サンプル ３ 2003年の１０月に撮影。
サンプル ４ 2003年の３月に撮影。
サンプル ５ ２００２年の９月に撮影。
サンプル ６ ２００２年の１１月に撮影。
サンプル ７ ２００２年の１２月に撮影。
サンプル ８ ２００９年の６月に撮影。
サンプル ９ ２００９年の７月に撮影。
サンプル １０ ２００９年の８月に撮影。
サンプル １１ ２００９年の８月に撮影。
COMP. DKの機器の取り付けが仮修理の状態。SPEED LOGは故障。
Gross tonnage: 81,135 tons、Summer DWT: 163,038 tonsそして検査会社が三流の検査会社
「14119 - POLLUTION PREVENTION - MARPOL ANNEX I - Oil and oily mixtures from machinery spaces (no responsibility of RO)
14108 - POLLUTION PREVENTION - MARPOL ANNEX I - 15 PPM Alarm arrangmts. (no responsibility of RO)
07113 - FIRE SAFETY - Fire pumps and its pipes (no responsibility of RO)
11101 - LIFE SAVING APPLIANCES - Lifeboats (no responsibility of RO)」
個人的な経験では、検査会社（Overseas Marine Certification Services）にこのような大型タンカーを検査出来る能力や検査官は存在しないと思う。
「北朝鮮の石油取引に関するFTの調査で暴露された中国人ブローカーが逮捕された 」2023年１月31日ファイナンシャルタイムズ(Financial Times)
の記事がある。メットオーシャン(Met Ocean)が運航していた中国船シュンドリ号 (Shundlli)):(Chinese ship called the Shundlli, which was operated by Met Ocean.)はトーゴ籍船だ。サブスタンダード船が犯罪や違法行為に使われるのは、船を登録する旗国の管理監督問題と検査会社の問題が相互にリンクして、犯罪や違法行為に使われやすい環境が出来上がっている。そしてＰＳＣの検査が甘い国やエリア、そしてサブスタンダード船を知りながら見ないふりしたり、利用したり、接岸させる施設や関係者の間接的な対応で活動範囲が拡大できる。
SHUNDLLI Oil Products Tanker, IMO 8355724 (VesselFinder)
Chinese broker exposed by FT investigation into North Korea oil trade arrested
South Korean authorities detain shipping agent amid fears of flight risk after activities revealed 01/31/23（Financial Times）
Christian Davies and Song Jung-a in Seoul and Polina Ivanova in Berlin
A Chinese oil broker whose activities were exposed by a Financial Times investigation has been arrested in South Korea on suspicion of organising illegal transfers of diesel to North Korea.
The broker is suspected of arranging more than 35 transfers amounting to 18,000 tonnes of diesel, in deals valued by the South Korean coastguard at Won18bn ($14.6mn).
Investigators from the South Korean coastguard allege that the agent arranged for a Russian oil tanker operated by a South Korean oil company to conduct ship-to-ship fuel transfers with a Chinese vessel in the South China Sea. The Chinese ship then conducted ship-to-ship transfers with North Korean vessels, a violation of UN sanctions.
Last month, a joint investigation by the FT and the Royal United Services Institute think-tank tracked a separate delivery of marine oil last year from South Korea’s south-east coast into North Korea’s exclusive economic zone.
The investigation revealed that an unnamed Chinese shipping agent had brokered a deal between a South Korean company called Eastern Pec and a Shanghai-based company called Met Ocean Co to conduct a fuel transfer in the South China Sea.
The marine oil was transferred from South Korea to a meeting point by Eastern Pec using a Russian oil tanker called the Mercury, which it had chartered from a company based in Vladivostok. The cargo was then transferred to a Chinese ship called the Shundlli, which was operated by Met Ocean.
In a “letter of guarantee” seen by the FT, Met Ocean promised Eastern Pec not to deliver the shipment to North Korea. But satellite imagery and tracking data show the Shundlli going on to conduct an apparent transfer with a second ship in the North Korean EEZ.
The shipping agent, who is a naturalised South Korean national, was arrested on Saturday. On Tuesday, the coastguard confirmed to the FT that the agent was the same person who is alleged to have brokered the deal between Eastern Pec and Met Ocean. The coastguard said it took action amid fears the agent could become a flight risk after his activities were revealed.
The broker was detained on charges relating to shipments conducted between October 2021 and January 2022, which do not involve the Mercury, the Shundlli or Eastern Pec, the coastguard said. Investigations into the operation exposed by the FT were continuing, it added.
“The FT report helped us broaden our investigation, enabling us to ask the broker about other deals that he was involved in,” said a Korean coastguard official. “We are also investigating his other activities involving the Mercury and Eastern Pec.”
Eastern Pec has said that the operation revealed by the FT was the first time it had worked with the broker.
The UN Security Council imposed a cap on permitted oil transfers to North Korea in 2017 after Pyongyang’s sixth and most recent nuclear test. The ceiling of 500,000 barrels a year is far below the energy needs of the North Korean economy.
All such oil transfers must be reported to a UN sanctions committee, but in practice, only a fraction are. An unreported transfer constitutes a violation of the sanctions.
Go Myong-hyun, a sanctions expert at the Asan Institute for Policy Studies in Seoul, said that the transfers helped prop up North Korea’s shattered economy, as well as Pyongyang’s capacity to train and field its armed forces and sustain its weapons development programmes.
“No matter how large or small, what this shows is that the South Korean authorities need to identify these operations and crack down on them hard,” he said.
Source: Financial Times
Ships Are Flying False Flags to Dodge Sanctions
Illegal Russian tankers are a maritime nightmare. 01/30/23（FOREIGN POLICY）
By Elisabeth Braw, a columnist at Foreign Policy and a fellow at the American Enterprise Institute. FP subscribers can now receive alerts when new stories written by this author are published
The world’s top three ship-owning countries are China, Greece, and Japan. But the top three countries under which ships sail include none of these—nor fourth-ranked United States or fifth-ranked Germany. The flag league is instead led by Panama, Liberia, and the Marshall Islands. They are flag-of-convenience states, economically weak countries that allow vessels to register in their ship registry for a much lower fee than developed countries. The lower fee comes with less service—and less scrutiny—than traditional maritime states offer. Although the former has made flag-of-convenience states popular with countless vessels over the past decades, the latter is now making them extremely attractive to vessels seeking to get around Western sanctions against Russia. Such vessels have begun switching to flag-of-convenience states—or even taken to sailing under their flag without telling them.
And these overburdened maritime nations do little to remove the squatters. Rickety tankers that should be headed for the junkyard are instead roaming the world’s oceans, bringing oil from Russia and its fellow sanctioned nations, Venezuela and Iran, to China and other customers. And it’ll take a major crisis to force the problem to the surface.
“Shipping companies that are trying to get around sanctions are targeting really small registries that are privately managed,” Lloyd’s List Intelligence maritime analyst Michelle Wiese Bockmann told Foreign Policy. “Then they either falsely claim that their ships are flagged there because the country will do nothing about it, or they legitimately flag the vessels there and get the country to issue false company IMO numbers,” referring to the International Maritime Organization (IMO). Every shipping company has an identification number with the IMO. But if a shipping company or vessel doesn’t want to be recognized, then they can trick a flag state’s registry into using fake IMO numbers—and since flag-of-convenience states’shipping registries are often poorly resourced, privately managed, or both, officials rarely spend serious time investigating IMO numbers. And shipping companies operating under a false IMO number can be traced only with extreme difficulty.
Shifting registries to avoid sanctions has been going on for a decade or so, ever since Iran’s state-owned oil company discovered that it could get around restrictions on its oil by having its shipping companies register their vessels with twin registries maintained by Tanzania and Zanzibar. (Zanzibar is now part of Tanzania, but the registries date back to the days when it was an independent state.)
Parking the Iranian tankers in the Tanzania-Zanzibar registry wasn’t exactly legitimate, since ships are not supposed to change flags simply to get around sanctions, but as Bockmann points out, “It was done with the knowledge of the privately owned company that manages the Tanzania-Zanzibar registry.” In fact, by registering its vessels in Tanzania-Zanzibar, Iran managed to continue exporting oil. Although traditional maritime states, such as Britain and Greece, comply with sanctions on goods that travel by sea, flag-of-convenience states are often laissez-faire regarding both vessels and cargo. And the world doesn’t have a maritime authority that can track every single vessel, especially if it changes its flag registrati
Malaysia: Four ships under arrest for Illegal bunker fuel transfer 01/11/23（SAFETY4SEA）
by The Editorial Team
The Malaysian Maritime Enforcement Agency (MMEA) detained four ships in Johor waters, on January 9, for illegal activities, including anchoring without permission and transferring oil illegally.
According to Johor MMEA director Maritime First Admiral Nurul Hizam Zakaria, the vessels are suspected of illegally transferring oil at a position of 32 nautical miles east of Tanjung Sedili Besar in Kota Tinggi.
For the offence of illegal oil transfers, 7,000 metric tonnes of Marine Fuel Oil (MFO) worth RM24.5 million were seized for investigation.
The first case was conducted between 10.50am and 11.30am by the agency’s marine patrol boat team on two tankers registered in Penang and Panama.
The second case occurred at 11.40am where a merchant ship from Douglas, Australia was detained at a position of 11.9 nautical miles east of Tanjung Siang.
The last case involved a tanker registered in Zanzibar, Tanzania and was manned by five Indonesian crew members, aged between 26 and 60, when they were detained at 4.14pm.
The detention of the third and fourth vessels was due to anchoring without permission and all crew members, including the respective vessel’s captains, were taken to the MMEA’s Tanjung Sedili Maritime Zone for further investigation.
下記の記事はPanama Maritime Documentation Services (PMDS)と呼ばれるパナマから承認されている検査会社と検査官達の不正である。また、International Maritime Survey Association (IMSA)と呼ばれるモンゴルから承認されている検査会社と検査官の不正に関して書かれている。記事は北朝鮮、又は、北朝鮮に関与している船に関して証書を発給している事だけに言及している。
ＰＳＣ（ポート・ステート・コントロール；国土交通省職員や国土交通省がどこまで情報を持っているのか知らないが、これらの検査会社は北朝鮮、又は、北朝鮮に関与している船に関して証書を発給している問題だけでなく、国際条約を満足していないサブスタンダード船に対して、船が運航できる証書を発給している問題がある。最近、ビックモーターの問題が注目を浴びているが、もし、国交省がPanama Maritime Documentation Services (PMDS)が検査したサブスタンダード船に対する検査程度の調査しかしなければ、甘い対応で終わりであろう。残念だが、個人的にはＰＳＣ（ポート・ステート・コントロール；国土交通省職員の検査は甘いと思う。また、検査する船や検査する項目が的外れだと思う。本当の意味での取り締まりであれば、問題があると思われる船に絞るべきだと思う。良い船を検査して、検査官の数が足りないから全ての船を検査できないとか言っているのであれば、本当にあんぽんたんか、やる気がないと思う。
Report links Panama flag with illegal North Korean shipments 05/24/19 (Splash247)
by The Editorial Team
The Royal United Services Institute (RUSI), a UK security think tank, published a report according to which the Panama flag is involved in illegal sanctions-busting in North Korea. This investigation focuses on Fan Mintian, Dong Changqing and Zhanq Qiao – three Chinese nationals who have appeared in the UN Panel of Experts investigations into North Korea’s sanctions evasion activities and several other reports linking them to flag registries, and oil, coal and iron ore smuggling networks.
Specifically, the report found that Fan and Dong worked as surveyors for the ‘Panama Maritime Documentation Services’ (PMDS) organisation, authorised by Panama, and provided various certificates t North Korean-linked vessels.
In addition, the report resulted to the fact that Chinese nationals with close links to North Korea’s illicit shipping networks have acted as surveyors for vessels registered under the Panamanian flag, and possibly the Mongolian flag, thereby potentially providing an avenue for North Korean-linked vessels to obtain flags of convenience and other maritime services prohibited under UN Security Council resolutions.
Also, PMDS was found to share an address and other contact details in Dalian, a city located near the North Korean border, with Fan and Dong’s companies, as well as another surveyor authorised by Mongolia called International Maritime Survey Association (IMSA), established by Zhang Qiao.
Moreover, a number of Chinese nationals with extensive links to North Korea’s illicit shipping fleet have acted as vessel surveyors for Recognized Organizations such as Panama Maritime Documentation Services and even operated their own classification agency named the International Marine Survey Association.
