Maritime corruption adversely impacts the industry, hinders social and economic progress, and contributes to security risks in both ports and on ships, endangering the well-being, health, and safety of seafarers.
Kitack Lim, the Secretary-General of the International Maritime Organization (IMO), has highlighted the prevalent risk of corruption in the maritime industry. Despite being an integral part of the global transport and logistics chain, shipping faces challenges such as corrupt demands on seafarers, including unlawful requests for payments to facilitate port entry or departure and disproportionate penalties for minor errors.
This not only disrupts normal operations but also poses risks to navigation and seafarer safety.
The Maritime Anti-Corruption Network (MACN) has received nearly 40,000 reports of corrupt demands globally through its anonymous reporting mechanism, raising significant concerns.
Unfairly gaining advantages
The lack of transparency in the maritime sector makes it susceptible to bribery related to lucrative contracts. Large shipping companies often engage in bidding for long-term contracts from major manufacturers and exporters. Bribes are sometimes paid to secure contracts, influence quota allocations, or manipulate tenders.
For instance, Maersk Group faced allegations of bribing Brazil’s state-owned Petroleo Brasileiro SA in 2014, using a less experienced brokerage to funnel bribes for privileged information on ship schedules. Similarly, the United States Department of Justice revealed that Sargeant Marine engaged in an eight-year bribery scheme in Brazil and Venezuela to secure valuable contracts.
Biased assessment of maritime assets
The multitude of stakeholders involved in daily port operations creates opportunities for corruption, particularly in the form of illicit payments. Marine surveyors, responsible for assessing vessel and cargo conditions, may issue favorable reports allowing ships to enter terminals when influenced by bribes. This can lead to safety risks, especially in the transportation of dangerous goods.
Role of clearing agents
Clearing agents, acting as intermediaries, facilitate cargo clearance through ports on behalf of clients. These agents, however, may engage in corrupt practices by recording inaccurate information, making bribe payments to customs officials and port operators, and influencing the clearance process.
Deflating the invoice
Under-invoicing, a prevalent fraud, involves declaring lower values on invoices than the actual sale price to evade customs duties and import taxes. This can lead to Trade Based Money Laundering (TBML), where criminal organizations use trade transactions to disguise the origin of illicit funds.
Corruption during customs clearance
Customs officials may engage in corrupt activities, including facilitation payments, to allow illegal goods to pass or overlook procedural requirements. This can range from routine corruption, where bribes expedite customs procedures, to fraudulent corruption involving false information to reduce tax liability, and criminal corruption, where bribes enable smuggling of illegal substances.
The battle against corruption
Captain Rajesh Unni further emphasizes that corruption is a pervasive threat not only to the maritime industry but to the global community at large. Describing it as a cancer, he asserts that it is the collective duty of individuals and organizations to confront and challenge corruption to pave the way for a fair, secure, and brighter future for future generations.
He warns that failure to take a united stand against corruption implies tacit support for its damaging effects. Given its entrenched history and widespread influence in various aspects of daily life, the fight against corruption cannot be an isolated effort; it requires a collaborative and altruistic approach from everyone in the industry.
Captain Unni stresses the importance of concerted efforts to make the world a safer place, highlighting that the detrimental impacts of corruption extend far beyond the confines of the maritime sector.
The battle against corruption, Captain Unni contends, is not just an industry-specific concern; it is a moral imperative that transcends individual interests. He calls for a collective and unwavering commitment to challenging corruption, underscoring the need for a shared responsibility in building a world where corruption has no place.
In conclusion, Captain Rajesh Unni’s words serve as a powerful call to action for the maritime industry and beyond. By recognizing corruption as a common adversary and uniting against it, individuals and organizations can contribute to fostering a culture of integrity, transparency, and ethical conduct, ultimately shaping a more just and secure global landscape.