Mystery of the giant shipping line linked to President Macron's chief of staff

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Why was Alexis Kohler, who is now secretary general at the Elysee and chief of staff to President Emmanuel Macron, so keen to become finance director at the shipping firm MSC and its cruise company subsidiary MSC Cruises? Yes, the Italian-Swiss group is world number two in maritime freight, is a major cruise company and controls a number of port terminals. But it also uses tax havens and practices tax avoidance, keeps its business confidential and operates in an environment where dangerous shadows lurk. Martine Orange and Cecilia Ferrara investigate.

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No one understood and no one understands. What are the reasons which made senior civil servant Alexis Kohler want to join MSC (Mediterranean Shipping Company) and MSC only when he wanted to move into the private sector? Was it a question of family, given that his mother is a first cousin of Rafaela Aponte, who co-founded the group with her husband Gianluigi? That is indeed how Kohler – who is now secretary general at the Élysée and President Emmanuel Macron's chief of staff – justifies this move from public to private sector, a practice known in France as 'pantouflage'. Yet that is not what he told the ethics commission from whom he has always hidden his family links (see Mediapart's investigation here).

The rest of the government has lined up to support Kohler, insisting that he has never concealed his links with MSC from his superiors while a civil servant and that there have never been any conflicts of interest. “He is of exemplary integrity,” President Macron himself said of Kohler, reacting to the news that the anti-corruption association ANTICOR has made a formal complaint over the issue, prompting the opening of a preliminary investigation by the financial crimes prosecution unit the Parquet National Financier.

In the circles around Macron, moving to the private sector is seen as the best way to learn, working in an arena where you understand the reality of the world in contrast to a state that is by definition regarded as fossilised. His supporters see such movement between private and public sectors as nothing but beneficial to the state, allowing officials to learn “best practice” - whatever the private company.

MSC container ships in the Spanish port of Valencia. © Reuters MSC container ships in the Spanish port of Valencia. © Reuters
But what are the “best practices” in operation at the Mediterranean Shipping Company? The maritime transport sector in general is a largely unseen world compared with many other industries. Nonetheless, even in this particularly discreet sector, this Italian-Swiss group is regarded as more enigmatic than other companies.

Apart from the glossy images of the launch of ever-larger liners in the shipbuilding yards at Saint-Nazaire in western France or the yards of the Italian firm Fincantieri, we know little about the Italian-Swiss shipping company, as the west of France newspaper Quest France pointed out in 2016. Secrecy seems to come as second nature in the way that the world's second largest maritime transporter operates. Many in the sector wonder what the group's astonishing success and domination is based on, and about its ability to resist the numerous problems that hit the sector without apparent difficulty.

MSC is the second largest transporter of goods by sea after the Danish firm Maersk and also operates a cruise business. It has a dominant position in the Italian market. It possesses port terminals around the world and has a logistical and land transport presence too. But it is also a group that uses tax havens, that does not publish its accounts, and which has shown astonishing financial resilience compared with its rivals.

As financial director of the MSC group and its subsidiary MSC Cruises, Alexis Kohler dived headlong into the mysteries of this major freight group. He was close to the decisions and followed its activities, its operations, its tax arrangements and money. In the course of his brief stay – he was there barely eight months – was the secretary-general of the Élysée able to avoid glimpsing the group's hidden side? A hidden side which includes its opaque capitalist practices, the practice of tax avoidance, its close relationship with politicians, a use of power that comes with money, in an environment where sometimes in the shadows there lurks one of the most dangerous mafia groups in the world, the 'Ndrangheta?

Below is Mediapart's lengthy investigation into this enigmatic group.

  • A world of obscurity

“What are MSC's results? What are its shareholdings? But everyone's been asking this for a long time. Without any response,” is the immediate reply of one of its Italian competitors. This is one of the first mysteries about MSC. It is difficult to know what the group is really like.

Despite its status as the world's second biggest maritime freight carrier it is completely unknown. Unlike its main rivals Maersk, who are number one, the French group CMA-CGM, who are third largest, or the Chinese group Cosco, its name never appears in the columns of the international financial press – Bloomberg, the Wall Street Journal, the Financial Times – who periodically scrutinise maritime transport which is seen as an early indicator of the world economic situation. In Italy, outside of the specialist press who chronicle the sector on a daily basis, the group and its founder Gianluigi Aponte are only heard of when there are new operations in a port or a new ship is launched, or sometimes if there is a dispute with the government. But there is nothing that indicates the group's true importance.

