Port Klang: Committed to Curbing Corruption

A clean culture is important to attract customers.

Malaysia’s Port Klang is going all the way out to fight corruption.  

By Rachael Philip, Malaysia correspondent, Maritime Fairtrade

Port Klang has made a name for itself as an efficient port with good infrastructure. Due to this, and its strategic location, the port has emerged as a gateway for entry into the Southeast Asia market. Now, it wants to be known as a port that is serious in its fight against corruption.

Experience is the best teacher, and the general manager of Port Klang Authority (PKA) Captain Subramaniam Karuppiah’s 13 years at sea has taught him a thing or two about the devastating effects of greed.

Captain Subramaniam Karuppiah, general manager of Port Klang Authority.

“I have experienced many encounters as a sea captain. I have captained a variety of vessels, worked under different climates and conditions in the oceans, I have had first-hand view of trade in different countries and the different levels of transparency and competency in all these ports,” Captain Subramaniam said to Maritime Fairtrade in an interview.

From instances of having to bribe port officials to be able to enter ports and clear their shipment, to extortion by Customs officials and under-invoicing by exporters, the industry’s worst enemy appears to be itself.

Today, as general manager of PKA, the statutory body that manages Port Klang – the 12th busiest port in the world, which handled a total container throughput of 13.2 million TEUs in 2020 – Captain Subramaniam is committed to keeping it clean and to upholding zero tolerance where corruption and bribery is concerned.

A port is a complex ecosystem

The maritime industry involves the import and export of trade worth billions of dollars, and for the industry to sail smoothly, it requires the collaboration of multi-stakeholders. Ports are centers of loading, discharging of cargo, trading and distribution. Even manufacturing is now carried out at ports to cut transportation costs, said Captain Subramaniam.

“Port Klang’s customers are both international and local companies. We deal with more than 40 international shipping lines including Maersk, CMA, Cosco and MSC, and large logistics companies such as Hume, Kuehne+Nagel and DHL. 

“With taxation and duties to be paid, there are many avenues for things to go wrong. And so, this is where we have to deal with corruption, fraud and bribery.”

Creating an anti-corruption culture

In December 2020, PKA introduced its anti-corruption policy statement, a step towards making anti-corruption part of the nature and identity of the two ports under its authority – Westports Malaysia and Northport Malaysia. 

The policy “sets out parameters for PKA to prevent, detect and respond to any form of bribery, misappropriation and abuse of power related to the organization. PKA pledges zero tolerance towards any form of bribery and abuse of power in carrying out its regulatory and operational functions”. 

It will, among others, review and improve work systems which may provide opportunities for corrupt practices, provide platforms for education and awareness on the seriousness of bribery offenses, and work with stakeholders to fight acts of bribery.

“Working with our terminal operators, PKA introduced programs and seminars on good governance, integrity and good ethics in daily life, even outside the office and at home, it is all part and parcel of creating a culture. The outcome of all this is evaluated. We do yearly audits with staff in governance and ethics,” said Captain Subramaniam.

“We have to send the right message out. When we do this, our stakeholders – terminal operators, import and export agents, producers, freight forwarders – they too will put in place elements to fight corruption and bribery. The next step after education is putting action in place, this is what we are working on now.” 

Port Klang receives with more than 40 international shipping lines at its ports.

Streamlining rules

Besides greed, Captain Subramaniam feels that cumbersome regulations are also to be blamed. Because the nature of the activities at ports is transactional, digitization and the streamlining of bureaucratic procedures have helped many countries to lower their incidence of bribes at the point of service delivery. 

“We need transparency, and not complex regulations and tedious steps to get things done. Digitalization can solve these issues and take away face-to-face contact. PKA is increasingly using the digital platform and promoting the maritime single window. This will assure all our stakeholders that bribery is addressed at all avenues.”

The port authority also has in place a reliable whistle blowing policy. 

“Whistle blowers can report directly to us no matter how small or insignificant the bribe may seem. Perpetrators often do not know the impact of what they do. Receiving a couple of ringgits may seem common, but we want to change this culture, and say that this is illegal.”

Learning from the PKFZ incident

PKA’s 2006 Port Klang Free Zone (PKFZ) project, regarded as Malaysia’s first integrated free zone providing facilities for international cargo distribution and consolidation, was mired in controversies for years. In the making of PKFZ, some hundreds of millions of ringgits were overcharged and unsubstantiated. Captain Subramaniam’s predecessor Datin Paduka OC Phang was eventually found responsible for the breaches of duty as alleged by PKA.

“After the PKFZ issues, we have reinforced and strengthened our development strategies. We have introduced a strict code of practice and guidelines. We have the Organizational Anti-Corruption Plan (OACP) in place and are working towards the Anti-Bribery Management System (ABMS) ISO 37001. We aim to be certified by end Q1 2022. Both Westports and Northport will embark on this soon.

“Corruption can hurt your business, it can make you lose your company’s advantage and eventually the nation will suffer. We won’t be afraid to wield the stick, our stakeholders have been warned. Bribery may be a short-term gain but it is a long-term loss for the country.”

Update: Northport has received the ISO37001:2016 Anti-Bribery Management Systems for Provision of Port Operations certification on December 23 2020 and has been officially acknowledged as the first port in Malaysia to obtain this standard following a comprehensive audit exercise conducted during the second half of last year.

Port Klang handled a total container throughput of 13.2 million TEUs in 2020.

Captain Subramaniam heads IAPH 

Captain Subramaniam Karuppiah was recently appointed as the president of the International Association of Ports and Harbours (IAPH). He is elected president for a term from 2021 to 2023. The IAPH consists of 190 port authorities and terminal operators in around 100 countries in the world. 

The association brings together the voice of ports around the world, advocating best practices in the areas of technology, human resources and environmental degradation. 

Members come together to resolve common issues, advance sustainable practices and improve how ports serve the maritime industries.

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Rachael Philip

Rachael Philip

Rachael Philip, our Malaysia correspondent based in Kuala Lumpur, brings more than 20 years of experience in reporting, editing and management to the team. She feels that passion coupled with integrity can make a real difference in our personal and professional space.

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