2006, March 30: The Associated Press (AP) reported this week that The Bahamas was getting sophisticated equipment to detect radioactive materials in shipping cargo but that US Customs agents would not be involved in supervising the machine's use as a nuclear safeguard for the American shoreline only 65 miles (105 kilometres) away from Freeport.

The Bahamas is a long-standing member of the Caribbean Shipping Association.  In fact the first Annual General Meeting in October 1971 was held in Nassau and the 10th Annual General Meeting was held in Freeport.

Under an unusual arrangement, a Hong Kong company will help operate the detector, the Associated Press noted.

According to AP, the Bush administration says it is finalising a no-bid contract with Hutchison Whampoa Ltd. It acknowledged that this is the first time a foreign company will be involved in running a radiation detector at an overseas port without American customs agents present.

Hutchison Whampoa is the world's largest ports operator and among the industry's most-respected companies. It was an early adopter of US anti-terror measures. But its billionaire chairman, Li Ka-Shing, also has substantial business ties to China's government that have raised US concerns over the years.

The administration is negotiating a second no-bid contract for a Philippine company to install radiation detectors in its home country, according to documents obtained by The Associated Press. At dozens of other overseas ports, foreign governments are primarily responsible for scanning cargo.

While President George Bush recently reassured Congress that foreigners would not manage security at US ports, the Hutchison deal in The Bahamas illustrates how the administration is relying on foreign companies at overseas ports to safeguard cargo headed to the United States.

Li Ka-Shing is reportedly close to a lot of senior leaders of the Chinese government and the Chinese Communist Party but is regarded by US government sources as a “legitimate international businessman”.

Hutchison operates independently from Beijing. Three years ago, according to the AP, the Bush administration blocked a Hutchison subsidiary from buying part of a bankrupt US telecommunications company, Global Crossing Ltd, on national security grounds. And a US military intelligence report, once marked "secret", cited Hutchison in 1999 as a potential risk for smuggling arms and other prohibited materials into the United States from The Bahamas.

Hutchison's port operations in The Bahamas and Panama "could provide a conduit for illegal shipments of technology or prohibited items from the West to the PRC (People's Republic of China), or facilitate the movement of arms and other prohibited items into the Americas," said the AP report, quoting the now-declassified assessment.

The CIA currently has no security concerns about Hutchison's port operations, and the Bush administration believes the pending deal with the foreign company would be safe.

Supervised by Bahamian customs officials, Hutchison employees will drive the towering, truck-like radiation scanner that moves slowly over large cargo containers and scans them for radiation that might be emitted by plutonium or a radiological weapon. Any positive reading would set off alarms monitored simultaneously by Bahamian customs inspectors at Freeport and by US Customs and Border Protection officials working at an anti-terrorism centre 800 miles (1,288 kilometres) away in northern Virginia. Any alarm would prompt a closer inspection of the cargo.

The equipment reportedly operates itself, said a spokesman for the US National Nuclear Security Administration, the agency negotiating the contract. "It's not going to be someone standing at the controls pressing buttons and flipping switches."

Hutchison's ports subsidiary said in a statement Friday from its headquarters in Hong Kong it was confident that Bahamian customs inspectors would notify US authorities whenever it is appropriate.

The administration is finalising the contract amid a national debate over maritime security sparked by the furore over now-abandoned plans by Dubai-owned DP World to take over significant operations at major US ports. In fact, some security experts questioned whether the US should pay a foreign company with ties to China to keep radioactive material out of the United States.

Giving a no-bid contract to a foreign company to carry out the most sensitive security screening for radioactive materials at ports abroad raises many questions, said Senator Charles Schumer.   A low-paid employee with access to the screening equipment could frustrate international security by studying how the equipment works and which materials set off its alarms, warned a retired US Customs investigator who specialised in smuggling cases.

