Support to tackle bribery and corruption at ports, canals and anchorages
By Calum Finch
Shippers and crew are exposed to bribery and corruption in the shipping industry as a result of multiple levels of stakeholder engagement. Demands for ‘compensation’ highlight a network of challenges for an industry habitually slow to reform ‘traditional’ practices. Collaborative engagement between multiple anti-corruption organisations and public sector bodies have supported a modern outlook, operating with strengthening oppositions to corrupt practices. Such action within the industry supports seafarers in their engagement with authorities making corrupt demands.
One of the most challenging and frequent demands made in the shipping industry are facilitation payments at ports, canals and anchorages by public officials. Transparency International determined that customs authorities of emerging economies, in particular, were ranked among the most corrupt government institutions. The OECD estimates that customs clearance is the second biggest reason for bribes to be paid. The nature of activities that customs officials engage in vary from country to country with acts such as extortion, patronage, nepotism, embezzlement, kickbacks and cronyism in exchange for rewards in cash or kind. These can largely be classified into three types:
- Routine corruption: instances when bribes are paid to customs officials to ensure customs procedures are completed without delays being incurred.
- Fraudulent corruption: this type of corruption involves the persuading of customs officials to ‘turn a blind eye’ to certain procedural requirements to decrease tax liability or other import/ export obligations.
- Criminal corruption: this occurs when criminal organisations offer payments to customs officials to enable the smuggling of illegal substances into the import country.
Refusing demands for facilitation payments can lead to commercial delays or even threats to crew safety in extreme circumstances. Seafarers should be aware of their options to mitigate such events.
Taking action
Seafarers and shipowners have a range of tools at their disposal:
- Implement a comprehensive anti- bribery and corruption compliance program across the business and ensure all areas of the organisation receive training.
- Periodically review policies and assess the effectiveness of programmes in organisation trading areas.
- Policies and procedures must be clear and practical for all levels of the business.
- ‘Tone from the top’ – adopt a zero- tolerance culture that is communicated from senior board members and directors.
- Strengthen internal controls by conducting anti-bribery training for senior management, seafarers, business partners and third parties that act on behalf of the company.
- Standardised due diligence and risk assessments process for all new business third party/vendors.
- Establish an effective and confidential whistleblowing mechanism to enable seafarers and other third parties to voice their concerns without the fear of retaliation.
Support available
To facilitate seafarers’ ability to ‘say no’ to corruption, they must feel supported by strong company policies and procedures. These must be dynamic living documents, and the best way to constantly strengthen them is by creating a forum to share challenges and best-practices, and collectively assess areas of improvement in internal processes and approaches.
Additionally, supporting seafarers with shared methodologies, tools, trainings, and awareness campaigns strengthens their knowledge of how to tackle corruption in ports, harbours and terminals. Membership of the Maritime Anti-Corruption Network (MACN) allows companies and seafarers to make use of these tools to report anonymously to MACN when faced with corrupt demands in ports, harbours or terminals.
MACN have made significant strides in combatting corruption in high-risk jurisdictions through the use of this submitted data.
Standard Club, one of the world’s leading mutual P & I insurers for the shipping and energy industries, has a reputation for lawful and ethical behaviour which stems from its zero tolerance for bribery or corruption. Standard Club accomplishes this through a variety of controls, including regular staff training on anti-bribery laws and regulations, internal reporting of suspicious behaviour, a process for identifying politically exposed persons, and meticulous record maintenance.
This is bolstered further by the fact that Standard Club’s compliance processes are user friendly and straightforward, and monitored by a very accessible compliance team.
Calum Finch is loss prevention analyst at Standard Club. With thanks to the Maritime Anti-Corruption Network. If you have further questions, please contact Standard Club via www.standard-club.com/contact.
