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Public Safety Canada Economic Sectors Vulnerable to Organized Crime: Marine Port Operations JANUARY 2011 RDIMS # 538909 1 Economic Sectors Vulnerable to Organized Crime: Marine Port Operations by Presidia Security Consulting prepared for Research and National Coordination Organized Crime Division Law Enforcement and Policing Branch Public Safety Canada The views expressed herein are those of the authors and do not necessarily reflect those of the Department of Public Safety Canada. Report No. 25 © Her Majesty the Queen in Right of Canada, 2011 Cat. No.: PS4-122/2012E-PDF ISBN No.: 978-1-100-19971-9 2 Table of Contents 1 Executive Summary ....................................................................................................................... 1 2 Introduction ................................................................................................................................... 6 2.1 Project Objectives ......................................................................................................................... 6 2.2 Key Issue Areas ............................................................................................................................ 6 2.3 Research Methods ......................................................................................................................... 7 3 Discussion and Analysis ............................................................................................................... 7 3.1 Different Purposes behind Organized Crime’s Use of Marine Ports / Commodities Smuggled through Marine Ports in Canada ............................................................................................................... 8 3.1.1 Profit-Oriented Crimes .......................................................................................................... 8 3.1.2 Tactical (Supporting) Crimes ................................................................................................ 9 3.2 Methods and Techniques used to Facilitate Criminal Use of Marine Ports .................................. 9 3.2.1 Smuggling Methods and Concealment Techniques .............................................................. 9 3.2.2 Corruption and Internal Conspiracies ................................................................................. 19 3.2.3 Intimidation ......................................................................................................................... 19 3.3 Recent Trends ............................................................................................................................. 20 3.4 Marine Ports in Canada Particularly Vulnerable to Organized Crime ........................................ 21 3.5 Conditions that Contribute to the Vulnerability of Marine Ports to Organized Crime ............... 24 3.6 Successful Enforcement Measures at Canadian Marine Ports .................................................... 31 4 Conclusion .................................................................................................................................. 39 Annex 1: Marine Ports Sector Overview ................................................................................................ 42 Purpose of the Report .............................................................................................................................. 42 Methodology ........................................................................................................................................... 42 An Overview of Port Traffic in Canada .................................................................................................. 42 Overview of Port Authority Governance and Regulation in Canada ...................................................... 46 The Reform of Ports’ Governance ...................................................................................................... 46 Profiling Canada Port Authority Ports .................................................................................................... 51 Financial Profiles for Canada Port Authority Ports ............................................................................ 52 Employment by Canadian Port Authorities and Terminal Operators ................................................. 53 Profiling Local/Regional Ports ............................................................................................................... 54 The Regulation of Port Security in Canada ............................................................................................ 55 3 Audit of the Marine Security Contribution Program .......................................................................... 55 Canada’s Container Ports and Supply Chain Vulnerabilities ................................................................. 56 Figure 5: Security Programs in Place .................................................................................................. 58 Annex 2: The 41 Local and Regional Ports Not Yet Transferred as of March 31, 2011 ........................ 60 Annex 3: The 26 Remote Ports in the Transport Canada Inventory as of March 31, 2011 .................... 62 Annex 4: Literature Review: Organized Crime Activity within the Marine Ports Sector ...................... 63 Introduction ............................................................................................................................................. 63 Vulnerability of Canadian Marine Ports to Organized Crime: A Historical Context ............................. 64 Revenue-Generating Organized Criminal Activity at Marine Ports ....................................................... 67 Smuggling through Canadian Marine Ports: Overview ...................................................................... 67 Inbound Smuggling of Drugs and Precursor Chemicals ..................................................................... 68 Inbound Smuggling of Counterfeit Goods .......................................................................................... 83 Illegal Immigrants and Migrant Smuggling ........................................................................................ 85 Outbound Smuggling through Canadian Marine Ports ....................................................................... 88 Cargo Theft at Canadian Marine Ports ............................................................................................... 91 Organized Crime-related Corruption and Internal Conspiracies at Canadian Commercial Marine Ports .................................................................................................................................................... 93 United States: Corruption and Labour Racketeering at the Port of New York and New Jersey ....... 100 Annex 5: Selective Seizures at Canada’s Three Major Commercial Marine Ports............................... 104 Annex 6: Works Cited .......................................................................................................................... 113 4 Table of Figures Table 1 - Shipments with Multiple Contraband Arriving at Canadian Marine Ports ................... 14 Table 2 - Top 10 Ports in Canada in 2008 and Percent of Domestic Traffic ................................ 43 Table 3 - Canada Port Authority Ports and the Volume of Traffic Handled ................................ 44 Table 4 - Canada’s Overseas Maritime Trade by Country ........................................................... 45 Table 5 - Marine Imports and Exports by Commodity ................................................................. 45 Table 6 - Allocation of functions for Canada Port Authorities ..................................................... 49 Table 7 - Types of ports in Canada (As of March 31, 2011) ........................................................ 50 Table 8 - Allocation of functions for Local / Regional ports in Canada....................................... 51 Table 9 - Allocation of functions for Remote ports in Canada ..................................................... 52 Table 10 - Financial Status of