The group is good at keeping its business quiet and it says the strict minimum. Its motto is seen as enough to make its point: “A third of the Earth is covered by land. We cover the rest.” It is officially classified as the second biggest transporter of maritime goods and has a fleet of 490 container ships, serving 500 ports across the planet. Its turnover is 27 billion euros a year and it employs 70,000 people around the world. It has a terminal division Terminal Investment Limited (TIL) which invests in port terminals; it currently has a stake in 34 in 22 countries.

However, it is its cruise line subsidiary MSC Cruises that it prefers to talk about, its big success story. Though this subsidiary only represents 6% of turnover (2.2 billion euros in 2017) , the group likes to highlight this growing business, which allows it to put on a show of strength alongside government ministers, government heads and various political figures at the launch of large liners.

As far as the rest is concerned, the official presentation stops there. With the exception of MSC Cruises, which published two consecutive annual reports in 2016 and 2017, the groups publishes no figures, no annual consolidated financial statements. Even the very light formalities imposed in Switzerland where it is based seem too intrusive for its taste. Though multinationals registered in Switzerland are supposed to deliver reports of their activities and shareholders at least once a year, the shipping line does not go along with any of these obligations, according to information obtained from a senior figure at the Swiss department in charge of multinationals based in Geneva.

When asked about why it does not publish its accounts and about other issues, the group sent Mediapart the following terse response:

In an email on June 25th, 2018, you addressed a list of questions to MSC Group in the context of an 'investigation' that you are conducting on Mr Alexis KOHLER's supposed 'pantouflage'. The tone of your recent articles and the direction of your questions show a manifest bias in the treatment of this issue. Founded in 1970, MSC is an international group which employs close to 70,000 people spread across more than 150 countries throughout the world, and in particular in France where it has carried out some important investments. Pointing a finger at MSC Group by your editorial team has already caused it significant damage. Our Group reserves the right to take all necessary legal action to assure the protection of its rights.”

MSC is not listed on the Stock Exchange,” the group's founder Gianluigi Aponte has explained on several occasions to justify its discretion. It does not make use of the financial markets either, seeming to have financed its spectacular growth by relying on either private financiers or on banks. In 48 years of existence the group has breached this rule only once: in June 2017 MSC Cruises launched a private bond issue of 335 million Swiss francs in Zurich. That is doubtless why MSC Cruises published its two annual reports in 2016 and 2017, to comply with the minimum regulations.

In fact, MSC is a much more powerful group than it likes to say. It is indeed a transporter of goods but its activities are not limited to transporting shoes, telephones or food products. It also carries oil, ores, dangerous materials (chemical and radioactive products), all the things that globalisation pretends not to see.

A map of the ports owned by MSC's subsidiary TIL. © extrait du rapport de gestion de TIL déposé au Luxembourg A map of the ports owned by MSC's subsidiary TIL. © extrait du rapport de gestion de TIL déposé au Luxembourg
It owns and runs port terminals via Terminal Investment Limited throughout the world, in Brazil, Argentina, the United States, India, Turkey, Singapore and Africa. Outside of Italy, where MSC dominates the ports of Genoa, Livorno, La Spezia, Trieste and Naples, just to mention the main ones, it has a strong presence in Antwerp, Rotterdam, Valencia and Bremen. In France it still has a discreet but significant presence: through joint ventures it owns 50% of the TNMSC and Seto terminals at Le Havre in northern France and 50% of Fos Holding and Seaward at Marseille in the south. By chance both ports feature in the French government's privatisation plans.

The group's influence does not stop there. As well as container ships and the running of ports, MSC is involved in logistics, road and modular transport, trains and ship repair yards. They have a total of 150 depots. Together it forms a labyrinth of holdings, subsidiaries, second-tier subsidiaries and joint ventures around the world. It is hard to gauge the extent of the group because of this complexity and the nature of different areas in which it is involved. This is not made easier by the fact that many of these different parts of the group are based in tax havens.

The maritime transport industry as a whole has for years been skilled at using – or inventing – tax havens, tax avoidance and flags of convenience. The MSC shipping line seems to slip into the sector's habits without any difficulty. As indicated by the revelations from “Offshore Leaks”, “Panama Papers”, “Paradise Papers” and the “Malta Files”, the name of the group and its subsidiaries have often been cited in the registering of companies - sometimes passing through the offices of law firm Mossack Fonseca - in Panama, Malta and Hong Kong, plus some in London and Monaco. It is not always easy to spot them, however, because there are so many similar-sounding companies involved.

