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Shifting Legacy Maritime Culture through Operational Management, Transparency, and Digital Transformation, Part 4

As a continuation of our multi-part discussion on the transformation of the maritime industry, last week we examined bribery, corruption, and its operational costs.  This week we turn the page and look at opportunities to address such issues.  Through policy, technology, and the power of collective action, society now has an opportunity to build a better more sustainable version of itself.  We begin with recommendations from Transparency International…

Recommendations to Heighten Transparency 

Analysis provided by Transparency International indicates that countries with the worst rates of corruption (with scores of 45 or less on the index) also represent the least protection for journalists, activists, and non-governmental organizations (NGOs). Combined, said countries are responsible for the death of at least one journalist per week. Not so long ago, journalism and activism represented transparency and a system of checks and balances to offset corruption. Unfortunately, due to the hyper-consolidation of media and big tech, the world is experiencing mass censorship and de-platforming independent voices. Such actions directly contradict the following recommendations that Transparency International provides to the global community. Recommendations include:

  1. Governments and businesses should proactively disclose relevant public interest information in open data formats. Proactive disclosure of relevant data, including government budgets, company ownership, public procurement, and political party finances, allow journalists, civil society, and affected communities to identify patterns of corrupt conduct more efficiently.
  2. Governments and businesses must do more to encourage free speech, independent media, political dissent, and an open and engaged civil society.
  3. Governments should minimize regulations on media, including traditional and new media, and ensure that journalists can work without fear of repression or violence. In addition, international donors should consider press freedom relevant to development aid or access to international organizations.  
  4. Civil society and governments should promote laws that focus on access to information. 

This access helps enhance transparency and accountability while reducing opportunities for corruption. However, governments need to invest in an appropriate legal framework for such laws and commit to their implementation.

Such recommendations, if followed, would positively influence the maritime industry and the cultural shift required to achieve sustainability. Overall, they are high-level insights that demonstrate civil and governmental actions. Their implementation, however, would trickle down to every form of commerce.

Technology To Combat Corruption

According to the Organization for Economic Cooperation and Development (OECD), advanced is technology such as blockchain, artificial intelligence (AI), big data analytics and civic technologies are offering new tools to address corrupt behaviors.  The proliferation of data and algorithms allows society to redefine standard practices, redefine knowledge, and challenge our moral standards of regulation and government.  With the help of technologies driving the digital age, our global economies, labor markets, and productivity now have a window of opportunity to take on a new renaissance. 

Below are a few examples of what the OECD sees may help society[i]:

  1. Distributed Ledger Technology or “Blockchain” –
    • Through decentralization and distribution of data, computers automatically help prevent tampering through what is known as consensus (all nodes must agree for info to be recorded) for the database. Data such as inspection records and financial records can be recorded and made immutable by any corrupt players as there is no single point of manipulation capable.  The enhancement of transparency and traceability ushers a high level of trust for participants.
  2. Big Data Analytics –
    • Electronic machine to machine communication activities have amassed enormous amounts of data. It is defined by the “3Vs” which are: Volume, Velocity (speed at which data is generated and become available), and Variety (structured/semi-structured/unstructured).  Multiple data sources enable improved monitoring, supervision, and enforcement of policies.  Big data analytics help identify, analyze, and prevent the risk of corruption, fraud, waste, and abuse.
  3. Artificial Intelligence –
    • Machine-learning algorithms can be trained and taught how to identify “irregularities” through predictive performance. Its use can increase the accuracy and efficiency of due diligence, and even identify loopholes within the regulatory framework.  When paired with big data analytics, it becomes a very powerful tool.
  4. Civic Technologies –
    • Leveraging information and communication technology (ICT) can enable crowdfunding platforms, crowdsourced data collection, freedom of information tools, and open data and publishing platforms. Citizens can spot potential irregularities in public service, ask questions, and disseminate information on abuse by public officials.  Such tools offer greater insight into governmental or public operations and thus can hold individuals and institutes accountable by exposing corrupt behavior.

Of course, no technology comes without its potential pitfalls and challenges.  However, through open-source coding and decentralization of information and network nodes, a more inclusive society can begin to bring the power back to the people.

A New Hope

With over 161 member companies from around the world, representing 50% of the total global tonnage, some of the largest shipping organizations are now involved with the Marine Anti-Corruption Network (MACN). Members include AET, B.P. Shipping, Teekay, Thome Group, Shell, Total, Hapag-Lloyd, MSC, NYK Line, “K” Line America, Kongsberg, MISC Berhad, Wallem, V.Ships, and many more prominent names. To demonstrate the early effectiveness of the program, Maersk Line, a founding member of MACN, reports upwards of 30,000 annual port calls by their fleet. In addition, through their whistler-blower hotline, training, and collective actions with stakeholders, Maersk stated a 96% reduction in facilitation payments year-over-year from 2016 to 2017.

Although the industry has achieved incredible feats by adopting a culture of safety, true sustainability will require a more significant cultural shift. For reference, increased safety includes providing personal protective equipment (PPE) and implementing safety management systems (standard operating procedures, internal/external audits, training, toolbox talks, and corrective & preventative actions). In addition, the MACN discusses integrity culture programs designed to change the industry’s mindset to effectively realize its vision: a maritime industry free of corruption.  

For those experiencing unethical practices, the MACN offers an anonymous incident reporting mechanism for corrupt demands anywhere in the world. A link to the incident reporting system can be found on the landing page for www.macn.dk.  At the time of this article, there have been over 41,000 reports of demands for illegal payments. Such reporting highlights hot spots for members to address through collective action. Cecilia Müller Torbrand states that such reporting is a powerful and unique tool to engage with governments by objectively demonstrating problems in specific ports. The 160+ member consortium, through collective action, can share all the tools, ideas, and the network to influence change or boycott offenders. Corrupt ports quickly determine the significant financial impact imposed when the network refuses to cooperate with such behavior.  

Clearly, there is no “silver bullet” in combatting corruption and bribery in the industry.  However, society now possesses tools, policies, and collective action through cooperation in order to address these threats.  Groups such as the Marine Anti-Corruption Network (MACN) are demonstrating effective collective actions that are slowly helping remove the immense burden affected by corruption.  Let us have hope that as society has previously overcome the tyrants of the past, so too may we do it again by banning together against the present bad actors.

As always, we welcome community engagement for topics discussed. Please feel free to comment and share your experience with other community members so we can all be as informed as possible.

[i] https://www.oecd.org/corruption/integrity-forum/tech-topics/

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