“Ginny!” said Mr Weasley, flabbergasted. “Haven’t I taught you anything? What have I always told you? Never trust anything that can think for itself if you can’t see where it keeps its brain?”
(JK Rowling –Harry Potter and the Chamber of Secrets)
In 21st century international business, this becomes, “Never trust anything that operates commercially, if you can’t see who controls it, and where it gets its money from!”
The buzzword is ‘transparency’, except when it comes to merchant shipping, where everyone is perfectly happy to entrust billions of dollars’ worth of cargo to, to finance, to insure and to pay millions in freight to, unknown individuals hiding behind offshore shell companies, who get their money from – where, exactly? There are plenty of rumours about shipowning companies, even very high profile ones, with alleged links to organised crime and to reprehensible regimes, but they are no more than rumours, because everyone in this industry is so busy covering their tracks that nobody can prove or disprove the rumours.
If you think that the insurers and the bankers, at least, must surely know who they deal with, you haven’t been in the room with an insurance broker talking to an underwriter, or a finance banker pitching a syndication.
Transparency is the word of the age, and transparent is just what merchant shipping is not. It’s all perfectly legal – it surely must be, as it was all put together by highly paid lawyers. What it isn’t is transparent. It is all deliberately made as opaque as can be.
We, the people ‘in the business’, ‘get round’ this deliberate obfuscation that we all love so much, by a system of nods and winks. We ‘know’ that the MV Saucy Sue, owners Compania Naviera Sieve, SA, is ‘really’” owned by Fred Papadopoulos, of 221B, Akti Miaouli. She probably isn’t – she’s probably owned by his mother-in-law and some cousins in the motor trade, but, by convention, we never look beyond what used to be called the managing owner. We ‘know’ and being ‘in the know’ makes us feel better about ourselves, somehow. We don’t really know, we just choose to believe what we are told. We do this because if we really had to take all these offshore shell companies at face value, or rather, at faceless value, we wouldn’t do business with them.
Much of this deliberate obfuscation serves no useful purpose, and we do it simply out of lazy habit. Does anyone really think that the one-ship company will protect anyone from a serious lawsuit, these days?
I have offered a potted history of the development of the ‘offshore’ tax ‘havens’ as they developed along with, and as part of, the flags of convenience. Today we have an international shipping industry doubling in capacity, but sadly not in profitability, every 15 years, but one which is almost invisible to the general public, who have no understanding of it, or sympathy with it, because the industry goes out of its way to try to hide.
That general public has grown much larger, as the peoples of Asia and Africa have joined up, gone on line, and joined in.
In the United States, the improbable figure of Donald Trump bestrides a wave of lower middle class outrage, in Britain, similar people demand “Brexit”, wrongly blaming the European Union for the web of regulations that they feel they are enmeshed in. In Greece, similar people vote for Syriza, in Sweden, in Japan, in Germany, in Italy, in France, in Spain and elsewhere there are other ‘populist’ movements. What they have in common, be they Left or Right, is that they are indeed populist – headed by charismatic figures offering a quick fix to people who have seen their standards of living decline, which is not at all what they expected. It didn’t happen to their parents.
Across the developing economies of Asia and Africa, we see people getting better off – and very rapidly becoming disenchanted with the thieving ways which their own elites seek to hide behind the very same offshore corporate structures.
What ties all this together is – merchant shipping. But how much sympathy can we expect any of the billions of people who now make up the global public to have with the obscurantist, devious, little traditions of our industry?
It all looks so 20th century…