Many of the group's ships sail under flags of convenience, usually Panama or Malta. Though the group is based in Switzerland, which has comprehensive tax and maritime laws, MSC has hived off some parts of its empire into other territories with less onerous tax systems.

One of its biggest activities, its investment in ports, was put in a Luxembourg-based holding company Terminal Investment Limited (TIL), which is controlled by members of the family and three outsiders, all linked to the investment fund Global Infrastructure Partners, which is itself based in Jersey. In February 2017, while Alexis Kohler was MSC's finance director, TIL's shareholders decided to move the Luxembourg holding company to Switzerland in order to “take advantage of its relationship with MSC”. The move had another advantage, too: in Switzerland the holding company's accounts are no longer accessible.

In a similar way the group's main subsidiary Marinvest, which controls all its activities in Italy, is itself owned by a fund called Trading and Projects Limited, base on the Isle of Man. This is a shell company which allows it to avoid taxes in Italy – one of its main concerns, it appears – and is run as it is obliged to be by representatives of specialist back room operations who play the role of frontmen.

These legal set-ups, these ad hoc structures formed to control this global group, all lead to the same place in a small and opaque organisation: the Nerine Trust which is based in Guernsey at Nerine Fiduciaries. This company is a specialist in wealth management based in Geneva but which also has the advantage of having offshoots in Guernsey, the British Virgin Islands, Hong Kong and India. “We are the trusted solution for our clients' long-term wealth structuring needs,” the company declares on its website.

Is it here that the Aponte family's wealth is kept? According to Forbes magazine, the family's fortune is around 8.3 billion dollars or 7.1 billion euros, though it is not clear how this estimate was arrived at.

  • The inner circle

“MSC Cruises SA is a wholly owned subsidiary of MSC MEDITERRANEAN SHIPPING COMPANY HOLDING SA. The ultimate controlling party is the Aponte family,” states MSC Cruises' annual report for 2016. Are there other shareholders besides them? Who are they? How much does the family directly control? The group declined to respond to Mediapart on these questions.

Gianluigi Aponte and his Rafaela, co-founders of MSC with their son Diego who is now CEO of the group, and his wife Ela. © Vatan Gianluigi Aponte and his Rafaela, co-founders of MSC with their son Diego who is now CEO of the group, and his wife Ela. © Vatan

But it is undeniable that MSC is, first and foremost, a family affair. As its founder Gianluigi Aponte recalled in an interview with Le Monde, everything is done to ensure strict family control of the group, making sure no controlling interest slips away. “My son Diego handles the container ships and the port terminals; my son-in-law Pierfransceco Vago the cruise ships and ferries; my daughter Alexa, the finances; my daughter-in-law Ela, the buying and selling of cargoes and relations with the banks,” he said. “As for my wife Rafaela, she is in charge of the liners' décor while being aware of all that's going on...”

To this list can be added Gianluigi's cousin, Franco Ronzi, who is chairman of Marinvest in Italy, cousin Mario Aponte, who is a director alongside Diego Aponte of the company MSC Malta Seafares. According to Mediapart's information this company, registered in Malta, is in charge of managing the crews.

It follows that even with his status as a cousin, Alexis Kohler must have really been seen as a trusted person to have been admitted to such an important role at the heart of the MSC empire. For it is rare for outsiders to be allowed to join the inner circle. Those that have been granted admission include: Gianni Onorato, director general of MSC Cruises, who seems to have been involved in operations involving the group's capital; Alberto Rossi, MSC's lawyer who is already a director at one of the group's companies in Genoa – according to the Italian press the group wants him to be the head of the future Naples-Sorrento port, having failed to impose him as chairman of the port authority of the Calabrian port of Gioia Tauro. There is also Zeno d'Ambrosio, currently chairman of the port of Trieste, a port for which MSC has big ambitions. He is also chairman of the association of Italian ports.

Above all there is Luigi Merlo, a former advisor to the minister of transport in the government of Matteo Renzi and former chairman of Genoa's port. His advice is seen as so valuable by MSC that it decided to hire him and and make him executive director of MSC in Italy. However, the nomination of this member of Italy's Democratic Party, whose wife Raffaella Paita is an MP and regional councillor, came up against an obstacle. As boss of Genoa port he signed some very large contracts, in particularly concerning port concessions with land and facilities, to allow MSC to build a base close to the port.

At the end of February 2018, the Italian National Anti-Corruption Authority (ANAC) banned Luigi Merlo from taking up any position at MSC. It pointed out that under Italian law a public servant must wait at least three years before being able to work in a company with which he has signed a contract. The ANAC thus asked MSC to cut all ties with Luigi Merlo, or face the risk of all the signed contracts being voided, in particular the one for a new terminal at Genoa.

