators. System-wide procedural changes, such as those imposed by the US 24-hour
advance notice rule, are more difficult to assess, but based on carriers’ data alone were
estimated in 2003 to be US$282 million. The overall costs of those transport counter-terrorism
measures that could be measured were estimated in 2003 to be slightly over US$2 billion
(OECD, 2003).
In Australia, the government announced in the 2003-04 Federal Budget that it would allocate
A$15.6 million over two years to tighten Australia’s maritime and port security by developing
enabling legislation, providing guidance to industry and ensuring compliance with the ISPS
code (DOTARS, 2003). The Government expects that the implementation costs to industry
will be A$313 million in the first year, with ongoing costs of up to A$96 million per year
(Maritime Security Bill 2003 Explanatory Memorandum).

The Australian Ship-owners Association estimates that the cost for the 47 affected
Australian-flagged vessels could be between A$750 000 and A$900 000 each
(Higgins, 2003).
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4.2
New aviation security measures
Since the terrorist attacks of 11 September 2001, the safety and security of the civil aviation
system has assumed greater importance, and efforts to strengthen the system have become
the subject of international attention. Significant aviation security measures have been introduced
by governments, airlines, airports and aviation associations.
The International Civil Aviation Organisation’s (ICAO) Plan of Action for Strengthening Aviation
Security formulated after 11 September 2001 includes:

the identification, analysis and development of an effective global response to new
and emerging threats integrating timely measures to be taken in specific fields including
airports, aircraft and air traffic control systems

strengthening of the security-related provisions of the Convention on International
Civil Aviation, using expedited procedures where warranted and subject to overall
safety considerations, to provide protection to the flight deck

the establishment of security audit programs to identify and correct deficiencies in the
implementation of ICAO security-related standards (ICAO, 2002).
In order to assist States with implementation, ICAO has developed a Training Programme for
Aviation Security, currently comprising seven aviation security training packages.
The G8 at the Kananaskis Summit committed to: accelerate implementation of standards for
reinforced flight deck doors for all G8 passenger aircraft and of mandatory aviation security
audits of all ICAO contracting States; enhance cooperation including sharing of information
about security assessments and vulnerabilities; and encourage proportionate contributions
to the ICAO aviation security mechanism.
In the US, the US Aviation and Transportation Security Act of 2001 aims to create, develop and
streamline security procedures and protocols and reduce the chances of any security breach
or violation (Coughlin et al., 2002). The legislation requires the Attorney General and the
Secretary of Transportation to develop a program that ensures the screening of all passengers
and baggage for illegal and dangerous items. The Act established a new Transport Security
Administration picking up elements including: sky marshals, flight deck integrity measures,
improved airport perimeter access security, security screening, and provision of passenger
manifests.
In Australia, since 11 September 2001, the Government has implemented additional security
measures, including: increased passenger baggage screening and access control; increased
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