What Are Common Maritime Frauds And Illegal Activities On Board Ships?

Almost a decade ago, when I was sailing on an oil tanker, a young chief officer who had joined my vessel, asked me if the ship was ever going to load in Iraq. When I asked him why he was so curious about Iraq, he innocently replied that since after completion of loading no survey was carried out in the Iraqi port and the Bill of lading was prepared based on figures provided by the ship. The ship would be loaded with crude oil almost 99% full and B/L figures provided by the ship would be 98% or less of the total cargo. The 1 % or more of this cargo would then be sold to small barges off the coast of a maritime nation in the Arabian sea arranged by the installation. The loot would then be equally divided among all on board and ashore. When I informed him that nothing of this sort can happen on board my ship, he was very disappointed and after a few weeks left the ship.

Have you ever faced food problems, salary issues, ship arrests, engine breakdowns, coercion by senior officers and abandonment by ship owners on a merchant ship?

illegal activities

Well these are just a few of the many problems faced by many seafarers on ships worldwide. The main reason behind these problems is greed, which is a worldwide phenomenon. Corrupt Masters, Chief engineers, Chief officers, ship superintendents, acting alone or in collusion with other shore based entities can make life hell for their crew. If the corruption is led by shore managers, then it’s high time you quit the company and report to authorities against such maritime frauds.

So what exactly is maritime fraud and how to detect them?

Maritime frauds can occur anywhere; be it a vessel, a shipping company office or a trading company transporting goods by sea. The list can go on. It necessarily has to involve two or more parties, out of which one or more must have unjustly or illegally succeeded in obtaining goods or services from another party. Since they can happen anywhere, it is important that seafarer is extra careful and do not get directly or indirectly involved in activities or get himself coerced by senior officers in wrong doings that can cost them dearly, both financially as well as to their reputation.

A special watchdog to detect, inform and combat such maritime frauds, International Maritime Bureau or IMB was set up in 1981 as a specialised division of International chamber of commerce (ICC). It is a nonprofit organization. Even IMO in its resolution A 504(XII) (5) and (9) adopted on 20 November 1981, has urged Governments, organizations and interested parties to co-operate and exchange information among each other to combat maritime frauds worldwide. Hopefully seafarers are already aware of the IMB piracy reporting centre based in Malaysia and getting worldwide piracy reports regularly on board. For more details, refer to icc-ccs.org.

Some of these maritime frauds are visible and can be easily detected, whereas others may remain hidden for a long time in the absence of evidence. For example, the easily visible ones on board are: –

  1. Master and / or Chief steward manipulating stores and victualling invoices by signing for unreceived goods and sharing the loot with the supplier.
  2. Senior deck officer(s) and / or ship’s crew selling ship stores or cargo.
  3. Senior ship engineer(s) selling bunkers by signing for more and receiving less on their ships and manipulating the shortage through cargo residues(diesel) on oil tankers.
  4. Senior ship engineers agreeing to accept substandard machinery spares.
  5. Senior deck officers manipulating B/L figures
  6. Ship superintendents acting alone or in liaison with senior deck officers inflating invoices with stores / spares and/or repair work not carried out in repair yards.
  7. Cargo surveyors in liaison with senior deck officers, manipulating daily outturn figs to boost their ratings. This is most common on bulk carriers.
  8. Agents, stevedores, suppliers, manipulating invoices in liaison with senior officers on board.
  9. Ship manning agents manipulating salaries of the ship crew.
  10. Ship manning agents supplying uncertified crew on board for less salary, by using fake certificates, CDC etc.
  11. Senior officers on board manipulating Oil record book figures to hide deficiency in ship machinery and pumping residues overboard through portable hoses.
  12. Senior deck officers manipulating cargo figures on oil tankers and pumping residues(diesel) to bunker tanks in liaison with ship owner, managers.
  13. Ship’s crew and/or Master illegally carrying stowaways intentionally.
  14. Ship’s crew and/or Master carrying contraband on board.
  15. Insurance frauds committed by ship owners/Managers by manipulating ship records in liaison with ship officers and Master, which may include death on board (Homicides shown as suicides)

I can go on but in their own best interest, seamen should remain vigilant and watchful and identify several other such frauds not reported in this article and bring them to the notice of the port authorities. Whistle blowers are rewarded handsomely these days as it happened in the case of a 3rd Engineer who provided substantial evidence to the US coast guard many years ago, of wrong doings by a chief engineer, causing environmental pollution. While a long prison sentence was awarded to the Chief engineer, the junior engineer was awarded with a million dollars and US citizenship.

Seafarers have many choices today to collect evidence against frauds committed on board. One of them being an Intrinsically safe camera for hazardous environment and various spy gadgets for indoor use. From false bottoms and incorrect sounding tapes provided by bunker barges to Bunker delivery notes and various stores /provisions supplied to your vessel, vigilance and alertness can prevent many frauds being committed. Never get blackmailed or coerced by seniors for environment related issues. Report quality issues and shortages to the master and 2 or more crew should counter sign all the invoices received on board. Speak freely about safety issues in your monthly safety meeting. Lastly report suspicious behaviour of any crew to your senior officer.

It is important to remember that if the fraud is happening on board, ignorance of any kind is not helpful. By virtue of crew’s presence on board, it is taken for granted that an event has taken place under the full knowledge of the Master or crew or both unless reported by either of them well before they are detected by authorities. The biggest reason for such frauds is mainly Greed, but a maritime fraud will also take place due to coercion of the crew, by senior officers or external person or persons and of a Master by either his own company officials, ship owner, agent, port authorities and criminal syndicates.

Over to you..

Have you ever personally found out about a maritime fraud on board ship?

Let’s know in the comment below.

Disclaimer: The authors’ views expressed in this article do not necessarily reflect the views of Marine Insight. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Marine Insight do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader.

The article or images cannot be reproduced, copied, shared or used in any form without the permission of the author and Marine Insight. 

3 Comments

  1. That is all well and good.

    But if the government officials are corrupt, together with businessmen and other entities then there will always be gatherings of people of like mindedness who will seek out each other and create dark concentrations of deceit.

    Where did the person in the Iraq scam go afterwards? Did he look for a captain and crew with the same attitudes as he had? The captain chooses his crew. Management chooses their captain. The board chooses management. The owners chooses the board. If the owner is a state entity or a state entity hidden in an offshore company. That state entity is in collusion with a foundation which receives donations from corrupt businessmen. Round and round.

  2. I support your view sir, but that also true many part of world corruption is an epidemic, may be end of day person will be suffered or murdered at high sea. As many incident happen in past.

  3. I have been working sea since 2009 and after I received 2nd off I havent ever seen ship which not do illegal work. Stealing, mobbing ,smuggling are really very very common.Even masters plan everything and create evidence to make you guilty without your knowledge like you do illegal business.

Leave a Reply

Your email address will not be published.