A New York approach to fighting corruption

With a focus on data, Maersk Line is applying New York City’s crime-fighting methods to further the combat against facilitation payments in ports around the world.

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Maersk Line is implementing a new data-driven strategy for confronting the improper demands for payment faced by its vessels. In doing so, Maersk Line has ‘stolen’ ideas and strategies from some of the most successful district attorneys in New York who have managed to turn around the city’s crime scene dramatically.

In a team effort spanning operations, ship management, captains and legal, Maersk Line is implementing a new data-driven strategy for confronting the improper demands for payment faced by its vessels, and it is drawing inspiration from an unlikely source: the New York District Attorney’s Office.

“There haven’t been a lot of success stories in the industry when it comes to countering facilitation payments. We started by looking at systematic strategies for targeting crime in general,” says Maersk Line’s Senior Legal counsel, Kristin Berglund, who heads up its anti-corruption programme.

"We’ve proudly ‘stolen’ ideas and strategies from some of the most successful district attorneys in New York who managed to turn around the city’s crime scene dramatically,” she says.

For its part, Maersk Line has been collecting data on its vessels’ facilitation payments since 2011 and is looking for ways to use the information in the battle against corruption. And, that’s where New York’s much heralded crime-busting efforts come in.

Maersk has a strict zero-tolerance policy on bribery, yet facilitation payments remain a challenge for the shipping industry as a whole. While bribes are payments to obtain something the giver is not entitled to receive, facilitation payments are small payments such as cash, cigarettes or soft drinks demanded by low-level public officials in order to perform routine duties. The small payments are so ingrained in some ports that officials consider them customary or part of their salaries.

Refusing to pay can lead to expensive commercial delays for a vessel or even threats to the crew.

The New York model has two main elements that Maersk Line is adapting to its shipping activities.

The first is the so-called “quality of life crime” policing strategy, which consists of going after the small offences that affect people’s quality of life by creating an environment of disorder and diminishing people’s trust in the system.

Maersk Line is targeting facilitation payments, which, while small, can place a significant mental strain on a captain and crew, creating inefficiency and impairing the integrity of the system in the process. Pilots, who board a vessel to guide it to berth, have refused to do so, in order to extort cigarettes, and captains have faced the use of physical force.

Mapping the data

The second element the company has adopted is New York’s strategy of using data to map out crime activity and go after repeat serious offenders known as ‘crime drivers’.

Maersk Line has launched a mapping project, based on its facilitation payment data. The fleet’s administration software, WIN-ADMI, logs all supplies that go on and off a ship, tracking the cigarette cartons or soft drinks that are given away. Where facilitation payments cannot be avoided, captains are required to record who made the demand and what the circumstances were. The Liner Operations Clusters – or clusters – are now tasked with using that data to target the offending ports.

“When one country is particularly bad, it tends to have a ripple effect on the surrounding countries. When a captain has had a very tough experience at one port, he’s fatigued and demoralised. Countering the demands at the next port will be more challenging and the likelihood of succeeding in that encounter is reduced,” says Berglund.

All of the clusters must strategise and come up with each their own map, classifying the countries in their region as one of the four following groups: Group 1, where ships should never have to pay facilitation payments; Group 2, where a zero tolerance policy will be implemented; Group 3, where the reduction will be gradual; and Group 4, which will remain under observation.

Setting targets

According to Berglund, the clusters have started returning the maps and recommended actions for their regions, and so far they’re taking an ambitious approach. The Latin America cluster, for example, returned its map with five main offender countries classified in zero-tolerance Group 2. Inspired by the success of pilot initiatives in other countries, the cluster aims to be the first cluster to have a 100% reduction of facilitation payments in the entire region by the second quarter of 2016.

“We are looking forward to this challenge, and we are sure that with constant care and team work we can emulate the result achieved in the pilot projects in the rest of Latin America”, says Analida Villavicencio, who works with Port Optimisation and Husbandry Performance for the Americas Marine Department at the Latin America Liner Operations Cluster in Panama.

Given the success Maersk Line has already achieved with so-called “hot spot” initiatives, Berglund is optimistic that the strategy will pay off.

“We’ve learned a lot from our pilot initiatives that can be applied to other countries, and are embarking on this project with a proven playbook,” she says.

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Maersk Line’s Senior Legal Counsel, Kristin Berglund: “There haven’t been a lot of success stories in the industry when it comes to countering facilitation payments. We started by looking at systematic strategies for targeting crime in general.”

What is a bribe and what is a facilitation payment?
Bribe:

  • Any payment to obtain something the giver is not entitled to receive
  • Payments greater than USD 150 made to one person, and smaller payments to higher level officials, even to obtain something the giver is clearly entitled to receive, would generally be considered potential bribes
  • Maersk has a zero tolerance policy for bribes

Facilitation payment:

  • Small payments such as cash or cigarettes demanded by low-level public officials to perform routine duties, which they otherwise refuse to perform. They are given to obtain something the giver is clearly entitled to receive
  • Maersk’s policy is that facilitation payments must be opposed and avoided. If this cannot be done without significant consequences for the company or employees, they must be documented and reported
  • The Group’s ultimate goal is to eliminate facilitation payments entirely