MACN 2017 Annual Report Published

MACN is pleased to share its 2017 Annual Report

The report contains an overview of progress against the three pillars of MACN’s Strategy: Collective Action, Capability Building, and Culture of Integrity.

MACN made significant progress in 2017. Through our Collective Actions, we have inspired and delivered increased participation in the Suez Canal Say No campaign; developed a new regulatory framework for the dry-bulk vessel clearance process in Argentina, trained over 400 stakeholders, and open-sourced guidance to support implementation; enhanced container tracking in Indonesia; and delivered ethics training for close to 600 government officials in Nigeria.

Our anonymous incident reporting has continued to grow substantially. With over 19,000 incidents of corrupt practices reported to date, MACN has a strong platform to better understand the challenges and to engage with stakeholders, including governments, on shared solutions. MACN has also collaborated with other shipping organizations to address the issue of maritime corruption more broadly in the industry and with maritime regulators.

Last but not least, we now have over 90 companies in our network. Our collective voice and influence grows with our membership.

Collective Action Updates | March 2018

Argentina

The UKFCO has agreed to sponsor continued training in Argentina to secure transparency and integrity in vessels inspections in Argentina. The funding will ensure that 40 company risk managers receive onsite training on how to prevent risks arising from the new regulatory framework. 100 companies will also receive practical educational materials about the new regulatory framework and how to minimize corruption risks during a vessel’s inspections. MACN is happy to have received this backing from the UKFCO in Argentina. Fernando Basch of Governance Latam is joining the MACN Spring meeting to provide additional updates.

Nigeria

An MACN letter has been delivered to the Vice President’s office to secure continued commitment to tackle the operational challenges at a senior government level, and to ensure that an adequate number of government officials will attend the integrity training arranged for mid-March. The final training of government officials is taking place in Lagos in mid-March and is arranged by our local partner Soji Apampa, the Nigerian Shippers Council, and the Nigerian Anti-Corruption agency, TUGAR. The correspondence with the Nigerian government is available on Onehub—Collective Action—Nigeria. In March, MACN will kick off the final session on training government officials.

Vietnam

MACN Program Director Cecilia participated in meetings in London with a Vietnamese delegation established to improve the business climate in Vietnam (the travel costs for the delegation were funded by the UKFCO). Representatives included officials from the Vietnamese government and the Vietnamese Chamber of Commerce. Cecilia presented on the trade barriers in Vietnam and this was well received.
Next steps: The MACN Secretariat is drafting a formal report to the delegation on the challenges seen in the ports and it will be shared with the membership before submission.

Suez Canal

Reminder: If you join the Suez Canal “Say No” campaign, please notify the MACN Secretariat (macn@bsr.org) so that we can follow up with companies in the campaign when we measure the impact of MACN’s activities.

Join MACN at the 2018 OECD Global Anti-Corruption and Integrity Forum

MACN is a supporting partner of the 2018 OECD Global Anti-Corruption and Integrity Forum, entitled “Planet Integrity: Building a Fairer Society,” which will take place March 27-28 in Paris.

A public multistakeholder platform, the 2018 Forum shapes anti-corruption and integrity dialogue between governments, policy communities, the private sector, civil society, and academia. To strengthen global solutions that address the dark side of globalization, the 2018 Forum will focus on how to shape an enabling environment for integrity in government, business, and society as a whole.

The 2018 Forum will:

Foster global solutions to combat the dark side of globalization.
Shape an enabling environment for integrity in government, business, and society.
Stimulate fair competition, economic growth, and sustainable development.
Reduce the inequality gap and enhance the benefits of globalization for all.
MACN Director Cecilia Müller Torbrand will attend the meeting on 27 March to launch MACN’s Annual report and MACN Senior Advisor Angie Farrag-Thibault will speak on the session “Anti-Corruption Collective Actions: Experience, Challenges, and Outcomes” during the side event under the banner of the 2018 Forum, “Institutionalising Public-Private Dialogue to Fight against Corruption in the MENA Region,” held March 29.

If you would like to attend, please register on the OECD website.

Case Study on MACN’s Argentina Collective Action Published

MACN is pleased to share a new case study outlining the process and outcomes of our collective action in Argentina.
In line with its strategy and in an effort to reduce corrupt demands, MACN pursued a collective action in Argentina beginning in 2014, which resulted last year in the successful adoption of a new regulatory framework for dry bulk shipping that reduces corruption risks for the industry and elevates the country’s culture of integrity.

Read the case study here

MACN Welcomes John Sypnowich as New Chair

Following his appointment as OCIMF’s Deputy Director and Chief Representative to the International Maritime Organization (IMO), Sam Megwa has stepped down as Chairman of MACN.

Sam commented:

“I have enjoyed every moment of my time in MACN, and I am very proud of our achievements over the years. It is has been an honor and privilege to be part of such a great cause with a great team. I will miss you all!”

MACN would like to express its deep gratitude to Sam for his commitment and energy during his time as Chair.

