The Singapore-managed, Vanuatu –flagged offshore service vessel WARD TIDE (1674-gt, built 2011) which arrived in Durban harbour at the recent weekend. Picture by Trevor Jones
News continues below…
TRADE COSTS AND CORRUPTION IN PORTS – DURBAN AND MAPUTO
Recent years have brought an increased awareness of the importance of trade costs in hindering trade, particularly in the developing world where these costs are highest, says a report in the latest edition of Port Technology.
The most salient type of trade costs have often been tariff duties and costs associated with the physical transportation of goods. As a result, several countries embarked on extensive programmes of tariff liberalisation and a significant portion of aid effort was channelled to investments in hard transport infrastructure, such as rebuilding railways and ports (the World Bank alone devotes more than 20 percent of its budget to transport infrastructure projects worldwide).
More recently, new light has been cast on the importance of a different type of trade cost: the cost imposed by the soft infrastructure of transport, defined as the bureaucratic infrastructure handling the movement of goods across borders. While there are many possible sources of inefficiencies stemming from the soft infrastructure of transport, recent research is beginning to document the role played by corruption in transport bureaucracies in driving trade costs. This article provides an overview of this research.
Durban and the Port of Durban, the subject of a study into port corruption. Picture by Steve McCurrach www.airserv.co.za
Research into corruption
Corruption can take many forms and emerge in many different phases of the process of clearing goods across borders. Sequeira and Djankov (2011) documented in great detail the ways in which port corruption emerges in Durban and Maputo in Southern Africa. This research was based on a unique dataset of directly observed bribe payments to each port bureaucracy for a random sample of 1,300 shipments.
The study began by defining two broad categories of port officials that differed in their administrative authority and in their discretion to stop cargo and generate opportunities for bribe extraction: customs officials and port operators. In principle, customs officials hold greater discretionary power to extract bribes than regular port operators, given their broader bureaucratic mandate and the fact that they can access full information on each shipment, and each shipper, at all times. Customs officials possess discretionary power to singlehandedly decide which cargo to stop and whether to reassess the classification of goods for tariff purposes, validate reported prices of goods, or request additional documentation from the shipper.
Regular port operators, on the other hand, have a narrower mandate to move or protect cargo on the docks, and at times even lack access to the cargo’s documentation specifying the value of the cargo and the client firm. This category of officials includes those receiving bribes to adjust reefer temperatures for refrigerated cargo stationed at the port; port gate officials who determine the acceptance of late cargo arrivals; stevedores who auction off forklifts and equipment on the docks; document clerks who stamp import, export and transit documentation for submission to customs; port security who oversee high value cargo vulnerable to theft; shipping planners who auction off priority slots in shipping vessels, and scanner agents who move cargo through non- intrusive scanning technology.
The organisational structure of each port created different opportunities for each type of port official to extract bribes: the high extractive types -customs agents- or the low extractive types -port operators. These opportunities were determined by the extent of face to face interactions between customs officials and clearing agents, the type of management overseeing port operations, and the time horizons of each type of official.
Durban and Maputo
Maputo Port from the air. Picture by Terry Hutson
In Durban, direct interaction between clearing agents and customs’ agents was kept to a minimum since all clearance documentation was processed online. In contrast, all clearance documentation was submitted in person by the clearing agent in the Port of Maputo. The close interaction between clearing agents and customs officials in Maputo created more opportunities for corrupt behaviour to emerge in customs relative to Durban.
In Maputo, port operators were privately managed but in Durban, most terminals (for containerised cargo) were under public control, with very lax monitoring and punishment strategies for those engaging in corrupt behaviour. Private management in Maputo was associated with fewer opportunities for bribe payments due to better monitoring and stricter punishment for misconduct. As a result, the organisational features of each bureaucracy determined that the high extractive types in customs had more opportunities to extract bribes in Maputo, while the low extractive types in port operations had more opportunities to extract bribes in Durban. While corruption levels were high in both ports, bribes were higher and more frequent in Maputo relative to Durban.
Finally, port officials with opportunities to extract bribes at each port differed in their time horizons. Customs in Maputo adopted a policy of frequently rotating agents across different terminals and ports, and since bribes varied significantly by the type of terminal at the port, customs agents were aware of the risk of being assigned to terminals with lower levels of extractive potential. On the other hand, port operators in Durban had extended time horizons given the stable support received from dock workers’ unions. Customs officials were therefore the high extractive types with the shortest time horizons, the broadest bureaucratic mandates and more opportunities to interact face to face with clearing agents. As a result, they extracted higher and more frequent bribes, relative to port operators in Durban (the low extractive types) who had longer time horizons and narrower bureaucratic mandates. Source PORT TECHNOLOGY. Use your BACK BUTTON to return to this page.
