Partners in Protection (PIP)
Evaluation Study

October 2006

Table of Contents

• Executive Summary
• Introduction and Context
  • Description of Partners in Protection (PIP)
  • Expected Outcomes of PIP
  • Evaluation Purpose
  • Evaluation Methodology
• Key Findings
  • To what extent is PIP consistent with CBSA and government-wide priorities?
  • To what extent is the rationale for PIP valid and addressing an actual need?
  • How appropriate and effective is the management structure for PIP?
  • How effectively do PIP processes, practices and available resources support program delivery?
  • How adequate are available data for monitoring and evaluating the program?
  • To what extent is PIP achieving expected outcomes?
  • Are there alternate approaches that could facilitate the achievement of expected results?
• Conclusion
• Key Recommendations
• Management Response

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Executive Summary

Partners in Protection (PIP) is a voluntary, goodwill-based program designed to allow the Canada Border Services Agency (CBSA) to work more closely with the private sector to detect and prevent contraband smuggling and terrorism. To secure private sector support and cooperation, the CBSA and participating companies sign Memoranda of Understanding (MOUs) describing how the two parties will work together in three main areas: security, information exchange and increasing awareness.

In operation since 1994, [ 1 ] the program was enhanced following the 2001 terrorist attacks in the United States to place more emphasis on security. Participation in PIP was also made a requirement for importers and carriers importing goods to Canada under the Free and Secure Trade (FAST) program. Canadian-based companies make up about 82% of participants. The majority of PIP’s foreign partners are U.S.-based companies.

The CBSA has recently proposed to expand the program to make PIP compatible with the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) program and align it with World Customs Organization (WCO) standards. This would involve mandatory participant standards for security, including the security of participants’ trade chains, and on-site reviews by CBSA officers to verify partner compliance with requirements.

The CBSA’s Evaluation Division conducted this evaluation, which was identified as a priority in the CBSA Risk-Based Multi-Year Evaluation Plan 2005–2008.

The key evaluation issues examined were the following:

• The effectiveness and appropriateness of the design, management and delivery of the program;
• The progress that the PIP program has made in achieving its expected outcomes;
• The extent to which PIP provides effective support for FAST;
• The extent to which PIP is congruent with CBSA and government priorities; and
• Comparison of PIP design, best practices and performances with similar programs operating in other countries, especially the C-TPAT program.

The evaluation assessed the program as it is currently designed and delivered, but also considered the potential impact of proposed changes.

Methodology

The plan for this evaluation was finalized in February 2006 and the research was conducted between February and May 2006. The following methodologies were used:

• Review of CBSA documents and statistics;
• In-depth interviews with CBSA and U.S. Customs and Border Protection management and officers, as well as private sector stakeholders;
• Survey of PIP participants;
• PIP site visits to observe program delivery in the Windsor–St. Clair, Prairies and Greater Toronto Area regions; and
• Review of other materials relating to similar programs in other countries.

Summary of Key Findings

PIP is a highly relevant program, has a valid program rationale and is clearly aligned with CBSA and government priorities. No other CBSA program provides the Agency with an opportunity to work in partnership with trading entities to focus on the security of their processes, procedures and premises. PIP falls short of addressing security needs at present. The most significant gaps are the lack of program focus on trade chain security and the lack of mandatory, enforced security requirements. Without these, PIP is not able to provide the optimum security support for the FAST program. The CBSA does have plans to address these gaps, which should better address security needs.

Several issues relating to the management of the program have affected PIP program delivery. The evaluation found that PIP management and delivery may not be optimally aligned with organizational mandates and competencies. National program direction by the Admissibility Branch at CBSA Headquarters with regional Program Services or Client Services having primary responsibility for program delivery may represent a better fit. That said, there continues to be a need for a significant role for the Enforcement Branch in the program.

Overall, PIP’s processes and practices provide effective support to program delivery. The CBSA is maintaining effective relations with relevant foreign and Canadian organizations, which is facilitating PIP’s alignment and coordination with similar programs in other countries. If proposed changes to PIP are implemented, the current officer training will not be adequate to support the program. Also, the lack of legislated support for PIP may make it difficult for the Agency to enforce security requirements, when these are implemented. In addition, MOUs may not be the best mechanism to formalize participation in the program since such agreements are not normally legally binding or enforceable.

Insufficient resources for PIP are having a negative impact. Funding shortfalls have contributed to application processing backlogs. Less than one third of PIP participants have received any one of the key program activities (outreach/awareness, security site visits, security recommendations). Limited contact between PIP regional intelligence officers (RIOs) and participants has meant that the program has not realized its full potential for generating useful intelligence. PIP has succeeded in increasing partners’ awareness of border security and compliance issues, and enhancing their skills in detecting security issues and threats; however, limited delivery of key program activities has reduced the extent to which these expected outcomes have been realized. Improving the security of partners’ systems has been further constrained by the lack of mandatory security requirements.

The evaluation found that the program can generate the key data required for measuring its performance. The absence of an automated system to facilitate program data collection and analysis, however, hinders effective program monitoring and evaluation.

Key Recommendations

1. Proceed with plans to expand the PIP program. While doing so, assess the sufficiency of resources for expansion, and consider legislative changes to support enforcement of mandatory requirements, an alternative to MOUs, additional benefits for PIP participants, and closer cooperation with the U.S. C-TPAT program than currently planned. In addition, develop and/or access additional officer training and revise the draft Results-Based Management and Accountability Framework (RMAF) to reflect the changes to the program.
2. Consider transferring responsibility for national direction of the PIP program to the Admissibility Branch and program delivery to Program Services or Client Services in the regions.
3. Focus on increasing program participation of companies currently under-represented.
4. Develop an effective automated case management and performance measurement system (or systems) to support the management of program participants and enable better program monitoring.
5. Assess opportunities to reduce the burden on the private sector and to increase cost-effectiveness, such as harmonizing PIP with NEXUS/FAST programs and more efficient and timely processing of applications.

Introduction and Context

The Canada Border Services Agency’s (CBSA) Evaluation Division conducted this evaluation, which was identified as a priority in the CBSA Risk-Based Multi-Year Evaluation Plan 2005–2008. CBSA senior management was interested in evaluating this program to inform its decision making, especially in light of the proposed expansion of PIP under the auspices of the Security and Prosperity Partnership of North America (SPP) that was signed by Canada, the United States and Mexico in March 2005. The Customs Action Plan – Interim Evaluation Study, completed in 2005, also recommended an evaluation of the program. 

Description of Partners in Protection (PIP)

Partners in Protection (PIP) is a voluntary, goodwill-based program designed to allow the CBSA to detect and prevent contraband smuggling and terrorism in collaboration with the private sector. To secure private sector support and cooperation, the CBSA and participating companies sign Memoranda of Understanding (MOUs) describing how the two parties will work together in three main areas: security, information exchange and increasing awareness. The program was established in 1994,[ 2 ] by the former Customs and Trade Administration Branch of Revenue Canada, in line with World Customs Organization (WCO) guidelines. In the beginning, the program’s primary focus was facilitating information exchange between customs and participants, and generating intelligence about cross-border criminality to enhance enforcement effectiveness and prevent contraband smuggling.

PIP was enhanced following the 2001 terrorist attacks in the United States to place more emphasis on security and, by extension, the security of PIP participants’ premises, processes and procedures. In addition, all organizations involved in international trade became eligible to participate in the program, not just carriers. Companies based abroad could become partners if they had operations in Canada.

The program was also linked to the Free and Secure Trade (FAST) program after 2001.[ 3 ] In order to import goods into Canada under FAST, importers and carriers also had to be PIP members. Similarly, to ship goods into the United States using FAST privileges, companies had to belong to PIP’s counterpart in the United States, the Customs-Trade Partnership Against Terrorism (C-TPAT), managed by U.S. Customs and Border Protection (CBP).

