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Third Party Validation: Partners in Protection or a Necessary Evil?. Manila, Philippines, May 13-14 2008. The First National Conference on Safe Trade and AEO. Agenda. SGS Group WCO SAFE Framework of Standards Validations – a Necessity? SGS Proposal “Philippine AEO’s Security Audits” - PowerPoint PPT Presentation
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Manila, Philippines, May 13-14 2008
Third Party Validation: Partners in Protection or a Necessary Evil?
The First National Conference on Safe Trade and AEO
2SGS Presentation to The First National Conference on Safe Trade and AEO
Agenda
SGS Group
WCO SAFE Framework of Standards
Validations – a Necessity?
SGS Proposal “Philippine AEO’s Security Audits”
Case Studies on Supply Chain Security
SGS Group
4SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Group
Founded in 1875 in France
World headquarters now in Geneva, Switzerland
International network 140 countries 845+ offices 335+ laboratories 42,000+ dedicated and trained employees
World’s largest … Verification Testing Certification
Asia Pacific 133 offices 54 laboratories 14,800 employees 495 companies certified by SGS Philippines
PhilippinesThailandMalaysiaChinaSingaporeIndonesiaAustraliaJapanVietnam
Security Audits
WCO SAFE Framework of Standards
6SGS Presentation to The First National Conference on Safe Trade and AEO
Core Elements of WCO SAFE Framework
Advance Cargo Information
Risk Management
Container Scanning
Supply Chain Security
7SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements
SGS ACI Capability Côte d’Ivoire (www.oic.ci)
Madagascar (www.bsgmg.sgs.com)
Advance Cargo Information.
Risk Management
Container Scanning Supply Chain Security
8SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements
SGS Risk Management Capability
Bangladesh
Mexico
Guatemala
Haiti
Nigeria
Madagascar
Ivory Coast
Kenya
Angola
Cameroon
Advance Cargo Information
Risk Management
Container Scanning
Supply Chain Security
9SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements
Advance Cargo Information
Risk Management
Container Scanning
Supply Chain Security
SGS Scanner Capability Mexico
The Gambia
Madagascar
Cameroon
Haiti
Nigeria
Bahrain
Kosovo
Uruguay
10SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements
Advance Cargo Information
Risk Management
Container Scanning
Supply Chain Security
SGS Supply Chain Security Capability
TAPA One of three companies ww Leader in certificates – 200 ww
C-TPAT
CBP China Pilot Validation
ISO 28000
WCO
11SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements C-TPAT
Questionnaire to C-TPAT requirements Developed with Greenberg Traurig LLB in 2003 Continuously improved with CTPAT, TAPA, CBP Pilot
program experience
Attributes, Weighting Criteria, Mandatory Requirements, Scoring Guidelines based on auditing expertise
Rigorous security auditor selection criteria
SGS auditor training program developed and presented to auditors ww from 2003 onward
Approximately 1500 C-TPAT audits conducted using SGS checklist or client prepared checklists and 500 more in 08
12SGS Presentation to The First National Conference on Safe Trade and AEO
SGS Capabilities on SAFE core Elements China Pilot Validation Program
SGS approved by US CBP to provide third party auditing services for China pilot validation project based on:
Experience in security auditing
Strength of our security auditing program and detail of our security questionnaire
Global presence of 100+ security auditors, in particular in China and throughout Asia
Validations A Necessity?