The report highlights that
Several links between these entities and individuals such as shared emails, phone numbers and addresses also suggest that Fan, Dong, Zhang and the companies and organisations they operate are much more closely connected than may at first appear on the surface.
In conclusion, James Byrne, the report’s researcher, resulted to the fact that Fan’s, Dong’s and Zhang’s employment with, and operation of, Recognized Organizations and Classification Societies may therefore help explain how some North Korean-linked vessels have been able to avoid scrutiny and continue operation as foreign-flagged vessels.
UK report links Panama flag with illicit North Korean shipments 05/12/19 (Splash247)
The world’s largest shipping registry has been embroiled in a scandal involving sanctions-busting North Korea.
A 27-page report from the Royal United Services Institute (RUSI), a UK security think tank, highlights how three individuals from the Chinese port city of Dalian have been working for entities entrusted by both the Panamanian and Mongolian flags to survey ships and authorise certificates, including for a number of North Korean-linked vessels.
The three men – Fan Mintian, Dong Changqing, and Zhang Qiao – stand accused of helping the Kim Jong Un regime flout sanctions.
RUSI found that Fan and Dong have worked as surveyors for an organisation authorised by Panama called Panama Maritime Documentation Services (PMDS), and have provided various certificates to North Korean-linked ships.
Fan and Dong were embroiled in an earlier North Korean illegal shipping incident when the vessel Light, managed by their company Dalian Sea Star Ship Technology, was “suspected of transporting North Korean missile technology to Myanmar”.
PMDS was also found to share an address and other contact details in Dalian, a city located near the North Korean border, with Fan and Dong’s companies, as well as another surveyor authorised by Mongolia called International Maritime Survey Association (IMSA), established by Zhang Qiao.
The report concluded that the business connections provided by the three men from Dalian could provide “an avenue for North Korean-linked vessels to obtain flags of convenience and other maritime services prohibited under UN Security Council resolutions.”
Measuring the effect of perceived corruption on detention and incident risk in the maritime industry – An empirical analysis 2021（ScienceDirect）
Sabine Knapp, Philip Hans Franses, Bruce Whitby
Port states with higher perceived corruption are less likely to detain vessels.
- Flag states or ship owners located in countries associated with higher perceived corruption are more likely to have very serious incidents.
- The findings also revealed the degree of underreporting for serious incidents by flag states.
- The results support the establishment of accountability frameworks and current efforts at the International Maritime Organization (IMO) to address corruption to support sustainable development goal 16 (SDG 16).
EDITORIAL: Say no to bribery during port inspection 07/01/19（Corporate Fair Trade Community）
Kok Leong, executive editor
The United Nations and World Bank estimated that corruption can add up to 10 percent to the cost of doing business globally. It fundamentally erodes the ability of shipping companies to operate efficiently and profitably, and tarnishes the reputation of the industry.
The shipping industry is relatively susceptible to corruption because of the following unique factors.
Regular port calls and numerous inspections in different countries around the world, distinct sets of archiac law and regulation in local languages, and multiple levels of bureaucracy, among others, often expose the ship captains and crew to demands for illicit payments.
Also, it doesn’t help that small bribes are often deeply embedded in local culture.
Moreover, the probable threats of physical harm and long delays that result in huge cost can add to the pressure to pay bribes.
The Maritime Anti-Corruption Network (MACN) reported that a customs officer accosted one captain and threatened to delay the ship and fine him US$60,000 for an error on the lubrication oil declaration.
He then proceeded to ask for a bribe of US$7,000 to solve the problem.
To show the pervasiveness of bribery, there are incidents occurring even in Singapore, a country with strict regulations, extensive enforcement and heavy penalties.
A recent case in Singapore involved an associate consultant of marine surveying company PacMarine Services Pte Ltd.
On three occasions, the respondent solicited bribes from ship masters in return for submitting false inspection reports that would allow the vessels to enter an oil terminal.
An aggravating factor in this case was that he was responsible for ensuring that vessels were free of high-risk defects before entering the oil terminal.
He ignored this responsibility, understated threats, and sought to illicit bribes of US$3,000 in each incident, thereby putting a significant risk to human lives, the terminal and vessel.
Know the serious consequences
From C-suite management like CEOs and CFOs, to operational crew like ship masters or captains, all staff should be aware that the consequences of paying bribes extend beyond potential prosecution to severe safety risks.
So too, according to MACN, these corrupt demands are bad for shipping companies who stood their ground, as they can lead to delays or other commercial consequences. They are bad for the ports and governments, who acquire a reputation for corruption and have friction in the trading environment.
They are bad for the ships’ captains and crews, who come under pressure to reject demands yet face threats, intimidation, and sometimes violence when they try to do so.
Another issue to note is that acceding to demands for bribes may also constitute an offence under Singapore’s Prevention of Corruption Act and other international anticorruption legislation.
Ship crew and port officials should be aware that even low-level bribery will be pursued by enforcement agencies and prosecutors who are willing to pursue strict penalties to deter future offenders.
Take action now
Anti-corruption compliance is clearly gaining ground in the maritime industry.
Now is the time, more than ever, for shipping companies if they have not already done so, to map out their anti-corruption strategy, come up with an action framework and then execute the plan.
To effect a positive change on the wider industry environment, I encourage shipping companies to also fight corruption through collective action.
This provides an opportunity to understand, communicate and engage with competitors and officials alike.
A stronger collective voice is often louder when speaking with governments, ports, and customs officials to combat ingrained and systemic corruption.
The fight is all about having transparency and integrity, therefore increasing the value of the companies.
In a nutshell, I wish to bring awareness to the fact that such acts are detrimental not only to the companies involved, but also to the industry as a whole.
I encourage CEOs of shipping companies to take the lead in the anti-corruption fight.
And on that note, stay informed, stand firm, and believe in the cause! Talk to you soon!
Viking Marine Services surveyor declines bribe; bunker clerk charged 03/11/19（Manifold Times）
Singapore’s Corrupt Practices Investigation Bureau (CPIB) on Friday (8 March) said 35-year-old Chinese Singaporean, Lim Leong, was charged in court for corruption during a bunkering operation.
He tried to bribe a Marine Surveyor in the employment of Viking Marine Services Pte Ltd (VMS) by offering him an unspecified sum to certify a certain quantity of bunker fuel was supplied to vessel A70 when in fact a lesser quantity of bunker fuel was supplied.
The VMS surveyor rejected the offer; Lim Leong was later charged with one count of corruptly offering gratification.
“The bunkering industry in Singapore is among the largest in the world. It is important to protect the integrity of the industry and to ensure a level playing field for all,” said CPIB.
“Singapore does not tolerate corruption. It is a serious offence to give or attempt to give bribes. Any person who is convicted of corruption can be fined up to $100,000 or sentenced to imprisonment of up to 5 years or to both.”
Bribery and corruption in the shipping industry A Singaporean case study September 2015（Global law firm | Norton Rose Fulbright）
‘ … this kind of corruption is antithetical to everything that Singapore stands for as it undermines the confidence that if a person needs something such as a permit or licence to do business in Singapore, it will be forthcoming without bribes being paid. It also destroys the notion that business in Singapore is clean and transparent and that rules are there for good reason rather than to give people in whom discretion is vested or upon whom duties are placed, opportunities to have their palms greased and their pockets lined. In such cases, all would-be offenders must be warned that such acts, which undermine legitimate rights, will not be tolerated and will be severely dealt with.’ (Menon CJ in Public Prosecutor v Syed Mostofa Romel  SGHC 117, at para. 30)
A recent case in Singapore, Public Prosecutor v Syed Mostofa Romel, has served to highlight some key lessons for the shipping industry in face of growing anti-corruption enforcement.
The case concerned bribery charges against Syed Mostofa Romel (the respondent), an associate consultant in the marine surveying business of PacMarine Services Pte Ltd. The respondent was responsible for conducting inspections of vessels seeking to enter an oil terminal, which involved ensuring vessels were sea-worthy and free of any high-risk defects; ensuring cargo was properly documented; and ensuring vessels had correct documentation. Where defects were identified during an inspection, vessels would be allowed to enter the terminal and remedial works would be carried out if the defects posed low to medium-risk; however, if defects were classified as high-risk, rectifications would have to be carried out prior to entering the terminal. Regardless of classification, the respondent was responsible for preparing a report and submitting it to his superior.
On three occasions, the respondent solicited bribes from ship masters in return for submitting false inspection reports that would allow the vessels to enter an oil terminal. Chief Justice of Singapore Sundaresh Menon (Menon CJ) allowed an appeal brought by the Public Prosecutor against the sentence imposed on the respondent by a district judge, deciding it was manifestly inadequate and clarifying guidelines on sentencing for bribery and corruption offences.
The respondent was charged with three offences under Singapore’s Prevention of Corruption Act (PCA) – two charges were proceeded with and the remaining charge was taken into consideration when sentencing. The facts of the offences are as follows:
•On March 10, 2014, the Respondent conducted a vessel safety inspection on the MT Torero at Vopak Terminal Banyan Jetty. After the inspection, he informed the ship master and the chief engineer of several high-risk observations which were likely to result in the vessel not being allowed to enter the terminal. The master disagreed with the observations and thought that the defects were minor ones which could be readily rectified. He asked the respondent how he could resolve the situation and the respondent informed him that money would do so. After some negotiation, the master agreed to pay the respondent US$3,000, while secretly reporting the bribe to his superiors.
•On May 27, 2014, a sting operation was launched by the Corrupt Practices Investigation Bureau (CPIB) to catch the respondent in the act of bribery when the MT Torero arrived at the same port. The vessel was deliberately prepared with high-risk defects and the respondent was assigned to conduct its inspection. The ship master was again informed by the Respondent that these could be omitted from his report in return for a bribe, which was paid, and the altered report printed before the respondent was arrested by the CPIB.
The decision by Menon CJ highlights Singapore’s increased efforts to tackle private sector corruption. Although public sector offences typically attract custodial sentences, while private sector cases typically attract fines, this case illustrates that the distinction is not rigid nor is it reflective of the law in Singapore. The respondent was in a position to overstate risks and cause inconvenience as well as unnecessary expense and delay to ship masters unless a bribe was paid. The respondent could also offer to understate risks and in doing so threaten the safety of others in the oil terminal. In combining these two breaches of his duty by overstating the risks and offering to understate them, he could receive financial benefit in the process.
Menon CJ made clear that a custodial sentence is generally expected. Regardless of whether bribery is related to a private or public sector, sentencing will be determined by the severity and nature of the offence, public interest in prosecution, and its potential threat to safety of people and facilities. In this case, the maritime industry’s strategic significance to Singapore was given as a specific aggravating factor in sentencing considerations. The shipping industry accounts for roughly 7 per cent of Singapore’s GDP and provides employment for 170,000 people. Since increased corruption could have a large effect on the nation’s economy, Menon CJ recommended that bribery offences in shipping relating to Singapore be strictly punished, with longer prison terms for offenders. As a result, Menon CJ disagreed with the district judge who had sentenced the respondent to a two months’ imprisonment for each charge and instead sentenced the respondent to a terms of six months’ imprisonment for each charge, which were to run concurrently.
On a global scale, demands for bribes in ports pose a particular threat to the maritime industry. In the case at hand, the respondent was required to ensure that vessels were free of high-risk defects before entering the oil terminal. On two occasions, the respondent ignored his responsibilities and sought to illicit bribes – US$3,000 in each incident. The admittance of unsafe vessels was a significant threat to the people working in the terminal, the terminal itself, the crew of the vessel, and also the vessel itself. Ship masters should be aware that the consequences of paying bribes extend beyond potential prosecution to severe safety risks.
Acceding to demands for bribes may also constitute an offence under the PCA and other international anticorruption legislation. There is no indication in the decision as to whether the master was also charged with bribery. UK and US regimes, as well as the law in Singapore, prohibit giving a bribe unless there is an immediate threat of physical harm (whether to the ship master or the crew). In this case, the facts suggest that the respondent made no threat of death or bodily injury and so the ship master could have safely refused to make payment. The fact that a bribe is first introduced by the recipient does ‘not alter the corrupt purpose of the part of the person paying the bribe’ (US Congress, introducing the Foreign Corrupt Practices Act 1977). It is clear from Menon CJ’s decision that Singapore is willing to pursue individuals for instances of low-level bribery. The sentence imposed on the respondent should be a warning to ship masters against future opportunities to grease palms. The sting operation carried out by the CPIB should also dissuade persons tempted to receive bribes from making such demands.