However, a former Coast Guard commander, Stephen Flynn, said foreign companies sometimes prove more trustworthy - and susceptible to US influence - than governments. Foreign companies recognise the US has the capacity and willingness to exercise a kill switch if something goes wrong, he said.

There are no US customs agents checking any cargo containers at the Hutchison port in Freeport. Under the contract, no US officials would be stationed permanently in The Bahamas with the radiation scanner.

Hutchison operates the sprawling Freeport Container Port on Grand Bahama Island. Its subsidiary, Hutchison Port Holdings, has operations in more than 20 countries but none in the United States.

Contract documents obtained by AP indicate Hutchison will be paid roughly US$6 million (euro5 million). The contract is for one year with options for three years.

The National Nuclear Security Administration, which is an Energy Department agency tasked with strengthening nuclear security worldwide, is negotiating The Bahamas contract under a US$121 million (euro102 million) programme it calls the "second line of defence".

It is understood that The Bahamas government dictated that the US give the contract to Hutchison. "It's their country, their port. The driver of the mobile carrier is the contractor selected by their government. We had no say or no choice," a US agency spokesman said. "We are fortunate to have allies who are signing these agreements with us."

However, some security experts said that is a weak explanation in The Bahamas, with its close reliance on the United States. The administration could insist that The Bahamas permit US Customs agents to operate at the port, said Albert Santoli, an expert on national security issues in Asia and the Pacific.

KILL THE BAHAMAS DEAL

Meanwhile, the Pittsburgh Tribune-Review (internet edition) described the arrangement as “a bad deal” and call for it to be killed.   Under the headline: “A bad Bahamas deal: Was Bush thinking?” the March 26, editorial stated:

“Fast on the heels of the scuttled Dubai Ports World deal, the Bush administration is finalizing a no-bid contract with Hutchison Whampoa Ltd. of Hong Kong to help operate sophisticated port radiation detection equipment in the Bahamas, sans any on-site U.S. oversight.

 

“This would be the same Hutchison Whampoa, the world's largest operator of ports, whose president, Li Ka-Shing, is so close to Communist China's leaders and the People's Liberation Army that intelligence sources are convinced the company is a front to aid China's strategy of world hegemony.

 

“Hutchison Whampoa has long-term leases on port facilities on both sides of the Panama and Suez canals. It monitors traffic through the Strait of Hormuz and the Arabian Sea. And it's chummy with the military government of Burma to better keep tabs on the Strait of Malacca.

 

“The United States blocked Hutchison Whampoa from buying a part of the bankrupt Global Crossings telecommunications giant in 2003; national security grounds were cited. A 1999 intelligence report cited Hutchison as a potential risk for smuggling arms and other contraband into and out of the U.S.

 

“The Bahamas deal is part of a program called the "second line of defense." Given what is known of Hutchison Whampoa, this country's first line of defense should be to kill the Bahamas deal. Then it must.”

 

Meanwhile,  The Bahamas Minister of Foreign Affairs, Fred Mitchell said that U.S. legislators concerned about the deal for the Hong Kong-based Hutchison Whampoa to operate equipment to detect radioactive material passing through the transshipment port in Freeport are confusing three separate issues.

 

In a story carried in the Bahama Journal, he firmly denied that the Bahamas has opposed the presence of U.S. Customs officials to assist in the screening.

 

"In connection with one aspect of this project, the question of U.S. Customs officials being involved did not arise. It is incorrect and inaccurate for anyone to assert that the Bahamas government prevented U.S. Customs officials from being at the port for that purpose."

Minister Fred Mitchell

(Original Photo by Timothy Clarke)

The Bahamas government agreed to participate in that programme, and what we agreed to was that the U.S. would supply the equipment and the training…we figured it’s good for us, it’s good for the customers of the port, and so we had no objection to that being done," Minister Mitchell said.

"The only caveat in our agreement to it was that there ought to be a protocol worked out so that if radioactive material were found in any of the containers and had to be disposed of, that it would not be disposed of in the Bahamas."