MACN today announces a new partnership with the Ministry of Foreign Affairs of Denmark (MOFA). The partnership will allow MACN to develop and launch the first ever Global Port Integrity Index and to scale up its collective action activities in West Africa.
We are pleased to share with you our 2018 Annual Report. This contains a comprehensive summary of our work and progress in 2018 under the three pillars of our strategy: Collective Action, Capability Building, and Culture of Integrity.
Below is the introductory letter from John Sypnowich, Chair of MACN:
Dear colleagues and friends,
After more than a year as Chair of the Maritime Anti-Corruption Network (MACN), two things are very clear to me. First, the growth and momentum of our Network gives us an unprecedented opportunity to progress in the battle to eliminate corruption in the maritime industry. Second, the need for action is high: our seafarers continue to face unacceptable risks in numerous regions.
There has been a lot to celebrate in 2018. Our growth to over 100 members makes us a clear leader in private-sector anti-corruption collaborations, and our collective actions have gone from strength to strength. As an example, following the implementation of new regulations in Argentina as a result of our collective action, reports of corrupt demands in Argentine port calls to MACN’s anonymous incident reporting system have dropped by 90 percent.
That’s a big result that we should all be proud of. But we also continue to hear accounts from our seafarers—either directly or through our shared reporting system—of harassment and threats as they try to complete routine port calls. In our social media campaign last December, we shared some of these stories:
- “If facilitation is not paid we are threatened with detention or no port clearance.”
- “Cases of extortion, harassment, and threats of violence are frequent events.”
- “In many places the customs officers always try to find defects and threaten us with penalties. They waste a lot of time checking and harassing the crew.”
Changing the attitudes that create these situations is hard work. We, as a Network, have the numbers to make a difference and we have seen this year that our efforts are directly benefiting seafarers. As one put it:
- “There were a few initial attempts while we passed through, but after a documented and polite denial it was clear that the vessel was part of MACN and no more questions were asked.”
These stories inspire me and remind me of what we can achieve. However, effective action requires consistent engagement from us as companies and from our partners around the world. We must keep pushing: contributing ideas and reports, coordinating our activities, working with our internal teams.
I call on all of us to maintain our commitment to work with and for each other. Let’s all work together in 2019 to bring us even closer to our goal of a maritime industry free of corruption, and together we will create a safer environment for all of our crews.
With warm regards,
John Sypnowich, The CSL Group, Inc.; Chair, MACN
Last week, the International Maritime Organisation (IMO) showed massive support agreeing to include maritime corruption as a regular work item on its agenda. A paper on the topic of maritime corruption was presented by the Marshall Islands with many countries and international organizations expressing their endorsement of a proposal to develop guidelines to assist all stakeholders in embracing and implementing anti-corruption practices and procedures at the 43rd meeting of the Facilitation Committee (FAL). The IMO will now work on a Guidance document to address maritime corruption. This is expected to be completed by 2021.
Danish Shipping welcomed the support from the international community for this initiative. “We have a long-standing commitment to stamping out maritime corruption. Thanks to the targeted efforts of MACN, we have seen tangible change in locations such as the Suez Canal, where facilitation payments have decreased considerably. With the IMO’s 174 member states working together on this agenda, we will stand even stronger in the fight against maritime corruption. Putting maritime anti-corruption on the IMO agenda marks a significant milestone for the maritime community as a whole”, says Anne H. Steffensen, Director General and CEO at Danish Shipping.
The Maritime Anti-Corruption Network applauds the efforts the IMO has taken to address maritime corruption as a regular work item. MACN’s Director, Cecilia Müller Torbrand, commented “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. 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 entry too often lack transparency, are deliberately misapplied, or widely interpreted for private gain.”
In 2018, MACN, together with leading maritime associations, started to engage the IMO on the consequences and risks facing the maritime industry in relation to maritime corruption. An IMO submission was sponsored by 12 NGO’s and submitted to the IMO’s Facilitation Committee in June 2018 (FAL 42/16/3). The submission was supported by a presentation to IMO delegates from MACN and ICS.
Maritime corruption has far-reaching consequences, it is detrimental to shipping operations and port communities, can have damaging effects on trade and investment, which in turn can have a negative effect on social and economic development. The IMO Facilitation Committee requested the IMO Secretariat provide advice on how to address this problem and invited Member States and international organizations to submit documents to the next FAL meeting with suggested actions to address this problem.
What does this mean for the industry?
“This is a significant milestone both for MACN’s work and for the industry to have the IMO recognising the damaging effect corruption has on shipping and trade” says MACN’s Director Cecilia Müller Torbrand. “Our hope is that MACN’s work will gain more leverage with IMO member states and that we can further strengthen the public-private dialogue in MACNs collective action programs (i.e. in country work).”
Congratulations to the member states and organizations who submitted the proposal this year: Liberia, Marshall Islands, Norway, United Kingdom, United States, Vanuatu, ICS, IAPH, BIMCO, ICHCA, IMPA, IFSMA, INTERTANKO, InterManager, IPTA, IHMA, IBIA, FONASBA, ITF and NI.
According to the latest data from the Maritime Anti-Corruption Network’s (MACN) Anonymous Incident Reporting System, corruption incidents in Argentina where MACN has engaged in collective action have decreased by more than 90 percent. This drop follows the development of a new regulatory framework with the National Service of Health and Agri-Food Quality (Senasa), the development of a new IT system for processing and registering hold/tank inspections, and high-level government support. These developments are part of the collective action project MACN created to support reforms initiated by Senasa, other local stakeholders, and the broader shipping community in Argentina back in 2014.