PIP was also linked to the CBSA’s Border Watch Toll-Free Line, operated by the National Risk Assessment Centre (NRAC) in Ottawa since its establishment in 2004. PIP participants and their employees are encouraged to call this Line with information about any suspected cross-border criminality.

The CBSA has never established any targets for PIP participation. Membership in the program, however, has increased steadily since the expansion of the program in 2002, when there were only 17 partners. By the end of December 2003, there were 405 partners. Participation more than doubled to nearly 900 by the end of the following year and rose to over 1,400 in 2005. As of May 2006, more than 1,600 companies had signed MOUs. Canadian-based companies make up about 82% of all participants, with U.S. companies constituting essentially all foreign partners. More than 70% of the members are highway carrier companies. About 600 of the approximately 1,100 highway carrier companies participate in FAST. Twenty-six importers (or about 12% of all importers participating in PIP) take part in the FAST program.

The CBSA recently proposed to expand the size and scope of the program under the aegis of the SPP. Deliverable 2.1.2 of the Action Plan is to: “make compatible requirements for the participation in the Customs-Trade Partnership Against Terrorism (C-TPAT) and PIP (U.S.-Canada)”.[ 4 ] The proposed changes would align the program further with the WCO’s Customs-to-Business Pillar of the Framework of Standards to Secure and Facilitate Global Trade, approved in June 2005.

While the expansion plans are not yet fully developed, the CBSA is moving toward making PIP compatible with C-TPAT. This would mean mandatory security standards of participants’ own full trade chain as well as that of any trade chain partners involved in importing goods into Canada. CBSA officers would conduct on-site reviews to verify compliance with the requirements, including the premises of PIP participants as well as their trade chain partners outside Canada. Companies not meeting the specified security requirements would be obliged to make the necessary changes or be removed from the program. To achieve greater efficiencies, the Agency is considering the feasibility of conducting joint security reviews with CBP officers of companies that are members of both PIP and C-TPAT. Through SPP Deliverable 2.1.1, the CBSA is also contemplating allowing PIP participants -- who use FAST-registered drivers and are compliant with Advance Commercial Information requirements -- to access FAST lanes.[ 5 ] This access hinges on the implementation of more stringent PIP program requirements to ensure the trade chain security of participants.

The Interoperability Division in the Enforcement Branch at CBSA Headquarters (HQ) in Ottawa provides overall direction and develops policies and procedures for the program. HQ officers also process companies’ applications (including conducting risk assessments), and manage multinational and non-resident participants. There are nine regional intelligence officers (RIOs)[ 6 ] to deliver the program across Canada. By agreement, the RIOs are supposed to devote 75% of their time to PIP-related activities (although in practice, the commitment level varies from region to region). If proposed program changes are implemented, there will be 22 PIP RIOs dedicated full-time to PIP.

Funding for the 2005–2006 fiscal year comprised $1,348,000 for salaries and $842,000 for operations and maintenance (O&M). The 2006–2007 fiscal year budget includes $1,317,000 for salaries and $349,000 for O&M. Through the SPP, the CBSA has requested additional funding for PIP’s expansion, which would result in an additional $2.163 million for the program in the 2006–2007 fiscal year including funding to cover the cost of conducting security verifications outside Canada.

The PIP program is delivered through the following key activities.

Application Processing

To apply for participation, companies submit a signed MOU and a completed “Company Information” sheet to the CBSA. Within 60 days of submitting the MOU, companies must also provide a self-assessment of the measures and controls they have in place to ensure the physical security of their facilities, conveyances and automated systems, as well as the security measures they take in relation to their employees and any service providers. Once the application has been submitted, HQ program officers review the applications and check law enforcement, customs and immigration databases to develop an enforcement profile. The MOU is then sent to the President of the CBSA for signature, upon which the company becomes a PIP participant. Information about the company is then provided to an RIO in the new member’s region, who then manages the PIP participant. The use of an MOU conforms to WCO guidelines for voluntary partnerships to combat cross-border criminal activity.[ 7 ]

Security Reviews

RIOs review participants’ security measures and procedures to identify any vulnerability in their premises, processes and procedures. The review includes an examination of the participant’s submitted security questionnaire, telephone or in person conversations with the identified company contact and on-site reviews. Due to limited resources, RIOs are unable to conduct on-site reviews of all companies. Consequently, they visit only those perceived to be the highest risk for trade chain vulnerability. The RIOs provide participants with recommendations for improvements, in writing and/or orally, to address any security-related weaknesses.

Information Exchange

RIOs provide partner companies and their employees with information to help them protect the company’s supply chain from criminal and terrorist elements. A key activity in this regard is delivering outreach/awareness sessions to employees of participating companies. Officers tell session attendees how to identify security threats and provide them with indicators to help them detect possible criminal and terrorist activities.  Officers also provide companies and their employees with outreach materials to supplement the information provided during the sessions. These include posters, pamphlets, and Border Watch Toll-Free Line cards, as well as indicator sheets. Attendees are encouraged to notify RIOs or call the Border Watch Toll-Free Line about suspicious cross-border activities that they come across. This is expected to result in tactical intelligence to assist border enforcement activities and investigations.

Expected Outcomes of PIP

The draft Results-Based Management and Accountability Framework (RMAF) for the PIP program identified the following expected program outcomes.

Immediate outcomes:

1. Increased awareness by the CBSA and private sector partners of border security and customs compliance issues, and of vulnerabilities in partners’ operations;
2. Improved skills of the CBSA and private sector partners in detecting security issues and threats;
3. Enhanced CBSA understanding of business operations and security norms of traders; and
4. Enhanced information reporting to the CBSA.

Intermediate outcomes:

1. Establishment of more secure systems for private sector partners’ foreign and domestic cargo storage, handling facilities, container yards and conveyances;
2. Enhanced cooperation between Agency and private sector partners in the detection and prevention of terrorism and contraband smuggling; and
3. Support of the CBSA’s intelligence and enforcement areas’ capacity to combat cross-border criminality and terrorism.

Ultimate outcome:

• Strengthened supply chain security.

Evaluation Purpose

The purpose of this evaluation study was to

• Evaluate the effectiveness and appropriateness of the design, management and delivery of the program;
• Assess the progress that the PIP program has made in achieving its expected outcomes;
• Examine the extent to which PIP provides effective support for FAST;
• Appraise the extent to which PIP is congruent with the CBSA and government priorities; and
• Compare PIP design, best practices and performances with similar programs operating in other countries, especially the C-TPAT program.

The evaluation assessed the program as it is currently designed and delivered, but also considered the potential impact of proposed changes.

Evaluation Methodology

The Evaluation Division completed the evaluation plan in February 2006. Data collection took place between February and May 2006.

The following methodologies were used.

Review of CBSA Documents and Statistics

To obtain a solid understanding of PIP, including the program’s context within the CBSA, its design, objectives, and actual and expected outputs and outcomes, the following documents, statistics and databases were examined and analyzed:

• PIP budget and expenditure data and reports;
• SPP proposals regarding PIP, FAST and E-Manifest; the Smart Border Declaration and associated 32-point Action Plan; and the National Security Policy;
• PIP program documents, such as standard operating procedures, the PIP handbook, outreach and awareness presentations and materials, and application forms;
• PIP-related materials available on the CBSA intranet and Internet sites;
• HQ and RIO reports on PIP activities and outputs;
• PIP partner database maintained by the Enforcement Branch;
• Selected RIO files concerning PIP activities;
• Statistics on imports and exports, and on the CBSA’s commercial clients; and
• NRAC statistics on calls received by the Border Watch Toll-Free Line.

In-depth Interviews

Thirty in-depth interviews were conducted with CBSA and U.S. CBP officers, and with representatives of the private sector.[ 8 ]

Interviewees included

• CBSA management and staff in the Enforcement, Admissibility, Operations and Innovation, Science and Technology branches;
• Select CBSA management and RIOs in the Pacific, Prairies, Windsor–St. Clair, Niagara–Fort Erie, Greater Toronto Area (GTA), Quebec and Atlantic regions;
• CBP officers responsible for the management of the C-TPAT program in the United States; and
• Industry trade organization representatives and companies participating in PIP.