Both in Italy and in France, MSC thus seems to have adopted a similar strategy; that of getting as close as possible to public decision-making. In Italy, however, the authorities noted that there was a law dealing with this issue and took action.

  • A 'legendary' success

It is the only story that Gianluigi Aponte is fond of telling: that of how his group started and its spectacular rise. All the ingredients for an industrial success story are there, a maritime version of the kind of 'garage' myth beloved by high-tech start-ups.

The founder of MSC, who comes from the Sorrento area, likes to recall the perilous early days when as a captain of a small ship, he started the venture. At first he had chosen to work in Swiss finance. In 1970, at the age of 30, Gianluigi Aponte joined the financial company Investors Overseas Services (IOS). Created by financier Bernard Cornfeld, the company was one of the first to invent modern forms of mutual funds. His target was rich Americans who wanted to escape taxation as well as Germans and Italians. The fund was a success, managing 2.5 billion dollars, a huge sum for that time.

Gianluigi Aponte's time at IOS was a brief one. “I was like a fish out of water,” he would later say, explaining his desire to return to the sea. At the time he decided to leave IOS it was in the process of collapsing. It became a Madoff-style financial scandal at the start of the 1970s, and around 1.5 billion dollars vanished. That money was never found.

The 'Patricia', MSC's first ship. © MSC The 'Patricia', MSC's first ship. © MSC
Meanwhile, having left the world of finance, Gianluigi Aponte decided to set up in maritime transport by buying an old freighter, the Patricia. “I knew a client at the time with money and that's how we started a maritime transport company together,” he told Le Monde.

Aponte's first company, Aponte Shipping Company, was initially based in Liberia before moving to Belgium. His ship served Italy and East Africa, in particular Somalia where Gianluigi spent his childhood. “Africa is the story of my family,” explains Gianluigi's son Diego, who is now chief executive officer and president of MSC. It was not, however, an easy time to be making a living transporting cargo in that region. The Suez Canal had been closed for more than two years and would be for another five. This added considerable extra costs as ships had to travel around the Cape of Good Hope to make the journey between East Africa and Europe.

Yet despite this problem the deliveries made by the small company were profitable enough to allow it to survive and expand: one ship became two, then 17. They were freighters which were often bought second hand before the company made its big move. That was to grasp that the future of maritime transport was about to be revolutionised by container ships. In 1980 Gianluigi Aponte seized the opportunity and sold off his fleet in one go to invest in container ships. Who helped him? Who agreed to get involved in the operation? The questions remain unanswered. From that moment on, the group took off. Every year there were new lines, more ships, more growth, more purchases, more diversification. In less than 30 years MSC became the world's second biggest transport maritime group.

Observers of the maritime transport industry find it hard to go along entirely with this story. “A real fairy tale,” says one ironically. They know the extent to which the sector faces spectacular economic squalls and even storms.

Though it forms a key part of it, maritime transport remains the poor relation of globalisation. The sector suffers from massive and chronic over capacity which leads to constant price wars. Most operators work with virtually non-existent margins. This means that they take a hit every time there is the slightest slowdown in world trade – which leads to a fall in the number of goods traded - every time there is a geopolitical crisis or simply when there is a fall in the value of the dollar or a spike in oil prices. Sometimes they go under as a result.

Of course there are successes in maritime transport but none quite like MSC. The third largest operator in the world, the French group CMA-CGM, whose back story is closest to that of MSC, has never know such good fortune. Like its Italian rival, the French group began small, and at roughly the same period. Like Gianluigi Aponte, its founder Jacques Saadé (who died on June 24th this year) gambled on container ships being the future, allowing transport that was more standardised and thus cheaper. But unlike MSC, CMA-CGM, which publishes its accounts, has gone through some very difficult periods. Twice in the last decade it has had to ask the state for help to prevent it from suffocating under the weight of its crippling debt.

Meanwhile in recent years the world's number one group, the Danish group Maersk, has had to implement plans to make several thousand people redundant, make savings and introduce restructuring plans to deal with the after-effects of the 2009 crisis and subsequent years.

In a bid to survive, the debt-laden sector has opted for ever-larger vessels which are supposed to bring economies of scale and reduced fixed costs. The ships have got bigger and bigger, going from 8,500 TEU – standing for twenty-foot equivalent unit, the unit used to describe the capacity of container ships – in the 2000s to close to 20,000 TEU today. Every shipping line has invested in these monsters of the sea. And as world trade has stagnated, that has led to a new collapse in prices.

