MARITIME ANTI-CORRUPTION & COLLECTIVE ACTION

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1 MARITIME ANTI-CORRUPTION & COLLECTIVE ACTION Karoline L. Bøhler Attorney-at-law & CSR Manager NHH Bergen

2 FOR COMPANIES, CORRUPTION: Poses serious legal and reputational risks Increase transaction costs Undermines fair competition Impedes investment Transparency International Corruption Index

3 Maritime Anti-Corruption Network

4 MACN OVERVIEW

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6 COLLABORATION - THE KEY TO SUCCESS MACN collaborates with key stakeholders, including governments, authorities, and international organizations, to identify and mitigate the root causes of corruption in the maritime industry and to develop sustainable solutions.

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8 WHAT IS A COLLECTIVE ACTION?

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11 SUCCESS STORIES ARGENTINA EXAMPLE Shipping face challenges with customs and SENASA in connection with the inspections of holds and tanks, custom declarations, and on-board practices. Systemic demands for payment including cases of extortion. Collective action initiated with local partner Governance Latam with support from Norwegian and Danish embassy in Buenos Aires and the International Chamber of Shipping (ICS). Status: The collective action project in Argentina has resulted in a number of reform actions: - A new regulation is submitted limiting inspectors discretion and more precise definitions and objective criteria for holds or tanks rejection. - Introduces inspectors rotation in ports and terminals, to hinder collusion and development of improper arrangements. - Strengthens control mechanisms by creating a new Technical Appeals Tribunal and establishing a trustworthy whistleblowing hotline.

12 SUCCESS STORIES NIGERIA EXAMPLE Nigeria one of the most challenging countries to do business in; requests for facilitation payments, cases of extortion, harassment, and threats of violence. Corruption risk assessment in Nigerian port was MACN first Collective Action 2012 in cooperation with TUGAR and UNDP on face-to-face integrity training, harmonizing regulations, establishing grievance mechanisms. The report describes main drivers of corruption in the port sector and puts forward specific recommendations for action to eliminate corruption in the Nigerian port sector. Status: Waiting time of vessel when calling port has decreased. Terminal operators and agents assist MACN members in resisting facilitation payments. MACN have supported harmonisation of all procedures and guidelines. MACN have rolled out integrity training of officials and best practice sessions with local trainer in two with additional ports.

13 EGYPT - SUEZ CANAL The Suez Canal is also called The Marlboro Canal due to demands for large quantities of cigarettes for transiting the canal. Refusal to meet these demands often endangers a timely and efficient passage. MACN Say no campaign to avoid facilitation payments launched MACN guidance material and Tool kit on board in Arabic language. MACN have engaged with the Suez Canal authorities and received recognition Status: The campaign has decreased the frequency of demands and made it easier for captains to say no. Pilots are also reported to be less aggressive and more forthcoming. As a next step, MACN are preparing a full launch pilot to broaden the project by engaging additional MACN members and other stakeholders such as ICC and other industry associations.

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16 COLLECTIVE ACTION INDONESIA EXAMPLE The risk of corruption in Indonesian ports is high, and illicit facilitation payments are common. Companies that refuse to pay are often penalized with delays or with fines for alleged noncompliance. Collective Actions start date 2015 with the aim of: - improving container tracking IT systems, - promoting an e-governance system for cashless export licenses, - integrating whistleblowing into existing procedures, - establishing stakeholder forum for discussion, raising awareness about laws/regulations. The project has been implemented with support from the local NGO Kemitraan and the UK Foreign and Commonwealth Office (UKFCO) and co-financed by UKFCO. Progress is reported - the project has improved the transparency of regulation for importing and exporting goods through Tanjung Priok, and has also improved the accountability of key government stakeholders towards the private sector.

17 NEW COLLECTIVE ACTION - INDIA & CHINA MACN are currently scoping out the Collective Action in India BSR will conduct a fact-finding mission in Mumbai on April 2017 to engage with relevant local stakeholders and members, and to further map challenges in the city. This will be followed by a stakeholder consultation meeting, where next steps will be developed. A work plan for 2017 has been developed, and BSR is re-engaging with lead companies to take the Collective Action forward in 2017.

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19 MACN COLLECTIVE ACTION IMPACT REPORT The report can be downloaded from: