Good progress is being made by the European Travel Retail Council (ETRC) in its campaign to secure the industry's best interests amidst heightened security regulations and the confiscation problems associated with sales to transit passengers.

But there is still much to do, as ETRC President Frank O'Connell and consultant John Hume told Doug Newhouse in this in-depth interview today.

Q: In broad terms what is the position from where you were when we last spoke and where you are today on the issue?

I think we have made a lot of progress and probably in the sense of coordinating things and getting a lot of different groups involved in a series of meetings with the political system which I'll go into in a minute.

I think that we have now got the industry coming very much aligned. We've got most of the industry bodies aligned and we have made a lot of progress, although there is still an awful lot of work to do.

The solution is certainly clear. It's a question of how to implement it. We now know clearly what has to be done and it is a question of getting all of the right political will and mechanisms and so on in place to do it.
We had a very good industry meeting yesterday in Amsterdam and think there between 45 and 50 people there which was very good for a Christmas week.

Q: And do you sense a much keener appreciation of the gravity of this situation amongst people?

Yes and absolutely in Europe. There is a very, very clear understanding in the industry and at all levels of the industry between the airlines and the airports.

I see ACI, IATA and ourselves are all very clear on the problem. But I am not totally convinced that that is the case in the rest of the world.

What has happened is we did have no agreement between the US and the EU. A broad regime is agreed between the two blocks. There is no mutual recognition in place on transfer passengers. That currently hinges around the famous tamper evident sealed bag and I think we are making progress here and I am hopeful that by January we will have that agreed and resolved.

Q: Just to stick with that for a moment, what are the reservations or what is the process required for hopefully some agreement with the US on that?

Well we ourselves have to gain agreement with that within the industry on the specification of the bags and we have to be able to go to the Commission and say this is the specification and it is agreed with all sides of the industry.

That means ACI, the airlines, ourselves, the retailers and operators and our American colleagues – the IAADFS – are willing to go with this specification and recommend this. The Commission will then reach agreement with the TSA formally to have it accepted.

Q: Is there any disagreement amongst those bodies at the moment?

No, not really. I think in broad terms I am happy and particularly after yesterday where we had a number of discussions around it. I'm happy that we have a specification now that is acceptable and that probably would be acceptable to the TSA and they are obviously one of the important bodies in all of this.

There's a lot of work that has gone into this in the last three months and I think it is moving closer now to an agreement.

Q: You've become a bit of an expert on plastic bags haven't you?

I know, but I don't know that I'll be putting it on my CV. Anyway, once that recognition is given there is no reason why the transfer problem between the US and Europe shouldn't go away.

Now the important piece about that however is that there is already an acceptance that the other two parts of the problem are already in place. That is the issue of the supply chain security and the issue of staff screening. They are the three pieces – if you like – to solve this problem.

The problem comes down to an agreed specification for a tamper evident carrier bag for goods, the security of the supply chain from which the goods come and then the security screening of all the staff that have access to those goods.

Once these pieces are in place then there is no reason why this problem shouldn't go away.

Q: So the key problem is to get third countries to apply for mutual recognition with the European Commission so that their security systems are seen to be secure and that needs to be done individually by each country?

Yes. The main thing is that there are three pieces to this and they are the solution and the only solution. They have to be in place for this thing to be resolved.

Q: So it is a bit worrying that only three countries have applied formally for that recognition isn't it?

Yes.

Q: Have any more come forward?

Not that we are aware of. Now if I could just say that we have been through a lot of meetings and a lot of political activity over the last couple of weeks.

In Europe the ETRC have met ACI Europe, we've met the fragrance industry trade body Colipa, we've had five meetings with Commission officials and then we have been at the SAGAS meetings in the advisory group to the Aviation Committee.

We went to Montreal and we met with the President of ICAO for an hour and we have had meetings with the ICAO ambassadors of France, Russia, Australia and Singapore. We've had ten meetings with ACI's permanent representation in ICAO as well and they have been extremely helpful to us and have set up a lot of this for us.

Those meetings were important because they have given us an insight into ICAO, their views and how they see the issue and they do see it as a very important problem that they need to resolve and there is no doubt about that at all.

I think the issue will be getting them to move quickly enough to resolve it. That will be the problem although they want to resolve it. It is a not an easy process to move forward at ICAO. While they would be central to any final global solution, unfortunately I think we are going to have to go down a different route.

