Obama executive order redefines critical infrastructure

More companies could get designated as part of the sector under this week's presidential cybersecurity order

President Barack Obama's cybersecurity executive order, signed on Tuesday, could significantly expand the list of companies categorized as part of U.S. critical infrastructure sector, security experts said Wednesday.

[BACKGROUND: Obama signs cybersecurity order]

The executive order requires federal agencies and critical infrastructure owners and operators to work cooperatively to minimize cyber risks and strengthen resilience to attacks. It also calls for the creation of new consensus security standards and best practices that critical infrastructure companies will be urged, but not mandated, to follow.

The order stems from what the White House has long said is the need for immediate action to protect critical assets against cyber threats.

Administration officials contended that the order was necessary because Congress has so far failed to adequately update cybersecurity legislation.

A key piece of the executive order is requires federal agencies overseeing critical infrastructure areas to identify organizations "where a cybersecurity incident could reasonably result in catastrophic regional or national effects on public health or safety, economic security, or national security."

Such entities will then be designated as part of the U.S. critical infrastructure.

The order gives the Department of Homeland Security (DHS) and sector-specific federal agencies 150 days to use a risk-based assessment approach to identify such organizations. Owners and operators of those businesses will then be notified by the DHS.

The order allows businesses to challenge a classification and ask to for reconsideration.

A separate Presidential Policy Directive (PPD-21) released on Tuesday scraps the previous national policy for federal agencies and departments to identify and prioritize critical infrastructure. That policy had been established under Homeland Security Presidential Directive-7 (HSPD-7) of 2003.

"This PPD updates our policy from a primary focus on protecting critical infrastructure against terrorism to protecting, securing, and making the nation's critical infrastructure more resilient to all hazards - including natural disasters, manmade threats, pandemics, and cyber attacks," a spokeswoman from the White House's National Security Council told Computerworld via email Wednesday.

"The PPD is focused on clarifying Federal roles and responsibilities; integrating physical security and cybersecurity analysis and situational awareness; improving information sharing; and having the Federal government function more effectively to be a better partner to the critical infrastructure owners and operators," she added.

The Presidential directive identifies 16 critical infrastructure sectors, including the Chemical, Commercial Facilities, Critical Manufacturing, Dams, Defense Industrial Base, Energy, Financial Services, Information Technology, Nuclear Reactors and Water and Wastewater systems.

The DHS is the designated federal agency for 10 of these sectors, including IT, Critical Manufacturing and Communication. The Treasury Department will oversee the identifying of critical infrastructure entities within the financial services sector while the Department of Defense will oversee the Defense Industrial Base sector.

The language in the executive order significantly broadens the number of entities that can be classified as being part of the country's critical infrastructure, said Andrew Serwin, chair of the privacy, security and information management practice at law firm Foley & Lardner LLP.

The order defines critical infrastructure as any organization and associated systems where a cyberattack could pose a threat to U.S. national security, public safety and health or economic interests.

So businesses that support or partner with companies and federal agencies from the listed as part of the critical infrastructure sector could be designated as well. "I think that you could see a variety of other industries getting sucked into the definition of critical infrastructure," Serwin said.

It's unclear yet what risk criteria the federal agencies will use to identify entities, he said. "But you could see a scenario where any business of a certain size" could be considered critical.

Obama's order does not require private sector owners and operators of critical infrastructure to adopt any of the new security standards and best practices. But they will be pressured to adopt them anyway from a due diligence standpoint, Serwin maintained.

"There are huge brand issues with cybersecurity and privacy," Serwin said. "If you are in a designated critical infrastructure category, you don't want to be the company that didn't follow the recommendations."

A wide range of companies from the health care, IT, financial services and other sectors need to determine whether they could be designated as part of the critical infrastructure sector under the executive order, said David Ransom, a partner at law firm McDermott Will & Emery.

The DHS secretary appears to have been given wide latitude to designate critical infrastructure under the order, Ransom said. The language leaves open the possibility that a wide range of private sector entities from a spectrum of industries could get classified as critical infrastructure.

"What their view is going to be remains to be seen," he said.

The executive order's open-ended definition of critical infrastructure gives the DHS and sector specific federal agencies the ability "to cast a wide net in the process of identifying which companies and their associated assets and systems might be included within their statutory capacity," said John South, chief security officer at Heartland Payment Systems.

The key question though is whether broadening the list of companies will make much of a difference in heading off cybersecurity threats, South said.

Efforts to define critical infrastructure entities goes back as far as 1998 at least, he noted. Considerable progress has already been made in identifying information sharing capabilities of the sort described in the executive order, South added.

"Nothing in this directive clarifies what timely information sharing is and how this differs from where we are currently," he said. "If there is no substantive product that provides actionable, timely intelligence - regardless of how wide the net of critical infrastructure is cast - we haven't advanced very much."

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan, or subscribe to Jaikumar's RSS feed . His e-mail address is jvijayan@computerworld.com.

Read more about security in Computerworld's Security Topic Center.

This story, "Obama executive order redefines critical infrastructure" was originally published by Computerworld.

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