Jan 05 | 2020
Putting an End to Exploitation
By Michael King
Corruption and trade are steadfast bedfellows; one smoothing passage for the other since time immemorial. Medieval history is littered with laws and initiatives designed to tackle the evils of corruption, many explicitly noting the corrosive and costly impact bribes and malfeasance have on the final cost of both necessities and luxuries.
Many of the same challenges facing medieval traders are still apparent today. Transparency International defines corruption as “the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.” The organization’s latest Corruption Perceptions Index found that no state is free of corruption, and more than half of countries are failing to fight corruption, resulting in a “crisis of democracy.”
One sector where corruption has always thrived is, of course, shipping, most specifically at ports where the ship/trader/cargo owner meets the state and is reliant on state officials for safe and timely passage – almost the perfect transactional scenario for abuse.
However, after sucking up or passing on the extra trading costs caused by corrupt practices for so long, shipping is now pushing back. The Maritime Anti-Corruption Network, or MACN, was set up in 2011 with a vision of creating “a maritime industry free of corruption that enables fair trade to the benefit of society at large.” MACN is essentially a global business network which brings together shipping stakeholders to tackle corruption through collective action.
“We were eight companies at our first meeting,” MACN Director Cecilia Müller Torbrand told Breakbulk. “That was January 2011. By the end of that year, we were 15 companies and today we have 115 global companies in the network. We’ve grown in size, but also in geographical representation. We represent approximately 30 percent of the world’s tonnage.
“Importantly, we have everybody in the network, from big companies like BP, Maersk and Rio Tinto, to smaller owners with 50 or so ships. We also have specific committees for containers and bulk, and we are very keen to get more people from the breakbulk and project communities onboard,” Torbrand said.
Tackling Corruption at Source
Copenhagen-headquartered MACN has in recent years launched a series of successful programs targeting corruption among port and government officials in Argentina, Nigeria and on the Suez Canal. It most recently launched a new pilot scheme in Mumbai, India, which it plans to roll out at more ports if successful. MACN has also created a Global Port Integrity Index, designed “to provide an overview and comparison of illicit demands in ports around the world.” This is created by collecting unique first-hand data from captains calling at ports around the world via MACN’s Anonymous Incident Reporting Mechanism, which has now collected more than 30,000 individual reports.
However, much work remains undone, particularly at the shipping-state interface at ports around the world, where the mismatch between regulatory requirements and the reality of successfully being able to operate are most apparent.
“You have ships going in and out of ports, and when they are in port, before they’re allowed to take on or offload cargo, there are multiple government inspections,” Torbrand said. “Health inspectors come on board, Customs comes on board, immigration authorities come on board, environmental authorities come on board. These multiple interactions the shipping industry has with government puts the industry at a high risk.
“In some countries it’s called ‘tea money,’ which is a small facilitation payment, but there are also more severe challenges in some locations where you have everything from extortion to captains being threatened,” she added.
In some places she related that there might be 40 officials boarding several times at night, trying to find something for which they can fine the vessel $100,000. “So, the problem for the industry is everything from low-level payments to the risk of extortion.”
According to Torbrand, MACN and its members work towards the elimination of all forms of maritime corruption by implementing MACN Anti-Corruption Principles, co-developing and sharing best practices, and raising awareness of the challenges faced by vessel captains entering ports. The organization also collaborates with governments, non-governmental organizations, and civil society to identify and mitigate the root causes of corruption and to create a culture of integrity within the maritime community.
“We help companies with everything from developing templates for codes of conduct to sharing best practices from captains so those on the frontline are better prepared for tackling demands,” she added. “A core part of our job is to make these ‘industry improvements.’ While this is typically based on what is, at a minimum, required by law, it can be difficult for companies to deal with these challenges singlehandedly,” she said.
Working in Partnership
MACN works through an inclusive model, attempting to partner with governments by demonstrating where they have problems and explaining how trade will benefit if they tackle those problems.
“We don’t want to blame and shame. We want to work in collaboration with governments and local authorities like we have in India and other places,” she explained. “On July 1 we launched a pilot campaign in the Mumbai region, which is actually an integrity pact between the government and the industry saying we’re just going to take this issue seriously and get out the message: ‘Don’t ask; don’t give.’ After six months we’ll see what we’ve learned and how we can expand it in partnership with the authorities perhaps to other ports.”
Earlier this year MACN’s anti-corruption agenda was also addressed by the International Maritime Organization, or IMO, when it agreed to include maritime corruption as a regular work item on its agenda. Guidelines to assist all stakeholders in embracing and implementing anti-corruption practices and procedures will now be development with a guidance document to address maritime corruption due for completion by 2021.
“It is important for the industry to have maritime corruption recognized as a problem by the IMO in its role as the international regulator for shipping,” Torbrand said. “Issues such as the wide discretionary powers held by some port officials have the potential to impact all ship owners, managers, and operators. The requirements for port operations too often lack transparency, are deliberately misapplied, or widely interpreted for private gain.
“Our aim is to address these challenges.”
Michael King is a multi-award- winning journalist as well as a shipping and logistics consultant.
