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.