You can read the PDF version and full article HERE
News continues below…
NEWS FROM THE PORTS
TNPA makes new appointment in Durban
Agrippa Mpofu, TNPA Aviation Manager
Transnet National Ports Authority has announced a couple of senior appointments. One of these is the appointment of Agrippa Mpofu, who has been appointed Aviation Manager.
Based at the Port of Durban, Mpofu will be responsible for the provision of a safe and efficient aviation service in line with TNPA’s business objectives. TNPA’s aviation involvement comes by way of its fleet of three Agusta A109 helicopters, which are used for marine pilot transfers to ships entering or sailing from the two KZN ports of Durban and Richards Bay.
Mpofu holds a Masters in Aviation Safety and Aircraft Airworthiness and was awarded the French Aeronautics and Space Industry Award (FASIA) in 2003 and the South African CAA Airworthiness Operational Manager of the quarter Award: July – September 2005.
“My greatest achievement was the day I obtained my Aviation Masters degree. It afforded me the confidence and skills to gain a ‘Category One’ status in global aviation ratings for my previous employer. The benefits will now be enjoyed by all aviation organisations in the country in terms of credibility in business expansion,” he said.
Mpofu says he aims to work closely with the aviation team to develop and implement aviation training programmes as well as to ensure that comprehensive aviation information systems run effectively in accordance with national and international aviation requirements.
His managerial expertise, technical skills and competencies which have evolved over the years include South African Air-Link (Pty) Ltd, South African Express Airways (Pty) Ltd and Airbus (France), with the most recent being the South African Civil Aviation Authority.
Sanjay Govan redeployed
Sanjay Govan, Port manager of Cape Town now redeployed to head tariffs portfolio in recently established MDS
The second senior appointment announced by TNPA involves the current port manager at the Port of Cape Town, Sanjay Govan, who has been redeployed to head the Tariffs portfolio of the recently established Transnet Market Demand Strategy (MDS).
The MDS forms part of the R300-billion capital investment programme over seven years that was announced in March this year and which will have a massive effect on the growth of the TNPA, the company said in a statement.
“To deliver on this function TNPA found the need to identify a competent and highly skilled individual,” said TNPA’s chief executive Tau Morwe.
He said Govan’s new duties would involve “Finalising Tariff Methodology and Pricing strategy with the Ports Regulator, implementing agreements and licences for all port services and facilities and creating oversight capacity to drive port compliance, which forms part of the Regulator and stakeholder engagement programme.”
RAIL RELATED NEWS
In what will be good news for farmers and the agricultural sector generally, and ultimately good for exports, Transnet Freight Rail (TFR) has set up a business unit that will focus on winning back and establishing rail infrastructure networks for the agricultural sector throughout South Africa, Transnet CEO Brian Molefe has announced.
He revealed that studies showed that Transnet’s market share has the potential of growing from 86 million tonnes of cargo carried by rail a year, to 182.4 million tonnes annually. Molefe, who was speaking at an agricultural indaba in Johannesburg, said that Transnet had seen its market share of agricultural freight dwindle from 9-million tonnes a year in the early 1990s to a mere 2- million tonnes currently.
“The railways had simply become unreliable due to old rolling stock, under-investment and lack of maintenance, and was no longer suitable for transporting agricultural produce,” Molefe said, adding that TFR has set out to assess viable agricultural freight requirements, including rail routes that have been abandoned due to insufficient volumes.
TFR intended finding new ways of providing services to farmers and the entire agricultural value chain business, particularly the sugar, maize, wheat and fruit growing regions.
This change in policy comes after TFR turned away from wanting to handle agricultural products which it regarded as unprofitable because of seasonal demand and a production that is determined by global market movements in price. The agricultural sector was not unique in this regard and TFR basically chased away business across several sectors when it embarked on a policy of only wanting to operate block trains.
Branch lines were abandoned and have fallen in disrepair. At a recent Freight Task Group meeting held in Durban delegates were shown slides of railway lines on the Greytown branch out of Pietermaritzburg, an area that has huge forestry activity. The slides showed tracks that have been cut up and stolen because no trains ever ran on them.