The purpose of these interviews was to obtain information about the management, activities, outputs, impacts and results of the PIP program, to get clarification on its design, and to solicit views and explanations of data and results obtained from other methodologies.

Survey of PIP Participants

The evaluation also included an on-line survey of PIP partners in March 2006. Its primary purpose was to obtain partners’ perceptions on the extent to which the program had achieved, or contributed to, expected outcomes. In addition, partners were asked to provide their perspectives on the effectiveness of PIP design, structure, processes and practices, and their level of satisfaction with the program.

The CBSA commissioned Decima Research Inc. to conduct this survey. All 1,465 companies then participating in PIP[ 9 ] were sent a letter and an e-mail inviting them to participate. The letter and the e-mail both provided a link to the Web-based survey questionnaire. The questionnaire was available for completion between March 8 and 20, 2006. A total of 407 partners (or 29%) participated,[ 10 ] yielding a confidence level of 95% and an error rate of plus or minus 4.1%. With a few exceptions, the demographic characteristics of the PIP participants who responded to the survey reflect those of PIP participants overall.[ 11 ]

PIP Site Visits

Members of the Evaluation Division team visited the Windsor–St. Clair, Prairies and GTA regions. The purpose of these visits was to observe the delivery of the various PIP program activities, as well as the context in which these activities were delivered in regions of different sizes, number and types of clients, and with different challenges. Visiting PIP partners and attending security review and awareness sessions enabled the evaluators to see first-hand how the program operates, as well as acquire a thorough understanding of its challenges and opportunities.

Review of Other Documents

For comparison purposes, the evaluation also reviewed Internet and hard-copy documents on the design, delivery and performance of similar programs in other countries. This included the C-TPAT program in the United States, as well as programs operating in New Zealand, Sweden and the United Kingdom. WCO guidelines, frameworks and other relevant documents concerning customs–private sector partnerships were also reviewed in order to facilitate a better understanding of the international context of such programs.[ 12 ]

Key Findings

1. To what extent is PIP consistent with CBSA and government-wide priorities?

PIP expected outcomes are congruent with CBSA and government strategic outcomes and priorities

As per the logic model developed for the PIP RMAF, PIP’s expected outcomes contribute to the CBSA’s expected strategic outcome of “efficient and effective border management that contributes to the security and prosperity of Canada.” PIP intends to provide “increased security measures”[ 13 ] to support the FAST program, which facilitates cross-border movements of low-risk importers and carriers. This is in line with the CBSA’s mandate to “…facilitate the free flow of persons and goods…that meet all requirements under the program legislation.” As indicated in the 2005–2006 Report on Plans and Priorities (RPP), “employing effective risk-management techniques and processes that allow for expediting the movement of legitimate people and goods will ensure a fluid border, in support of the economic well-being of Canadians.”

The program is also directly aligned with the government’s National Security Policy, released in April 2004,[ 14 ] and with the SPP. The National Security Policy committed the government to build on programs like PIP and to develop a “next-generation smart borders agenda with Mexico and the United States.” This “next generation” is the SPP, which includes the commitment to enhance the PIP program.

Should the CBSA transform PIP to include security requirements of participant trade chains and their trade chain partners, the program will also be aligned with the Agency’s priority (as indicated in the 2005–2006 RPP) of “working with our domestic and international partners to ‘push the borders out,’ allow[ing] us to manage risk away from our perimeter, not only to protect Canadians, but also to enhance trade.”

2. To what extent is the rationale for PIP valid and addressing an actual need?

The rationale for PIP is valid and there is a need for a program that leverages traders’ assistance in combating border criminality

PIP exists to allow the CBSA to work with the private sector to detect and prevent terrorism and contraband smuggling. The program is fully justified in an environment of heightened security concerns and increased risk of terrorism and contraband smuggling within cross-border movements of goods. Since terrorists and smugglers seek vulnerabilities in the processes, procedures and systems of trading entities, the CBSA’s ability to deal with border criminality is elevated with the assistance of organizations involved in cross-border trade.

No CBSA program other than PIP focuses on the security of the processes, procedures and premises of trading entities, although a few other programs address other risks in commercial import processing. For example, through Customs Self Assessment (CSA), the CBSA risk assesses companies and their key employees to determine if they are low risk and verifies that their accounting systems capture and report data in compliance with Agency requirements.

The program as currently designed and delivered falls short of addressing security needs

The current program does not address trade chain security

The current program focuses on the security of the premises, processes and procedures of program participants and only for companies that are located in Canada. The Agency does not carry out any program activities (e.g. security reviews, outreach sessions) with companies whose premises are in other countries.

The under-representation of several types of private sector companies restricts PIP’s capacity to improve trade chain security

The most significant group under-represented in PIP is foreign-based companies. Only 265 non-Canadian companies participate in the program (about 18% of total members), and only one of these is based outside North America. The CBSA does not actively market PIP to foreign-based companies because of resource constraints, distances to travel to serve these companies, and because the current program does not focus on trade chain security. Many U.S. carriers joined to use the FAST lanes for expedited highway border clearance and therefore needed to be PIP partners. Since the most serious trade chain security risks are outside Canada, particularly overseas, the shortfall of foreign-based companies in PIP is problematic.

Overall, only a small proportion of the industry groups involved in significant cross-border importation of goods participate in PIP (see Chart 1). Of note, very few warehouse operators or airline companies are PIP partners and only a small proportion of importers. The CBSA and private sector interviews revealed that though there are few costs associated with participation at present, there are only a few tangible benefits associated with being a partner. Only importers and carriers may obtain access to expedited border clearance through the FAST program. The limited participation of importers reflects, in part, the small number of importers who participate in FAST.

Chart 1: Comparison of number and types of companies participating in PIP to number and type of companies involved in significant cross-border goods movement

Type of company	Number of PIP participants	Number of companies involved in significant cross-border movement of goods into Canada[ 15 ]
Highway carriers	1,045	About 6,000
Commercial importers	218	About 17,000
Marine carriers	6	25
Air carriers	2	116
Rail carriers	3	21
Customs brokers	40	239
Warehouse operators licensed by the CBSA	6	About 1,200

Sources: various, as indicated in note 15

Lack of mandatory participant requirements also limits PIP’s ability to improve security

Though the current program is intended to improve the security of partners’ systems for foreign and domestic cargo storage, handling facilities, container yards and conveyances, PIP participants are not obliged to satisfy any security requirements. The CBSA officers may identify weaknesses in security processes, recommend changes and assist participants in addressing deficiencies, but there are no consequences for non-compliance such as Administrative Monetary Penalties System (AMPS) penalties or removal from the program.

PIP does not provide necessary security support for FAST at this time, although the proposed changes to PIP will position the program to better address security needs

PIP’s expected support to FAST is “increased security measures” through the enhanced partnership between the Agency and PIP partners. This is supposed to result in “greater integrity in supply chain management and processes” of participating companies, providing additional assurance that these companies are “low risk” and thus preventing the streamlined FAST processes from being exploited for smuggling of people or prohibited goods. Since the program does not ensure full trade chain security and lacks mandatory requirements, PIP’s current design does not allow it to provide this increased security for FAST.

Under SPP Deliverable 2.1.2, implementing mandatory, verified, security requirements for PIP participation will shift the program’s focus somewhat. While the program will still include information exchange between the Agency and participants, the program’s primary raison d’être will be to ensure the security of participants’ trade chains. CBSA officers would conduct on-site reviews of participants and their trade chain partners, both in Canada and abroad, to verify compliance with the stated requirements.

There is a legitimate and necessary role for the Government of Canada in this program

There is no ambiguity about the legitimate role that the Government of Canada has in the PIP program — it is in place to detect and prevent terrorism and contraband smuggling. As indicated when the Department of Public Safety and Emergency Preparedness was established (and stated in similar fashion in numerous other documents and fora) “the most fundamental role of Government is the protection of its citizens.”

The Government of Canada has the exclusive authority for border administration,[ 16 ] and its role in PIP is crucial since the program involves the use and management of protected and sensitive data, the development and use of intelligence information, risk management of clients and overall border management. With the proposed changes to the program, it could impact the way in which the Agency manages the border, especially if participants are provided with benefits such as lower examination rates. As a result, there is no compelling reason to transfer the PIP program to the provinces or to private sector management.

3. How appropriate and effective is the management structure for PIP?

Management and delivery of the program solely within the enforcement/contraband and intelligence areas of the CBSA is not optimal

Since PIP’s inception, the Enforcement Branch[ 17 ] has provided national direction for the program, with officers operating in Intelligence and Contraband (I&C) divisions in each region exclusively responsible for delivering the program across Canada. Though the Enforcement Branch and I&C divisions should retain a significant role in PIP, the organizational placement of PIP may no longer be suitable given the current direction of the program.

When the program was first launched, management of the program by Enforcement was an appropriate organizational fit, since PIP’s primary purpose was to facilitate information exchange between customs and private sector partners to better combat smuggling. Though information exchange is and will continue to be an important part of the program, Agency management has indicated that improving the security of partners’ systems, processes and trade chains is now the most important program component.

It should be noted that as the program has changed, the Enforcement Branch has made significant efforts to direct the program effectively. Officers have been sent on physical security and oral presentation courses to enhance the knowledge and skills they need to deliver the program. However, trade chain security involves interacting with commercial clients regarding the intricacies of their international trade activities, which is not within the usual competencies of RIOs. RIOs focus more on gathering and using information about criminal activity for enforcement purposes. They have little contact with commercial import clients and limited involvement in matters relating to cross-border shipment handling and processing.

PIP’s future direction raises the question as to whether its current organizational placement is optimal. Operating under the national direction of the Admissibility Branch, with Program Services (PS) or Client Services (CS) in the regions responsible for most of PIP’s program delivery may be a better fit. PS and CS officers have primary responsibility for interactions with commercial clients regarding the details of their import processes. PS officers are currently responsible for conducting security reviews of bonded and sufferance warehouses, while the primary mandate of CS officers is to work with clients to improve their compliance. Enforcement Branch and regional I&C divisions should still retain important responsibilities and roles in the program, but this should be in the PIP program areas that are more closely related to their mandate and usual responsibilities: applicant security screening and information exchange (including the Border Watch Toll-Free Line).

Border administrations in other countries with trade chain security programs manage them in different ways. Enforcement/intelligence do play a role in each program (although that role is limited in the U.S. C-TPAT program), but it is the trade administration or trade management authorities within these organizations that provide national direction. In the United States, the Office of Field Operations runs the C-TPAT program. Though a wide variety of C-TPAT officers work as supply chain security specialists, their core competencies are knowledge of cross-border trade operations, mechanics of importing (classification, valuation, origin, etc.), effective interactions with trade clients, and cargo and conveyance security. “Managing the Trade” authorities in Swedish Customs direct the Swedish Stairway and StairSec programs, with assistance of enforcement officers for risk assessment of applicants. New Zealand takes a similar approach in its Secure Exports Partnership Scheme, although New Zealand Customs’ “Intelligence Assessment” checks each applicant’s security plan for each site where export goods are manufactured, packed and/or stored.

Unstable management of PIP and its low priority have not produced an ideal environment for the program

Since 1999, there have been seven different managers responsible for PIP in the Enforcement Branch, and no single manager has been in charge of the program for more than two years. This has hindered effective management, impeded planning and prevented the development of a coherent program vision. Until recently, limited strategic planning has been conducted, and results-based management has not driven program activities. For example, targets have been set for delivery of program activities, but these are not linked to expected program outcomes. However, program management is currently concluding a RMAF, which should help to guide future program direction.

Even with its expansion after 2001, PIP remains a relatively small program within the CBSA’s Enforcement Branch. Until recently, it received limited attention due to the high priority of developing and implementing other enforcement and security initiatives post-9/11.

HQ and regional I&C management see PIP program delivery differently

I&C management in some regions is very supportive of PIP and its objectives, but management in other regions do not see the program as a high priority. This is due, in part, to a belief that the program can achieve little without mandatory security requirements for participation. In addition, some think that enforcement officers such as RIOs can be deployed more effectively to other intelligence or enforcement duties deemed to be more important. In these regions, officers often have been assigned to non-PIP activities, either on an ad hoc or ongoing basis.

Other regions have resisted HQ management’s attempts to set program priorities, targets and program processes, or provided their own direction to the RIOs at variance with HQ’s intent. This has resulted in inconsistent PIP program delivery across Canada: RIO quarterly reports show that some regions deliver few outreach presentations or conduct only small numbers of on-site security reviews, while others are highly engaged.

The Enforcement Branch at HQ is responsible for providing functional and policy direction to the PIP program, but PIP RIOs are regional employees, who report to I&C regional directors. HQ PIP management must govern by maintaining performance management frameworks, with well-defined objectives, expected outcomes and reporting mechanisms, and work with the Operations Branch to increase consistency in program delivery.

4. How effectively do PIP processes, practices and available resources support program delivery?

Policies and procedures provide the necessary direction for RIO activities

HQ developed the Security Guidelines and Operating Procedures and began providing it in handbook form to RIOs in March 2004. It provides policies, guidelines, templates and checklists for the officers. These guidelines and procedures are presented and discussed in detail at the annual five-day PIP conference for HQ staff and RIOs.

RIOs interviewed for the evaluation indicated that this document has provided effective guidance to their activities. They know what they are supposed to do and how to do it.  The more experienced officers do not consult the handbook frequently, but find it useful as a reference tool.

Current training for RIOs is sufficient; however, different and additional training must be provided if proposed changes to PIP are implemented

Since fall 2005, all PIP RIOs must attend a four-day physical security course offered by the RCMP, as well as the annual five-day PIP conference. A course on giving oral presentations is now also obligatory.[ 18 ] Most RIOs interviewed indicated that this training program is adequate, providing them with the knowledge they need to deliver the PIP program as it is currently designed. There is limited evidence available to corroborate the officers’ perceptions of the training, but the partner survey results do indicate that 83% of PIP participants are “very satisfied” or “somewhat satisfied” with the level of knowledge of the CBSA officers assigned to work with them, with only 3% “somewhat dissatisfied” or “very dissatisfied.”[ 19 ]

RIO training was more limited prior to fall 2005, when there was no standardized instruction program. Many officers felt that they did not have the skills and knowledge to conduct basic PIP activities, particularly conducting security reviews of partners’ premises, and believed they lacked credibility when dealing with their clients.

If the proposed changes to PIP were implemented, the current training would not be sufficient. Though RIOs indicated that they found the RCMP physical security course useful and informative, it provides general training only and does not specifically address validations of mandatory security requirements or trade chain security. U.S. CBP supply chain security specialists, who validate trade chain security of C-TPAT participants, attend a two-week course on specific C-TPAT requirements.

The CBSA is maintaining effective relations with relevant foreign and Canadian organizations regarding PIP and trade chain security

It is important that the CBSA maintain successful associations with other organizations regarding trade chain security, particularly the WCO and the United States, to stay abreast of new developments and to align to relevant programs and frameworks. Interest in trade chain security has increased significantly around the world since the 2001 terrorist attacks. There is a growing[ 20 ] perception that “the global trading community is vulnerable to terrorist exploitation that would severely damage the entire global economy” and that private and public entities around the world, especially customs organizations, have a key role to play in providing increased security. This view is particularly strong in the United States, which is by far Canada’s largest trading partner.  Maintaining (and indeed increasing) the volume of cross-border trade with the United States and others is key to Canada’s economic well-being.

