TMCM’s Stephen Hunt lifts the lid on the consequences of corrupt medical related practices
Shipping still carries over 90% of the world’s traded goods,
meaning the industry deals with the world more closely and
more frequently than any other sector.
Vessels arriving in foreign ports are confronted by what
seems like an ever-increasing global bureaucracy concerned
with security, immigration, customs, health and sanitary matters,
often duplicated at various levels of government from the local,
to the provincial, to the national. Today, modern fears over
security, disease control and immigration make routine activities
a fertile revenue opportunity for local public officials and
‘gatekeepers’.
Paying someone a few dollars to get cargo moved faster
may not be the same as bribing a public official to avoid some
regulatory requirement, but where such practices exist at every
level of society, it is easy to see how those on the spot can get
on the wrong side of the line.
An economy reliant on bribery and corruption at the very
highest level makes its presence felt to masters and crew through
petty demands on the quayside, which might once have been
settled with whisky and cigarettes but now often involve significant
cash payments.
Arbitrary fines by Brazilian sanitary authorities for out-ofdate
medicines or yellow fever certificates are famous and still
commonplace, while similar demands are still seen in Ukrainian
and Russian ports for having “undeclared chemicals” on board,
often found in the paint store or other non-cargo areas.
The everyday need to ‘get things done’ will always be central
to the discussion on corruption, especially in shipping, where
there are so many opportunities for officials and local interests
to put up obstacles which can only be shifted by making
payments. The present regulatory climate threatens to criminalise
shipowners, masters and underwriters dealing with these everyday
realities, rather than seeing them as victims of habitual extortion.
The same pressures are felt in maritime employment,
particularly in low income countries where earnings at sea can
be significantly greater than those available at home.
SICK NOTE
One of the key requirements for engagement at sea is a
pre-employment medical (PEME) which satisfies the
requirements of domestic maritime authorities and the flag
states of vessels on which they might serve. Many owners,
managers and underwriters enhance regulatory PEMEs with
their own tests and criteria. Clinics in crew countries
around the world have started to implement these enhanced
standards, especially since the coming into force in 2012 of
the Maritime Labour Convention, which requires that crew be
provided with a PEME under a suitably audited and accredited
scheme.
The importance of the PEME document in securing
seagoing employment, and the remoteness of many owners
from their crew sources, sadly creates the ideal conditions for
fraud. Apparently legitimate PEMEs are frequently
obtained through cash payments to clinics not authorised to
issue them, with the result that the best-looking PEME in
the world can take a crew member to sea with
uncontrolled diabetes, severe hypertension, a serious heart
condition, or a host of other ailments which can result in
medical emergencies mid-ocean, leading to vessel diversions,
evacuations and urgent hospitalisation abroad, at great risk
to the crew member and at great cost to owners and
underwriters.
Data security measures such as barcodes, sequential
numbering and holograms can be used to maximise
fraud prevention, with the result that fraudulent PEMEs
and duplicitous clinics are often quickly evident. It is an
ongoing battle however, given the pressures felt by crew
members to get to sea, the pressures on all manning
agents to provide what appear to be healthy crew, and
also the apparent collusion of some clinics and agents
in having unfit crew going to sea and fuelling a selfperpetuating
cycle of repatriations, replacements and
courses of treatment.
Time and again, we find that frequent audit and
review visits to accredited clinics are necessary not only
to maintain standards, but to investigate anomalies and
potential fraud. Many owners and underwriters take an
enlightened view of this cost, knowing the potential
costs and consequences of a medical emergency.
ARM’S LENGTH
A further effect of the distance between owners and
their crew, particularly among cruise lines and other
mass employers who may not have a formal manning
agency structure, is that home country medical expenses
and associated costs are vulnerable to fraud. Through
the use of translations, in-house and external medical
review, cost comparators and local agents, we have
uncovered attempts to pass off receipts for furniture
and electrical goods as medical costs, medical reports
issued by doctors who have been dead for years and
clinics which do not exist, and travel expenses for
treatment a short walk from a crew member’s home.
A more subtle problem in crew medical matters is
the difficulty in moving cases along. Many doctors,
particularly those working in state systems or those
whose bills are paid by crew members in the first instance,
are quick to sign a crew member off for a few more
months because they don’t yet feel quite well enough
to return to sea. Doctors who look no further than a
crew member’s subjective description of their progress
are one of the biggest challenges in case management,
and entail creeping costs for owners in sick wages as
well as a lack of certainty over when crew might be
available for work again. In many cases this is down to
poor reporting, but fraud and collusion are also common
and we see many cases in which reports have effectively
been written by the crew member themselves.
Fraud is most prevalent in countries where corruption
is also a fact of life. A particular challenge we face in
arranging medical care on behalf of US cruise operators,
who recruit worldwide and yet are still subject to the
US requirement to pay “maintenance and cure”
expenses, is that there exists a strict obligation to provide
the necessary treatment, yet with very little leeway
allowed for dealing with cases in countries where a grey
economy and a lack of transparency are part of the
landscape.
On a day-to-day level, crew members on sick leave
visiting a state doctor, doing their best to get treatment
and regain their fitness for work, are often required to
pay a private sector-type fee in order to get a prompt
appointment. This is simply the way in which state
doctors get some kind of return on their years of training,
which poorly paid state health jobs do not give them.
At the same time, the crew member is obliged to show
progress in regaining fitness and the crew manager or
ship owner wants their employee back at work.
These are the realities of staffing such an
international but cost-conscious industry. The practical
challenges will only get harder as the regulatory climate
becomes more and more strict. Owners and underwriters
need to be protected from fraudulent practices and the
stain of corruption. SN
Stephen Hunt is director at Thomas Miller Claims
Management. TMCM is a marine risk management
consultancy providing marine claims handling, adjusting
and operational support services to clients in the marine,
transport and general commercial business sectors. Find
out more at www.thomasmiller.com.