Moving forward, MACN is delighted to welcome John Sypnowich as the new Chair, and Paul Townsend as Vice Chair. John is proud to take over as Chair:

“A huge thanks to Sam for his inspirational leadership. His strategic vision and deep insight has brought us closer to our goal of a maritime industry free of corruption. I am very excited to take on the Chair of MACN at this time. We have a lot of work ahead of us but we have the energy, ideas and motivation to get it done.”

Paul commented:

“I am honored to have been asked to take on the role of Vice Chair for the MACN. This is a great, well-run organization. I will endeavor to maintain the high standards that have been forged before me, and look forward to serving the membership in this capacity.”

From Malboro Canal to Zero-Tolerance Transits

MACN Collective Action at Work in the Suez Canal

On International Anti-Corruption Day 2017, the Maritime Anti-Corruption Network (MACN) is pleased to share significant progress on tackling corruption in the Suez Canal thanks to a two-year collective action.

Approximately ten percent of all global seaborne trade currently moves through the Suez Canal, and with the expansion of the Canal, trade volumes will likely increase. However, the Suez Canal has also been a consistent hot-spot for corruption, with Captains and crew facing regular demands for “facilitation payments” for passage or for routine services. As cigarettes are the most frequent form of demand, the Suez Canal has been referred to as the “Marlboro Canal” in media, and the US Coast Guard highlighted the problems in a report from 2014.

Incident data from MACN’s incident reporting mechanism also showed that demands in the Suez Canal can be accompanied by threats of retaliation to the Captain and ship if cigarettes are not provided to the authorities. Refusal of pilots to cooperate has led to heavy delays, making timely passage difficult.

To tackle challenges like this—and in particular, to reduce threats to the safety of crews—MACN launched a “Say No” campaign for the Suez Canal on International Anti-Corruption Day 2015. The campaign was a true collective effort, with MACN member companies agreeing to reject demands by using a coordinated zero tolerance policy, communication material, and an onboard toolkit for Captains developed by MACN. The campaign was piloted with a handful of companies after engagement with the Suez Canal authorities. Following positive results from the pilot, MACN agreed to make the collective action a permanent campaign.

Since the launch in 2015, MACN has assessed the impact of the campaign by surveying members and by collecting incident data. The situation has improved every year, and feedback in 2017 shows that companies taking part in the campaign are transiting Suez without any delays or issues. Demands for cigarettes have decreased dramatically or have even been eliminated, while threats to the safety of both crew and vessel have also decreased significantly.

Cecilia Müller Torbrand, MACN Program Director, commented: “Addressing this issue is a milestone for the whole maritime industry and we now encourage more industry players to follow. The campaign has not led to delays or threats, and many Captains have welcomed the initiative. The purpose of this campaign is not to name and shame anyone but to find constructive workable solutions to an industry problem.”

Müller Torbrand added: “It is however important for shipowners to prepare their Captains and offer support. Individual captains cannot bear full responsibility but must rather have the backing of the company”.

“The collective action has seen companies of all sizes, nationalities and industry segments successfully saying no. This clearly demonstrates that it is possible to say no by acting collectively and through committed leadership on integrity,” concluded Müller Torbrand.

Kevin Leach Smith, Vice President Operation, Masterbulk, has been monitoring the campaign closely with Masterbulk’s fleet and shares input from the frontline: “Explaining MACN and the company’s anti-corruption policy significantly reduces the risk of demands for cash or in-kind payments during transits. Our Captains are relieved of the pressure of dealing with these corrupt practices and can focus on the safe navigation of the vessel in the Canal. Overall, our vessels have had smooth transits and with the support of our agents they have rejected any type of demands”.

Collective Action Updates | November 2017

Argentina

We are delighted to announce that a new regulation has been adopted in Argentina, as a successful outcome of a three-year MACN collective action. For more information, please see our media release. So far the release has led to articles in Lloyd’s List, the American Journal of TransportationShip Management InternationalDry Bulk MagazineShipping Watch (Danish), and the B20 Collective Action Hub. To help MACN members and industry players to navigate the new regulation, please download the below:

Egypt

The Suez Canal Say No campaign continues to deliver! A member company shared the latest from one of its captains:

“I am delighted to inform your good office that the transit in Suez Canal was smooth and uneventful. The agent promptly introduced himself to boarding authorities/visitors and explained about MACN and the company’s anti-corruption policy, thereby eliminating the chance for these individuals to demand cash or in-kind payments. During pilot boarding and the exchange of pilots, the agent was present at the bridge to explain the MACN policy for the pilots to understand. This meant that the master was relieved of the pressure of dealing with these corrupt practices and could therefore focus on the safe navigation of the vessel in the canal. There were a few attempts from the quarantine officers and the electrician, but these were immediately dealt with by our agent. Overall, the experience was good, and no facilitation of any kind was given by the ship.”

Nigeria

The MACN Secretariat collects issues and provides direct feedback to the Nigerian authorities with support from our local partner, Soji Apampa of the Convention on Business Integrity Nigeria (CBI). We have provided feedback on specific issues, which were escalated to the Nigerian authorities and presented to senior government representatives in Abuja for further investigation. We also encourage industry players to use the Nigerian grievance mechanism for issues occurring in ports. For more information, see the relevant SOPS and grievance mechanisms on the Port Services Support Portal (PSSP): https://www.pssp.ng and https://www.pssp.ng/SOP.