Anti-bribery compliance is clearly gaining ground in the maritime industry. Corruption dramatically increases the costs of transporting goods by sea and small bribes are often deeply embedded in local culture. Harsher sentencing for offenders is one means of deterring demands for bribes. At the same time, shipping companies need to work together to fight corruption through collective action. Collective action initiatives are increasingly gaining interest from the shipping industry, as they provide the opportunity to engage with competitors and the public sector to combat systemic issues such as demands for small bribes. The World Bank has explicitly encouraged businesses to take part in collective action and funding is available for new enterprises.1 While companies may have ensured that the activities they control reflect good practice, isolated efforts are insufficient to counter institutionalised corruption.
In recent years, there has been a significant uplift in anti-corruption enforcement activity, coupled with increased cooperation between regulators. For the maritime industry, the case of Public Prosecutor v Syed Mostofa Romel reflects increasing stringency against a background of growing concern around the world for anti-bribery compliance. Masters and port officials should be aware that even low-level bribery will be pursued by enforcement agencies and prosecutors who are willing to pursue strict penalties to deter future offenders. At the same time, given the growing attention on graft in the maritime industry, now is the time for shipping companies to think about what they can do to change the wider business environment through collective action. The fragmented nature of the shipping industry makes fighting corruption difficult. The problem demands collaboration in order to put pressure on governments, port officials and the sector as a whole to improve their reputation for transparency and integrity.
Singapore bribery case reveals corruption risks in shipping industry 05/10/2015（Basel Institute on Governance）
This piece was originally published by the TRACE International Blog on 8 May 2015. Republished here with permission.
Last week’s (ed: 28 April 2015) decision by the Chief Justice of Singapore’s Supreme Court entitled Public Prosecutor v Syed Mostofa Romel is important for shipping companies operating in Singapore. The decision regards bribery charges against a local vessel surveyor who on three occasions solicited bribes from ship masters for issuing favorable inspection reports that would allow the ships to enter an oil terminal. Chief Justice Sundaresh Menon disagreed with a district judge that had sentenced the respondent, Syed Mostofa Romel, to a two-month imprisonment and instead argued that given the circumstances the jail time should be extended to at least six months per charge, (at least 12 months). Chief Justice Menon’s explanation may be used in future maritime-related bribery cases in Singapore.
Singapore’s 1960 Prevention of Corruption Act (PCA) applies to both the supply and demand side of a bribery transaction including agents, and is punishable by a fine of up to SGD$100,000 or imprisonment up to five years, or both. The PCA does not contain any exceptions for “customary” payments, including facilitation payments. Any person who is suspected of bribery can be arrested and searched without a warrant by the Corrupt Practices Investigation Bureau (CPIB). The CPIB can also investigate any bank account or safe deposit box belonging to a suspect of a bribery offence. Given the growing international cooperation in bribery investigations, it is plausible to assume that non-Singapore citizens or residents could be implicated in national investigations with the information being subsequently shared with other national authorities.
The decision contains three main takeaway lessons for those operating in the shipping industry. First, punishment for private sector bribery is just as harsh as that for public sector bribery. Chief Justice Menon argues against the presumption of predominantly non-jail sentences in cases of private sector corruption and refers to the PCA’s enforcement practice, according to which the public interest and the gravity of the offence, among other considerations, determine the sentencing decisions. Chief Justice Menon points out that even though the PCA largely focuses on private sector bribery, it also applies to bribery by “private agents, trustees and others in a fiduciary capacity.” In this particular case the vessel surveyor was a private sector agent without any regulatory and oversight functions that could justify the application of a “public service rationale.” Regardless of whether bribery is related to a private or public sector, the severity of the offence due to its potential threat to safety of people and facilities should justify a longer prison term for the offender, argues the chief justice.
Second, bribery in port can cause severe safety risks. In the case at hand, the vessel surveyor was supposed to have ensured that the vessels had no high-risk defects before entering the oil terminal. If such defects were identified during the inspection, the vessels would have undergone rectifications before being permitted to enter the terminal. On two occasions, the surveyor exaggerated his findings by indicating some non-existing high-risk defects to elicit bribes–US$3,000 in each incident–from the ship masters in exchange for the accurate inspection reports he should have produced. On a third occasion, which was in reality a sting operation organized by the CPIB, the surveyor attempted to elicit a bribe from a ship master in exchange for a report that would not mention the high-risk defects that the inspection identified. (Those defects were intentionally created for the purposes of the sting operation.) Chief Justice Menon argues that a bribery incident that allows a vessel with high-risk defects to enter an oil terminal poses a grave threat to both people working in the terminal and the terminal itself, and therefore should be regarded as an aggravating factor in considering the type and degree of punishment.
Third, acquiescence to extortion demands are also considered bribes. Even though there is no information available as to whether either or both ship masters were accused of bribery, the main international anti-bribery laws prohibit giving a bribe, unless there is imminent threat of physical harm. In this particular case, it appears that no threat of death or serious bodily injury was present, and therefore both ship masters could safely walk away without making a payment. As the U.S. Congress noted when it enacted the 1977 U.S. Foreign Corrupt Practices Act, the fact that the payment was “first proposed by the recipient… does not alter the corrupt purpose of the part of the person paying the bribe.”
Finally, bribery in the maritime industry as a whole—not just in ports – may be regarded as an aggravating factor in sentencing considerations. Chief Justice Menon maintains in his opinion that the maritime industry is a strategic industry in Singapore that accounts for up to 7% of GDP and provides employment to 170,000 people. Since the ramifications of increased corruption perceptions in Singapore’s shipping industry could have significant detrimental effect on the nation’s economy, one can expect that any bribery incidents involving shipping will be strictly punished, including through longer prison terms for offenders.
This Singapore bribery case, along with other recent legislative, enforcement, and collective action initiatives in the shipping industry worldwide, strongly suggests that anti-bribery compliance is gaining ground. The most challenging perhaps would be to change long-established attitudes towards bribery in the industry that “things are just done that way.” No longer.
Marine Surveyors' Liabilities 09/30/1996（ITIC）
As a marine surveyor it may seem you are there to be shot at by just about everyone! Not only may those who have instructed you try and hold you liable if things go wrong but you may find that third parties claim to have suffered as a result of something you have done.
It is, perhaps, the unique position of a marine surveyor, as someone who will produce a report which may be seen and possibly relied upon by parties other than his original client, that has given rise to questions as to the extent of a surveyor's liabilities.
The purpose of this article is to examine briefly the extent of those liabilities and to give what we hope will be some obvious suggestions about how potential problems could be avoided.
The surveyor's duty
You will have been retained by your client either verbally over the telephone, or in writing, or a combination of the two. The written contract may just be an exchange of correspondence or something more detailed.
Whether the terms of the contract expressly say so or not there will be, implied in every contract, a term that the surveyor will carry out his work with the due skill and care of a competent surveyor in the circumstances of a particular case.
The circumstances which will be taken into account by the court will be the extent of the surveyor's instructions from his client. In other words, a court would look at what the surveyor had been asked to do. Oral evidence will often be important.
Whether the survey is a pre-purchase inspection of a vessel, an on or off-hire survey in relation to a charterparty, or a cargo survey, it is in the surveyor's interests to define for his clients, at the very outset, the precise extent of the work he is to undertake and specifically what matters are to be excluded. We have seen a number of disputes between a surveyor and his client as to the extent of the work that had been agreed to be carried out where the client's expectations invariably exceeded those of the surveyor! To avoid such difficulties we cannot emphasise enough the need to be specific about the extent of the work to be undertaken.
Quite apart from the duties the surveyor will owe under his contract with his client, he also owes him a duty of care under the law of tort. It is for this reason that many claims are framed in negligence as well as in breach of contract. The extent of the duty is the same as in the contract, namely to carry out the job with the reasonable skill and care of a competent surveyor in the circumstances of the case.
Although the duty is the same in both contract and tort, there is a legal difference when it comes to the question of a breach of those duties. There may be differences in damages where a claim is framed in contract rather than in negligence. The most significant difference is, that, under his contract, the surveyor owes the duty only to his client whereas a duty of care is not necessarily so confined. It is, therefore, important to see if the law allows the surveyor to be liable to someone other than his own client.
To whom is the duty of care in tort owed?
There is, of course, no question that the duty of care extends to the surveyor's client but, given that the duty is independent of a contractual relationship, need the surveyor fear attack from any other quarter?
The law of negligence is part of that body of English law that is under continual review by the English courts. The courts are bound by a system of precedent formed by previous legal decisions going back over many years and it is up to the courts to develop that precedent as new factual situations come before them. As far as a surveyor's task is concerned he will be making statements, usually in a written report, upon which someone is going to rely and a claim will usually arise when the party relying on those statements claims to be out of pocket as a result of them. The courts have always been reluctant to restrict situations in which liability can arise for financial loss through statements negligently made. They have done so by restricting the duty of care to situations where a ''special relationship'' exists between the innocent party and the wrongdoer. Under this restriction liability would arise only where the wrongdoer was aware of the transaction that the innocent party had in mind and knew that the innocent party would rely on his advice.
It may seem, therefore, that a surveyor, who knows his report may be seen and relied upon by a third party, would have a liability to that third party if he suffered financial loss.
Fortunately for surveyors and those involved in a similar advisory capacity, the courts have further restricted the duty of care as highlighted by the 1990 landmark case of Mariola Marine Corporation - v- Lloyds Register of Shipping ("Morning Watch"). In that case a Lloyds surveyor had given an 80 foot steel hulled motor yacht, the "Morning Watch", a periodical special survey and had passed her as 100 A1. The surveyor knew that a purchaser was interested in the yacht at the time and that purchaser decided to rely on the class certificate as confirming the yacht's good condition at the time he purchased her. Subsequently after delivery the owner discovered substantial defects with the yacht which were enough to take her well outside Class. The purchaser looked to Lloyds to reimburse him for the substantial repair costs. He had, after all, relied on the Lloyds surveyor's report, as the surveyor well knew.
Lloyds declined to reimburse the purchaser and the case went to court. The purchaser argued that the necessary "special relationship" existed and the court accepted that the surveyor had been negligent. The court, however, decided that Lloyds did not owe a duty of care to this purchaser, or indeed to any future purchaser of a vessel who was likely to rely on a pre purchase classification certificate issued by Lloyds. Whilst it would appear that public policy played no little part in the decision it produced an important precedent greatly limiting the possible liability of a surveyor whose reports may be relied upon by those other than his client.
Although the range of possible parties from whom a Surveyor might face claims is limited, he would still owe a duty to his client.
To minimise the likelihood of such a claim the surveyor's starting point must be a careful definition at the outset of the services to be provided. Particular consideration should also be given to making quite explicit in the survey report any limitations to the investigation to which the surveyor had been subject. He should also advise where further investigation by the client or a specialist expert would be considered prudent. Where a client may be present at the time of survey then no reliance should be placed on any oral comments made to the client which could later be denied. Instead it is important to ensure that everything found at the time of the survey finds its way into the written report.
SEA LANDSORT (EX-KAMARI I)IMO8919154 Flag: Panama built: 1990 Vessel type: Crude Oil Tanker, Gross tonnage: 81,135 tons,
Summer DWT: 163,038 tons (ShipSpotting.com)
SEA LANDSORT (EX-KAMARI I)IMO8919154, Classification: Overseas Marine Certification Services, Manager: WAVES SHIPPING LINE FZE TOKYO MOUのサイト
Hw Global IMO 8914037 Flag: Panama built: 1990（ShipSpotting.com)
Lucky Future IMO 8822260 Flag: Panama built: 1989（ShipSpotting.com)
SOUTH HILL 2 IMO 8412467 Flag: Sierra Leone (Ex-North Korea) built: 1984（ShipSpotting.com)
のOriental Sunny (IMO 8318817
検査会社: Overseas Marine Certification Services)
三流のOverseas Marine Certification Services
Oriental Sunny IMO 8318817 Flag: Cambodia built: 1985（ShipSpotting.com)
カンボジア船籍船 AN FENG 8 IMO 9365726の無責任な放置に成功したケースで
韓国、パナマ船も検査か 北朝鮮船に石油積み替え疑い （1/3）
韓国、パナマ船も検査か 北朝鮮船に石油積み替え疑い 01/01/18（日本経済新聞）
韓国当局がパナマ船も調査か 北朝鮮船への石油移転疑い 12/31/17（産経新聞）
北朝鮮船に石油積み替えか パナマ船を検査＝韓国当局 12/31/17（ソウル聯合ニュース）
北朝鮮船が制裁逃れ、船名を次々と変更 国連報告書 02/26/15 （朝日新聞）
(The ISROC then states that it is a ship owner’s “Own Obligations and Duties” to comply with international laws, thus absolving the South Korean company of responsibility for illegal actions by ships flying the Cambodian flag provided by the company.)