Image Credit: MACN
Corruption and trade are steadfast bedfellows; one smoothing passage for the other since time immemorial. Medieval history is littered with laws and initiatives designed to tackle the evils of corruption, many explicitly noting the corrosive and costly impact bribes and malfeasance have on the final cost of both necessities and luxuries.
Many of the same challenges facing medieval traders are still apparent today. Transparency International defines corruption as “the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.” The organization’s latest Corruption Perceptions Index found that no state is free of corruption, and more than half of countries are failing to fight corruption, resulting in a “crisis of democracy.”
One sector where corruption has always thrived is, of course, shipping, most specifically at ports where the ship/trader/cargo owner meets the state and is reliant on state officials for safe and timely passage – almost the perfect transactional scenario for abuse.
However, after sucking up or passing on the extra trading costs caused by corrupt practices for so long, shipping is now pushing back. The Maritime Anti-Corruption Network, or MACN, was set up in 2011 with a vision of creating “a maritime industry free of corruption that enables fair trade to the benefit of society at large.” MACN is essentially a global business network which brings together shipping stakeholders to tackle corruption through collective action.
“We were eight companies at our first meeting,” MACN Director Cecilia Müller Torbrand told Breakbulk. “That was January 2011. By the end of that year, we were 15 companies and today we have 115 global companies in the network. We’ve grown in size, but also in geographical representation. We represent approximately 30 percent of the world’s tonnage.
“Importantly, we have everybody in the network, from big companies like BP, Maersk and Rio Tinto, to smaller owners with 50 or so ships. We also have specific committees for containers and bulk, and we are very keen to get more people from the breakbulk and project communities onboard,” Torbrand said.
Tackling Corruption at Source
Copenhagen-headquartered MACN has in recent years launched a series of successful programs targeting corruption among port and government officials in Argentina, Nigeria and on the Suez Canal. It most recently launched a new pilot scheme in Mumbai, India, which it plans to roll out at more ports if successful. MACN has also created a Global Port Integrity Index, designed “to provide an overview and comparison of illicit demands in ports around the world.” This is created by collecting unique first-hand data from captains calling at ports around the world via MACN’s Anonymous Incident Reporting Mechanism, which has now collected more than 30,000 individual reports.
However, much work remains undone, particularly at the shipping-state interface at ports around the world, where the mismatch between regulatory requirements and the reality of successfully being able to operate are most apparent.
“You have ships going in and out of ports, and when they are in port, before they’re allowed to take on or offload cargo, there are multiple government inspections,” Torbrand said. “Health inspectors come on board, Customs comes on board, immigration authorities come on board, environmental authorities come on board. These multiple interactions the shipping industry has with government puts the industry at a high risk.
“In some countries it’s called ‘tea money,’ which is a small facilitation payment, but there are also more severe challenges in some locations where you have everything from extortion to captains being threatened,” she added.
In some places she related that there might be 40 officials boarding several times at night, trying to find something for which they can fine the vessel $100,000. “So, the problem for the industry is everything from low-level payments to the risk of extortion.”
According to Torbrand, MACN and its members work towards the elimination of all forms of maritime corruption by implementing MACN Anti-Corruption Principles, co-developing and sharing best practices, and raising awareness of the challenges faced by vessel captains entering ports. The organization also collaborates with governments, non-governmental organizations, and civil society to identify and mitigate the root causes of corruption and to create a culture of integrity within the maritime community.
“We help companies with everything from developing templates for codes of conduct to sharing best practices from captains so those on the frontline are better prepared for tackling demands,” she added. “A core part of our job is to make these ‘industry improvements.’ While this is typically based on what is, at a minimum, required by law, it can be difficult for companies to deal with these challenges singlehandedly,” she said.
Working in Partnership
MACN works through an inclusive model, attempting to partner with governments by demonstrating where they have problems and explaining how trade will benefit if they tackle those problems.
“We don’t want to blame and shame. We want to work in collaboration with governments and local authorities like we have in India and other places,” she explained. “On July 1 we launched a pilot campaign in the Mumbai region, which is actually an integrity pact between the government and the industry saying we’re just going to take this issue seriously and get out the message: ‘Don’t ask; don’t give.’ After six months we’ll see what we’ve learned and how we can expand it in partnership with the authorities perhaps to other ports.”
Earlier this year MACN’s anti-corruption agenda was also addressed by the International Maritime Organization, or IMO, when it agreed to include maritime corruption as a regular work item on its agenda. Guidelines to assist all stakeholders in embracing and implementing anti-corruption practices and procedures will now be development with a guidance document to address maritime corruption due for completion by 2021.
“It is important for the industry to have maritime corruption recognized as a problem by the IMO in its role as the international regulator for shipping,” Torbrand said. “Issues such as the wide discretionary powers held by some port officials have the potential to impact all ship owners, managers, and operators. The requirements for port operations too often lack transparency, are deliberately misapplied, or widely interpreted for private gain.
“Our aim is to address these challenges.”
Michael King is a multi-award- winning journalist as well as a shipping and logistics consultant.
Image Credit: MACN