I also met with Jacques Barrot, the Transport Commissioner and Vice President of the Commission last week and that was extremely helpful and a very positive hour-long meeting. I think that the Commission and ETRC's view of the meeting were equally the same that the meeting was very good and very positive.

I think they see the industry very much as working with them to try and solve this and being very proactive and coming forward with solutions and trying to do something, so it is a real can do attitude on our part.

So they have come out very positively and said look, there is a problem, we know the problem and we want to try and solve it. What is also important is that he indicated at that meeting that a priority for him would be to get the US/EU piece in place and he intends to raise it with his counterpart in the US.

He sees that as a priority because I put it to him that it is a priority. We have to have that in place because then we have a model for others to look at and follow.

So that is what has been going on and we also met a series of MEPs while we were there as well because they'd also been helpful in raising the issue in Parliament on a number of different sides of the Parliament.

Q: Well you must have been meeting with them because I've been monitoring all of the press on my service and for once I've actually seen about four accurate reports from MEPs on what it is actually going on…

Well that doesn't happen by accident. John [John Hume-Ed] here has been very good here. They've been planting questions here, there and everywhere.

So I think that to date we have got all of the industry stakeholders together and we basically have an agreed solution. We've got the membership of SAGAS which I think is an important access into the official side of things and we've a broad agreement and working relationship with the Commission which I think is very, very useful and which I think will help a lot.

The Commission has now asked ETRC to come forward with an industry standard for this famous bag that will have agreement of the airports and the airlines, both here and in the US, so we are moving on that basis. I think we have made progress already.

ACI Europe's security committee has agreed to support what we are proposing for the bag and our own industry is in favour of it.

We have draft recommendations on the bag that we have presented to a range of groups, such as the Commission, to SAGAS, to the ICAO representatives in Montreal and to ACI Europe and to the TSA through IAADFS. So on that side of things we are moving forward very well and I hope that by January we will have agreement on that.

Once we get that agreement, then the Commission will work with the TSA to get their formal agreement and once that happens then the transfer issue and Europe should go away.
Now we have commissioned an economic impact study to measure the impact and look at the flows of transfer traffic and where the key flows are into Europe and what airports are they coming from.

That will obviously look at the impact since the beginning of November in so far as they can. That will look at what behavioural changes there have been and what the customer reaction to it all is and so on.

There is an agreed brief with that study between ourselves and ACI World and while we are commissioning the study and running it, ACI World will use the study as part of the input into the ICAO study group on this issue.

ACI World and IATA represent the industry to ICAO, so we will be feeding it through them and we are in full agreement as to the brief on that study between the two groups and that has a delivery date at the end of January.

That is going to be an important piece in terms of our discussions obviously with government and so on. So to go back to ICAO, as you know, ICAO has sent out letters to members recommending the application of the EU/US regime or rules.

Now in that letter they have also urged countries to consider adopting the sealed bag system and I think that is very useful and very important because at least one piece of the equation will be in place. Then we also have to ensure the security of the supply chains and the staff security protocols that are put in place as well and they need to be verified and it is the verification procedure that is the key.

Q: That could be quite a lengthy process couldn't it?

Absolutely, because the question is who verifies it on behalf of who and on behalf of who and so on and that is a difficulty. But the reality here is that ICAO probably won't act quickly enough to solve our problem. In other words you won't get a situation where there is a global solution implemented overnight.

Q: That is not going to happen…

No. So we need to look at some other directions. Now the Commission has stated clearly that they will be able to mutually recognise third countries on the issue if the right pieces are in place.

Q: Meaning more than one country at a time?

Well that is possible and an obvious one there would the Gulf. It is possible that the Gulf could be done as a group of countries under the Gulf Coordinating Council. I don't know, but that is a possibility that we have raised with the Commission.

I think maybe the way here is that we try and find a couple of countries that seem to fit the criteria, or seem to have the necessary criteria in place as it were. So we can try and build a template of mutual recognition.

Countries will always react much quicker if they see an example in practice. So if we can get one or two examples in place, so that all of the necessary boxes are ticked and there's a working solution then I think we will find that we will quickly get other countries saying right, we can do that and then the solution will start to spread.

I believe that this is probably the only way of doing this quickly. If we wait for a global solution from ICAO or whatever, we could be waiting for another year. This is the only way that we can start to get things happening quickly.

I do believe that there is a very powerful motivational force in one country having an agreement and having it working with the EU. Other countries will absolutely be queuing up then to do it. So that is the reality and that is probably how we are going to have to go.

