Reported Corruption Incidents down 90 Percent in Argentina

iStock-139540669-cropped.jpg

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.

Happy New Year!

As we reflect on 2018, we would like to acknowledge MACN’s members and partners, and all organizations who have supported MACN and the activities we have pursued. Thank you!

We are proud of the results that MACN has achieved in 2018, which include:

  • 109 members—a phenomenal 20 percent growth in membership. We welcomed new members from around the world, for instance from West Africa, Malaysia, and Israel.

  • Collection of over 27,000 anonymous incident reports to date. The reporting has helped us to engage in further dialogue with governments in Argentina, India, and Nigeria. We have also increased awareness of our anonymous reporting platform among national shipowners’ associations and local maritime service providers to encourage more reporting and transparency.

  • Progress in our collective action programs: 

    • We have continued to increase participation in MACN’s Say No campaign the Suez Canal;

    • We have witnessed a 90 percent decrease in reported corrupt demands in Argentina in the ports targeted in MACN’s collective action project. MACN’s collective action in Argentina was featured in the World Economic Forum’s Report on the Future of Trust and Integrity;

    • With strong and visible support from the Indian government, we are now ready to kick off MACN’s port integrity campaign in February 2019 in Mumbai;

  • We have trained over 1,000 government officials in Nigeria.

  • Two international recognitions: MACN received a High Commendation at the SeaTrade Awards and was the winner of the 2018 SAFETY4SEA Sustainability Award.

  • Together with leading maritime organizations, MACN submitted the first paper on the consequences of maritime corruption to the International Maritime Organisation—the UN’s specialized regulatory agency for shipping.

  • We arranged our largest ever member meeting in London, and MACN’s activities and meetings continue to be rated highly by members.

MACN in 2018: More Members, More Action, More Impact

MACN members at the 2018 Fall meeting in London.

MACN members at the 2018 Fall meeting in London.

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.

Collective Action

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.

Our Impact

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.

MACN Receives SAFETY4SEA Sustainability Award

Photo by SAFETY4SEA.

Photo by SAFETY4SEA.

Earlier this month, MACN was delighted to be awarded the SAFETY4SEA Sustainability Award, sponsored by UMAR.

The winners of this year’s Awards were announced at a prestigious ceremony which took place on Tuesday 2 October, 2018 at the Yacht Club of Greece.

The awards focus exclusively on initiatives and individuals who foster Safety Excellence & Sustainable Shipping, following a combination of open nomination and audience-vote.

Presenting the award Mr. Thrasos Tsangarides, Group CEO, UMAR, said: 

“The Maritime Anti-Corruption Network understands that our economic and technological growth often come at a cost. Ethical business practices are being tested and corruption is a major problem that costs trillions in bribes every year. It distorts competition, deters the free market and delays further development of social and economic growth. The answer to this centuries-old problem lies in developing corporate cultures with strong business values that understand that ethical behaviour and transparency actually add competitive advantages to organisations while enabling more trustworthy business relationships and lower costs.”

Accepting the award on behalf of MACN, Mr. Dimitris Balamatsias, DPA & HSQE Manager, Neptune Lines, stated:

Corruption is a real threat to the people who work on our ships and it damages our business and reputation. Shipping is not alone in facing this enormous problem, a problem that is too-often excused as being too hard to solve: ‘it is the way things have always been done. However, in the fight against corruption the shipping industry has shown unparalleled leadership. The Maritime Anti-Corruption Network is now over 100 members strong. We have shown that shipping companies – working together – can be more effective in fighting corruption than any regulation or press expose.”

MACN would like to thank everyone who voted for us. This award is great recognition for the hard work and commitment of our seafarers, member companies, and partners.

The SAFETY4SEA award follows MACN’s receiving a High Commendation at the 2018 Seatrade Awards, demonstrating the growing international recognition of MACN’s efforts.

In 2015, MACN was the winner of the second annual TRACE Innovation in Anti-Bribery Compliance Award (IACA) for its efforts to create an industry-wide compliance culture through collective action.

MACN Reaches 100 Members

MACN is delighted to announce that with the recent additions of ZIM and Frontline to our membership, the organization now numbers over 100 companies across the maritime sector. MACN’s members now represent a major percentage of the global world fleet by tonnage and play a key role in ocean transport and global logistics.

MACN Chair, John Sypnowich, noted the symbolic significance of this milestone for the organization:

As an industry led organization, we have strength in numbers. By having more and more companies join our cause, we have a better and better chance of making a difference and eliminating all forms of corruption.  Together, as an industry, we are taking a stand.

MACN was established in 2011 as an industry-led collective action initiative, to stamp out corruption in the maritime industry and to promote inclusive trade. Since its inception, MACN has become one of the preeminent examples of an industry led network taking tangible collective action to eliminate corruption across the wider supply chain. By working in partnership with the industry, governments, and civil society, it has been successful in tackling corruption through country-specific actions in locations as diverse as Nigeria, Indonesia, Egypt, and Argentina. 

MACN Programme Director, Cecilia Müller Torbrand, noted the impact corrupt practices on the shipping sector:

Corruption is a real threat to the people who work on our ships and it damages our business and reputation. MACN has received over 25,000 anonymous reports of corrupt demands to-date. Only last year MACN received over 260 anonymous incident which were directly related to the safety of crew.

It is a problem that is too-often excused as being too hard to solve – ‘it is the way things have always been done’. While the shipping industry is not alone in facing this enormous problem, we have shown unparalleled leadership in spearheading business-led anti-corruption efforts. 

The stronger our membership, the greater the impact of our collective actions. Shipping companies, working together to refuse corrupt demands, have been undertaken projects in Nigeria, Argentina, Indonesia, and Egypt. Our ‘Say No’ campaign in the Suez has been a particular success. This has shown that as an industry we can fight corruption and win. And we can do this better than anyone.