Meanwhile the adjacent roads were being pounded to death by road trucks that are often overloaded and which carry the timber from the plantations to the mills at the coast.
According to Molefe, the state-endorsed rail, port and logistics infrastructure development of R300bn over the coming years would see the company target the agriculture sector among others, including mines and manufacturing. He said that provinces where new farming methods were beginning to increase yields could see new rail lines built.
News continues below...
SHIPWATCH: NEWS FROM THE WORLD OF SHIPS AND SHIPPING LINES
Pressure mounts on resurrecting the SA flag
SEZELA of Ocean Africa Container Line, the only South African company operating a regular coastal shipping service on the southern African coast. All OACL ships are chartered and flagged offshore. Picture by Terry Hutson
The campaign being led primarily by SAMSA (South African Maritime Safety Authority) to bring about an increase in the number of ships flying the South African flag is mounting and has been linked with a call for cabotage to be introduced.
SAMSA intends holding a conference in Cape Town between 11 and 13 June (at the Cape Town ICC) at which both cabotage and reflagging of ships will feature high on the agenda.
According to Commander Tsietsi Mokhele, SAMSA’s chief executive, South Africa has no commercial ships on its register but pays R45 -billion a year in shipping services to foreign ship owners and operators.
He told the parliamentary transport portfolio committee that this was the cost of carrying 264 million tonnes of cargo on ships last year. Having recently attended a meeting of the BRICS countries, he said that while South Africa had to admit to not a single ship flying its flag, the other BRICS members all had large fleets on their respective registers. Brazil had a fleet of 172 merchant ships flying the Brazilian flag, Russia had 1891 ships, India 534 and China 2044.
Telling the committee that 98 percent of South Africa’s foreign trade arrived or left the country by sea, he tabled a document calling for a policy framework that would enable the establishment of both a coastal and an international high seas merchant fleet.
“We’re almost 100 percent dependent on foreign shipping to get our goods to market,” Mokhele said. “All our BRCS partners are regional maritime powers, with vast maritime interests and capabilities in sea trade, commerce and naval influence.”
Mokhele also questioned why South African exporters continued to use FOB (Free on Board) when exporting their products, which ensured that with the point of sale being the port through which the goods were exported, the shipping requirements would invariably be decided by foreign interests at the expense of the South African economy. He said that most commodity-exporting nations used CIF (cost, insurance and freight) for their export transactions with the benefits accruing to the country that nominates the transport.
“We only export up to the export port. That’s where all our trade stands and from there all the way to market is deemed as a risk taken by the other economies. And that’s where we are losing out as a country.” Meanwhile the director-general of the Department of Transport, George Mahlalela said the government is giving consideration to introducing a policy that compels ships that carry cargo between South African ports to be registered locally.
He indicated that cabotage is one of the levers that the DoT is considering including in a new policy framework for the maritime sector.
Mahlalela said the African Union had in 2008 adopted the African Maritime Transport Charter which aimed at promoting local shipping in Africa. Cabotage was identified as one way of promoting local shipping, he said.
NAVAL NEWS – USS SWIFT ARRIVES IN SA
USS Swift arriving in Simon’s Town last week. Picture by Bob Johnston
The US Navy catamaran vessel USS SWIFT arrived last week in Simon’s Town on an official visit, following a call at the Namibian port of Walvis Bay. This is the ship’s third visit to South Africa since entering service with the US Navy.
The vessel is unusual in more ways than one. Apart from her design, she is not owned by the US Navy, which leases her from Sealift Inc from whom she is on charter to the US Navy Military Sealift Command (MSC).
USS Swift is designed as a mine countermeasures vessel but has been used quite extensively when participating in joint training exercises with several West African navies.
On her current voyage she is visiting Simon’s Town, East London (eta 31 May) and Durban (eta 5 June). We could not confirm whether USS Swift was to call at Port Elizabeth en route to Durban, but the visit to East London marks a rare call at that port by an American navy ship.
Starry-eyed guests in Marseille celebrate latest MSC jewel
A fabulous event for a fabulous ship – MSC Divina, latest in the MSC Cruises’ fleet which was launched into service on Saturday
The latest jewel in the MSC Cruises’ fleet, MSC DIVINA was christened in suitably elegant style in the French port of Marseille at the weekend by international screen legend, Sophia Loren.
