The guilty are promoted instead of going to prison.
Amidst endless talk of attracting investment into the port industry, selling off portions of port capacity, and port concessions (which in our country have so far been carried out exclusively by SCM and exclusively for its own benefit), another year of violence against the normal activities of port clients is underway.
Memoranda are signed, reforms are promised, countless negotiations are conducted with "potential investors," but the industry lives its own life, which has no relation whatsoever to the civilized working methods of Western and Eastern investors.
Example.
This "magnificent table" is from a recent letter from the Ukrainian Fiscal Service detailing the number of times various "state forms of control" were used against port clients in the first half of 2015. And this is just one port. Almost 20 times (!), government agencies literally interfered with other people's property, and in the vast majority of cases, without court approval, without accountability for their actions, either disciplinary or financial.
For many years, the effectiveness of such controls has hovered around 1%. This means that the state has no need for these actions, which incur enormous additional taxpayer costs, unnecessary transport delays, and always encourage corruption, as they bring no benefit to the budget. Moreover, when asked about the costs incurred by port clients due to this useless and even harmful activity, the Federal Service for Supervision of Transport honestly responded that this should be asked of the port clients, who were cynically forced to pay for all these "state" controls by someone (who?). Their cynical and insolent response: "Yes, we 'inspect' and 'check,' but all our 'wants' are at your expense."
We've written numerous times about the deliberately constructed corruption scheme at ports and customs that has persisted in recent years. Excessive pocket money is being appropriated by the Ukrainian Sea Ports Authority (USPA) itself and numerous private "suckers" deliberately integrated into the process. 200 to 400 hryvnias per "inspection" (just opening the container door) on the invoice, and the usual "fifty bucks" for not forcing the unloading of the entire container before the inspecting inspector—these are the usual expenses for freight forwarders and owners of cargo transported through Ukrainian ports. Sometimes it's several times higher. With 20 such "inspections" in just one port per year, the corruption scheme results in a huge flow of cash and non-cash payments for all who solicitously oversee these criminal schemes.
Why would the Port Authority itself need these funds from "control measures"? AMPU is already a highly profitable enterprise, often "stashing" billions in accounts for years without the ability to spend them in a manner consistent with the state's mandate. Moreover, all the criminal customs service schemes are built without state regulation; that is, if they were changed consciously and in the interests of port clients, there would be no violation of the law. Even senior AMPU officials have recently acknowledged this. But they have no intention of changing anything, even despite constant complaints from port clients and activists advocating for modern operating methods. These "illegal money-making schemes" are being set up on state property too professionally to be quickly eliminated.
Government officials stubbornly refuse to dismantle their corrupt schemes. Moreover, these same officials are persistently kept in their positions and even regularly promoted, so that the new authorities can conveniently control the schemes that have been "established" for years.
Examples of such "scheme-driven port overseers" include Deputy Minister of Infrastructure Yu. Yu. Vas'kov and Deputy Head of the Sea Ports Administration V. I. Voronoy. These statesmen, carefully nurtured on the schemes of the Yanukovych era, diligently guard their positions on the current "captain's bridge" of the Ministry of Infrastructure. For whom?
Criminal cases, inspections by the Security Service of Ukraine (SBU), and other state regulators are an integral part of this couple's activities, but the cash flow from their schemes apparently allows them to quickly settle any claims. This has been the case for many years.
Consider the port scam involving the software integration of a private company into the entire process of cargo clearance and vehicle servicing at ports. The so-called "single window—a global solution." A private company is assigned to "software-driven" the task of extracting funds from freight forwarders for customs, border guards, environmentalists, and other government functions. Moreover, the payments are perpetual. Refusal is impossible, as there are no other alternatives to this private "software-driven" extortion. We've already written about this in our articles "Ports of Ukraine: Who Will Finally Stop the Scam?" and "Port Community Information System"—a scam at public expense.
But the worst thing is that this built-in program perpetuates corruption in ports for years to come, as it was designed and tuned specifically for this corruption, not for improving the quality of work at Ukrainian ports. There are numerous examples of this; activists have been pointing out blatant corruption holes in the program for years, but... Years go by, and the schemes are carefully guarded by their creators and implementers.
Moreover, these schemes are being integrated into the ports' operations in such a way that they will earn their keep with any foreign investors—if any are found under this approach. The fact is that both the Minister of Infrastructure and other ministry officials are trying to sell off port stevedoring companies, and these thieving schemes are being implemented at the port gates, on the roads leading to and within the ports, in computer programs—that is, at the points where cargo flow logistics are facilitated. Essentially, the Ministry of Infrastructure is trying to sell potential investors a "baited dummy" from shady port officials.