カンボジア政府は管理および監督を放棄し、全ての責任は船の所有者である船主と船の登録の権限を持つ韓国プサンにあるInternational Ship Registry of Cambodia (ISROC) と
★シエラレオネ籍船: 北九州で大量の麻薬が見つかり、船主は行方不明になり船が放置された事件に認知度がアップ。また、東京・伊豆大島沖で2013年9月、丸仲海運が所有する貨物船「第１８栄福丸」が中国企業所有のシエラレオネ籍船貨物船「ＪＩＡ ＨＵＩ」と衝突し、栄福丸の乗組員六人が死亡した事故でさらに注目を集める。
SONG CHENG 松城 (PAN-ASIA SHIPPING)
関門海峡座礁：原因はかじ脱落 安全委「聞いたことない」 11/26/10（毎日新聞）
HASCO QINGDAO IMO 9132521 (VesselFinder)
Type of Ship:
Gross Tonnage (ITC):
Year of Built:
QIUXIN SHIPYARD - SHANGHAI, CHINA
LLOYD´S SHIPPING REGISTER
Manager & owner:
FLYING LEAF SHIPPING - HONG KONG, CHINA
中国船、関門海峡漂流…海保「大惨事の危険性」 10/27/14 (読売新聞)
７１１１トンコンテナ船が漂流 関門海峡で突然停止 [福岡県] 10/27/14 (西日本新聞朝刊)
関門海峡であわや事故 10/27/14 (ＮＨＫ)
宮城）行方不明の漁船の仲介業者「心配で夜も眠れない」 01/03/14 (朝日新聞)
日本人６人乗った漁船不明 奄美大島沖で先月２２日から 01/02/14 (朝日新聞)
日本人６人乗った漁船と連絡取れず 01/02/14 2時14分(NHKニュース)
インドネシア回航中の旅客船、屋久島沖で浸水 03/26/12 (読売新聞）
１２人乗り元旅客船、「浸水」連絡＝四国フェリーが売却－屋久島沖 03/26/12 (時事ドットコム）
屋久島沖で一時１２人漂流 元客船、ヘリで全員救助 03/26/12 (朝日新聞）
第三日通丸 Nittsu Maru No,3 ２００７年フィリピンへ（にらいかない）
西表沖で外国船沈没 漂流物に注意呼びかけ 08/27/07（八重山毎日新聞）
西表島沖で外国船沈没 08/26/07（琉球朝日放送 報道部）
西表島沖外国船浸水沈没事故 08/26/07（事件です！事故です！8月バックナンバー 第十一管区海上保安本部 ）
平成１９年８月２６日 浸水沈没する Ｎ号
２５日午後９時４５分頃、台湾RCC(救助調整本部）から当本部に西表島西約４０キロﾒ-トル沖合いで、「売船のためフィリピン向け回航中のＮ号（１９９トン カンボジア国籍 ８名乗組（全員フィリピン人）が海上荒天のため浸水中。」との救助要請を受け、午後１０時４５分、当本部は石垣航空基地ＭＨ７１３（潜水士２名同乗）と石垣保安部の巡視船「ばんな」を現場に急行させました。
− O号のISM証書問題に関する論争を経てパナマ政府は検査代行機関をどのように監督するかという難しい問題に直面している −
＜ O号事件の概要 ＞
O号はパナマ海事局が公認したPanama Register Corporationという会社が発行したISM
フィリピンからの新聞報道によれば、マニラの2つの非公認会社が1日に200件ないし300件免状申請を処理していたという。その一つ、Maritime Services Inc.は、10％の市場シェアを持っていたといわれている。パナマ海事局長、Jerry Salazar氏は、調査団をマニラに派遣したが、既に、会社のオフィスは蛻の殻であった。
評判の良い法律事務所では、公然たる汚職というのは決して一般的なものではない。「この種の報告書は誇張されている。」とパナマのDe Castro & Robles法律事務所の海上弁護士、Cesar Escobar氏は言っている。「もし、誰かが賄賂を持って役所にやってきたら、はたして法に反する不正を犯す誘惑にかられる役人が一人もいない国があろうか？」
便宜置籍船の評判が落ちた場合、それは置籍船の減少という商売上の損失になって しまうのだ。このスキャンダルがパナマ海事局のイメージを著しく傷つけて以来、パナマ置籍申請の照会が50％も減少したと一人で法律事務所を経営しているRuben J. Levy弁護士は報告している。
海事法律協会の会長である、Juan Felipe Pittyは、海事局が決然とした行動をとるよう促した。
船籍国と船級協会 合田 浩之 (一般財団法人 山縣記念財団）
While fearing Cambodian-flagged ships could ruin Cambodia's image on the international scene, Hun Sen needs not look farther than his own mirror (KI Media)
Citing the fact that Cambodian-flagged ship could ruin Cambodia's reputation, Mr. Hun Sen wants reform for the flag-of-convenience registry. One thing which already tarnished Cambodia's image was the fact that Mr. Hun Sen miserably failed to see his thuggish response to the criticisms leveled by Prof. Yash Ghai, the UN Special Envoy for Human Rights, on his government. To find out who is ruining Cambodia's reputation, Mr. Hun Sen needs not look father than his own mirror. (Photo Reuters)
Tuesday, April 4, 2006
PM: Flag-of-Convenience Registry Needs Reform
By Kay Kimsong
THE CAMBODIA DAILY
Prime Minister Hun Sen has called for Cambodia's flag-of-convenience shipping registry to be reformed, citing the damage that could be caused to the nation's reputation if terrorists used Cambodia-registered vessels.
On Monday, however, the Council of Ministers official in charge of the ship registry concession deal with a South Korean company said the system was going well and should be continued.
"The flag registration system has to be reconsidered, otherwise the reputation of Cambodia will be destroyed by a foreign ship," Hun Sen said on Friday at the annual meeting of the Ministry of Public Works and Transportation. "If there was a terrorist problem on a Cambodian ship, how spoiled would the name of Cambodia be?"
He said that in the past, a ship flying the Cambodian flag had been caught smuggling drugs to France, and that another was found transporting missiles.
Council of Ministers Secretary of State Seng Lim Neou said the flag-of-convenience system should continue with the South Korean company Cosmos Group. "We can't stop a business contract midway," he said. "If we do so, the company can sue for breach of contract."
A 10-year contract with Cosmos was signed in 2003, when the Council of Ministers took over the supervision of the registry from the Transport Ministry, he said.
He added that the government has earned $1.5 million in three years from the fees for registering foreign ships. He said that the only problem in recent years has been a Cambodian vessel caught illegally fishing off Australia in September, manned by a crew of Chilean, Peruvian, Spanish, Ukrainian and Russian sailors.
"Now everything is smooth, in good condition and strictly controlled," he said.
The government discontinued its registry concession with the Cambodian Shipping Corp after a Cambodian-registered freighter, The Winner, was seized by the French Navy in June 2002 and found to be smuggling cocaine.
The Russian coast guard fired warning shots Saturday to stop a Cambodian-flagged vessel that was fishing illegally off the coast of the Bolshoi Pelis island; the vessel maneuvered dangerously at high speed in an attempt to escape, the Interfax news agency reported on Monday. A second Cambodian-flagged vessel was also discovered fishing illegally on Monday in the same area, Interfax reported. Both vessels, the Daring and the Aquarius 1, were being escorted to Russian polls.
Responsibilities of the Flag State… (AFCAN)
At the end of March 2004, more than four years after the disaster, the French judge Dominique de Talancé has closed the "ERIKA" file accusing 19 different entities! It's a record: she combed very wide and the list is long, starting with the Ship's Captain to the Coastal state, including the ship owner, classification society etc.
In this she is completely right as the case of the "ERIKA" and that of the "PRESTIGE" shows that the whole maritime transport chain is implicated in these two catastrophes. Of course with different degrees of responsibility, however all 19 accused entities have for the moment been cited as having comparatively the same level of culpability: it will be for the courts to define who is at fault and who is to be exonerated.
In this there is a great improvement with respect to past practices. Some will remember the dramatic disaster in March 1980 of the old Malagasy tanker "Tanio" loaded with 20,000 tons of the same Heavy Fuel n°2, who broke in two and sunk in stormy weather off the French coast in the English Channel . It was a very similar case, except that eight sailors lost their lives in that catastrophe. That affair was not judged in the same manner, was it because there were a lot of French interests at stake?
But coming back to the "ERIKA", without wanting to pre-judge what the courts will decide. In all these maritime dramas the sailors as well as the coastal populations, the fauna and flora, pay heavily when the "misfortunes of the sea" degenerate into an ecological catastrophe.
In these cases there exists a highly responsible entity who regularly escapes all forms of sanction and who should normally be in the front line to receive the heaviest penalties: that entity is the flag state.
It is that flag state that registers the vessel so it has to have resources and sufficient personnel with maritime expertise to impose and control the maritime legislation on its ship. It is this same flag state therefore that should see that the conventions, international rules and standards are respected onboard all vessels registered under its flag in accordance with requirements. It is that flag state that should ensure the seaworthiness of each of these vessels, fit for service for which she is intended, renewing the certificates as well as the navigation certificate and safe manning certificate during the regular inspections and surveys performed by qualified inspectors and competent surveyors with a good level of experience. That's the job of a responsible administration from the point of view of Safety and Protection of the Maritime Environment.
But alas this is not always the case for small countries that often have no maritime traditions and even less a strong and accountable maritime administration behind to support their fleet and preserve maritime safety and impose the relevant legislation! These micro-countries delegate their authority to a Recognized Organisation (R.O), generally a Classification Society, that can in certain cases be the same one that is in contact with the ship owner for the classification of his vessel. Too many unscrupulous ship owners, those who tarnish the image of Shipping, are looking for these flags without states (without a genuine link) to make their most profitable business in a tax fee Paradise, which will transform into Hell for the Sailors.
Following on this there is a classification evaluating the performance of the flag states according to their seriousness. They are classed according to numerous criteria taking into account their compliance with basic international conventions ( Marpol, Solas, STCW, Load Line, OIT, FIPOL), whether they are on the black or the white lists of the Paris or Tokyo Memorandum of Understanding (MoU) and US Coast Guard , depending also of deficiencies and detention rates, and whether or not they have good relations with the International Maritime Organisation.
Not forgetting also their relations with the Classification Societies, are they members of the International Association of Classification Societies (IACS) ?
The number of old vessels flying their flags also plays a part for their respectability classification including annual loss statistics. We notice however that the greater number of registrations, not the lesser, pose serious problems, such as Panama and other banana republics, not forgetting Malta who joined the European Community on the 1st May and has still not ratified the Marpol convention! Astounding for the 5th fleet in the world!….
Hopefully a clause insists that it ratify the principal international conventions as quickly as possible.
Imagine a vessel identified in a doubtful register, in the framework of all the previously mentioned situations, who has a record a long way from being clean, having had an important number of major and minor deficiencies found during port state controls (PSC) leading to days of detention abroad during the last years. In fact a heavy past record which comes to light following a maritime disaster of great importance, shipwreck of the vessel , loss of human lives and large-scale coastal pollution! Is it not possible in this type of case that the Coastal State, victim of this oil spill, as well as the families of the missing sailors could lodge a complaint before the International Tribunal for the Law of the Sea (ITLOS) ?
This court exists with its head office in Hamburg. It's an independent and competent judicial body to deal with disputes arising out of the interpretation an application of the United Nations Convention for the Law Of the Sea ( UNCLOS - Montego Bay 1982). It was established by a United Nations convention and is called "Settling of Disagreements". Inaugurated in 1996 it is composed of 21 members.
