News and Events

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).

Update on Container Tracking in Tanjung Priok

The MACN Secretariat is pleased to provide an update on Collective Action activities in the port of Tanjung Priok, Indonesia.

During phase I of the Collective Action, stakeholders reported 1) a lack of awareness of container tracking systems in general and 2) a lack of transparency in terms of how containers are prioritized and when they need to be relocated. To address these issues, MACN and Kemitraan collaborated with Pelindo II and its subsidiary, Jakarta International Container Terminal (JICT), both to consolidate information on existing resources to support container tracking, and also to upgrade JICT’s online system.

For an update on progress and advice for team members, please download this short brief.

Speakers Announced for MACN Fall Members Meeting

MACN is pleased to present four external speakers for the MACN Fall Members meeting, which will take place in London on October 11-12, 2017.

  • Thomas Lüthi is founding partner of Pohlmann & Company, a multidisciplinary law and consulting firm established in 2012 and based in Frankfurt and Munich. From 2007 to 2010 Thomas was Corporate Compliance Officer of Siemens AG. In this role he was directly involved in a U.S. DOJ and U.S. SEC settlement for several corruption cases. Prior to founding Pohlmann & Company he also advised MAN (2010) and Ferrostaal (2011) during their settlements with the German authorities.
  • Soji Apampa is co-founder of The Integrity Organisation Ltd. Gte (1995). He has been actively involved with the designing, resourcing and supervising of programme implementation that has helped to make the strategy of “empowering people, their transactions, systems and institutions against corruption” relevant to Nigeria.
  • Dominic Johnson is a Partner at HFW in the Admiralty and Crisis Management Department. He focuses on collisions, groundings, total loss, fire and explosion, wreck removal, salvage, piracy, limitation of liability and both civil and criminal liabilities. He also deals with insurance coverage, and other shipping and offshore related commercial and contractual disputes.
  • Aron Cramer is President and CEO of BSR (the secretariat of MACN). In addition to leading BSR, which has grown substantially throughout his tenure as President and CEO, Aron advises senior executives at BSR’s more than 250 member companies and other global businesses on the full spectrum of social and environmental issues.

MACN Fall Members Meeting, 11-12 October, London, UK

MACN will host its second biannual members meeting of 2017 in London. The meeting will give MACN members the opportunity to assess the progress we have made on the three pillars of our strategy and to discuss current or developing challenges around corruption in the maritime sector. Sector-specific and country-specific breakout sessions will allow members to explore issues in detail and to share relevant best practices.

In addition to the regular, member-driven content and updates on our activities, we’ll be hearing from prominent speakers on topics including the connections between compliance and other sustainability goals, and how to react in a crisis.

If you have any further questions regarding MACN or BSR, please contact Cecilia Muller Torbrand, MACN Program Director.

Collective Actions Updates | June 2017

Egypt

MACN took part in the EU-OECD workshop “Supporting the Development of the Suez Canal Economic Zone, and Creating a Business-Friendly Regulatory Environment”, in Cairo on May 22. MACN’s presentation was well received by the authorities. The OECD and EU will be working with the Suez Canal to implement a number of integrity measures, including integrity training and accountability mechanisms. MACN will review and provide input to the recommendations that the OECD is developing for the Economic Zone Authorities.

Indonesia

MACN is engaging with the Australia Indonesia Partnership for Economic Governance (AIPEG) to explore a partnership to implement phase 3 of the collective action in Indonesia.

Nigeria

MACN’s local training partner, Soji Apampa (co-founder of the Convention on Business Integrity) has now fully implemented the “train the trainer” concept in in Port Harcourt, Onne, and Calabar. Over 100 private sector and public sector representatives have now been trained. The MACN Secretariat is now assessing how to move forward with end user training, in coordination with the local training partner.

MACN Article in WCO News

World Customs Organization (WCO) News has published an article by Martin Benderson. The article explains MACN’s Collective Action approach and details the benefits of united action to tackle corruption in the maritime industry.

Fundamental to MACN’s collective action approach is that sustainable solutions to tackle corruption must be enabled by, supported by, and beneficial to key stakeholders. Dialogue with stakeholders is, therefore, a critical part of MACN’s collective action projects, securing commitment and buy-in from local stakeholders in specific countries and ports. Customs authorities are a key stakeholder in MACN’s collective action projects, as they play a central role in the clearance of goods through maritime ports worldwide.

Please download the issue here (PDF) or visit the WCO News website.