Transcript bp c-tpat & validation experience

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bp c-tpat & validation experience
Presentation to the ABA International Law Section
13 April 2005
Aaron Gothelf
Customs Attorney
BP America, Inc.
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bp c-tpat & validation experience
• About BP
• C-TPAT – The Right Thing To Do
• BP’s Experience in the Process (2003)
• BP’s Experience Now
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introduction to bp
• Statistics
– $200+ billion Market Capitalization
– $174 billion Revenues
– 110,000 employees in 100 countries
– Well-established operations:
• Europe, North & South America, Asia, Australasia and Africa
– In business since:
• Amoco 1889;
• ARCO 1866;
• BP 1909;
• BP Amoco 1998
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introduction to bp
• Statistics
– Daily production: 1.9 million barrels of crude oil; 8.6 billion cubic feet of natural gas
– Daily sales: 6.2 million barrels of refined products
– Service stations: 26,800 (USA 15,500, Rest of World 11,300)
– Exploration Active in 21 countries. Production activities in 22 countries
– Refineries (owned or part-owned) 21 (5 in USA, 15 in rest of the world)
– Refinery capacity (BP share): 3.3 million barrels of crude oil a day
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introduction to bp
• Supply Chain
– BP's transport network criss-crosses the globe.
• Own/operate 25,700 miles of pipeline, much of it in the US.
• Control an international tanker fleet of more than 40 vessels, either fully owned or on
long-term charter.
– Once refining is completed:
• Different products are moved to storage terminals by ship, barge, pipeline or rail.
• From there they are usually delivered to customers by road tankers.
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bp and c-tpat
• History
– Decision to join made by BP America’s President
– Charter Member (1 of 7)
– First Member to become C-TPAT certified
– First to be Validated
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bp and c-tpat
• Why?
– Good corporate thing to do
– Access to other Customs programs
• ISA
– Being in the Known Bucket
– Ease in applying our existing position
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bp and c-tpat
• BP’s participation
– Voluntary
– Challenged against Customs’ overbroad use of CF-28s to push participation
– BP was contacted in early January 2003 and asked if it would agree to be one of the
initial C-TPAT validations.
– BP volunteered to be first and asked Customs to show up the following week.
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the bp validation experience
• Customs’ team
– People
• Michael Pfeiffer, USCS* Supervisory Inspector
• Jose de Jesus Lopez, USCS* Chief Inspector
– Qualifications
• BP team
– Director of Customs
– Head of Tax
– Customs Attorney (Tax) & Law Department
– Security Department Heads and Facility Managers
– HR
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bp validation process
• C-TPAT
– Membership process already complete
• MOU signed (1/15/2002)
• Security profile reviewed
• Customs C-TPAT office reviewed the profile
– Possible results for any participant:
• Accepted – acknowledgement sent
• Rejected – additional information is needed
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bp validation process initial meeting
• Opening Meeting
– Held February 3, 2003
• Customs and BP teams met for the afternoon
• Presented the company background and supply chain
• BP concerns explained
– Compromised vessel or crew or port of unlading for bulk cargo
– Compromised containers for other heavy bulk materials
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bp validation process – site visits
• Site visits
– Purposes
• prove security profile is true
• Obtain suggestions from Customs for improvements
– Process
• Visit 2 sites – 1 domestic and 1 foreign; tour all aspects of security
– West Coast Refinery
» Included Refinery, Ship Terminal and Pipeline start
– Belgium chemical plant
» Included plant and tours of Antwerp shipping terminals and EU Customs officers
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bp validation process – site visits
• Site visits
– Results
• West Coast
– Proved security profile was true
» Security process and procedures found all in place
» Strengths and weaknesses in Customs’ perspective discussed
» Customs’ suggestions promised to be considered
• Belgium
– Same results
– Waiting on written report of findings
– Customs’ verbal comments
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observations & lessons learned
• Positive experience overall
– Spirit of partnership did exist
– Validated per the submitted profile
– Useful exchanges of ideas & information
– Voluntary “ness” is still questionable
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observations & lessons learned
• Participation was not as difficult as it first seemed
– Processes exist for almost every company
• Security
• Procurement
• HR
• HSE
– Compare:
• Corporate processes vs. Customs recommendations
• Fill in the gaps
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observations & lessons learned
• Control must be clearly identified
– What is in the company’s control
• Internal security
• Site security
– What is not in the company’s control
• External area
• Neighbors
• Geography
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open issues
• Foreign visits
– Scheduling
• Cost effective for Customs
• Cost effective for participant
– Failure to obtain permission to enter
• Mexico & Honduras
– Other companies being validated have noted several failures by Customs to obtain proper
permission to enter certain countries including Honduras and Mexico, thus ending any
possibility of validating those sites
– No explanation given as to whether this puts the validation on hold
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the bp future with c-tpat
• Participation will continue
– Strong belief C-TPAT is the right thing
• Desire to improve the program
– Expressed concerns
• Improve C-TPAT program
• Aspire to participate to the fullest extent
• Desire to maintain program within the bounds of the law
– Voluntary program – nothing to lose
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future at international level
• Many countries working on similar programs.
• World Customs Organization 161 customs agencies.
– Working on advance manifest data
– Development of a standardized C-TPAT type of program.
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thank you
Q&A