MACN Helps Pass Regulation to Tackle Critical Dry Bulk Challenges in Argentina

Copenhagen, Denmark, October 26, 2017: The Maritime Anti-Corruption Network (MACN)—a global business network of 90 companies working toward the elimination of corrupt practices in the maritime industry—celebrates the passing of a new regulation as a successful outcome of its collective action in Argentina. The new regulation modernizes the inspections system for dry cargo and has the potential to dramatically increase the efficiency of port clearances.

Three years ago, MACN members agreed to establish a collective action to promote the reform of the vessel clearance process for loading grain in Argentina, which had been flagged as an issue by MACN members. MACN partnered with Governance Latam—a local law firm and well-recognized integrity champion—to drive this effort.

MACN and 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. Together, this coalition developed and agreed on the key points for a new regulatory framework that would improve operating practices for the vessel inspection process. Working closely with SENASA[1], MACN and Governance Latam ensured that the Argentinian authorities were engaged and were active drivers of the change.

The new regulatory framework[2] approved by SENASA Resolution 693-E/2017, published on October 19, 2017 and going into effect on November 1, 2017 for a testing period of one year, reduces discretion in the inspection of holds and tanks, establishes a system of cross-checks to increase integrity, provides an escalation process when disputes occur, and creates an e-governance system to underpin the framework. Inspections will be conducted by registered private surveyors, and in case of conflict, bulk carriers will be able to request supervision from SENASA.

MACN believes that these changes will increase the efficiency, integrity, and transparency of inspections, reducing the possibility of ships being delayed for unclear or unfounded reasons.

The development of the regulation was supported by a wide range of organizations, including BIMCO; CADECRA (the Association of Private Inspection Agencies of Argentina); CEC (the Grain Exporters Association of Argentina); Centro de Navegación (the Maritime Agencies Association of Argentina); CIARA (the Argentine Oil Industry Chamber); the International Chamber of Shipping; and the International Group of P&I Clubs.

MACN and Governance Latam are now conducting integrity training of local public and private stakeholders and providing fact sheets for industry to ensure successful ongoing implementation of the regulation.

John Sypnowich, The CSL Group Inc., Vice-Chair of MACN, commented: “This successful collective action highlights the benefits of a strong and committed network, with members sharing information to highlight a problem, mobilizing to take action, and utilizing their combined expertise and influence to develop an impactful solution, together with the government. I would call on all shipping companies to work with MACN in collective actions that improve our maritime operating environment.”

Fernando Basch, Partner at Governance Latam, said: “This process was a truly collaborative effort, which would not have been possible without the strong commitment shown by SENASA and the support of all the industry associations involved. Improving port governance increases maritime transparency and efficiency, reducing trade barriers.”

Angie Farrag-Thibault, Director at BSR (the secretariat of MACN) and lead coordinator for this effort, stated: “This outcome shows MACN’s global collective action strategy is working. We are very happy to prove that it is really possible to drive improvements in the operating environment when industry and government come together so effectively. Thank you to our partners for this great achievement.”

[1] Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA)—the agency that guarantees the quality and healthiness of Argentine agricultural products.

[2] The regulatory framework follows international standards to modernize the inspections system, balancing the government’s responsibility to ensure the cleanliness of vessels exporting agricultural products with the necessary conditions for integrity in the context of foreign trade relations.

For more information please see the joint statement agreed by the participants in this Collective Action.

About BSR (Business for Social Responsibility)

BSR serves as the secretariat of MACN. BSR is a global nonprofit organization that works with its network of more than 250 member companies and other partners to build a just and sustainable world. From its offices in Asia, Europe, and North America, BSR develops sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. Read more.

About Governance Latam

Governance Latam is a law firm specialized in corporate governance, integrity and asset recovery, which has provided solutions to fraud and corruption to companies, governments and multilateral organizations for more than 20 years. Based in Buenos Aires, Governance Latam has influenced the definition of public policies in many Latin American countries. Read more.

Over 90 Participants Attend MACN Members Meeting

We were delighted to welcome over 90 participants to the second MACN Members Meeting of 2017, which took place in London on October 11-12.

One major theme of the meeting was that “Collective Action Works!” – MACN members shared numerous testimonies of tangible impacts of anti-corruption efforts in locations including Argentina, Nigeria, and the Suez Canal. MACN was also delighted to welcome a number of new members, and to have Brendan Hawley join the Steering Committee as an Associate Member representative.

MACN members will receive a summary of the meeting outcomes next week. Many thanks to all members for your active and engaged participation!

Preread Available for MACN Fall Members Meeting

We are pleased to share the Preread for the MACN Fall Members Meeting, to be held in London on October 11-12.

This document provides a range of useful information to help you prepare for the meeting, including details on sessions and updates on all of MACN’s Collective Actions. We recommend that MACN Members print the Preread and use it as a guide to the meeting.

Please download the Preread from OneHub here (member access required).