MACN Program Director Cecilia Müller-Torbrand highlighted this as one of the organization’s real success stories: “In 2014, when we started this project, shipping companies operating in Argentina faced challenges in connection with the inspection of holds and tanks inspection practices. Data from MACN’s Anonymous Incident Reporting System highlighted a systemic issue with demands for payment for unclean grain holds, including cases of extortion.”
Using this data as a starting point, MACN and local partner Governance Latam conducted a fact-finding mission to fully understand the nature of the problem before building a strong coalition of local and global stakeholders.
Governance Latam Partner Fernando Basch noted the vital role of the National Service of Health and Agri-Food Quality (Senasa): “The rapid fall in corruption incidents is a direct consequence of the leadership and regulatory changes Senasa was able to put in place. The 2017 redrafting and clarification of regulations for approval of a vessel’s holds or tanks for the loading of agricultural products greatly improved operating practices for the vessel inspection process. This also allowed us to develop comprehensive training for public and private stakeholders to further reinforce the required change in behavior.”
Cecilia Müller-Torbrand commented: "The Argentine authorities demonstrated the importance of the authorities’ role. Following industry feedback, they put in place key changes to processes, systems and standards, which resulted in clarity and transparency in the inspection of warehouses and vessel tanks and holds.”
John Sypnowich, Chair of the Maritime Anti-Corruption Network, noted that the shipping community was providing a best-practice template to fight corruption: “MACN’s Argentina project should be seen by the international community as an exemplary case of public-private collective action against corruption. The results we have achieved, in a relatively short time-frame, set the benchmark for future collective actions.”
The new regulatory framework entered into force on November 1, 2017 for a one-year pilot period. Given the success and impact achieved to date, Senasa is now taking steps to maintain the new system. MACN’s support and incident data have been key drivers behind this decision and there is recognition within the industry of the ongoing need to confront corruption risks, leveraging the same collective action approach used with Senasa.
MACN was founded in 2011 by a small group of companies. It was created with the recognition that for many years, the shipping industry has faced a difficult issue: When a ship travels in and out of ports, there is an opportunity to ask for illegal payments.
For example, one captain told us recently:
“The customs officer threatened to delay the ship and fine us US$60,000 for an error on the luboil [lubrication oil] declaration. Then he asked us for US$7,000 to help us have no problem.”
These corrupt demands are bad for shipping companies, as they can lead to delays or other commercial consequences for those who stood their ground. They are bad for the ports and governments, who acquire a reputation for corruption and have friction in the trading environment. Above all, they are bad for the ships’ captains and crews, who come under pressure to reject demands yet face threats, intimidation, and sometimes violence when they try to do so.
MACN started small, but it’s not small today: In 2018, MACN was delighted to welcome its 100th member. Members come from across the shipping value chain and include the largest vessel owners and operators, as well as associate members like companies that provide agents for ships entering ports. Collectively, MACN members represent over 25 percent of total global tonnage.
A bigger membership means a stronger collective voice when speaking with governments, ports, and customs: With over 100 members, we have real power to bring to the table and push for change. It means more resources to deliver tools and resources to members. And ultimately, it means greater impact and a better operating environment for those on the front line—the captains and crews.
Here are some of the things we have been proud to accomplish in 2018 and three reasons why we would love for you to join us.
MACN’s collective action in Argentina has resulted in the successful adoption of a new regulatory framework for dry bulk shipping. This year, according to MACN data submitted through our anonymous incident reporting mechanism, corruption incidents in Argentina have decreased by more than 90 percent. This has been driven in part by high-level support for the new regulatory framework from the authorities and also from high-level politicians, including the Argentine President.
Elsewhere, we have completed our collective action project in Nigeria, which was supported by (among others) the Danish Maritime Foundation, the Orient Fond, and Lauritzen Fonden. The project included training over 1,000 government officials and developing a training course on ethics for government officials. We are proud to work with local partner Soji Apampa, founder of The Convention on Business Integrity Ltd.
MACN is also preparing to launch a collective action in India, with a port integrity campaign through which vessels will prominently display signs and posters co-signed by the government about the “Say No” policy and opposition to corruption.
Culture of Integrity
In addition to collaborating with members and stakeholders to find solutions in corruption hot-spots, MACN seeks to influence the wider culture to ensure lasting change. In 2018, MACN was delighted to present its work to the Facilitation Committee (FAL) of the International Maritime Organization (IMO). This was a major step in engaging the broader maritime community, and MACN is following up through a cross-industry working group.
MACN also spoke at several major conferences this year, including Transparency International’s International Anti-Corruption Conference in Copenhagen.
Finally, MACN was invited to provide testimony at the UK House of Lords on the UK Bribery Act’s effect on the maritime industry. You can watch a recording of the session here.
We’re delighted to see that the word is spreading, and our impact is growing. Around the world, corrupt demands in hot-spots is decreasing, and where demands are still being made, our members are better prepared, with stronger policies, more resources, and the best practices of their peers.
But don’t just take our word for it. We asked some of our members why they joined MACN, what its value was, and how it can enable fair trade to the benefit of society and all stakeholders. Watch the video below to hear from them, and if you would like to get involved, contact us.