I suppose we have a strategy in place now that has ACI Europe, ourselves and other pressure groups working in Europe to maintain pressure on the Commission. We have set up a coordinating group in Brussels where we are involving all of the Brussels trade associations who are involved here representing the perfume industry, the alcohol industry, our own, the airlines and the airports and so on.

So with all of the trade groups that have lobby groups that are based in Brussels we have set up a coordinating group which we will chair to exchange information and try to work as a group to maximize the effort. We have obviously been involved with the Americans and the IAADFS and we are in contact with them regularly and with APTRA, ASUTIL and MEDFA to try and get coordination of activities around the world.

In that regard we are looking at the possibility of some regional workshops, to try and mobilize support on the ground in these places.

ICAO and ACI World are obviously important in this. ICAO have set up a study group to look at the issue and ACI World and IATA are on that group and will be able to feed information into us. We are working closely with ACI World to agree the input for that ICAO study group.

Inside Europe I suppose what needs to happen now.. well airports, retailers and suppliers need to keep up the pressure and raise this issue with their own government, because it is not enough to leave this with the Commission.

Q: Doesn't the Commission need to feel the heat from some of these people because they have other issues to contend with?

Yes, although the Commission are actually fully engaged in this process and they know the problem and they want to try and solve it and they are feeling pressure.

Q: But they have got other things to do. In terms of prioritizing the issue they are only going to do that if lots of people get on their backs aren't they?

Yes, but I think they are feeling the pressure because they were very anxious to talk to us and they are very anxious to get things moving. But the Commission is only the executive branch and they are answerable and beholden to the member states. So we need to make sure that the member states are saying that this is the priority.

Q: Because they are only going to act if they do..

Yes and not give them some other priority to follow. So national associations and airports and suppliers and anybody who is in a position to influence needs to raise issues with the national government and particularly with their transport ministers, because this is an aviation security issue.

On this AVSEC Aviation Security Committee they are all people from the member states, so they need to be briefed and told this is an issue and that it needs to be resolved.

But really important in this Doug is another factor that is arising now which would be seriously damaging to us. That is the linking of this issue to some other issues. There are some member states that are suggesting or raising the possibility that we could link this to a couple of other issues and we could solve them all at the same time. There is an issue around cargo and there is an issue around one-stop security and so on.

Now these issues have been around for years and if our issue gets locked into any of those, then forget it, because we will still be talking here in five year's time.

So it is really important right now that the national associations and anybody else such as the airports and the suppliers and so on get this message to their ministers of transport and it has to be treated as a stand a lone issue and it is an urgent issue needing resolution.

Now we will be writing to the national associations tomorrow to raise this with them. We will also be writing to all of the director generals of aviation to raise to this and we will also be looking for ACI Europe to do the same. This is a very important point that we need to get across that if we are linked into anything else, the whole timetable goes out of the window.

Q: That?s like trying to get a bill through as an amendment on somebody else's bill – you just get lost in the greater focus on the rest of it…

Yes. So that's a really important and genuine piece to get moving, because this is a real risk because if it is locked onto something else then that could be disastrous for us.

Now ICAO have given a deadline of the first of March for people to implement the new rules and that is probably ambitious. No doubt countries will start implementing them.

Q: But on a technicality, countries don't have to implement ICAO's recommendations do they?

No they don't.

John Hume: But if you go to Montreal and you agree to this in an international forum and then go home and decide to ignore it that?s not good. I think it will be read as it will happen.

Some people will drag their heels in implementing the rules. Some people will want to be first in the queue like Croatia for example. Australia has said at the end of March. But there is no formal or legal obligation.

Frank O'Connell: We have to find a way now of getting people in non-EU countries to do something with their political system and to use their political system to get their governments to make a formal approach to the EU through diplomatic channels using their Brussels' representation – and all of them have representation in Brussels – to say we want it solved.
As you have already said, so far only three countries have done that. [The countries O'Connell refers to are Singapore, Australia and Japan-Ed]. We really have to get 10, 20 to 30 countries banging on the door saying we want to resolve this.

Q: I find it incredible that we have just had a conference down in the Middle East where everybody was made absolutely totally aware of the issue and there has still been no representations from any of those countries.

Yes. But these things take time as well as they go through diplomatic channels. But I agree with you. We need to have many more people shouting at the Commission before long, otherwise the view will be obviously there isn't a problem.

Q: That's the one thing you don't want. You don't want the focus to suddenly drop or the momentum to suddenly slow…

Absolutely. A lot of members of the industry either operate shops in many places around the world or operate in most countries. They need to be using their local people on the ground that have their own political connections.