One of MSC's most recent container ships, MSC Sveva. © MSC One of MSC's most recent container ships, MSC Sveva. © MSC
Without saying so, the large maritime carriers have organised themselves into quasi-cartels to try to organise the competition. “The truth is that there is complete centralisation,” says Andrea Bottalico, who has a doctorate in the economic sociology of work at the University of Milan and who wrote a thesis on the way work is organised in ports. “There are three alliances that are in charge of the world of maritime companies: 2M (Maersk + MSC), Ocean Alliance (China Cosco Shipping, Evergreen Line, CMA-CGM and Oocl) and The Alliance (Nyk Line, Mol, “K” Line, Hapag-Lloyd and Yang Ming Line). “They are multinational companies who operate across the whole world and who have also set up a lobby group in Europe to get around antitrust rules.”

Such measures, however, do not protect firms against a shift in the economic climate. In 2016 the maritime industry suffered a new blow when the price of freight collapsed and all the shipping lines felt the effects. The South Korean firm Hanjin Shipping did not survive. According to maritime research company Drewry, the world leaders in the industry suffered on average an operational loss above 9% of turnover in the second quarter of 2016. Over the year the total deficit reached 5 billion dollars. They all brought in new measures to save money, lay off staff or sell assets.

All except MSC.

Whatever the economic situation MSC seems to be able to sail on serenely. It appears immune to everything, the world crisis, the collapse in world trade, the price of oil, the dollar exchange rate. When questioned in June 2017 about this astonishing resilience , Diego Aponte, happy that the group did not have to lay off any staff, gave his own explanations: “Without going into figures, I can say that MSC recorded a smaller loss than its competitors. As a diversified group that has a presence in the whole world, MSC is able to compensate for a reduction in business in Brazil with an increase in business in the United States or in China. The vertical integration of our activities also allows us to diversify the goods that we are transporting.”

Observers of the maritime transport industry do not know what to make of these arguments. “Diversification and vertical integration? But every world leader in the sector does the same thing. That doesn't stop them from losing lots of money at each change in the economic situation,” says one such expert, who still does not understand what lies behind MSC's incredible resilience.

  • A desire for domination

It is said that every new president of a port authority must go to Geneva to visit Gianluigi Aponte, to find out what his plans are in Italy. But not just those officials. In September 2017, the president of Liguria region, Giovanni Toti (from Silvio Berlusconi's Forza Italia party), the mayor of Genoa Marco Bucci (Forza Italia), the president of Genoa port authority, Paolo Signorini, and the logistic entrepreneur Aldo Spinelli, with whom he took over the Rinfuse terminal at Genoa, all make the trek to the Swiss city.

“It was a routine visit,” insisted Giovanni Toti. He added: “But above all it was a way of making a large operator such as MSC understand that it can expect to find institutions that are working together, dependable and keen to attract those who want to do business.” A spokesperson for the Democratic Party in Genoa responded: “The future of Italy's biggest port being discussed in a private jet with no [tender] contest and no competitors. A tale from South America? No. From Genoa, 2017.”

A few weeks ago MSC's CEO Diego Aponte was in Genoa for the signature of the award of the Calata Bettollo terminal concession to the consortium Consorzio Bettollo, in which MSC has a 65% stake and Gruppo Investimenti Portuali 35%. The deal was negotiated when Luigi Merlo was in charge of the port. The terminal should now be able to accommodate large container ships up to 20,000 TEU. The port itself has already invested 213 million euros in the new terminal and under the deal the consortium will put in a further 136 million euros.

“You have to understand that maritime companies are like large factories,” says Andrea Bottalico. “They can say to the mayor, the region's president, the president of the port: 'You don't accept my conditions? Then I'm off to another port.' And MSC is the second biggest group in the world in terms of volume of goods transported. And it's allied with the number 1, the Danish [group] Maersk.” Bottalico continues: “It's difficult to say no to these giants. MSC used the same blackmail at Antwerp. It dangled in front of them all the traffic it could bring and asked the port authority to invest millions in infrastructure. Or we're off to Rotterdam...”

MSC is starting to gain control of the port at Genoa. It is the country's largest port and the cornerstone of MSC's irresistible rise in Italy. MSC no longer seems to have any rivals when it comes to taking control of Italy's ports. And if there are, it buys them.

