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SECURITY | ANTI-CORRUPTION November 2018 Standing up to corrupt demands is good business By Mette Kronholm Frnde, Communications Manager and Editor at BIMCO s hipping companies that fight corrupt demands have less compliance issues, fewer threats to their crew, and greater predictability in their operations. These are some of the invaluable lessons learned by the Maritime AntiCorruption Network (MACN) in Argentina. Another lesson learned is that you really can change corrupt practices. MACN has been working on the Collective Action Programme in Argentina since 2015. Last year, the programme resulted in the adoption of a new regulatory framework for dry bulk shipping that reduces corruption risks for the industry. The programme benefits the country and its economy, as transparent commercial practices attract more business and shipping companies, according to MACN. Changing the wider business environment can only happen if private companies change their practices too so the shipping industry has a big role to play There is a good business case in being clean fewer issues, more predictable port calls MACN says that implementing and promoting good corporate practices provides a foundation for a company and its employees to take a stand against corruption. However, the key to driving external change is to build an industry coalition based on reciprocal commitments to fight such practices. To be successful, this must involve mobilising all key stakeholders, from state agencies to international companies and local agents, to identify and mitigate the root causes of corruption. We can see that companies that fight corrupt demands and have good internal support structures, from operations all the way to the front line, have fewer operational issues and more predictable port calls. There is a good business case in being clean, says Cecilia Mller Torbrand, MACN Programme Director. Changing behaviour does not happen overnight, but the programme in Argentina has proven that it is possible, according to MACN. However, changing the wider business environment can only happen if private companies change their practices too. So the shipping industry has a big role to play. The world will not become perfect after three years, but what we are showing in Argentina is that you can change ingrained practices. We know this approach works and we have seen positive changes in Argentina, Nigeria, and the Suez Canal, says Mller Torbrand. If a shipmaster reports back to us that he or she is using the training they have received and followed the procedures that we have encouraged them to follow, and the result is that government officials backed away from illicit demands the second time they tried and did not even try asking the third then that is a success story for us. Anonymous reporting from shipping companies a valuable tool fighting corrupt demands A start guide for shipping companies by Governance latam and MACN: Set up robust compliance practices, including training masters and agents on how to take advantage of the new integrity measures in force, and how to react together in response to improper demands. Seek as much information as possible about corrupt demands, and report potential cases to the internal reporting mechanisms or to the authorities, as appropriate. This can be done through anonymous whistleblowing lines set up by the respective governments or through MACNs Anonymous Incident Reporting system. Display signs on the ships clearly outlining the zero-tolerance rules to corruption to dissuade improper demands. These are available through MACN. Limit the use of cash on board to enhance resistance to solicitation. Minimise your operational exposure; ensure your vessel is in good order and the holds are in optimal condition. Photo (top): Dan Rosenbaum / Royal Navy (UK) Encouraging MACN members to record incidents and demands through the networks Anonymous Incident Reporting System is a valuable tool in collecting data relating to the risks faced during port calls. This data is then used in dialogue with governments to highlight and address problems and seek engagement. Supporting MACNs Collective Action Programme in Argentina and the data-collection process, BIMCO has engaged its own membership to assist in gathering information. This includes BIMCO members being encouraged to report incidents, frequency of occurrence, payment demanded, and threats to crew, as well as any relevant details about the impact on operations. According to MACNs local partner working in Argentina, the biggest overall challenge in the programme was to fight the prisoners dilemma. Everyone agrees in a free-of-corruption market, but no-one wants to be the first to commit to change without certainty that the rest will follow suit, says Guillermo Jorge, founding partner of Governance Latam, MACNs local partner in Argentina. To overcome that challenge, we set up specific training and internal mechanisms within each business association, to exchange information and set the scene for broad compliance with the new system. We moved from players encountering systemic corrupt demands to a very few marginal incidents. The incidents are now regularly reported and appropriate disciplinary measures are taken. About MACN: About Governance latam: The Maritime Anti-Corruption Network (MACN) is a global business network working towards the vision of a maritime industry free of corruption. Governance Latam specialises in the design, implementation and evaluation of governance and compliance structures within the public and private sectors. 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