This court is for the Law of the Sea, the equivalent of the International Court of Justice of Den Hague (Netherlands).
Its competence extends to the protection of marine environment. A nation who does not respect its obligations could be brought before this court. All nations have rights to the Main Sea, referring to that famous Freedom of the Seas that has governed maritime shipping for a long time.
Notwithstanding a nation also has its own obligations, made clear since 1982 during the elaboration of the Montego Bay convention on the Law of the Sea. It is on this precise point that the intervention of the ITLOS can be effective in the fight against non respectable flags: harassing them constantly by lodging complaints before this international court at each breach of a vessel flying their flag.
Consulted about a possible complaint by the coastal state against the flag state, following an oil-spill caused by a substandard ship, the answer of a judge of this court was clear: "…It is a very significant and difficult question. The ITLOS could know of any dispute between the flag state and the coastal state on this subject for insufficient control by the flag state of the polluting ship. It never was it and ,moreover, I do not know a case in which one sought to blame the flag state. It is a pity, because all the question of the responsibility for the flag state remains to be defined in international law. It is the one question of will of the sovereign states. It would be enough that France , for example, lodges a complaint against the Bahamas in connection with the Prestige affair in front of the ITLOS or an arbitration court to finally pose the problem in front of an international court. I believe that it would be an interesting contribution to the evolution of the international law on the matter. But I note the reserve of the states to enter this way…"
There is a good chance that constantly being pointed at and wearied by multiple convictions the incriminated state would "cleanup" its fleet by upwardly reviewing the standards to which it must be subjected and equipping itself with a competent maritime administration better able to control its vessels. Only presentable flag registrations would survive this necessary cleanup.
There are still too many countries on the Black and Grey Lists of the Paris and Tokyo MoU. These countries should either cease to practice maritime transport because of the menace they represent for the sailors and the environment or they should make the necessary efforts to get on to the White List grouping the presentable registrations.
Why, at each blatant crime of voluntary illegal oil discharge off its coast, would not a country, as a sovereign coastal state , lodge a complaint before that jurisdiction against the incriminated vessel's flag state ? No doubt, that the complaint would be admissible and that the consequent conviction would carry a fine in keeping with the committed fault, would have effective repercussions in the hunt for the polluters. Above all if there is an obligation for the flag state to restore the environment following any pollution incident.
For the same reasons the flag state has to be responsible of the acts of the ship owner . Especially in the dramatic case of seafarers left behind by their ship owner who disappears when the ship is seized in port. The flag state has many duties, it is normally the one and only link to which should be able to be attached with hope the seamen for payment of their unpaid wages and the expenses of repatriation towards their respective countries. Alas the truth is very different, disturbing, the flag state is always without any reaction in this particular cases and doesn't seem concern at all by this humanitarian problem.
Recently in Argentina, the International Transport Workers'
Federation (ITF) has carried out a study about this problem: it showed that during last 10 years, 8 ships were seized and derelict by their ship owners in Argentine ports, 6 of these "ships of shame"(S.O.S) were flying the Panama flag ! These bad behaviours deserved an action of the port state (Argentine) against the flag state (Panama) before the international court of Hamburg.
These new actions will give work to the ITLOS whom, it must be said, is all but dormant, treating only fishing disputes between states.
There is not any alternative that to bring such cases of maritime offences before the ITLOS because a sovereign state is not allowed to bring charges before its own jurisdiction against another sovereign state for acts holding with the exercise of its sovereignty.
The French magistrate , Dominique de Talancé, in charge of the Erika affair, is well placed to know this principle of jurisdiction immunity based on an "international courtesy" having to chair the relations of good vicinity between sovereign states!
Bad news on the 16th of June 2004, she failed in her attempt to lodge a complaint before the French jurisdiction against Maltese Maritime Authority for negligence in its inspections of the tanker Erika endangering seaman's life and complicity of pollution. Unfortunately, well defended by French clever lawyers, the MMA found the flaw in the first judgement before the Appeal Court in Paris . They succeed to demonstrate that MMA is a public authority, emanation of the Republic of Malta !
Can one speak about courtesy in the sinking of the Erika ?.. We hope that Mrs de Talancé is tenacious and will try to pose the dispute against the flag state before an international jurisdiction, the right one this time, the ITLOS for example.
What will happen if the other entities do the same and succeed to slip through the net of the French justice? The odds are that Captain Mathur, the ship's master, will be very lonely in front of the French judge when the Erika case will stand trial next year. Once more the focus will be entirely on Master, diverting attention from responsibilities of classification society , ship owner, port authorities , charterer, etc…the ship's captain will be The tree which hides the forest !
So, the International Maritime Organisation has a major role to play in cleaning up the international shipping by eradicating from the surface of the oceans the old sub-standard vessels and the easy registration flags who are lax in the area of maritime security.
The IMO is firmly harnessed to this very difficult task to make shipping safer as well as to improve shipping routes, all in order to preserve life at sea to a maximum approaching the zero tolerance. "He that would sail without danger must never come on the Main Sea" said an old adage , it means that the zero tolerance is quite impossible but all measures that contribute to the goal of maritime safety improvement and pollution prevention are very welcome. To this objective the use of the International Tribunal for the Law Of the Sea is a link, a trump that must not be neglected.
At sea there is no room for complacency and substandard flag state, these flags without states , where you can register a ship in a few minutes! We can no longer continue to transport no matter what,.. no matter how. Safer Shipping, Cleaner Oceans …
Member of AFCAN
Why so many shipowners find Panama's flag convenient 5 August 2014 (BBC)
Panama, a small nation of just three million, has the largest shipping fleet in the world, greater than those of the US and China combined. Aliyya Swaby investigates how this tiny Central American country came to rule the waves.
Thanks to its location and slender shape, Panama enjoys a position as the guardian of one of the world's most important marine trade routes, which connects the Pacific and Atlantic oceans.
For a hundred years the Panama Canal has provided a short cut for ships wishing to avoid the more hazardous route via Cape Horn.
Dubbed one of the seven wonders of the modern world, the 77km (48-mile) canal is a feat of engineering that handles 14,000 ships every year along its intricate lock system.
Many of these vessels fly the Panamanian flag yet the country itself has a limited history of trade.
Panama only has one small shipping line as well as a number of companies providing supplementary maritime services around the ports and canal.
Cheaper foreign labour
Most merchant ships flying Panama's flag belong to foreign owners wishing to avoid the stricter marine regulations imposed by their own countries.
Panama operates what is known as an open registry. Its flag offers the advantages of easier registration (often online) and the ability to employ cheaper foreign labour. Furthermore the foreign owners pay no income taxes.
About 8,600 ships fly the Panamanian flag. By comparison, the US has around 3,400 registered vessels and China just over 3,700.
Under international law, every merchant ship must be registered with a country, known as its flag state.
That country has jurisdiction over the vessel and is responsible for inspecting that it is safe to sail and to check on the crew's working conditions.
Open registries, sometimes referred to pejoratively as flags of convenience, have been contentious from the start.
The first transfer of ships to Panama's register in 1922 involved two US passenger ships wishing to serve alcohol to passengers during Prohibition. More followed as shipowners sought to avoid higher wages and improved working conditions secured through US legislation.
After World War Two, Panama's registry grew more rapidly as US shipowners sought to lower overheads while European ones switched flags to avoid high tax rates.
As demand rose for open registration, other countries in the developing world formed their own. The US used Liberia's registry to build a fleet of neutral ships during the Cold War.
Panama now has the largest registry in the world, followed by Liberia, the Marshall Islands, Hong Kong and Singapore. By last year, almost three quarters of the world's fleet was registered under a flag of a country other than its own.
The registry is lucrative for Panama, bringing in half a billion dollars for the economy in fees, services and taxes.
However, critics of the system point to the ease of hiding the true identity of shipowners and the lax enforcement of rules and regulations.
Allegations of corruption
Luis Fruto, representative of the International Transport Workers' Federation (ITF) in Panama, says the country turns a blind eye to its "responsibilities in order to acquire higher registration".
The ITF has led a campaign against flags of convenience since 1958. It considers that Panamanian registration is better than some "from a safety viewpoint, but it remains seriously flawed in areas such as oversight, accident investigation and crew assistance".
Two years ago, Mr Fruto investigated the death of a woman sailor, 22, on her first voyage. She became trapped in machinery that was reportedly faulty and died.
The ITF says that, rather than heading for the nearest port as rules dictate, the ship continued to sail for more than two weeks with her body in a freezer.
Further investigation by the ITF suggested that some of the shipping certificates had been bought.
International legal requirements insist that countries operating open registries inspect vessels, comply with international regulations and investigate accidents and corruption.
But critics say that Panama cuts corners in all these tasks, putting maritime workers at risk.
Indeed, accidents involving Panamanian-registered ships are high.
However, Carlos Gonzalez, former executive secretary of the Panamanian Maritime Authority, attributes this to a numbers game.
Panama has the most ships and therefore the most incidents, he says.
Since 2008, Panama has cut down on enough offences to move up from the black to the white list of the Paris Memorandum of Understanding, a watchdog comprising 27 maritime administrations from Europe and North America.
Yet Panama's registry is consistently beset by allegations of corruption.
In 2000, ITF general secretary David Cockroft was able to buy a Panamanian first officer's certificate for $4,000 to navigate a ship - even though he had no maritime skills or experience.
Despite repeated assurances that the country was cleaning up its act, Roberto Linares, the head of the Panama Maritime Authority, resigned in June after it was discovered that workers were being certified without the proper qualifications.
"The scandal brings us back to the days that Panama was called a 'convenience flag'," said Franklin Castrellon, former spokesman for the Panama Canal Commission, an independent agency operating the waterway until the country took over from the US in 1999.
New leadership plans to turn things around again.
Jorge Barakat, the new head of the maritime authority, said: "The Panamanian flag is still robust and secure. Whatever kind of non-compliance there is will be reviewed by the administration."
As a commercial venture, Panama's flag of convenience is a success. But according to the ITF, that comes at a cost.
'Distorted the market'
It believes the world economy could survive a ban on flags of convenience and the higher costs that it says would follow.
ITF secretary Jon Whitlow said: "There would be some reconfiguration. The positive effects would include better protections and safeguards for seafarers who found themselves once again serving on a national flag ship."
Shipping prices would rise, but free competition has extensively distorted the market, he says.
However, defenders of the system say this thinking is outdated and that flags of convenience are here to stay.
"Panama's registry will last for ever," said Jorge Luis Sanchez, professor at the International Maritime University of Panama. "Those who don't like the open registry can opt to do something else with their ships."
Jazmina Rovi, former director of the Panama Maritime Law Association, said unions are better off enforcing uniform standards than eliminating the registry altogether.
With the new maritime administrator sworn in last month, it remains to be seen whether Panama will crack down on corruption and safety breaches or continue to live with the taint that still clings to flags of convenience.
Open Registry, the Genuine Link and the 1986 Convention on Registration Conditions for Ships
H.W. Wefers Bettink
https://doi.org/10.1017/S0167676800001689 Published online: 01 July 2009
(CAMBRIDGE UNIVERSITY PRESS)
3. Boczek, B.A., Flags of Convenience. An International Legal Study (1962) p. 9 Google Scholar, mentions the transfer of two cruise ships in 1922 from the American to the Panamanian register, to evade the prohibition on selling or transporting alcoholic beverages on board American-owned vessels. R. Carlisle, who in his Sovereignty for Sale (1981) makes a historical analysis of open registries, demonstrates at p. 17 that the real motives were the possibility of saving on crew costs and to evade burdensome inspection regulations. Similar reasons were given by the buyer of six freighters which the US Government had confiscated from the Central Powers during World War I, when these were transferred to a Panamanian registry in 1922, ibid., pp. 9–11.
4. Amendments to the Neutrality Act of November 1939 prohibited American ships from entering war zones, i.e., the East Atlantic. Registration in Panama enabled American companies to evade this prohibition and to keep their ships in a trading position with the United Kingdom and Western Europe, Carlisle, op.cit. n. 3, p. 71 et seq.
