Panama Canal’s Expansion to Include Significant Security Upgrade
By Dialogo May 14, 2012
PANAMA CITY — The Western Hemisphere’s most vital commercial waterway is undergoing a historic makeover.
The 51-mile-long Panama Canal is being widened, deepened and modernized to allow the world’s largest containerships, known as post-Panamax tankers, to pass through the inter-oceanic channel. The ambitious project, which began in 2007, will require $5.25 billion in investment and security upgrades by the time it’s completed in late 2014.
“This is the most revolutionary expansion in the canal’s history,” said Rodolfo Sabonge, vice-president of research and market analysis at the Panama Canal Authority. “The expansion will affect both ends, origin and destination, because the economies of scale of using larger ships will benefit the whole supply chain. Liner services will likely decrease as the large vessels will be able to carry more than twice as many containers onboard.”
Construction activities on and around the canal are proceeding at a dizzying pace. Along the flanks of the channel and near both canal mouths at the oceans, thousands of workers toil in the tropical heat — drilling, digging and dredging as Mack trucks and giant tow trucks transport concrete and building materials from one place to another.
“It’s the first real project that Panama will be able to claim as its own since taking control of the canal in 1999,” said Julio Adibel, administrator of Panama Canal Authority, interviewed by Diálogo during a tour of the canal in April.
Project to boost employment, standard of living
For nearly a century, the Panama Canal was owned and operated by the U.S. government, which constructed the transoceanic channel from 1904 to 1918. In 2006, seven years after taking back ownership of the canal, Panamanian voters approved a referendum to expand the canal to keep pace with the growing volume of cargo passing through each year.
In 2011, more than 320 million tons of cargo transited the canal, according to official figures, up from 205 million tons the year before.
The newly carved expansion route will be more efficient and direct, and have almost double the amount of cargo capacity of the canal. A third set of locks — which are used to lift and lower ships as they pass through the freshwater channel — will be added. The new locks will have deeper docking areas, offer an additional lane for more ship transit, and come equipped with sliding doors to expedite the transfer process.
The Panama Canal expansion project, which involves significant U.S., Chinese and Japanese investment, employs more than 40,000 people. Several regional economic and trade experts predict that revenue earned from the canal expansion turn Panama into Central America's first “developed” country.
“The expansion, by allowing post-Panamax ships to enter, will give an advantage to other countries in the Americas that will see a greater possibility of connection through Panama,” said Ricardo Sanchez of the United Nations’ Economic Commission for Latin America and the Caribbean. “The Panamanian economy will likely thrive.”
More ships, more high-tech security
Adibel said that Panama has “always been a transit nation.” And Latin America’s narrowest country has always been one of its most vital, providing a link between South America and North America.
But with voluminous transit come large security responsibilities, Adibel said. The region surrounding Panama to the north and south is the source of much of the world’s cocaine. Southern neighbors Colombia and Venezuela, as well as Panama and all Central American nations to the north, are on the U.S. State Department’s list of the world’s 22 major drug-trafficking countries.
With that in mind, the Panamanian government, the country’s security forces and the Panama Maritime Authority (AMP in Spanish) have jointly designed a high-tech security system to accompany the expansion project.
Roberto Linares, the AMP’s administrator, said a digital ship registry has been designed to give Panamanian authorities access to maritime bureaus around the world. Using that registry, canal officials will be able to view the identification numbers, licenses, country of origin, cargo and travel routes of more than 9,000 international vessels.
“The registry eases the process for ships passing through the canal and allows us to monitor the history and travels of all cargo and shipments that arrive at the canal,” Linares said.
A central contributor to the canal’s cargo monitoring scheme is the Absolute Maritime Tracking System (AMTS), which has designed tracking systems to improve maritime security, anti-piracy countermeasures and environmental protection. The company has agents in more than 90 countries and monitor major shipping centers every day, every hour of the year.
AMTS uses digital tracking and surveillance to monitor the course, speed and position of vessels. Any deviations or oddities in transport are flagged and reported to the AMP.
Joint security efforts at the canal
Aside from the digital monitoring systems in place, physical surveillance and canal vigilance are provided by Panama’s security forces with assistance from several other countries including the United States.
Since 2003, the U.S. and Panamanian governments have held annual security meetings known as Fuerzas Aliadas PANAMAX (Allied Forces PANAMAX), which are 10-day to two week seminars centered on protecting the canal from drug trafficking, crime and terrorist threats. At the first PANAMAX demonstration exercises in 2003, only three countries participated. By 2011, more than 3,500 military personnel from 16 countries took part in live and simulated training scenarios in Panama and off U.S. coastal bases.
“The security threats of drug trafficking and crime in the region are continuing to grow, and transportation methods are always evolving. Seventy percent of crimes in Central America are now directly linked to drug trafficking,” said Panamanian Vice President Juan Carlos Varela. “This reinforced focus on maritime security will help governments in the region to tackle the common threat of organized crime.”
At the annual PANAMAX demonstrations, security officials are instructed on how to spot potential maritime, air, land, space and cyber threats in the vicinity of the canal. Security officers are trained how to locate and diffuse a threat, often through a board, search and seizure procedure.
Varela noted that since more than 5 percent of the world’s trade passes through the Panama Canal, “it is imperative that all international security forces work together to assure safe travel of cargo.”
UNODC assists with container surveillance
In 2010, the United Nations joined canal security efforts, launching the Center of Excellence on Maritime Security through its UN Office on Drugs and Crime (UNODC). The center focuses its efforts on shipping container surveillance to confiscate and prevent illicit and counterfeit goods from entering markets through seaports.
“Better container security can raise the risks and lower the benefits to organized crime,” said Francis Maertens, deputy executive director of UNODC during a visit to the port of Balboa. He noted that less than 2 percent of the 420 million shipping containers used annually worldwide are inspected, meaning better opportunities for drug trafficking and illicit cargo.
“Thanks to improved intelligence and information-sharing, in just seven months Panamanian authorities managed to confiscate 146 containers transporting drugs and counterfeit goods, with a value of over $20 million,” Maertens said in 2011.
As the canal expands and more ships and cargo pass between the Atlantic and Pacific oceans, increased security will be crucial to ensuring prosperity for Panama’s biggest undertaking ever.
“The canal is the heart of Panama’s future and a vital part of the world's economic circulatory system,” Adibel said. “It’s good to see that Panama and much of the region is taking the proper steps make sure the expansion is secure.”