Interviews with HQ management and a review of CBSA files revealed that the CBSA keeps a close eye on how other western customs organizations are approaching their partnership programs and trade chain security. In fact, PIP was originally modelled after the Australian FrontLine program. The CBSA made a significant contribution to the development of the Framework of Standards to Secure and Facilitate Global Trade, finalized in 2005, including its Customs-to-Business Pillar, which provides the basis for trade chain security programs. Most importantly, the CBSA is liaising frequently with the United States to design a revised PIP program that incorporates good practices and lessons learned from the design, implementation and delivery of C-TPAT and to meet U.S. trade chain security expectations.

PIP program management is also keeping track of related programs and initiatives in Canada. For instance, it is keeping abreast of Transport Canada’s implementation of the International Ship and Port Facility Security (ISPS) Code.[ 21 ] This initiative is of interest as PIP expands to avoid duplicating ISPS Code provisions and thereby placing unnecessary burden on companies.

The use of Memoranda of Understanding (MOUs) to formalize the participation of companies in PIP may not be suitable once planned program changes are implemented

Until now, PIP has essentially been a partnership between the CBSA and participating companies, in which the two sides agreed to work together to suppress smuggling of contraband. Since the terrorist attacks in 2001, the scope has been extended to countering terrorist threats as well. The use of MOUs, signed by both the company and the CBSA, has been an appropriate format for PIP given the goodwill nature of the program and its focus on exchange of information and joint efforts to achieve explicit benefits for both sides. This has also been in line with WCO guidelines regarding such partnerships, as noted in the Introduction and Context section.

Though the information exchange component will stay in PIP, the most important part of the program will now be trade chain security, with mandatory security standards for participants and their trade chain partners. MOUs may not be the appropriate mechanism in this context since they are voluntary agreements between parties, which are not normally binding or enforceable on the signatories. Consequently, there may be barriers to enforcing PIP requirements if the CBSA continues to use MOUs to formalize participation in the program. It should be noted that few other CBSA programs use MOUs in any form.[ 22 ] Most other programs require participating companies to sign agreements in which they pledge to meet certain requirements. For example, those entering the CSA program must sign a Client Undertaking document.

Should the CBSA retain MOUs for the PIP program, the question remains whether the President of the CBSA should be the Agency official signing the agreement or whether an executive within the Branch responsible for directing the program (perhaps at the director or director general level) should be signing. This would be an effective delegation of authority to an official more closely associated to the program.

Lack of legislative support for PIP may make it difficult for the Agency to enforce mandatory security requirements

There is currently no legislative basis to enforce PIP participant requirements. This is of minor significance at present since participation involves no requirements nor any consequences for not complying with security recommendations. Once mandatory security requirements are in effect, however, it may be difficult for the CBSA to enforce them without supporting legislation. It should be noted that the CSA program, which also has mandatory participant requirements, obtained the needed support to enforce program requirements through the 2001 amendments to the Customs Act under Bill S-23. Any legislation to support PIP should incorporate sufficient flexibility to allow PIP to adapt to a frequently changing environment.

Key program components are often not provided to PIP participants, largely a result of insufficient numbers of RIOs assigned to program

Chart 2 – PIP program delivery to partners

PIP program activity	% of partners reporting that they have received program activity
Outreach/awareness session	30%
Site security review	29%
Security recommendations	20%

Source: survey of PIP partners

Only one officer is assigned to most regions, and each region (with the exception of Northern Ontario) has more than 100 partners. Most regions span a very large area, with considerable distances for RIOs to travel in order to visit the premises of many partners.

It is difficult to calculate the level of the shortfall. RIOs are not currently working full-time on PIP activities, and their level of involvement varies from region to region. In addition, RIOs’ reports on time spent on PIP activities are inaccurate due to under-reporting of preparation and travel time.[ 23 ] Until additional Public Security and Anti-Terrorism (PSAT) funding became available in November 2005,[ 24 ] there was limited money available to officers for travel. Operations and maintenance money available to each RIO (from which travel is funded) was $1,270 for the 2003–2004 fiscal year and $1,524 for the 2004–2005 and 2005–2006 fiscal years (before the additional money was available). This also restricted the ability of officers to visit PIP participants.

Significant turnover of PIP RIOs has negatively impacted the quantity and quality of PIP program delivery

In four of the eight regions (Quebec, GTA, Pacific and Northern Ontario), staff changes have been particularly significant. At least four different officers have been assigned to each of these regions since 2000, and only a single officer has remained with the program for more than two years. According to interviews conducted for the evaluation, some turnover has been unavoidable, with officers leaving due to retirement, pregnancy or for higher-paying positions. In some regions, however, officer changes have occurred because the program is not highly valued by officers or regional management. PIP work is not regarded as genuine “intelligence” work and the lack of mandatory participant requirements have resulted in officers moving on to positions considered more desirable. 

According to interviews with HQ and regional management and RIOs, the level of turnover, and resultant discontinuity, has impeded the nurturing of deeper contacts between partners and RIOs necessary to facilitate information exchange. Interviews and quarterly RIO reports on PIP activities also indicate that staff changes have contributed to a decrease in contact between officers and participants since newly assigned officers need time to learn about the program and how to deliver it, and receive the required training. Knowledge transfer to new officers has been hindered by the lack of adequate automated systems for managing clients, as described in more detail in Key Finding No. 5. This has made it difficult for officers to ascertain what previous contacts have occurred with partners, or, in some cases, even basic client information.

Partners are satisfied with the PIP enrolment process

The survey results indicate that more than five-sixths of PIP participants were either “very satisfied” or “somewhat satisfied” with the clarity of information available about how to apply for PIP, the clarity of the security questionnaire, and the ease of finding information about PIP on the CBSA’s Internet site. Close to nine in ten were satisfied with the length of time it took for the CBSA to process their applications.

The duration of CBSA processing of PIP applications increased gradually until the end of 2005, but recent temporary measures have shortened processing times. With a few exceptions, it now takes about 60 days for officers to complete all parts of application processing. In 2004 the average duration was more than 120 days, rising to almost 140 days in 2005.[ 25 ] Assistance from officers in other parts of the Enforcement Branch and assessment officers assigned to the CSA/FAST program has contributed to shorter processing times; however, this assistance has been on an ad hoc basis, and it is not sustainable in the long term, so the CBSA has specifically asked for funding for additional officers for PIP application processing.

The outreach/awareness component of PIP works well

The evaluation found that outreach/awareness is perhaps the most successful component of PIP. As noted above, only 30% of survey respondents reported that they had attended a session, but those who did found them very useful. The survey indicated that 89% of participants were “very satisfied” or “somewhat satisfied” with the accessibility of the information provided in the outreach/awareness sessions, while 71% noted that the sessions had “significantly increased” or “somewhat increased” employees’ awareness of border security and compliance issues.[ 26 ] Partners found the materials distributed to participants highly useful.[ 27 ] Officers and private sector individuals interviewed for this evaluation were of the opinion that the sessions were useful for providing information to participants about indicators of suspicious activity and how to report suspicious activities. 

HQ has developed a generic presentation deck for the outreach sessions. RIOs who were interviewed indicated that they made significant changes to them without altering its substance. Their changes give the presentations more “punch” in their estimation, enabling a better connection with session attendees. They found the HQ presentations too dry, not flowing well and containing too much “headquarters” language, making them less interesting for certain audiences, such as truck drivers.

