When zero means zero

Maersk Line Limited has achieved zero facilitation payments on the Suez Canal route as a result of teamwork from all parties, and this is one resounding victory that it is hoped can be rolled out across other ports and fleets.

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Best Practices on vessels for combatting facilitation payment demands

 The Group’s anti-corruption policy is explained in a Best Practices document. Here is a summary of the preventive actions:

  • Post the anti-corruption placard and materials on the gangway and in all visible places on the vessel, including on meeting tables when sitting with officials.
  • Individual crew members should be well prepared when embarking, with all the necessary paperwork in place.
  • Ensure all medicine lists are correct and reflect actual supply.
  • Never let public officials inspect the vessel without being accompanied by a Maersk officer. Show officials respect and be hospitable to help pacify the situation.
  • Be consistent – if one vessel succeeds in reducing or rejecting demands, talk to other vessels on the same route so they know and can follow suit.

When Master Frank Warnekros of the Maersk Denver docked at a port in the Indian subcontinent on Christmas Eve last year, he was presented with a chocolate cake by Immigrations and Customs officials.

“I was told it was a gift to me,” Master Warnekros recounts. “One guy went on about how Christmas is about the spirit of giving, and that all ships give 20 cartons (of cigarettes) in return. But in my case he would accept 10 cartons. I told him I was not giving any and explained the Maersk policy, adding that I’m worried that I would be charged with bribery.”

When told that as the Captain he could “break the policy”, Master Warnekros repeated: “I intend to follow Maersk Policies.” Three more Customs officials who boarded the ship faced the same stoic stance by the Master.

“One of them said he will not make any charges against me but made the empty threat that every ship that follows will be charged three extra cartons to make up the difference. I replied that he can do what he likes in that regard. They then left.”

This incident is one out of many that Masters face when traversing ports in various countries. Defined as small payments such as cash, cigarettes or soft drinks demanded by low-level public officials to perform their routine tasks, facilitation payment demands remain a great challenge for Maersk’s anti-corruption policy, and will be high on the agenda to tackle in the coming years.

Zero payment on the Suez
Starting from December last year, all Maersk Line Limited vessels took the lead in reducing facilitation payments, where feasible stopping them all together. The project started in ports across the Indian subcontinent, as well as the Suez Canal where the ships ply.

Master Scott E. Pendleton of the Maersk Chicago says, “as one ship, it was not possible to eliminate the payments. Only acting as a fleet were we able to make this change.”

And the change has indeed been resounding. Zero facilitation payments have been achieved by Maersk Line Limited on the Suez Canal, according to General Manager Fernando Querol from Marine Execution, Operations, who confirms this through extensive fleet-wide communication. Master Pendleton recalls: “some of the Suez pilots were initially irate and complained to other pilots in their convoy, resulting in some slight delays in transit to other Maersk Line Limited vessels.”

Same policy in Maersk Line

The project has triggered some unusual responses. For example, there have been pilots stating that this is President Obama’s fault!’ In this case, Master Pendleton tried to explain to the officials that all US-flagged Maersk ships are following the same company policy.

According to Henrik Petersen, Marine Manager of West Central Asia, the same stance applies to all Maersk Line ships calling across the Indian subcontinent since last December.

“The positive results so far have only been possible with the close liaison of all involved parties from port agents to Ship Command, Cluster Operations and the Liner Operations Cluster,” he says, “this is something which takes time to implement. Involving all parties and applying pressure from all angles towards the local authorities, such as having our local agents push to avoid delays to vessels, has resulted in success.”

Petersen adds: “overall we have seen a drastic reduction in facilitation payments. While we have achieved zero payments on the Suez, some ports are a bit harder to break.”

Only acting as a fleet are we able to make a change

quote scott

MASTER SCOTT E. PENDLETON

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Stamping out corruption is in the best interest of all societies. Facilitation payments were always on the edge of the slippery slope to bribery, and we are glad this practice is ending

quote

ED HANLEY,VICE PRESIDENT OF LABOUR RELATION AND FLEET MANAGEMENT, MAERSK LINE

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3:17

What’s the difference between facilitation payments and bribes?

  • A bribe is something given to obtain something that the giver is not clearly entitled to receive.
  • Maersk has a zero-tolerance policy for bribes.
  • Facilitation payments are small payments such as cash, cigarettes or soft drinks demanded by low-level public officials for them to perform routine duties which they otherwise refuse to perform. They may only be given to obtain some- thing that the giver is clearly entitled to receive.
  • Facilitation payments are not paid to jump queues or obtain an unfair advantage.
  • Time is spent refusing demands, some of which if refused can lead to commercial delay or even threat of crew imprisonment. Yet if facilitation payments are allowed to be ‘embedded’ as a way of business, it will foster a system of corruption and inefficiency that is much costlier in the long run.
  • Maersk’s policy is that facilitation payments must be opposed and avoided whenever possible, and if this cannot be done without significant consequences for the company or employees, they must be documented and reported.
  • If the payment is greater than USD 150 made to one person, it would generally be considered to be a potential bribe.
  • Even a small payment can be a bribe, e.g. if paid to avoid a fine or to obtain an improper benefit.
  • The Group’s ultimate goal is the elimination of facilitation payments.

According to Ed Hanley, Vice President of Labour Relations and Fleet Management, Maersk Line Limited, the achievement of being able to transit the Suez (also known as the “Marlboro canal”) with zero facilitation payments is a testament to Maersk’s thorough Anti-Corruption campaign that includes training for all col- leagues globally – and to the American Masters on board who persistently enforced the policy without disrupting operations.

“Stamping out corruption is in the best interest of
all societies. Facilitation payments were always on the edge of the slippery slope to bribery, and we are glad this practice is ending,” says Hanley.

Standing firm
In some ports, facilitation payments are so ingrained that officials consider them customary or part of their salary. For example, some officials refuse to grant shore leave unless they receive their cigarettes.

In other situations, officials will deliberately find fault with paperwork on the ship, or request for irrelevant paperwork just to cause delays. In more extreme cases, gangs associated with customs officials will board a ves- sel and use intimidation to gather gratuities.

In these situations Masters have been forced to use local security teams during discussion with local authorities.

24 cartons of cigarettes
Maersk Chicago’s Master Pendleton experienced a situation in which customs officials from a port in the Indian subcontinent also refused to let cargo operations start unless they were given their 24 cartons of cigarettes. However, the Master remained calm and mentioned that the US Consulate might have to be contacted. Cargo operations were finally allowed to start, but demands and threats continued for another hour.

“We are now at a point where we are still asked for cigarettes at other ports, but when we refuse that is the end of the discussion,” Pendleton says. Vessels are actually cleared faster now, with fewer officials coming on board. The inclusion of more of the Maersk fleet is the only way to shore up resistance and make officials real- ise that zero means zero.

Master Warnekros of the Maersk Denver, whose ship was the first to pass ports in the Indian subcontinent without making any facilitation payments, shares his comments:

“I attribute this success to the gathering and sharing of information with other MLL ships, and just my plain stubbornness,” he says.