  • European investigation

In Italy port terminals are public concessions. MSC now has a well-established practice for taking control of them. Either it takes a stake in those companies who already own the concession and then gradually take control. Or, as their opponents claim, they become its most important client, sweeping away others customers by stepping up the commercial pressure. Then, when they are in a dominant position, they reduce the level of the volume of goods, which may leave the concession holder at the port in desperate straits. At that point MSC offers to take a stake. The company and even more so the creditors – Italian banks are heavily invested in the maritime sector, especially Gruppo Banca Carige and UniCredit – gratefully accept what looks like a rescue deal.

MSC cruise line at Venice. MSC cruise line at Venice.
In the course of the last 15 years, MSC's presence in Italian ports has been relentless and has gone hand in hand with the purchase of maritime passenger companies and maritime agencies. It has extended its presence across Italy both as a transporter and in port management – involved in warehouses, terminals and dispatch. Having bought the cruise company Lauro in 1988 – using the same tactics of whittling away at it – it continued to buy up its rivals. For example it bought a stake in Grandi Navi Veloci, who were then considered to be one of the most pioneering companies in the world of cruise companies. MSC now controls the company.

In Naples, MSC's subsidiary Marinvest – not to be confused with the Swedish maritime group of the same name – controls virtually everything. It took control of the Terminal Spa Napoli, the maritime station, the terminal for cabotage transport and the container terminal CONATECO. The group also owns 50% of the new operator carrying out ship repairs. And thanks to the timely transfer during the Berlusconi era of the state-owned company Caremar to the Campania region, which was in a hurry to privatise it, the group bought complete control of SNAV. This is the company which operates ferries in the Tyrrhenian and Adriatic seas. The group's cruise ships also stop at Naples as do its container ships.

However, this dominance is starting to attract attention. In July 2016 the Directorate-General for Competition at the European Union carried out an investigation into the port of Naples. Among other things, it looked at why all the invitations to tender for the port's modernization, which was part-funded by the EU, went to companies belonging to MSC.

In December 2013 a criminal investigation had already been opened into the way the port of Naples was run, over alleged irregular tender invitations, tax fraud and corruption. According to prosecutors, the president of the port, Admiral Luciano Dassatti, was ready to do the bidding of a group of port terminal management companies, all of them linked to the MSC group. At the opening of the investigation the name of Gianluigi Aponte featured in the rather long list of potential suspects. His name later disappeared from the investigation.

 The investigation is progressing very slowly. Meanwhile MSC seems to be pursuing the path of compromise ahead of any possible proceedings. At the start of 2018 an agreement was reached between Nuova Meccanica Naval and Palumbo, the company which had been excluded from the invitation to tender, to build a dry dock together in the port of Naples.

  • Dangerous liaisons

“Everything now's in light brown, the colours of MSC's containers. Before, it was like a rainbow here. There was Maersk, Evergreen, Uasc, P&O... we did 20 cranes a day, today the maximum is 11 or 12.” The speaker is Vincenzo Malvaso, from the Sindicato Unitario Lavoratori (SUL) union. He is nostalgic about what it used to be like in the Mediterranean's biggest transhipment port, Gioia Tauro in Calabria.

An MSC container at the port of Gioia Tauro. © Reuters An MSC container at the port of Gioia Tauro. © Reuters

But in 2011 the world leader Maersk left Gioia Tauro, transferring its traffic to Malta. Since then the port has just had one client: MSC. And the group has also become a shareholder, owning 50% of the Medcenter port terminal alongside Contship Italia after buying Maersk's shares. It seems to have been a good deal. According to some sources the Danish group paid up to 70 million euros for its stake in the port, whereas MSC is only said to have paid between 4 million and 12 million euros.

MSC has complete control at Gioia Tauro. “It decides the volumes at the port. Over the last two weeks we've returned to 32,000 containers a week. Two weeks ago we were at 20,000,” says Vincenzo Malvaso. Last year the port experienced a 12% fall in the number of containers handled, while other Italian ports at the very least maintained their existing numbers. The fall seems to have been linked as much to a power struggle between MSC and its co-shareholder in the port as much as economic circumstances. On 31 March this year, after months of tension, Gianluigi Aponte declared on the fringes of a meeting with Liguria's regional authorities that MSC was ready to take a 100% share in the port of Gioia Tauro and step up its activities there.

But why is MSC so keen to have control of Gioia Tauro?