Proposed funding increases for program expansion will likely be insufficient

If the U.S. C-TPAT program is used as a benchmark, proposed increases in PIP funding under SPP may be insufficient to deliver an expanded program. As of January 2006, there were 1,465 PIP partners, managed by 12 officers,[ 28 ] which is a workload of 122.1 PIP partners per officer. SPP funding, if approved, would increase the number of CBSA officers to deliver PIP program activities to 26.[ 29 ] At the current PIP participation level, this means that each officer would manage 56.3 partners. CBP, on the other hand, employs 156 officers to manage its 6,133 C-TPAT participants, or 37.3 participants per officer. The CBSA would need about 12 additional officers (or 38 overall), in addition to the 26 planned for the expanded PIP program.

It should be noted that the above calculation is based on the current number of PIP participants. An increase in program membership means a greater officer shortfall. Also, the C-TPAT program does not have an “information exchange” component to generate intelligence from program participants,[ 30 ] so officers do not devote any time to this activity. As a result, the CBSA officer shortage may be even larger.

5.  How adequate are available data for monitoring and evaluating the program?

The absence of an automated system to facilitate collection and analysis of program data hampers the ability to monitor and evaluate the PIP program

The program can generate the key data identified in the Performance Measurement Plan and Evaluation Framework of its RMAF. These data are not readily available, however, and are not in formats conducive to effective program monitoring and evaluation.

HQ maintains a stand-alone database containing information on partners as well as applicants who have not been accepted to the program, which only HQ staff have access to. Because of the system’s limited functionality to ensure standardized data input and since all data are entered manually, the system contains errors. In addition, no process exists to systematically record changes to partner information. Partners are expected to inform the CBSA of changes, but this requirement is not enforced, making it difficult to generate accurate reports about the program. The evaluation team encountered this challenge when extracting partner contact data from the database to conduct the survey. Invitation letters to 26 partners could not be delivered because the company was not at the address indicated in the database. A further 18 partners advised of mistakes or changes in their contact information upon receipt of the survey invitation letter.

There is no complete record of what program activities a partner has been involved in, which prevents effective management and monitoring of program delivery. The partner database does not capture information about security reviews or information exchange activities. RIOs maintain their own files on these activities, and provide statistics to HQ about their activities on a quarterly basis and on an ad hoc basis as requested.

Adequate and reliable information about program activities and participants is an issue that will be of great importance if the program moves to mandatory security requirements, especially in regard to ensuring partners’ compliance with program requirements.

The Intelligence Management System (IMS) is one of the few CBSA systems that could be used for PIP; however, it would be difficult to adapt it for PIP’s use.

IMS is a secure on-line case management system used by CBSA intelligence officers and analysts to manage and share intelligence information related to border criminality.  Apart from tips on suspicious activities received from partners, most interactions between RIOs and partners are not related to intelligence. IMS would require significant enhancements to support the PIP program, since it does not have all the necessary functionality to satisfy program needs, such as partner management, program monitoring and performance measurement. Adding non-intelligence functions to IMS could result in a push to open access to IMS beyond the CBSA intelligence community, which may limit its usage and therefore its effectiveness for the intelligence community.

CBP has recently implemented a Security Link Portal for the C-TPAT program on the Internet

This portal provides a comprehensive automated system for CBP to manage its clients, monitor program activity and generate performance data. It has external components for participants and internal functionality for CBP officers delivering, managing and monitoring the program. It allows applicants to submit their applications on-line, submit new information and updates, and maintain a “living” supply chain security profile that can be updated by participants as needed (and must be updated and re-certified on a yearly basis). Officers can also use the portal to send information electronically to participants, and it will capture key data for program monitoring and measuring its performance.

6. To what extent is PIP achieving expected outcomes?

PIP is increasing participants’ awareness of border security and compliance issues, and improving their skills in detecting security issues and threats

The survey results show that 83% of PIP partners believe that their employees’ level of awareness of border security and compliance issues has increased compared to before they were PIP partners. Almost 80% also indicated that their employees’ skills in detecting security issues and threats have increased since becoming partners. As currently structured, PIP is largely an education or outreach program and it is clear that it has had success in meeting its objectives in this area.

Survey data suggest that insufficient delivery of PIP activities represents a missed opportunity to improve awareness and skills of company employees. Between 40% and 50% of survey respondents indicated “not applicable” to questions on the contribution of outreach sessions and security reviews to increases their employees’ awareness and skills. About 80% of these companies had either not participated in any PIP program activities at all or only had a telephone conversation with a CBSA officer.

Too few RIO security recommendations to PIP participants and the lack of mandatory security requirements limit the program’s ability to improve the security of partners’ systems

Interviews conducted for the evaluation indicated that PIP RIOs do not have the time to conduct on-site reviews of all companies and visit only those they assess to represent the highest risk. In addition, officers do not conduct site reviews of any PIP participants abroad. Correspondingly, only 29% of PIP participants who responded to the survey indicated that a CBSA officer had conducted an on-site review of their premises, and only 20% indicated that they had received recommendations for changes to the physical security of their facilities or to the security of their systems or processes. It should be noted that more than 90% of PIP participants who received such recommendations found them to be “very helpful” or “somewhat helpful.”

Participants are not obliged to implement the recommendations. Indeed, PIP RIOs interviewed for the evaluation indicated that many participants do not implement their more expensive recommendations. In addition, since there is no requirement to implement the recommendations, officers will avoid making expensive security enhancement suggestions (such as improved fencing and gate systems) that they believe participants will not implement, even if these are necessary to eliminate vulnerabilities.  It is not appropriate for officers to hold back from making recommendations since companies need this information to remove security gaps. Saying nothing will not improve the security of partners’ systems and processes.

About 19% of PIP participants reported making changes to their company’s systems and processes after receiving a recommendation from a PIP RIO. About two-thirds of partners who reported making the recommended changes indicated that these cost them $5,000 or less; only 18% spent more than $10,000. It should be noted, however, that almost 50% of these partners reported finding the cost of making these changes “very expensive” or “somewhat expensive.” Survey respondents reported making a wide variety of changes to their company’s systems and processes after receiving recommendations. About 18% introduced changes in policies, procedures or ways to identify their employees (i.e. swipe cards or photo identification) to allow better access control to their facilities, while 17% put in place security training/awareness and/or security procedures for their employees. A further 16% indicated that they had improved physical security in some way (e.g. by installing fences, gates, better locking mechanisms or door security, closed-circuit television or other surveillance equipment).

PIP has generated some useful intelligence for enforcement; however, its potential has not been realized, partly because of insufficient contact between PIP RIOs and partners

Agency documents reviewed and CBSA staff interviewed for this evaluation indicated that contact with the Agency’s commercial clients has a considerable potential to generate intelligence about border criminality. A significant proportion of border criminality, particularly contraband smuggling, occurs in the commercial import stream. Large quantities of contraband can be readily concealed in commercial conveyances, such as tractor-trailers and marine containers. The infrastructure facilitating speedy transportation of large volumes of legitimate goods into Canada is also the most cost-effective way for smugglers to get their “product” to contraband consumers. Consequently, PIP partners and employees of companies (such as drivers) are well placed to provide the Agency with tips about suspicious activity in the commercial mode.

The CBSA has obtained some useful intelligence tips as a result of PIP. Agency program statistics indicate that PIP activities have generated at least 70[ 31 ] tips (either provided by partners to RIOs or communicated to the CBSA’s Border Watch Toll-Free Line). About 5% of survey respondents said they had used the Line to report suspicious or criminal activity. Tips received as a result of PIP have made some contribution to 15 enforcement activities.[ 32 ] Inconsistent data collection and difficulties in attributing tips and enforcement actions to PIP, however, means that data about tips and resultant enforcement activities are likely inaccurate. Since generating tips for enforcement purposes is at the heart of the program, not measuring the performance of this component is problematic.

PIP program staff acknowledge that the potential for generating useful intelligence has not been maximized. The limited contact between RIOs and participants has been a key factor. In intelligence, it is necessary to build relationships with potential informants in order to obtain useful information. One meeting or infrequent contacts are generally insufficient to form and nurture such relationships. The survey results show that partners do not have a high level of interaction with PIP RIOs.

