John Sypnowich is chief legal and compliance officer at The CSL Group Inc., a world-leading provider of marine dry bulk cargo handling and delivery services. He serves on the steering committee of the Maritime Anti-Corruption Network (MACN) and is currently vice chairman of MACN.
Established in 2011 and formalized in 2012 by BSR, which steers the initiative, MACN is a global business network working toward a maritime industry free of corruption that enables fair trade to the benefit of society at large. It is a network comprised of vessel-owning companies within the main sectors of the maritime industry and other companies in the industry, including cargo owners and service providers.
Having experienced significant growth over the last five years (from eight founding members to more than 70 members today), MACN is now one of the leading business initiatives tackling bribery and corruption in global supply chains.
We sat down with Sypnowich to discuss anticorruption trends, collective action, and next steps for MACN.
Dominic Kotas: Why did The CSL Group join MACN?
John Sypnowich: We have been strong advocates of the fight against corruption for many years, being well aware that corruption is a particularly sensitive issue in the shipping industry, and we wanted to do more. But we found that there were not a lot of resources or networks available to help us exchange best practices and work on collective action. So when we learned about MACN, we jumped at the opportunity to join.
Kotas: What are the main anticorruption issues that The CSL Group faces?
Sypnowich: We tend to operate with long-term contracts and established freight, so compliance is a little easier for us than it is for other shipowners and operators, as we work with the same agents and suppliers for many years. That being said, like all shipping companies, we risk being delayed when calling at certain ports for real or perceived regulatory irregularities. We also do business in a lot of developing areas of the world, where the bureaucracy is sometimes less well established, and the legal systems are either unlike our own or are not as well developed. That sometimes makes it challenging to acquire authorization and licenses on a timely basis while ensuring that we fully respect our company’s code of ethics, our compliance code, and our zero-tolerance policy toward corruption.
Kotas: Do you think these things are issues that are particularly evident in the shipping industry compared to other industries?
Sypnowich: Yes, I think so. There are challenges that are unique to the shipping industry. For instance, shipping has tended to have a conservative culture, which in the past has prioritized meeting schedules above other considerations. Another challenge is the huge conflicts of law that arise with vessels operating in multiple jurisdictions all over the world. Applying a single uniform standard can be difficult. This means that, as a shipping company, you might be complying with your domestic laws, but when you operate in another part of the world, you may have to comply with a very different standard. And of course the risk is that, depending on what standards you’re trying to meet, there may be somebody willing to meet a lower standard and win the business on that basis.
Kotas: So what drives compliance for you?
Sypnowich: I like to say that in our business, meeting the highest ethical standards is no different from meeting the highest safety standards. Customer satisfaction, operating efficiency—all of these are critical to our business, but if we can’t deliver them in a safe, legal, and ethical way, then they can’t be done. Our number one obligation is to operate in a way that guarantees the safety of our vessels and crew while meeting all legal and ethical standards.
Kotas: Would you say that during your career you have seen a shift in the process of tackling corruption within the shipping industry?
Sypnowich: Absolutely. It used to be an accepted problem that people didn’t discuss. Now you can almost feel the cathartic effect on people when they join the network, this ability to talk openly about the challenges they’re facing and the challenges of compliance. That also means acknowledging that this is difficult. But being able to discuss your progress in an open and honest fashion is, for me, an entirely new development in the shipping industry—and, I think, a genuine commitment by many within the shipping industry to effect change. This is something that wasn’t talked about 20 years ago and is now a topic of discussion and an agenda item for responsible shipping companies the world over.