The exclusive high-profile event included a gala dinner and entertainment from illustrious performers in the company of international celebrities, selected guests, media, authorities and the top management of MSC Cruises.
At the heart of the festivities was not only the addition of the 12th ship to the MSC Cruises’ ultra-modern fleet, but also the Mediterranean heritage of which the company is so proud. The event was themed Med with Passion, and MSC Divina herself represents the embodiment of Mediterranean style. Every detail of the on board experience and the christening itself were carefully considered to reflect the colours, the perfumes, the history and the culture of the area, offering guests an unparalleled opportunity to enjoy the region’s celebrated values of authenticity and warm hospitality.
Continuing MSC Cruises’ tradition of christening its ships in different European ports, the company and the port itself yesterday paid homage to Marseille and its centuries-old customs.
“Since 2003 we have built our ships on French soil, partnering with the French shipyard (at St Nazairre) and heavily contributing to employment and the economy. Tonight in Marseille we will celebrate this long-established relationship, paying homage to the country’s oldest and biggest port at the christening ceremony of our latest flagship, MSC Divina,” said MSC Cruises CEO Pierfrancesco Vago, summing up the occasion.
“We could not have found a better choice than Marseille, where the majority of our French guests embark all year round and where MSC ships will call 80 times in 2012, bringing over 280,000 international guests to the region. MSC has also worked alongside the French Government with substantial investment in the local cruise terminal and MSC Divina’s christening event is the perfect opportunity to show MSC guests the comfort and modernity of a state-of-the-art terminal, a fitting gateway to the unforgettable onboard experience they will discover.”
The Captens Aerobatic Display Team and the Breitling Jet Team opened yesterday evening’s celebrations with two breathtakingly beautiful and skilful aerial shows.
This was followed by a performance from La Poulido de Gèmo, a local folk-group which strives to preserve regional traditions through dance, music and traditional costumes. Members of the group, both young and old, are all motivated by a love of Provence and its traditions, and this passion for their region shone through last night.
A dynamic eight-minute medley of MSC Divina’s theatrical shows then followed, complete with energetic dance, acrobatics, and an impressive 14-person pyramid.
Gerard Depardieu, one of Europe's most accomplished actors and talented leading men, then narrated the evening’s events and the story of MSC Divina in his own lively and entertaining manner.
The christening ceremony was of course attended by numerous international stars, including celebrated classical performer and UNICEF Goodwill Ambassador Maxim Vengerov, a supporter of the MSC Cruises and UNICEF Get on Board for Children initiative which funds a project for education equality for disadvantaged children in Brazil and which has raised over 1 million euros to date. Vengerov took to the stage with local children and released hundreds of UNICEF balloons to mark the occasion. He then delighted guests with a surprise violin solo.
The event’s main artist, critically acclaimed Italian singer, pianist and composer Paolo Conte mesmerised the audience with his grainy, resonant voice and his colourful and dreamy compositions, evocative of jazz and blues.
The highlight of the evening was of course the floodlit ceremony and the parade of the ship’s officers, when the peerless Sophia Loren – treasured godmother of the MSC Cruises’ fleet - cut the ribbon and named MSC Divina to a crescendo of champagne, confetti, and sparkling fountains.
While this went on, an equally talented famous face was cooking up a storm in the kitchen. Lucky guests enjoyed two signature gourmet menus from French favourite Chef Christian Constant. Each traditional delicacy aimed to surprise and delight, and was prepared using the finest ingredients with a fresh new twist, just like MSC Divina herself.
The Marseilles Provence Cruise Club, who welcomed MSC Divina into Marseille harbour on Friday 25 May with an impressive parade, saw her off again on Sunday 27 May in style as she takes to the seas for her long-awaited first season.
News continues below…
WEST AFRICAN NEWS: SA WILL LOOK TO NIGERIA FOR SECURE OIL SUPPLY - MOTLANTHE
Cape Town – With the uncertainty over supply of oil from Iran, South Africa is looking to Nigeria to purchase its oil, the Deputy President Kgalema Motlanthe said, following the signing of a Memorandum of Agreement with the Vice President of Nigeria, Namadi Sambo, last week.
South Africa may be forced to comply with a US order to cease buying oil from Iran – from which it sources about a quarter of its oil – or risk economic penalties from America. The Minister of Energy Dipuo Peters last week said government would decide on its response to proposed sanctions by the end of this month.
Motlanthe said PetroSA and private traders were expected to look at supply agreements for oil from Nigeria.