5. Liberia had a special relationship with the US as it had been founded in 1822 on the West Coast of Africa by liberated American slaves. The Liberian register was set up by former US Secretary of State Edward Stettinius Jr., in response to requests from American shipowners looking for an alternative to Panamanian registration. As Carlisle explains his initiative was partly philanthropic, partly commercial. Under an agreement with the Liberian Government he set up the Liberia Company to implement plans for Liberia's development: Carlisle, op.cit. n.3, p. 115 et seq. Profits were to be shared with the Liberian Government. Stettinius was to set up the International Trust Company in New York, to handle the registration of ships. It was kept separate from the Liberia Company and was purchased by the International Bank of Washington in 1954. See also Boczek, op.cit. n. 3, p. 13.
Measuring the effect of perceived corruption on detention and incident risk in the maritime industry – An empirical analysis 2021（SAFETY4SEA）
Sabine Knapp, Philip Hans Franses, Bruce Whitby
Port states with higher perceived corruption are less likely to detain vessels.
Flag states or ship owners located in countries associated with higher perceived corruption are more likely to have very serious incidents.
The findings also revealed the degree of underreporting for serious incidents by flag states.
The results support the establishment of accountability frameworks and current efforts at the International Maritime Organization (IMO) to address corruption to support sustainable development goal 16 (SDG 16).
This manuscript uses a global and comprehensive approach based on 1.14 million observations to investigate whether the effect of perceived corruption can be detected towards safety qualities of vessels. Since safety qualities of vessels are influenced by many factors and the effect of corruption can be confounded by their interactions, a multi-step approach is used at ship level. The findings confirm the hypothesis that port States with higher perceived corruption are less likely to detain vessels and that flag States or ship owners located in countries associated with higher perceived corruption are more likely to have very serious incidents as the operating environment might facilitate substandard shipping and weaker enforcement of international conventions or increased operating costs that can influence safety qualities of vessels in economic hardship. The analysis has also highlighted underreporting of serious incidents. The results support the establishment of accountability frameworks and current efforts at the International Maritime Organization (IMO) to address corruption to support sustainable development goal 16 (SDG 16). Relevant policy implications could be to strengthen the fight against corruption via IMO's Member State Audit Scheme and Facilitation Committee in general and specifically by strengthening training and enforcement of the Code of Good Conduct for Port State Control Inspectors. To enhance transparency, the Global Integrated Ship Information System (GISIS) could be adjusted to include an option to report corruption directly by ship owners and operators to IMO. Mandatory reporting requirements of flag States should be revised to capture all serious incidents to GISIS.
Detention riskIncident riskCorruption perception indexSafety qualitiesPort state controlBinary logistic regressionCorrelation
The topic of corruption in the maritime industry has been analysed from various aspects mainly using qualitative approaches as quantitative approaches are often limited since the true extend of the problem is not fully documented or populated. Industry led initiatives such as the Maritime Anti-Corruption Network (MACN) have received 38,000 anonymous reports of corruption of 1365 ports since 2011 (MACN, 2019) which gives an indication of the extend of the problem. Furthermore, in 2020, the International Maritime Organization (IMO) via its Facilitation Committee (FAL) (IMO, 2019a) provided possible ways forward to address corruption in cooperation with the United Nations Office on Drugs and Crime (UNODC) including the possible development of a new module for the Global Integrated Ship Information System (GISIS).
The multi-dimensional nature of corruption means that it can be found in different ways and with different levels of understanding of what constitutes corruption. Corruption hinders sustainable growth and is found to be correlated with long term economic growth and often affects least developed countries disproportionately (United Nations Global Compact and Transparency International 2011; Podobnik et al., 2008; Shao et al., 2007). Furthermore, SDG 16 specifically relates to the fight against corruption (Hutter, 2018). Sequeira and Djankov (2010) investigate corruption at the port State level. Graziano (2018) investigates Port State Control performance including corruption. Examples of corruption that are experienced by ship owners can come in the form of facilitation payments, a carton of cigarettes, a case of whiskey or cash payments to clear the vessel through port formalities, receive a deficiency free Port State Control (PSC) inspection or vetting report, or for provision of services, equipment or supplies that are not actually provided. If the ship refuses to pay, it will incur delays or penalties that cannot be insured against or mitigated through other mechanisms. The financial costs of these delays are then often many times the amount of the bribe or facilitation payments sought.
For ship owners or operators, corruption is often part of political risk and factored into the business environment (Salleh et al., 2015; Lindroos, 2019) especially when operating or trading in ports of less developed nations. Sequeira and Djankov (2010) for instance demonstrate different ways of opportunities for corruption in South Africa that can emerge and distinguish between collusive and coercive types of corruption. They define collusive corruption as a means for shipping companies to reduce their costs while coercive corruption increases their cost of operating. They also conclude that shipping companies adapt to the challenges to work with the public system on hand and measure the effect on demand for services such as ports to be used.
In addition, for a ship owner, the additional costs associated with corruption can impact upon the profitability of the vessel's operation especially during periods of economic hardship. When this occurs the standard of safety on board declines which is reflected in increased accident risks (see Bijwaard and Knapp, 2009) who investigated the relationship of earnings towards incident risk). Ship management companies often factor the cost of corruption into their budgeting process as an additional operational expenditure and simply accept it as an inevitable cost of doing business in certain parts of the world. Often it is treated as operational expenditure in the same way as other operational costs in order to carry out their lawful business activities. Whilst global shipping continues to absorb these invisible costs, the impact on the bottom-line during times of industry or sector down turns can quickly turn a safe and sustainable operation into a loss-making venture. Rabarijaona (2017) studies the impact of anti-corruption initiatives in the maritime industry and tries to identify the efficiency of the established framework. According to Ravarijaona (2017), 81% of maritime professionals understand corruption to be “abusive power to obtain personal gain”.
Shipowners are generally unwilling to report instances of corruption for fear of retribution, either immediately whilst lengthy investigations are carried out, through additional barriers placed in the way when the vessel returns to the port or by other vessels receiving preferential treatment. Often the ship operator suffers an additional loss as a result. Whilst there are appeal processes in place for owners and operators to appeal the outcome of PSC inspections, such an approach citing corruption as the root cause is difficult to substantiate. It is simply easier to pay the inducement and get on with business than to challenge the system particularly in places where corruption extends upwards through government. IMO has established The Code of Good Conduct as part of Port State Control Procedures (IMO, 2019b) but enforcement is left to Member States. The Global Integrated Ship Information System (GISIS) of IMO has a mechanism that provides for the reporting of corruption, but the report can only be made by flag State administrations and not directly by the public. Given the general context described above and supported by the literature as well as the developments at IMO and the limited remedies for ship owners, the manuscript will test the following set of hypotheses:
An increase in the CPI could be associated with a negative correlation for the probability of detention as briberies are paid off to ensure that a vessel is not detained. Ship owners treat these costs as operational costs associated with the management of the vessel when trading in a region known for corruption. With this hypothesis, we are interested to see whether a negative effect of corruption can be found towards the probability of detention.
An increase in the CPI could be associated with a positive correlation for the probability of incident. As highlighted in the introduction and literature, shipowners treat corruption costs as operational costs, these expenses reduce earnings which reduce the safety qualities of vessels and increase incident risk.
A positive correlation for the probability of incident can indicate that vessels that are registered, managed or owned by registries, managers or owners in countries with higher perceived corruption tend to also have lower safety qualities. This is due to the lower enforcement mechanisms of international conventions that create loopholes in the system and promote substandard shipping which is one of the major reasons Port State Control came into existence.
For H2 and H3, we are interested to test the effect of a positive relationship of perceived corruption towards incident risk which can be due to higher operating costs to maintain safety qualities but also due to weak enforcement of international legislation which allows legal loopholes in the system thereby reducing safety qualities of vessels.
This manuscript takes a wider approach and measures the effect of corruption on safety qualities at the vessel level using quantitative methods and a global dataset. Using a unique and comprehensive combination of data, the effect is measured towards an increase or decrease of the probability of detention or incident at the ship level taking a three-step approach. Both end points are considered since they are found to be separate risk dimensions relevant to identify risky vessels (Knapp and Heij, 2020; Heij and Knapp, 2019). Besides the effect of corruption on detention, high corruption can also facilitate weak implementation or enforcement of international conventions and can create loopholes for substandard shipping which then increases incident risk.
Corruption is expressed by the Corruption Perception Index (CPI) of Transparency International. The CPI score is an index that combines 13 different sources and is based on a combination of surveys to determine how experts and business executives perceive a country's public sector to be corrupt. As by Transparency International (2018), it covers different corrupt behaviours in the public sector such as bribery, diversion of public funds, use of public funds for private gain, nepotism in the civil service and state capture in addition to some mechanism available to prevent corruption. It is widely used and has been assessed by the European Commission's Competence Centre on Composite Indicator and by the Joint Research center (JRC, 2018) to ensure transparency of the methodology used and to ensure reliability of the scores. JRC (2018) concludes that the CPI provides a more accurate measurement than each of the individual sources separately (JRC, 2018).
Since corruption has several dimensions, the approach used here covers the effect at the level of port State towards detention and at the level of flag State, beneficial owner and safety management company towards incident risk. In order to account for other effects that influence safety quality of vessels to predict detention or incident risk (Knapp and Heij 2020; Heij and Knapp 2018, 2012; Podobnik et al., 2008; Shao et al., 2007) such as for instance age, size, ship type, class society, flag State, beneficial owner and economic factors (Bijwaard and Knapp, 2009), a multi-step approach is used to ensure that the effect is filtered out and the result for CPI can be interpreted and visualized.
2. Description of data and methodology
2.1. Data sources and creation of matrixes for analysis
The time frame used for the creation of the datasets used for the analysis was 2014 to 2019 and Table 1 provides an overview of the data sources used to create the matrixes. Two main data matrixes are created – global inspection data for the detention models and global incident data and world fleet data for the incident models.
Table 1. Data sources used for the period 2014 to 2019.
Type of data Data sources
Ship particulars (global fleet above 100 gt) IHS Markit
Global PSC data (all MoU's) IHS Markit
Global Incident data IHS Markit, LLIS, IMO, USCG
Corruption Perception Index Transparency International
Country income classifications World Bank
Earnings Ship Intelligence Network (Clarkson)
Notes: IHS Markit (Information Handling Services Markit), LLIS = Lloyds List Intelligence Services, IMO = International Maritime Organization, USCG = United States Coast Guard.
The selection for global inspection data is based on Knapp (2006) and Knapp and Franses (2007) who conclude that data from several Port State Control regimes can be combined for statistical analysis. For this analysis, global inspection data is used from the following Port State Control Memoranda of Understanding (MoU's): Paris MoU, Tokyo MoU, Indian Ocean MoU, United States Coast Guard (USCG), Black Sea MoU, Mediterranean MoU, Vina del Mar Agreement, the Indian Ocean MoU and the Caribbean MoU in order to cover most of the port States at the global level. The total number of inspections used are 421,518 inspections (12,543 detentions). For all global inspection data, only initial inspections are considered and follow up inspections are excluded to reduce a possible source of bias.
Global incident information is combined from four different sources to reduce data bias due to underreporting of incident data for serious and less serious incidents as currently there is no mandatory requirement to report these to IMO. The data sources used are based on the main data providers in the shipping industry such as IHS Markit (IHSM), the Lloyds List Intelligence Service (LLIS), the International Maritime Organization (IMO) and the United States Coast Guard (USCG). Ship particular information is from IHSM (the manager of the IMO numbering schemes for vessels) and is considered the best source for ship particular data. Since the various data providers use different definitions for the degree of seriousness, incidents need to be reclassified manually according to internationally agreed definitions of IMO (IMO 2000) which are as follows:
Very serious casualties: casualties to ships which involve total loss of the ship, loss of life or severe pollution, the definition of which, as agreed by the Marine Environment Protection Committee as follows: “severe pollution” is a case of pollution which, as evaluated by the coastal State(s) affected or the flag State, as appropriate, produces a major deleterious effect upon the environment, or which would have produced such an effect without preventive action.
Serious casualties are casualties to ships which do not qualify as “very serious casualties” and which involve fire, explosion, collision, grounding, contact, heavy weather damage, ice damage, hull cracking, or suspected hull defect, etc. resulting in 1) immobilization of main engines, extensive accommodation damage, severe structural damage, such as penetration of the hull under water, etc. rendering the ship unfit to proceed, or 2) pollution (regardless of quantity); and/or 3) breakdown necessitation towage or shore assistance.
Less serious casualties are casualties to ships which do not qualify as “very serious casualties” or “serious casualties” and for the purpose of recording useful information also include “marine incidents” which themselves include “hazardous incidents” and “near misses”.
