SIU looking into the maritime fund’s missing millions

A former employee at the South African Maritime Safety Authorityhas spilled the beans about how the multimillion-rand maritime fund was exposed to fraud, theft and corruption.

The maritime fund is sustained by money collected as a result of penalties, fines and forfeitures to ship owners who violate certain laws and pollute the oceans.

Themba Ntshangase (54) – a former maritime specialist in policy research and development – has deposed an affidavit to the Special Investigations Unit (SIU), detailing what he found after Maritime Safety Authority chief operations officer Sobantu Tilayi instructed him to conduct research on maritime administration in South Africa in 2015.

“The more I continued with the research, the more I discovered … ever since the fund came into existence in 1999, the Maritime Safety Authority has been accounting for the fund separately and preparing separate financial statements,” Ntshangase wrote.

Therefore, he said, the fund was left without control elements such as the Public Finance Management Act and National Treasury regulations, and did not grow.

“This gap opened the fund to negative impacts of fraud, corruption, maladministration, mismanagement, money laundering and theft. Once the fund suffers such negative impacts, there was no way that Port State Control will be effective and efficient and in turn the maritime administration will not experience smooth development,” Ntshangase said.

However, Tilayi denied this week that the fund was not audited by the Auditor-General and said money in the fund could not be accessed without the approval of the minister of transport.

“In any event, there has been no withdrawal against the fund for the past two years. I’m not sure what period the allegations [in the affidavit] refer to. The growth of the fund does not depend on passing traffic [but] on ships that we fine for transgressions,” Tilayi said.

“I’m not sure at what rate it has been growing but I can tell you we still fine ships and 100% of the fines can only be paid into the fund,” he added.

SIU spokesperson Nazreen Pandor confirmed that the unit was looking into the matter.

“The SIU received a referral and the assessment is being finalised, with a view to establishing how best the SIU can assist the Maritime Safety Authority,” she said.

Despite increases in traffic on the South African coastal routes, said Ntshangase in his affidavit, due to piracy and unrests in certain countries, the fund did not grow as expected.

He said that the fund should have grown from R80 million to R750 million in the period 1999 to 2013, but it did not despite the MV Treasure oil spill in June 2000 when the ship carrying iron from China to Brazil sank off the South African shore.

In the period between 2004 and 2008, the Maritime Fund should have grown to R1 billion because of traffic volumes in the South African routes due to the increase in Somali piracy in the Suez Canal and the fact that the insurance claim payments for the Cordigliera oil spill were made during this period.

Between 2014 and 2018, the Maritime Fund should have grown to R1.5 billion. Ntshangase said that this period covered the detention of the 55 000-ton NM Cherry Blossom ship on May 1 2017. This ship, which contained high-grade phosphate rock worth $39.6 million was detained on the request of the Front Polisaro Front of Western Sahara because it was heading to New Zealand.

“The South African High Court in Port Elizabeth found in favour of Pisaro Front … The Maritime Safety Authority should have joined the case on behalf of the maritime fund in order to ensure that the ship becomes a forfeiture of the fund. This did not happen and as a result the applicant [Pisaro Front] will claim the ship should the sheriff successfully auction it,” said Ntshangase.

“The legal process could have seen the Maritime Fund grow to an estimated value of R1.5 billion,” he added.

Ntshangase said that ship incidents increased proportionately to an increase in traffic volumes, which could have seen a positive growth in the fund as a result of penalties, fines and forfeitures.

“However, in my research, I found that there was a reverse to this expectation. The next question was why was this so? Bad governance? But by who? The Maritime Safety Authority management claims that the authority does not derive any direct benefit from the fund! This cannot be correct [because] the fund is established to assist in supporting the objectives of the South African Maritime Safety Authority Act,” said Ntshangase.

“The failure of the fund to grow as expected despite the fact that there was an increase in traffic volumes due to a civil war in Syria and Yemen as well as political instability in Somalia, can only be blamed on bribery by international ship owners, fraud, corruption, maladministration, mismanagement, money laundering and theft,” he said.

Ntshangase recommends that forensic investigators should be brought in to stop “fraud, corruption, mismanagement, money-laundering” and failure by Maritime Safety Authority officials to issue fines, penalties and get forfeitures to help the fund to grow.

“All money that has been claimed on behalf of the Maritime Fund at London Lloyds Club and the International Oil Pollution Compensation Fund 1992 and the Supplementary Fund Protocol must be hunted, identified and be brought to the maritime fund’s account,” he said.