15SGS Presentation to The First National Conference on Safe Trade and AEO
Why Third Parties are Necessary: Customs
“Customs Administration, together with representatives from the trade community will design validation processes…[for] AEOs”5
Capacity to extend Borders Customs have inadequate resources to validate and continually
monitor supply chains outside borders As AEO programs expand these resources will be stretched
Capability for security: Customs primary focus is on protection of revenue and economic
interest…… they typically lack security expertise
Political Jurisdictional rights There is no International Jurisdiction for Trade - Customs have no
inspection/enforcement rights outside their own territory
AEO Supply Chains4 are too complex and evolve too rapidly Multiple blind spots – container stuffing, inland dray Operational - 20+ handoffs, 25+ documents, 200+ data elements
16SGS Presentation to The First National Conference on Safe Trade and AEO
Why Third Party Validations
“Validation process based on principles of audit and Inspection”6
Security is Standardised, systems, process approach Measurement and proper allocation of Benefits “Accreditation procedures that offer incentives”
US Experience - Validations “Trust and Verify” prerequisite Gaming - no validations allows free riding & competitive
disadvantage Self verification without assurance leads to lower level of
complaince6
Disincentives – threat of detection against a reliance “on companies that we haven't even gone out to check7
“inadvertently … actually raise the risk of a WMD being smuggled into the United States via a participant’s supply chain” 8
17SGS Presentation to The First National Conference on Safe Trade and AEO
Why Third are Necessary: Private Sector “Ensure all service providers commit to the implementation and adherence to security
recommendations” “Regular visits to AEO suppliers to verify requirements”11
“Trading Partner Security extends to AEO suppliers …. assessment and training are key components” 9
Customs recognize AEO compliance with other Intergovernmental organizations” 10
Raw Materials Manufacturing Warehousing Port Importer
Philippines Supply Chain US
International Supply Chain Philippines
SGS Partner in ProtectionAudit Proposal Philippine AEOsWhat Philippine AEOs can expect
19SGS Presentation to The First National Conference on Safe Trade and AEO
Proposal: Value of 3rd Party Validations to Philippine AEOs
Provide independent and objective assessment of security and required improvements Your Company - “ Your Business Partners -
The global vantage point of SGS auditors and trainers can Save time and money for you provide audits in the local language by auditors who
know the local customs
An SGS audit program can give you consistent comparisons across the breadth of your organization’s supplier base
20SGS Presentation to The First National Conference on Safe Trade and AEO
Proposal: Options for Philippine AEOs
Use company’s own AEO security checklist and associated summary documents
Use SGS AEO security questionnaire and associated summary documents
Combination of the two above
Customized classroom or Webinar training to AEO requirements for your suppliers (based on generic AEO requirements, or your own security program accepted by Philippine Bureau of Customs)
21SGS Presentation to The First National Conference on Safe Trade and AEO
Proposal: Management of Philippine AEO Program
SGS Audit Infrastructure Global key account manager overseeing account – final
review of AEO audits Regional audit managers responsible for first level, local
review of audits Dedicated scheduling and customer care personnel in
affiliates
Trained and experienced security auditors
Web-based reporting available – client can review on line, build their own reports of results
22SGS Presentation to The First National Conference on Safe Trade and AEO
Proposal: Philippine AEO Training
One day SGS AEO course covering all areas of Philippine Bureau of Customs requirements with Q and A time
Three hour overview of AEO
Custom designed course to fit your security profile and your business partners
Custom designed Webinar training
Discussion points: Where do you want training? Who do you want trained? When do you need the training
SGS Supply Chain Security Case Studies
What our C-TPAT clients have experienced
24SGS Presentation to The First National Conference on Safe Trade and AEO
Case Studies of SGS Security Program (1)
US based global retail company
Over 315 supplier security audits completed, with 275 in China alone for first phase
Audits in Philippines
US based account manager for audit control
Checklist developed by client
25SGS Presentation to The First National Conference on Safe Trade and AEO
Case Studies of SGS Security Program(2)
US based freight forwarding company
Over 70 security audits conducted overseas and in US at ff warehouse locations
US based account manager for audit control and scheduling
Checklist developed by client in consultation with SGS security manager
(Prior to C-TPAT program conducted 53 TAPA certification audits in North America)
26SGS Presentation to The First National Conference on Safe Trade and AEO
Case Studies of SGS Security Program(3)
US based freight forwarder security project
Developed internal auditor checklist for company to use on all world wide locations
Developed training program based on their CBP approved security program (prepared in English and Chinese languages)
Held 4 classroom training sessions in…– Chicago, il– Shenzhen, China – Shanghai, China– Penang, Malaysia
28SGS Presentation to The First National Conference on Safe Trade and AEO
Contact
Sten BertelsenSGS GIS Head of Supply Chain SecurityTel +44 (0)7973 600 990Email: [email protected]