After reclassification of the degree of seriousness, overlapping incidents are identified and eliminated since the various data sources have overlapping data points. In eliminating the duplicate data points, data priorities are applied where data from the IMO prevails followed by data from IHSM, LLIS and the USCG as IMO data is vetted by the IMO secretariat and the IMO Member States. For the analysis presented here, only total loss, very serious and serious incidents (TLVSS) are considered because less serious incidents are characterized by a high degree of underreporting and can bias results. Less serious incidents are only included as covariate accounting for the incident history of a vessel but not as dependent variable. The incident matrix (ships with incidents and ships without incidents) comprises of 721,767 observations (11,896 TLVSS=total loss, very serious and serious incidents).
The main variable of interest in this analysis is the Corruption Perception Index (CPI) from Transparency International. For this analysis, the CPI scores are merged by respective year and country for port State to inspection matrix and by flag State, owner and Document of Compliance Company (DoC) location to the incident matrix. The CPI index normally runs from 0 to 100 with 0 meaning highly corrupt and 100 meaning no corruption. To facilitate interpretation of the results, CPI was inverted so that 0 means no corruption and 100 means highly corrupt (see Fig. 1 for the year 2019). A positive effect therefore means an increasing effect towards the probability of detention (or incident) given an increase in the CPI. For more information about the scores, please refer to Joint Research Center (JRC, 2018). Not all countries are evaluated by the CPI, hence the number of observations is adjusted for each regression. For international registries, the corruption index of the main country was used (e.g. for the Norwegian International Registry (NIS), the CPI of Norway would be used).
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Fig. 1. Histogram of inverted CPI (2019).
Note: inverted CPI (0 = no corruption, 100 = high corruption).
To create some of the covariates used in the analysis, country of income classifications from the World Bank and monthly earnings from the Shipping Intelligence Network are needed and are merged accordingly to the two data matrixes and are further explained in the methodology section. Missing data for covariates (eg. size, age, flag State, classification society) explained in detail under the methodology section are added to the dataset at the time of the incident or inspection to improve the quality of the data using IMO and date as the link to add data (at the time of incident or inspection) since ship particulars can change over time.
The two matrixes that form the basis for the analysis are as follows: 1) Inspection models (detention): 421,518 inspections with 12,543 detentions and 2) Incident models (TLVSS = total loss, very serious and serious incidents): 721,767 observations with 11,896 incidents.
2.2. Methodology used to test hypotheses
Individual coefficients in models with many factors are always hard to interpret as they measure partial effects. By including some covariates that are correlated with the variable of interest (CPI), parts of the CPI effects can be absorbed into these variables and can also change signs and significance of signs of the coefficients of CPI. For this reason, we use a stepwise modelling approach with three dependent variables as follows:
Detention: for this combination, the main interest is the effect of port States where the vessel was inspected and corresponding CPI values of the port States towards detention to test hypothesis H1. This combination provides insight into corruption at the port State level.
Incidents (TLVSS=total loss, very serious and serious, TLVS=total loss and very serious): for these combinations, we have six combinations in total (two dependent variables and three areas of interest): (1) flag States, (2) county of location of Beneficial Owner and (3) country of location of DoC company (Document of compliance company as by the International Safety Management Code of the IMO) of the vessel at time of incident and corresponding CPI values. Both are relevant for hypotheses H2 and H3 and provide insight into corruption at the flag State, owner and manager level associated with a vessel.
For incidents, TLVSS and TLVS is used as TLVS has less underreporting compared to TLVSS. All vessels above 100 gross registered tonnage (GRT) with IMO are included in the analysis and all ship types are considered as follows: general cargo, dry bulk, container, tanker, passenger vessels, other ship types, fishing vessels, tugs and pleasure craft (large yachts with IMO number). For the detention models, fishing vessels, tugs and commercial yachts are excluded as very few inspections are carried out on these vessel types. For the incident models, all ship types are considered.
The base model to model the probability of detention or incident is binary logistic regression. Let xi contain the explanatory variables (refer to Table 2 for a description of the main variable groups and number of variables within each group), then the logit model postulates that P (yi = 1|xi) = F (xiβ), where the weights β consist of a vector of unknown parameters and F is a cumulative distribution function (CDF). A popular choice is the CDF of the logistic distribution, which gives the well-known logit model. This model states that P (yi = 1|xi) = exp(xiβ)/(1+exp(xiβ) where xiβ is a weighted average of all explanatory variables and changes according to the model of interest plus the intercept. The probabilities are estimated at individual ship level (i). For further details on logit models, refer to Heij et al., (2004) or Verbeek (2008). To estimate the coefficients, quasi-maximum likelihood (QML) is used (Greene, 2000) as method of estimation in order to give some allowance for a possible misspecification of the assumed underlying distribution function.
able 2. Number of variables per main covariate group.
Group A: variables included in step 1 and 3 Empty Cell Nr of variables
Type DV: detention DV: incidents
log Age continuous 1 1
log Size (GRT) continuous 1 1
Ship types dummy 6 8
Ship yard country@age group interaction dummy 8 8
Classification societies dummy 39 58
Main engine designer dummy 39 24
Main engine builder dummy 14 15
Maritime expertise continuous 1 1
Years in existence DoC Company continuous 1 1
Years in existence Beneficial Ownership continuous 1 1
Changes in Flag State continuous 1 1
Changes in Classification Society continuous 1 1
Changes in Beneficial Ownership continuous 1 1
Changes in DoC Company continuous 1 1
Previous Nr TLVS incidents continuous 1 1
Previous Nr serious incidents continuous 1 1
Previous Nr less serious incidents continuous 1 1
Previous Nr detentions continuous 1 1
Previous Nr inspections continuous 1 1
Previous Nr of deficiencies continuous 1 1
Earnings continuous 1 1
Group B: variable groups in model when needed
Flag State dummy 67 152
Beneficial Owner location income group dummy 5 5
DoC company location income group dummy 5 5
Group C: variable groups to correlate with CPI in step 2
Port States (countries) dummy 77 n/a
Owner locations (countries) dummy n/a 65
DoC company location (countries) dummy n/a 54
Group D: CPI for visualization for step 3 only
CPI value for port States, flag States, owner and DoC locations continuous 1 1
Total variables 276 411
Notes: DV= dependent variable. For incidents two dependent variables are used (TLVSS and TLVS where TLVS is a sub-group of TLVSS).
Other factors that can influence safety qualities of vessels beside the CPI, need to be included in the regressions to account for their effects. The selection of covariates to model the probability of detention or incident is based on Knapp (2006), Knapp and Franses (2007), Bijwaard and Knapp (2009), Knapp and Heij (2020). Table 2 provides a list of the covariate groups with the number of variables within each group that was used for the two main types of models (detention and incidents). Three main variable groups are distinguished where group A variables are always entered into the model, group B variables are entered when needed and group C variables are the main variables of interest that is then correlated with the CPI values using a stepwise approach (step 1 and 2). Variable group D is only used for regressions related to the visualization of the effect (step 3).
Group A variables are basic ship particulars such as age, size of vessel (GRT=gross registered tonnage) and ship type. In addition, the following covariates are included to account for the main factors that influence safety qualities at the ship level: (1) classification society, (2) the country of built of the vessels which is grouped into four groups as suggested by surveyors from the Australian Maritime Safety Authority and based on their experience and are modelled with interaction effects with age groups (0–2 and above 14 years of age represent high age risk while 3–14 years of ship age represent low age risk), (3) main engine designer (individual company), (4) main engine builder (individual country of location) if the model is large enough, (5) a variable indicating the ‘presence of maritime expertise’ expressed as concentration of ownership companies, DoC companies, main engine builders, main engine designers in a particular country, (6) years of existence of beneficial ownership and DoC company, (7) lagged inspection and incident history of the ship within 30–360 days prior to the event of interest to account for the ship history with respect to incidents, detention and deficiencies and (8) flag State changes, ownership changes, DoC company changes and class changes (within 3 years prior to the event date of interest). The final variable in this group is related to earnings which is an economic indicator to account for the effect of economic cycles and is based on data from the Shipping Intelligence Network of Clarksons.
Group B variables are entered into the equation when needed. These are flag States, DoC companies and beneficial owners grouped by income in order to reduce the number of variables. For income groups, the World Bank groups are used which are (1) high income, (2) upper middle income, (3) lower middle income, (4) low income and (5) unknown.
Group C variables are the variables of main interest needed in step 2 which are the port States for the detention model to account for the differences in Port State Control inspection qualities at port State level and individual flag States as well as countries of location for beneficial ownership and DoC companies. In order to test the hypotheses, to enhance interpretation of CPI and to be able to visualize the effects of interest, a multi-stage approach is used consisting of three main steps.
Step 1: Estimation of full model without CPI values
In step 1, a full binary logistic regression model is estimated as specified above to account for all possible factors that can influence the probability of detention or the probability of incident (TLVSS, TLVS). These models do not include any parameters for CPI values as they might be correlated with other factors of interest. The main parameters of interest in this round are the coefficients for the type C variables which are port States for detention and the coefficients for flag State, beneficial owner and DoC company for incidents which forms the basis for step 2. For instance, when estimating the probability of incident (TLVSS) and test for CPI, the 65 individual owner locations are entered into the model and the 5 owner income groups are left out as otherwise they would be correlated. The 5 owner income groups are however included for all other models as the effect needs to be accounted for such as for detention or for models that have DoC location as interest.
Step 2: Correlation of step 1 outcome with CPI values
In this step, the coefficients from the binary logistic regression outputs from step 1 are correlated with the inverted CPI values (0=low to 100=high) for the port States for detention and for the country of location (beneficial owner, safety management company) or flag State for incident (TLVSS, TLVS). The correlation provides the direction (positive or negative), strength and its significance.
Step 3: Estimation of reduced model to obtain coefficient for CPI for visualization
In this step, a reduced logit model is estimated still containing all important factors that influence safety qualities of vessels (variable groups A, B depending on the model) plus one parameter for CPI (variable group D) to measure the effect towards the probability. In this step, parameters that are highly correlated with the CPI values are excluded such as for instance port State factor for detention, flag State, ownership, or DoC company for the various incident type combinations. The sign and significance of the coefficient for the CPI parameter is compared with the outcome for step 2 to see whether there is any change in the sign or its significance and to confirm whether the coefficients can be used for visualization of the partial effect of interest.
3. Results and visualization of partial effects of interest
Due the large amount of regression outputs and variables, only the most relevant results of the second stage are presented here. Appendix A and B provide basic model statistics of the logit models for step 1 and 3. For further details on logit model statistics such as the Mc Fadden R-squared, the Schwarz Criteria and hit rate, please refer to Heij et al., (2004). Table 3 provides the main results of interest for the analysis from step 2 – that is the correlation coefficients from the parameters of interest from step 1 with the CPI values for the respective parameters of interest for each model combination. Fig. 2 provides the scatter plots (and fitted regression line) of the correlations that are significant (either at the 1 or 5% level) in Table 3. Overall, correlations are not strong which can be seen from Fig. 2 and only significant for 3 combinations.
Table 3. Correlation of CPI results step 2.
Parameter of interest to test correlation DV Nr var Correlation Prob Empty Cell
CPI port States with port States (step 1) detention 74 -0.27780 0.01660 **
CPI beneficial owner with owner location (step 1) TLVSS 61 0.10462 0.42230 ns
TLVS 60 0.29514 0.02210 **
CPI DoC company with DoC location (step1) TLVSS 53 0.06056 0.66660 ns
TLVS 51 0.09780 0.49480 ns
CPI flag States with flag States (step 1) TLVSS 131 -0.25182 0.00370 *
TLVS 60 0.39548 0.00090 *
Note: * significant at 1% level, ** significant at 5% level, - ns = not significant, DV =- dependent variable.
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Fig. 2. Scatter plots of correlations from step 2.
a: Detention – Port States; b: Incident (TLVSS) – Flag State; c: Incident (TLVS) – Flag State; 2d: Incident (TLVS) – Ownership.
From Table 3, one can see that H1 of CPI values for port States towards detention is confirmed with a negative correlation coefficient. Port States with high perceived corruption are less likely to detain which could be due to briberies and detention avoidance. The results for incident (TLVSS) do not confirm H2 or H3 albeit a positive correlation for beneficial owner and DoC company is found but not significant.