“We would guarantee going forward to our Nigerian brothers (that there will be) demand for their liquid fuel, because we don’t want to source our fuel in areas that are likely to be unstable,” he said.
“Indeed, we are quite confident that Nigeria will become one of our trusted suppliers of liquid fuel going forward,” he said.
Sambo said Nigeria was ready to offer any economic support – be it energy or otherwise. Motlanthe said the agreement he signed with Sambo today would help prepare the way for a more enabling business environment between two of the continent’s biggest economies.
He said the agreement enabled both countries to rope in business people from both countries that had an idea for investment opportunities in both countries.
Nigerian companies with the wherewithal to supply infrastructure projects – including the supply of cement – would be invited to participate in South Africa’s massive infrastructure programme.
Sambo arrived in South Africa at the invitation of Motlanthe to attend the 8th South Africa-Nigeria Bi-National Commission. He has since departed the country.
The two discussed several issues and reviewed the progress made since the 7th Bi-National Commission was held in Abuja in 2008.
They also discussed the progress made on the seven working groups of the Bi-National Commission. These workings groups are: foreign affairs and co-operation; trade, industry and finance; security and defence; agriculture, water resources and environment; minerals and energy; public enterprises and infrastructure; and the social and technical working group.
In addition, a Memorandum of Understanding on economic and technical co-operation was signed between Minister of Trade and Industry Rob Davies and Nigeria’s Finance Minister Olusegan Aganga.
Another Memorandum of Understanding was also signed between Aganga and the Minister of Finance Pravin Gordhan, to offer mutual assistance with customs administration between the two countries.
Sambo said Nigeria had put the incident that took place at OR Tambo International Airport in Johannesburg in March – when several Nigerians were deported after a dispute over yellow fever vaccinations – behind it.
“Nigerians are happy about the way they are treated in South Africa,” he said, adding that there was a plan to expand the number of years for which travel visas can be used for, while doing away completely with diplomatic passports. – BuaNews
Ivorian minister fired over Trafigura funds
An Ivory Coast cabinet minister has been dismissed after reparations from Trafigura Beheer BV for the victims of the 2006 dumping of toxic waste in Abidjan disappeared.
The minister, Adama Bictogo had been appointed to ensure that compensation from the European oil company reached the victims, reported the BBC. Readers may recall that in 2006 the bulk ship PROBO KOALA shipped drums of toxic waste from Amsterdam in Europe to Abidjan, where it was supposed to have been disposed of by a local company. The waste was instead fed into the city’s waterways and resulted in large numbers of people becoming sick. Three people died and over 1500 suffered ill effects as a result of being poisoned by the waste which entered the city’s water supply.
The unprecedented resignation of the entire Ivory Coast cabinet was accepted by the Ivory Coast President Laurent Gbagbo. You can read that report in our September 2006 report on the incident Cote D’Ivoire cabinet resigns over toxic fumes scandal - use your BACK BUTTON to return to this page.
According to the BBC the new government of President Alassane Ouattara has been urged to investigate why victims of the pollution have not yet received any compensation. Bictogo has meantime rejected the claims and denies any wrong doing.
News continues below…
TRADE NEWS: INVESTING IN TRAINING STEERS YOU UP THE CORPORATE LADDER
With supply chain skills where IT skills were in the 20th Century, being in demand, scarce and mobile, the best way to keep up with the latest industry trends and win the talent race is to invest in training — on an individual and a corporate level. ASTL is one of the oldest companies to offer training courses in transportation logistics.
The ASTL Certifications are now brought to you in South Africa though Pathfinder Logistic Solutions.
The benefits of ASTL certification include career enhancement through professional certification and high employee retention rate when providing professional development opportunities, global common industry standards, proven knowledge in the transportation and logistics industry, as well as understanding your customer needs.
People are integral to our supply chains as they will continue to operate, manage and plan the movement of all five modes of transportation, provide timely deliveries, create value added with distribution centre and warehouse services, and be in the front line of essential customer service.
The companies that get the people side of their business right will be the winners in modern supply chains.
South Africa’s most comprehensive Directory of Maritime Services is now listed on this site. Please check if your company is included. To sign up for a free listing contact firstname.lastname@example.org or register online
Looking for help? Try our MARITIME SERVICES DIRECTORY CLICK HERE
CRUISE SHIPS AND CRUISING
Bringing you shipping, freight, trade and transport related news of interest for Africa since 2002