Recently, even First Deputy Minister of Infrastructure V. Yu. Shulmeister publicly and in detail described 15 different corruption schemes at the ministry's state-owned enterprises, involving colossal amounts of criminal activity. Over 100 billion hryvnias of "illegal" turnover! Excellent description, thank you. So what next? Isn't it clear that corruption schemes don't arise spontaneously and immaculately? Aren't the people behind all the schemes described by the First Deputy Minister the very same people who headed the Ukrainian Seaports Administration for many years and who passed through this state agency with criminal cases and ruthlessly planted schemes? People who, even now—with their ranks and regalia—continue to actively perpetuate all the corruption schemes of the Yanukovych era? Shouldn't Mr. Shulmeister's open description of the thieves' schemes have been followed by a similarly public action plan to shut down all these existing schemes? A plan in which point number 1 should be the immediate removal from work for the state of senior industry employees involved in these schemes?
It's perfectly clear that in our country, the rule "not proven in court means clean" is fundamentally inapplicable to government officials. From Pavlo Lazarenko to the Kaletniks, Azirovs, and other bureaucratic and parliamentary scum. Therefore, the Ministry, more than ever, is committed to a program for the decisive and swift removal of all corrupt officials. Even if they aren't yet in the dock or under suspicion. And this is currently a far more important task than finding foreign investors in the port industry. A critically important task, the importance of which the minister seems to fail to grasp.
Thank goodness they've at least started publishing the schemes openly. This is perhaps the greatest achievement for the Ministry of Infrastructure of Ukraine since February 2014. A year and a half after the victory of the Revolution of Dignity, and only just now are individual schemes being uncovered... And immediately—total losses for the state in the hundreds of billions...
But when does the destruction of patterns begin? The question remains unanswered.
Today the following is already clear:
1. No one has been held accountable for the container terminal built at the Odessa port, which has a sunken breakwater and a payback period of over 100 years. Neither the minister nor law enforcement agencies have been held accountable. (Details are in the publication "A Failure for Which No One Was Responsible"). We enter 2016 with this shameful failure, as no one will restore such a facility this winter. Even though they promised to begin work on May 15th of this year...
2. They've once again planned a massive expansion of berths at the Odessa port. They plan to import nearly 8 million tons of grain annually into Odessa in the coming years... They're aiming to increase the port's cargo turnover several-fold—and this is happening in the center of a city with a population of over a million! This is happening with the city's transport infrastructure around the port almost completely destroyed, with the resort coastline vulnerable to the environmental impacts of the port's operations (ore, scrap metal, and clay are handled in the center of the resort town), plus the incessant noise of railcars, loaders, and trucks in the port day and night. And officials at the USPU and the Ministry have become so adept at crafting beautiful justifications for their failed actions that these plans could very well be implemented. Unless, of course, this mess isn't stopped.
3. Of Ukraine's existing container terminals, only those currently in private hands and free from corruption schemes by the Sea Ports Authority are showing stability or growth. These include infrastructure fees, fees for a private "accounting" program, entrance fees, travel fees, passes, and dozens of other fees. These include terminals like TIS and the terminal at the fishing port. Moreover, a top-three global container carrier recently announced that it will not return to the state-owned port of Illichivsk. And if it does plan to return to the region, it will only be to the other side of the Sukhoi Estuary, that is, to the fishing port.
The Port Administration has done too much. Ships don't want to dock with them with cargo. We'll go through the estuary to private docks, but not to the state port. And who will be held accountable for this—true sabotage?
Public accusations against individuals are generally avoided in the business community. I am deliberately breaking this rule, as the country's most important transport sector has been directly dependent on the work of the individuals I mentioned for many years. Hundreds of attempts have been made, in various forms, to convince these officials that the strategy of catering to the "wants" of all government agencies at ports is utterly destructive and detrimental to Ukraine's transport sector. Letters from activists, articles from activists, expert press conferences, roundtables with business participation, statements, and so on—in short, the entire arsenal available for dealing with government officials. And what happened? During this time, officials from the USPA and the Ministry of Infrastructure have "drowned" container handling at Ukrainian ports, with no prospect of recovery in the coming years.
Just look at the date of this publication: Customs is sabotaging Ukraine's international trade: the ports are a mess and corrupt. But since the strategy of the top officials at the USPA has remained the same all these years and the performance indicators are clearly disastrous, the "strategists" need to be replaced. These "strategists" have already completely and irrevocably discredited themselves. This hasn't stopped them from rising to the level of ministerial leadership. There's no doubt these figures will "fail" the entire ministry. They simply don't know how to work any other way.
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Alexander Zakharov, Coordinator of the NO corruption in transport movement, especially for the publication Argument
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