Chart 3 – Contacts of CBSA officers with PIP partners

Number of contacts	% of partners contacted by CBSA officer
Never contacted	30%
Not contacted in last year	38%
One contact in last year	16%
Two contacts in last year	13%
Three or more contacts in last year	27%
Don’t know	6%

Source: survey of PIP partners

About 95% of partners indicated that they were “very satisfied” or “somewhat satisfied” with the ease of accessing the Border Watch Toll-Free Line.[ 33 ]

The program has increased the CBSA’s understanding of business norms, but the use of this information is not optimal

PIP appears to have contributed to an increase in the CBSA’s understanding of operations and security norms of traders. Officers have acquired information about length of truck runs, routings, security features and processes normally used by companies involved in cross-border movement of goods, etc., through their site reviews and other interactions with partners. This information is being used by the RIOs (and shared to some extent with other intelligence officers) to further investigations and interdiction of border criminality. However, this information would be of use to other CBSA officers who work with these companies as client service or program services officers, as well as some HQ officers, particularly in the Admissibility Branch. It does not appear that much, if any, such information transfer is occurring.

There have been some positive unexpected outcomes of PIP

Private sector interviewees shared that participation in programs like PIP and C-TPAT has become a must for many companies interested in maintaining business relationships with other companies. Indeed, over 80% of PIP survey respondents indicated that the need to maintain existing business or obtain additional business was a factor in their decision to join the program. This dynamic has allowed PIP inroads into companies that might not otherwise have joined, facilitating incremental increases in benefits achievement from the program.

PIP RIOs also reported that many companies have more enthusiasm for the program than they expected. These companies appear to be genuinely interested in improving the security of their operations, even in the absence of mandatory security requirements.  They are highly aware of the importance of security to their business, and want to lead by example. Some benefits they expect from enhanced security processes are not explicitly envisaged by PIP, such as decreased theft, reduced product tampering and improved health and safety of company employees. Several companies have been so committed to ensuring security and PIP as a means to this end that they have made their company equipment (such as trucks and ships) available to CBSA officers to train on examination techniques, and assist the Agency in discovering potential smuggling methods.

7.  Are there alternate approaches that could facilitate the achievement of expected results?

Attaching real benefits to participation in PIP would make the program more attractive to companies

At present, the CBSA provides only a few benefits to PIP participants. Membership makes participating importers and carriers eligible for FAST participation, and it can improve their awareness and skills in detecting operational vulnerabilities. As noted in Key Finding No. 4, PIP is far from attaining its potential participation. Private sector representatives and Agency officials interviewed for the evaluation see the lack of tangible benefits as a key factor preventing companies from enrolling.

There are several benefits that the CBSA could offer to participants, once the program is expanded to include mandatory security requirements verified by CBSA officers:

• Lower border examination rates, as CBP has done for C-TPAT participants. This could include tying PIP membership to a reduced risk factor in TITAN.
• Priority CBSA secondary processing of PIP participants’ import shipments (again similar to what CBP offers C-TPAT members). For example, PIP participants’ cross-border shipments referred for examination would not wait in line behind those of non-participants, thus minimizing delays in crossing the border.
• Lower rates charged to PIP participants for examination off-loads of trucks and containers.
• Mitigation or alternative means for handling minor violations involving otherwise compliant participants. These could include
  • mitigation of AMPS;[ 34 ]
  • direction of all or a portion of assessed monetary penalty amounts to company security improvements or employee security training;
  • using action plans instead of imposing penalties for some violations; and
  • expedited release of participants’ conveyances detained during seizures when it can be proved that individual employees were responsible, but the company was not involved.
• Linking PIP to the CBSA’s implementation of Mutual Recognition of Authorized Economic Operators (AEOs) so that Canadian participants in PIP would be recognized as low-risk “known shippers” worldwide.[ 35 ] This would provide these companies with benefits when they export goods to other countries.

Harmonizing PIP with NEXUS/FAST programs and closer cooperation with C-TPAT would reduce the burden on participants and provide benefits to the CBSA

The CBSA currently operates a variety of different programs for pre-approved, low-risk clients in the traveller and commercial streams, each with separate applicant and enrolment processes, eligibility criteria and program requirements, and separate application fees. These programs include NEXUS (NEXUS Highway, NEXUS Air and NEXUS Marine), CSA/FAST and the CANPASS family of programs. The CBSA is in the process of harmonizing NEXUS and FAST processes as much as possible, largely through their integration into a single, multi-modal NEXUS/FAST program. The vision is to use standard eligibility criteria for participation. This would benefit not only clients, but also the CBSA since application and enrolment processing will be required only once for each applicant for all NEXUS/FAST programs.

Further benefits to clients and better use of CBSA resources could occur if components of PIP were included in this harmonization. Instead of running a unique application process and conducting separate client management, it would be simpler and more cost-effective to include PIP within a program that is more integrated. Potentially, PIP’s distinctive elements (such as activities geared towards improving trade chain security or information exchange) could be separate components within a single, comprehensive program.

Similarly, it could be beneficial for the PIP program to work even more closely with the U.S. C-TPAT program than currently envisaged under PIP expansion plans. The CBSA is examining the feasibility of conducting joint site reviews (particularly for companies outside North America) and joint training with CBP C-TPAT officers. Closer cooperation could include facilitating PIP membership for companies that are compliant with C-TPAT requirements, and accepting validations conducted of PIP participants through the C-TPAT program. Similarly, the CBSA could offer to conduct validations on CBP’s behalf. Such cooperation would be in line with recent WCO resolutions concerning Mutual Recognition of AEOs.[ 36 ] In fact, Canada could consider establishing a partnership similar to the one being implemented for the Container Security Initiative, in which Canada and the United States have a reciprocal arrangement for requesting examinations at foreign seaports. Such cooperation would enable the CBSA and CBP to use their resources more effectively and make it more possible to verify all participants’ security. This is particularly important for verifications required overseas, as these by their nature will be resource-intensive.

Avoiding CBP’s practice of making frequent changes to program requirements would benefit PIP partners and provide better risk management

CBP makes repeated (sometimes monthly) changes to its security standards. Private sector representatives interviewed for this evaluation indicated that these frequent changes mean C-TPAT requirements are a “moving target,” making it challenging for many participants to comply. In addition, the requirements are often imposed on all members of the trade chain, when the vulnerabilities they are designed to address are relevant only to certain members of the trade chain.

There is obviously a need to makes changes to security standards as new risks and vulnerabilities are identified, but too many changes may burden participants to the point that it impacts trade chain security. The CBSA could also use risk analysis and manage identified risk by tailoring the requirements to the different vulnerabilities in each trade sector. This could reduce the compliance burden of participants and ensure a closer match between security requirements and risks.

Avoiding frequent changes to PIP, in contrast to the C-TPAT program, is not inconsistent with increased cooperation with the program. After all, the burden that the C-TPAT program places on its program participants exists regardless of what PIP requires of them.  Closer cooperation between the two programs would simply lessen the burden on companies that participate in both C-TPAT and PIP.

The CBSA could improve the efficiency of the application process

Officers (PM-04s) are involved in several repetitive parts of the application process, such as data entry and database systems checks. These tasks could be performed by administrative staff, such as CRs, as is done at CBSA processing centres for other pre-approval programs. Other CBSA programs have conducted business flow analyses to identify the most efficient and cost-effective ways of handling applications. CSA/FAST, for example, increased efficiency (in both application processing and client management) by reducing paper files to a minimum and automating most client management activities, including the bulk of application processing.

Online applications, programmed to prompt mandatory answers or reject invalid responses, would likely result in more efficient processing for PIP, since there would be fewer incomplete applications requiring follow-up. This could also help to improve application processing times. Harmonizing the PIP application process with that of the NEXUS and FAST programs would also likely improve processing efficiency.