For flag States, the correlation is negative and significant implying that overall, vessels registered in countries with higher CPI values are less likely to have incidents. This could reflect the degree of underreporting of serious incidents since leaving out serious incidents from TLVSS, the result for total loss and very serious (TLVS) becomes positive and significant. At this stage, mandatory reporting of serious incidents is not mandatory at IMO level and even with incident data and including four different data sources, serious incidents will not be fully covered compared to TLVS incidents. With respect to interpretation, the results are therefore more valid for TLVS compared to TLVSS.
For incidents (TLVS), the results also confirm H2 and H3 for flag States and beneficial owners but not for DoC companies where correlation is positive but not significant. This could be due to the fact that for DoC companies, the link of vessel to company is not well defined in the IHSM data and 26% of the observations with incidents have missing data compared to 14% for beneficial owner or less than 15% for flag States.
Vessels registered in a flag State with higher CPI values corruption are more likely to have incidents (TLVS) as the correlation is positive and significant. The same applies for vessels with owners located in a country with higher CPI values. This can confirm weaker enforcement and subsequently a higher degree of substandard shipping. It may also confirm that ship owners are subject to higher costs due to corruption which affects safety qualities negatively.
Building on the four combinations provided in Table 3 that provide significant results, step 3 is applied to obtain the coefficient for CPI for visualization. The reduced model enters CPI directly into the logit but excludes parameters such as port States for detention and flag States and beneficial owner and DoC company location for incidents which can be highly correlated. The results are presented in Table 4. CPI values do not exist for all countries so the number of variables in the models are reduced respectively and are given in Table 4.
Table 4. Coefficients of interest for visualization (logit model step 3).
Parameter of interest for visualization DV Nr var Coefficient Prob Empty Cell
CPI port State detention 199 -0.00956 0.00000 *
CPI beneficial owner TLVS 108 -0.00016 0.94390 ns
CPI flag State TLVSS 134 -0.00955 0.00000 *
TLVS 69 -0.00043 0.83020 ns
Note: * significant at 1% level, ns = not significant, DV =- dependent variable.
The results confirm the negative relationship of CPI for port States towards the probability of detention and a negative relationship of CPI for flag States towards the probability of incident (TLVSS). The relationship could not be confirmed for flag State or beneficial ownership location for the probability of incident (TLVS) which is most likely due to confounding and also confirms that a multi-step approach is needed to test for the underlying relationship. As a result, only significant coefficients from Table 4 (CPI port State towards detention and CPI flag State towards TLVSS) are visualized in Fig. 3, Fig. 4 to visualize the effect of interest. For the effects that could not be obtained from the logit model, the direction of the correlation can be seen from the scatter plots in Fig. 2.
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Fig. 3. Decreasing effect of CPI port States towards probability of detention.
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Fig. 4. Decreasing effect of CPI flag States towards probability of incident (TLVSS).
To create Figs. 3 and 4, a typical vessel is chosen, and the base probability (detention and incident) is estimated given the various input parameters where the base probability assumes no corruption. Keeping all other variables fixed and only varying CPI from 0 (base) to 100 using the coefficients obtained in step 3 and provided in Table 4 for CPI, the respective probabilities are estimated and visualized in the graphs. The increase in the CPI values is shown on the x-axis and the estimated probabilities are plotted on the y-axis respectively.
The vessel used for this demonstration is a dry bulk carrier of 5 years of age with 38,927 GRT, Liberian flag and classified by Lloyds Register. The vessel is built in China with main engine builder from Italy and main engine designer Cummins (company). The vessel is managed by a DoC company located in a middle-income country and is owned by an owner located in a low-income country. It has changed flag State and class once within the last 3 years and had one less serious incident in the last 365 days and 2 deficiencies were found during PSC inspections over the last 365 days. Average monthly earnings over the last 6 months prior to the event of interest are as by the SIN of Clarkson for dry bulk carriers.
4. Discussions and policy implications
While corruption is known to exist in the maritime industry and has been brought to the attention at IMO via the FAL Committee, the effect has not been quantified or visualized in the manner this analysis has and draws further attention to possible policy implications. Furthermore, SDG 16 specifically relates to the fight against corruption (Hutter, 2018), in particular SDG 16.5 (reduce corruption and bribery in all their forms), SDG 16.6 (develop effective, accountable, and transparent institutions at all levels, SDG 16.10 (ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements). Given the results presented here, some policy implications and challenges are discussed in this section based on the three key findings:
Finding 1 related to H1: The result provides a negative effect and correlation of CPI towards the probability of detention. Our interpretation of the results confirm the hypothesis that port States with higher perceived corruption are less likely to detain vessels as ship owners try to avoid detention, pay off briberies and treat those as part of operating costs.
Finding 2 related to H2 and H3: The results indicate a positive effect for beneficial ownership and flag State towards the probability of incident (TLVS). Our interpretations with respect to H2 and H3 confirm that flag States or ship owners located in countries associated with higher perceived corruption are more likely to have incidents (TLVS) as the operating environment might facilitate substandard shipping and weaker enforcement of international conventions. Corruption can also influence ship owners operating costs and can enhance economic hardship that influences reduced safety qualities of vessels as investigated and confirmed by Bijwaard and Knapp (2009).
Finding 3: Independent from H2 or H3, the results also highlight a degree of underreporting of serious incidents of flag States with higher perceived corruption. Results for TLVSS are either negative or not significant while they are positive and significant towards TLVS. Mandatory reporting of serious incidents at IMO level is not yet established.
Even though the most relevant factors that can influence safety qualities are included in this analysis to try to account for these effects and a multi-step approach was used, interpretation of the results is limited to the hypotheses provided and our interpretations of the results which are also based on our understanding of the operational context of the maritime industry. Our interpretations provide an indication but not definite proof. They support the work that is already underway at IMO as corruption is known to be a problem in the industry that needs to be addressed in order to enhance the achievement of the sustainable development goals. The real extend of the problem is somewhat unknown since there are limited collection of data and remedies for ship owners.
Accountability frameworks are not well established and harmonized across UN Organizations (Zahran, 2011) which was also recognized by the United Nations General Assembly (Resolution 64/259). Based on a comparative analysis by the Joint Inspection Unit (Zahran 2011), a recommendation was made to IMO to develop a stand-alone accountability framework which relates to both Member States and Secretariat (Zahran, 2011) as part of the political covenant of the Organization. The accountability framework should refer to 17 benchmarks and 43 tools including provisions for anti-corruption and anti-fraud. Latest development at IMO via the FAL Committee however highlight the importance to address corruption and the need to develop guidance to enforce anti-corruption practices which could cover all legislative areas of IMO and go beyond the Code of good conduct (IMO, 2019b).
In the absence of IMO's own accountability framework, the relevant recommended benchmarks of the JIU related to corruption could be integrated into IMO's IMSAS (Mandatory Member States Audit Scheme at IMO). IMSAS is based on mandatory provisions in particular the provisions of the III Code (IMO, 2015). The consolidated IMSAS report on findings does not go into detail with respect to the areas of root causes that contribute to the lack of effective implementation of requirements (IMO, 2018).
It is worth noting that existing policy processes within the PSC MoU's were not established to tackle or account for the impact of corruption in the PSC space or flag State implementation in general. IMO in its remit can provide guidance to Member States on PSC procedures as is done with the implementation of the Code of good conduct (IMO, 2019b) as part of existing training. The Code encompasses three fundamental principles against which all actions of Port State Control officers are judged: integrity, professionalism and transparency and specifically refers to the freedom from corruption influences or motives, openness, and accountability.
While the development of a new targeting factor is outside the scope of this analysis (see Knapp and Heij, 2020 for improved targeting using statistical models), CPI values could be included into targeting routines for detention, but it is not recommended to do so. The effect can easily be confounded with other factors. Only one maritime administration (Australia) so far uses statistical models to target vessels for Port State Control inspection. It would be challenging to convince PSC MoU's to agree on using quantitative methods to improve their targeting besides including a factor that accounts for CPI given the political sensitivities associated with allegations of corruption and the slowness of the process of updating targeting routines in general. A better approach would be to try to enforce the Good code of conduct by enhanced training and to include measures within IMSAS as well as work via the FAL Committee to establish a GISIS module that enables transparent reporting of corruption.
Perhaps an improvement in transparency of PSC inspection data might assist with the detection of corruption and provide better means to provide the necessary proof for ship owners. GISIS does not allow reporting by members of the public. The channel currently is from the owner company to the flag State and activation of appeal procedure within the PSC regime. It may be that company report directly to the PSC regimes but that does not happen often. GISIS could be amended to include a reporting capability that allows ship owners or companies to report directly to IMO and the flag State either via a standalone module on corruption or via the already existing module for Port State Control. The improvement of GISIS would also assist IMSAS auditors to prepare for an audit as well as increasing transparency in line with SDG 16.
Concerning finding 3 related to the possible degree of underreporting by flag States, the relevant policy implication would be to make the reporting of serious incidents to GISIS mandatory. Currently, only the reporting of very serious incidents is mandatory (IMO, 2014) by electronic means to GISIS. Increased reporting will also help with pre-emptive risk management and could also include less serious incidents.
5. Conclusions and future research
This manuscript investigates the relationship of the CPI index towards the probability of detention and incident from several dimensions. A multi-step approach is used in order to enhance interpretation of the effect of interest that can otherwise become confounded with the effect of other factors that influence safety qualities of a vessel. The findings confirm the hypotheses and demonstrate that the effect of corruption is present albeit correlation is not strong.
Since corruption can potentially increase incident risk and create burden to ship owners and operators who integrate the cost of corruption into their operating costs, the findings should not be ignored by policy makers and the findings support industry efforts and efforts at IMO to establish accountability frameworks and enhance transparency in line with SDG 16.
Relevant policy implications could be to strengthen the fight against corruption via IMSAS or the FAL Committee in general and specifically by strengthening training and enforcement of the Code of Good Conduct for Port State Control Inspectors. To enhance transparency, GISIS could be adjusted to include an option to report corruption directly by ship owners and operators to IMO and flag States. In order to decrease underreporting of incidents, mandatory reporting of serious incidents and less serious should be included into GISIS.
Future research in this area would be to quantify the effect of corruption in monetary terms – that is to translate the effect towards the probability of detention or incident into potential incident costs. One other avenue for further research could be to rely on alternative methods that can handle latent variables (like structural equation modelling (SEM)). Altogether, this can provide policy makers with an estimate on the magnitude of the effect of corruption on damages related to potential incidents.
Declarations of Competing Interest
No funding was received to assist with the preparation of this manuscript.
The authors have no financial or proprietary interests in any material discussed in this article.
The authors have no conflicts of interest to declare that are relevant to the content of this article.
Appendix A. Model statistics binary logistics regression (step 1).
Model Empty Cell Empty Cell Empty Cell Empty Cell Nr McFad Schwarz HR%
Parameter of interest DV Total DV Rate var R-sqrd criteria overall
Port States detention 421,518 12,543 0.0298 275 0.1801 0.2280 74.90
Beneficial owner locations TLVSS 721,767 11,896 0.0165 349 0.1581 0.1480 72.05
TLVS 721,767 1736 0.0024 196 0.0838 0.0315 71.22
DoC Company locations TLVSS 721,767 11,896 0.0165 336 0.1511 0.1436 71.65
TLVS 721,767 1738 0.0024 299 0.0998 0.0313 71.54
Flag States TLVSS 721,767 11,896 0.0165 289 0.1539 0.1476 72.26
TLVS 721,767 1738 0.0024 150 0.0864 0.0337 71.78
Note: DV = dependent variable, Nr var = Number of variables in model, HR = overall hit rates.
Appendix B. Model statistics binary logistics regression (step 3).
Model Empty Cell Empty Cell Empty Cell Empty Cell Nr McFad Schwarz HR%
Parameter of interest DV Total DV Rate var R-sqrd criteria overall
CPI port States detention 420,985 12,530 0.0298 199 0.1217 0.2414 74.91
CPI beneficial owner location TLVS 354,679 924 0.0026 108 0.0801 0.0372 71.55
CPI flag States TLVSS 398,113 7505 0.0189 134 0.1337 0.1664 73.81
TLVS 398,113 1092 0.0027 69 0.0693 0.0375 68.92
Note: DV = dependent variable, Nr var = Number of variables in model, HR = overall hit rates.