This port was the result of the biggest investment carried out in the south of Italy in the 1970s, and was intended to show the desire of the Italian state to develop Calabria. A giant steelworks was supposed to be built next to the port as well, though it never was. It is also said that this was one of the biggest contracts for the local mafia, the 'Ndrangheta, who then started to work out how to share out the 'cake' - the work at the port – with the other 'gangs' – local family-based mafia groups. This is how the Piromalli-Molè clan of the 'Ndrangheta, which controlled Gioia Tauro, made themselves indispensable to other clans.

Before work had even begun, the 'Ndrangheta moved into the port, putting itself in a position to influence the creator of the modern port, Angelo Ravano of Contship Italia, as well as its subsidiary Medcenter Containers Terminal (MCT). An investigation carried out between 1998 and 2000 showed that “the carrying out of the largest political-industrial investment ever conceived in the South had been preceded by a preventative agreement between the multinational led by the entrepreneur Angelo Ravano and the Piromalli-Molè gang [editor's note, 'cosche' in Italian] from Gioia Tauro, and the Bellocco-Pesce gang from Rosarno [editor's note, another clan] united in one group and solely represented in the negotiations by the boss Piromalli.” The clans had, for example, imposed protection costs of 1.5 dollars per container, according to a Parliamentary report from the Anti-Mafia Commission.

  • The port of Gioia Tauro and the Mafia

'Ndrangheta's influence at Gioia Tauro seems stronger than ever. The Italian Parliament's Anti-Mafia Commission says that the mafia group has become involved in all the port's economic activity via the supply of services, in particular the hiring of labour. It has a strong influence over all the public bodies whose job it is to coordinate the port's activities. “The Piromalli-Molè and Bellocco-Pesce gangs and others connected to them have shown their ability to focus on all the economic sectors in the regions they dominate, and have shown a great ability to adapt, in financial and business terms as well as strictly criminal, to the new opportunities that arise for them in their areas,” says the commission's report. For example, the 'Ndrangheta manage many companies linked to import-expert and have also infiltrated the customs.

Page 304 of the 2016 report by the National Anti-Mafia andTerrorism Directorate. Page 304 of the 2016 report by the National Anti-Mafia andTerrorism Directorate.

In its 2016 and 2017 reports the National Anti-Mafia and Terrorism Directorate painted an alarming picture of the situation at Gioia Tauro (see those reports here and here). The state body said that 'Ndrangheta groups “completely controlled” the port, putting it at the disposal of the whole of the wider 'Ndrangheta organisation. The mafia group had the ability to infiltrate on a wide scale, because of its alliances and relations in the port of Genoa and “other major European ports” such as Amsterdam, Rotterdam, Antwerp and so on, the anti-Mafia body stated.

Since the start of the 2000s, Gioia Tauro has been seen as the hub for cocaine trafficking in Europe. “Italian official investigators estimate that 80% of Europe's cocaine arrives from Colombia via Gioia Tauro's docks, along with regular consignments of Kalashnikov and Uzi guns,” the British daily newspaper The Guardian reported in 2006. Indeed, the Italian press nickname Gioia Tauro the cocaine port. A report by the Parliamentary Anti-Mafia Commission in February 2018 said that Gioia Tauro was one of the “crossroads” for drug trafficking between Latin America and Europe. It said that the gangs controlled activities inside the port where they can “count on” help from technical staff and workers in unloading the drugs from containers. In 2017 police and customs officers seized just under two tons of cocaine at the terminal.

The port of Gioia Tauro. © Reuters The port of Gioia Tauro. © Reuters
How has MSC managed this situation since they have been involved in Gioia Tauro port? “There are completely separate levels,” says one source very closely involved in maritime transport. “They don't run into each other. Moreover, at Gioia Tauro the inspections are very frequent compared, for example, with Barcelona. That penalises the port a lot because it loses competitiveness. Where just one container is checked at Barcelona, 20 containers are inspected at Gioia Tauro.”

Authorities involved in the fight against drugs find it hard to be convinced by this argument. For as the port only has one client, the containers used by the drug traffickers are inevitably those transported by MSC. Meanwhile the ships and corrupt skippers or other corrupted workers who agree to transport the cocaine often belong to or work for MSC. The port also serves many of the sea routes from South America, where the main exporters of cocaine are based.

