GCTL8.com (FocusAsia Media Ltd)
MOSCOW, Nov 17 (FAM) – Freight and logistics companies need to do more to reduce their bribery and corruption risks, with the freight sector especially exposed in its dealings with customs officials at ports and border crossings.
As highlighted by a number of incidents over the years, initiatives by various national regulatory authorities have exposed the risk of freight firms being caught up in bribery and corrupt practices, leading to reputational damage as well as potential multi-million dollar fines. Only this month DB Schenker was fined €2 million for “compliance violations” in its business in Russia, with the “unclear payments in connection with logistics services in Russia” thought to be bribes paid to corrupt officials at the port of St Petersburg.
While the freight industry’s exposure to corruption, particularly in ocean shipping and road haulage, is difficult to gauge, companies, nevertheless, need to develop strategies which will reduce their risk to such practices, said Trace International, a US-based, non-profit business association that provides members with anti-bribery compliance support.
In an interview with Lloyd’s Loading List to be published in full next week, Katya Lysova, Trace International’s associate for member services and advocacy, said estimates show that the cost of corruption equals more than 5% of global GDP (US$ 2.6 trillion), with more than US$ 1 trillion paid in bribes each year. Demands for bribes by government officials for services that companies are entitled to is a common risk in ocean shipping.