They need to tell their governments that this is a real problem for us and their governments need to approach the EU to get a bi-lateral agreement to solve this problem and that's really crucial that that happens. Otherwise we might as well all go home because it won't be solved.

Q: The level of coordination sounds unprecedented to me and even when you compare it with the 1999 situation, with all of these organisations talking about one issue…

Well I suppose we actually learned something from 1999 and with John here with us and with Keith Spinks, Sarah Branquinho and with others we've been through the 1999 thing and we did learn a lot from that. Almost all of us in this group that's running with this are all seasoned ninety-niners and that is paying off because you learn so much from that process.

Well I take my hat off to you for what you and everybody involved has managed to do and get in place in such a short time. But back on the issue, it looks like the call for funding is going OK at present. Are you satisfied with that to date, because it seems to me that you are probably going to need a little more than you've got at present?

The key to this funding issue is that we have structured it in such a way that it is ring-fenced funding, so it will be used for this campaign and this campaign only and then whatever money is left goes back. That is the underlying rule and agreement.

What is important is that we have a situation where we have sufficient money to be able to do whatever we have to do without wondering will we be able to this or that, or do we have the money and so on.

What is happening is that to date and to the end of this month we have probably spent something in the order of E.225,000 or thereabouts. In actual money in we have got about E.98,000 and we have got about another E.120,000 invoiced out to companies arising from the meeting in Cannes and so on.

Q: I counted up all of the various contributions that have been pledged and it came to over $700,000?

In terms of what has been pledged, then yes. We've spent about E.225,000 and we've got about E.98,000 actually in and then we have got pledges for about another E.550,000 or E.600,000. I've no doubt that this will come through in January and February, which is what we've asked.

But the reality is that this campaign is probably going to run through most of next year and I am just concerned that we will have sufficient funds to sustain us through that period.

Q: Because the end of the campaign is almost more important than the beginning…

Yes and so I would still be saying we need further contributions and we need more people involved in putting money in through the next couple of months. As I have said, I think it has been very good so far and many companies have come forward and made very generous contributions and I think it has been very encouraging to all of us that so many have.

But I think that inevitably we still need some more because we need a bigger chest of money that we can use without having to be concerned about where it is coming from.

Q: But you haven't got enough time to worry about doing your day job, never mind whether you have got enough money to carry on doing this job…

Don't mention the day job.

Q: Do you think there is a good feeling amongst the team at the ETRC with regard to the ability of others to engage others?

I think there is a lot of engagement in Europe. I know that the IAADFS in America are certainly engaged with the TSA and so on. But the rest of the world I am not so sure about.

Q: I get the impression that it is going to be a test of some duty free association's abilities' to communicate with higher levels?

Yes. I think the Australian, Singaporean and Japanese approaches to the Commission again didn't just happen by accident. They happened becausethe industry in those places are involved and engaged and they obviously did the work at the right levels to make this happen.

That is what has to happen in all of the other places and sooner rather than later and that is the area right now that I would have most concern about.

We are talking to the Commission and they are listening and saying they accept that there is a problem. The AVSEC Committee accepts there is a problem which can't be allowed to continue, but we can't solve the problem unless other countries make their approaches and actually start the process.

You can't impose the solution on people. These countries need to come forward and ask for a solution.

Q: One comment that was put to me by somebody in the Middle East recently was one of resentment that their security arrangements should be questioned as anything other than excellent in the first place. Do you think there might be an element of that in all this?

I'm sure there is. But it isn't actually an issue of questioning their arrangements – that's not what is at issue here. It is saying tell us what your arrangements are and let's verify those arrangements and then away we go. It's not saying we don't believe you. It's just that nobody has ever had a reason to check or verify them – now we do have.

They need to be formally put down and in fact this is something that the industry I think could usefully do in the non-EU countries, which is to actually document their supply chain security as a starting point and be able to give this to their government and say there is our supply chain and that is where it is secure.

People could do this and feed it into their governments and ask them to verify it and then that could be given to the EU with all of the documentation and the government's verification.

There are a number of practical things that people could be doing to try and move this along because it is not going to go away. You can sit there and say I resent this or that and fine, but it is not going to change anything.

Q: So we are talking very much about work in progress here?

Oh yes. This is going to go on for many, many months. The Commission has said that it hopes to start discussions with some countries probably maybe by April. Maybe we can get them to do it sooner than that. But that still means that we probably won't get a solution in place until the summer at the earliest.