An investigation dubbed 'Santa Fe', which was carried out in conjunction with the US Drugs Enforcement Agency the DEA, shed some light on 'Ndrangheta's practices when it comes to drug trafficking. Investigators followed several cargoes. An initial cargo of “medicines”was put onboard the MSC Maureen, which left Santos in Brazil and arrived at Gioia Tauro in August 2013. According to investigating judges it was organised by a mafia figure from Gioia Tauro. Another mafia figure organised a cargo of drugs onboard the MSC Adriana in July 2014; this went to the port of Genoa that same month. A final cargo was organised directly through an agreement by Antonio Femia - a key figure in the 'Ndrangheta in Calabria who has since turned his back on the organisation - with an emissary from South America nicknamed 'Perrito', which means 'Puppy'. The cargo was apparently carried by the MSC Mandraki and collected in an inflatable dinghy off the port of Gioia Tauro. In June 2015, up to 38 people were arrested , including three employees of the terminal's company Medcenter.

Mediapart understands that three years ago a group of investigators – including a number from Britain – was discreetly formed as part of an Europol operation to investigate MSC. For reports of drug seizures have featured a number of MSC vessels.

In May 2010, as part of an anti-drugs operation led by Britain's Serious Organised Crime Agency (since merged into the National Crime Agency) five fishermen who had been catching crab and lobster off the Isle of Wight off England's southern coast were arrested. They were suspected of trying to smuggle in cocaine that had come off the MSC Oriane container ship which was in the English Channel at the time and which had come from Brazil. Eleven sacks of cocaine were found wrapped around a buoy. The fishermen were convicted but still protest their innocence.

Two years later, in 2012, the MSC Poh Lin was intercepted at Gioia Tauro with 300 kilos of cocaine stashed aboard in three containers. In 2016 the same ship and its crew were arrested as part of an investigation called Operation Volcano, as they were preparing to leave 80 kilos of cocaine to be collected off the same port. See the article on this by the Corriere della Calabria here. The Poh Lin's captain, Gabriello Salvarese, who was in retirement, had been authorised to sail the ship from what is known as the California Express route, which serves two Panamanian ports and is where many drugs often come from, over to Calabria. The prosecutor in charge of the case, Gaetano Paci, said at the time that local gangs in Calabria had set up a “cartel” to buy the enormous quantities of cocaine coming from Central and South America and had been on the point of collecting their cargo. “It was their first voyage,” he said.

An MSC container ship. An MSC container ship.

More recently, on May 31st, 2018, Algerian customs officials, acting on information that resulted from an international investigation, stopped the ship Vega Mercury, which had been charted by MSC, in the port of Oran. It had been travelling between Valencia in Span and Algerian and Moroccan ports. In the middle of containers of frozen meat from Brazil investigators found 710 kilos of pure cocaine. The cargo was clearly not just intended for the Algerian market. The Algerian newspaper El Watan reported that investigators who followed the trail of the drug from Brazil to Oran via Valencia found that it had all travelled via MSC ships and terminals.

At the press conference which followed the seizure of the drugs onboard the MSC Poh Lin in 2016, prosecutor Gaetano Paci declared: “MSC is going to have to explain itself.” The human rights group Algeria Watch said on its website in June 2018: “What is the involvement or otherwise of the transport company which is bringing the merchandise from Brazil to Oran? The answer is no foregone conclusion as MSC, which is being questioned as a witness, just like the members of the crew incidentally, considers that it is not responsible for the merchandise that it transports.”

Following this seizure MSC Group issued a statement announcing its full cooperation with the authorities. It said: “MSC Mediterranean Shipping Company S.A. confirms that it is cooperating with Algerian authorities regarding the inspection of a single MSC container at the port of Oran.

“The container was subject to all the usual customs checking procedures on its journey from the port of Santos, Brazil, via transshipment at the port of Valencia, Spain, prior to its arrival in Algeria on 3 June.

“MSC takes this matter very seriously and we will continue to cooperate with the authorities, as we always do when confronted by suspected trafficking of illicit goods. We have informed any customers with cargo inside the container of a delay.”

It added: “Unfortunately, MSC, like other transportation companies, is affected from time to time by trafficking problems, even though we are meticulous about our internal processes and documentation procedures. MSC is in general committed to working with all regulatory bodies to ensure illegal practices of this nature are dealt with promptly and thoroughly.”

MSC has declined to respond to questions from Mediapart about the situation in Gioia Tauro and the measures that it has taken following the involvement of several of its ships and employees in drug trafficking. One question remains: what was Alexis Kohler, who is now secretary-general at the Élysée, doing amid this mess?

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  • The French version of this article can be found here.

English version by Michael Streeter

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Cecilia Ferrara is an independent journalist and one of the founders of the Investigative Reporting Project Italy (IRPI). Her two most recent articles for Mediapart are here and here. Fabio Lo Verso, who is editor-in-chief of the Swiss publication La Cité, which is a partner of Mediapart, also contributed to this article.