Conclusions

PIP is a highly relevant program, has a valid program rationale and is clearly aligned with CBSA and government priorities. No other CBSA program provides the Agency with an opportunity to work in partnership with trading entities to focus on the security of their processes, procedures and premises. As currently delivered, however, PIP falls short of addressing security needs. The most significant gaps are the lack of program focus on the security of participants’ trade chains, no security requirements and an inability to enforce security recommendations. Because of these shortfalls, PIP is not able to provide the necessary security support for the FAST program. The CBSA does have plans to address these gaps, which should better address security needs. Levels of program funding will need to be monitored to ensure that they are sufficient to allow adequate focus on companies posing the greatest risk.

Several issues relating to the management of the program have affected PIP program delivery. Until recently, management of PIP has not been very stable, which has impeded program planning as well as the development of a coherent vision for PIP. Differences in perspectives between HQ management and regional intelligence and contraband management have resulted in inconsistent program delivery.

The evaluation also found that PIP management and delivery may not reflect an optimal alignment of organizational mandates and competencies, largely the result of a changing mandate over time. Though the Enforcement Branch should retain a significant role in PIP, a better fit may be the Admissibility Branch at HQ providing national direction to the program, with Program Services or Client Services in the regions having primary responsibility for program delivery.

PIP processes, policies and procedures generally provide effective support to program delivery; however, if the proposed changes to PIP are implemented, the current complement of officer training will not be adequate to support the program. Lack of legislated support for PIP may make it difficult for the Agency to enforce security requirements, when these are implemented. Of significant benefit to PIP are the CBSA’s effective relations with relevant foreign and Canadian organizations. These facilitate PIP’s alignment and coordination with similar programs in other countries, particularly the United States. In addition, MOUs may not be the best mechanism to formalize participation in the program since such agreements are not normally legally binding or enforceable.

Insufficient program resources are having a negative impact. Funding shortfalls have contributed to increasing application processing backlogs. Less than one third of PIP participants have received any one of the key program activities. Significant turnover of PIP RIOs has also had a negative impact on the quantity (as well as quality, in some cases) of program delivery. The sporadic contact between PIP RIOs and participants has meant that PIP has not realized its full potential for generating useful intelligence information. PIP has succeeded in increasing partners’ awareness of border security and compliance issues, and enhancing their skills in detecting security issues and threats; however, limited delivery of key program activities has reduced the extent to which these expected outcomes have been realized. Improving the security of partners’ systems has been further constrained by the lack of mandatory security requirements.

Finally, the evaluation found that the program can generate the key data required for measuring its performance. Effective program monitoring and evaluation is hindered, however, by the absence of an automated system to facilitate program data collection and analysis.

Recommendations

1. Proceed with current proposals to expand the PIP program, which would focus on the security of participants’ trade chains and include mandatory security requirements and on-site verification of participant compliance with these. While proceeding with expansion plans, the Agency should
   • Conduct an assessment to determine whether the proposed resource increases will be sufficient to achieve full program results.
   • Consider amending the Customs Act to provide legislative support for enforcing mandatory requirements.
   • Assess whether MOUs should continue to be the appropriate mechanism to formalize participation in PIP when mandatory security standards for participants and their trade chain partners have been implemented. MOUs are not normally legally binding or enforceable.
   • Consider offering additional benefits to encourage companies to participate in the program (e.g. lower border examination rates; priority secondary processing of PIP participants’ shipments; lower rates for examination off-loads; and mitigation or alternative means for handling certain violations involving otherwise PIP-compliant participants).
   • Consider going beyond current plans for closer cooperation with the U.S. C-TPAT program to reduce the burden on the private sector, increase program delivery to PIP participants, and reduce CBSA costs by:
     • facilitating PIP membership for companies that are compliant with C-TPAT requirements; and
     • recognizing security reviews/validations conducted of PIP participants through the C-TPAT program.
   • Develop and/or access additional officer training.
   • Revise the draft RMAF to reflect the changes to the program.
2. To facilitate a more appropriate alignment of mandates and responsibilities, consider transferring primary responsibility for the national direction of PIP to the Admissibility Branch, with program delivery provided by regional Program Services or Client Services. If a new model is implemented, the Enforcement Branch should continue to have a significant role in the PIP program (particularly with applicant security screening and information exchange).
3. While seeking to increase company participation in PIP generally, focus specifically on organizations that are currently under-represented, particularly foreign-based companies.
4. Develop an effective automated case management and performance measurement system (or systems) to support the management of program participants and enable better monitoring and evaluation of program performance. As part of such systems development, consider including on-line functionality for participants to update their security information and for the CBSA to communicate with partners.
5. To reduce the burden on the private sector, avoid any duplication of efforts, increase overall cost-effectiveness and assess whether there are opportunities to harmonize PIP program components (and potentially the overall program) with other programs for low-risk traders and travellers (such as NEXUS/FAST). Explore avenues for more efficient and timely processing of applications.

Management Response

Recommendation 1: Proceed with plans to expand PIP. While doing so, assess the sufficiency of resources for expansion, and consider legislative changes to support enforcement of mandatory requirements, an alternative to MOUs, additional benefits for participants and closer cooperation with C-TPAT than planned. In addition, develop and/or access additional officer training and revise the draft RMAF to reflect the changes to the program.

As the program is evolving and expanding, the Enforcement Branch will conduct an assessment of whether the proposed resource increase will be sufficient to achieve program results and consider amendments to the Customs Act to provide legislative support for enforcing mandatory requirements. The Branch will also consult with Legal Services on the appropriateness of using MOUs versus alternative mechanisms and with other CBSA program areas concerning additional benefits for participants. In fact, discussions have been initiated with the Innovation, Science and Technology Branch to leverage the Harmonized Risk Scoring and Advanced Trade Data system for the program to provide border processing benefits to PIP participants, such as lower examination rates, priority secondary processing, etc. Closer alignment of PIP to C-TPAT, however, will require significant negotiation with CBP.

A draft RMAF has been prepared, which reflects the design and objectives of the program as it currently exists, so it needs to be revised to take the proposed program changes into account. The Enforcement Branch is already in the process of developing training plans for the expanded PIP program so that officers delivering the program will have the skills and knowledge they require.

Recommendation 2: Consider transferring responsibility for national direction of the program to the Admissibility Branch and program delivery to regional Program Services or Client Services.

In light of the planned changes to the program, the Enforcement Branch will be initiating consultations with the Admissibility and Operations branches to ensure the program is aligned in the manner most appropriate for delivery on its intended mandate. This will include a deliberation concerning the appropriate roles of RIOs, other regional officers, the Border Watch Toll-Free Line at NRAC, as well as the roles of the Enforcement and Admissibility branches in PIP.

Recommendation 3: Focus on increasing program participation of companies currently under-represented.

Efforts to increase PIP membership will be undertaken within the scope of the CBSA’s work under the WCO’s Framework of Standards to Secure and Facilitate Global Trade, published in October 2005. PIP participation and verification efforts abroad will be enhanced, while recognizing AEOs in other countries as low risk. 

Recommendation 4: Develop an effective automated case management and performance measurement system to support the management of program participants and enable better program monitoring.

A case and performance management system would be beneficial to PIP, particularly with the implementation of minimum security requirements, but this cannot be achieved with current PIP resources. The Enforcement Branch will take steps to obtain the necessary funding and work with the Innovation, Science and Technology Branch to ensure the timely development of an effective system to support PIP. 

Recommendation 5: Assess opportunities to reduce the burden on the private sector and to improve cost-effectiveness, such as harmonizing PIP with NEXUS/FAST programs and more efficient and timely processing of applications.

In consultation with the Admissibility, Operations and Innovation, Science and Technology branches, the Enforcement Branch will conduct an assessment to identify opportunities for harmonizing PIP and NEXUS/FAST program components. While some improvements have already been made to the processing time of applications, the Enforcement Branch will explore greater efficiencies in application processing.