You buy travel insurance thinking that you will be covered for any mishaps, but does it really protect you in the time of need? The details are in the fine print as discovered by Cox and Kings Europe tourists even as C&K is giving its “customers” a rude brush-off
Cox and Kings' (C&K) European Whirl tour ended with a whirlwind for 32 passengers just before takeoff back home. After being robbed of valuables left in the bus (on insistence of the tour manager), C&K has given them a cold shoulder and the prospects of the insurance company paying them anything is zero. C&K's reasoning is that they are not responsible for loss of any baggage, valuables and personal effects of the passengers.
Read the first part of the story - Cox & Kings’ tourists robbed in Europe
What is unique in this case is that the passengers lost belongings by following the C&K tour manager's instructions and yet C&K does not believe that they have to take the responsibility. C&K asserts that "passengers should not leave any property in the coach while disembarking", but ironically the tour manager gave exact opposite directions during all the 10 days of the tour.
If the standard operating procedure was to make the passengers keep the baggage inside the coach during sightseeing, C&K should have had an understanding with bus operator/sub-contractor about them taking the responsibility of baggage. C&K should be able to get compensation from bus operator/sub-contractor to indemnify the huge loss to the 32 passengers. Did they get any report from bus operator and tour manager? Was any action taken? How about C&K taking interest to follow-up with the police station in Rome where a complaint has been made? Why is C&K shrugging off the case with a casual attitude?
What makes the case appalling is that all the passengers lost the carry-on baggage and not a small tourist bag, which people carry during sightseeing. According to YN Bhattacharya, a senior banker who along with his family had lost of around Rs2 lakh says, "Instead of going directly to the airport or giving the option to leave the baggage in the safety of hotel lockers which was hardly five miles from the airport and ample time on-hand, the C&K tour manager made the full tour to not only carry all the baggage in the bus but also made them keep it inside the bus with no option for passengers to sit inside the bus. All of them had to go to the mall, which was actually not mentioned in the itinerary." If this is true, it was clearly a trap, possibly involving the tour manager himself. What is the implication is all this for insurance?
While buying travel insurance, customers hardly know what is really covered. What is mentioned in the fine print is that the cover is for checked baggage with the airline and does not cover loss due to theft. Oriental Travel Insurance purchased through C&K only covers loss of checked baggage. One insurer who covers theft from vehicle which clearly states-"It excludes theft from a motor vehicle unless the property is securely locked in the boot and entry to such vehicle is gained by visible, violent and forcible means." Even if the travel insurance purchased through C&K had this clause it would not have helped as it was an inside job. There was no need for forced entry or tampering of the lock. The learning for travel insurance buyers is to not buy blindly. If certain situations are not covered, you have to be extra vigilant about protecting your assets in a foreign land.
One of the 32 passengers lost his passport, ticket and was stranded in Rome. C&K's terms and conditions (T&C) states following-"If you lose your passport, visa, tickets, etc, you may have to incur extra expenses, for which you alone shall be responsible." Moreover, the T&C of Oriental Travel Insurance covering loss of passport excludes following-"Loss or theft of passport left unattended by the insured person unless located in a locked hotel room or apartment and an appropriate sized safety deposit box was not available for use by the Insured Person." There is low chance of getting insurance reimbursement in this case.
Even small tour operators carry public liability and professional indemnity insurance to handle such situations. C&K, being a major player in this business for over 250 years, will surely protect itself for any liability as it would have an insurance cover. So, it is not as if C&K will have to pay from its pocket to reimburse the 32 passengers. The reluctance to entertain and empathise with the loss of its own customers shows horrible a shocking business attitude.
If the fight goes to courts, the tour operator may simply invoke their insurance to pay off any liability. It may eschew doing justice till the noose tightens around its neck.
Tour passengers have been trying to contact C&K by personal visits or emails, but without any success. YN Bhattacharya tried repeatedly to contact Pankaj Sethi, C&K co-coordinator for the tour, who did not pick up the call, but sent an SMS that he would call back later, which he never did. Another passenger G Elangovan's email was unanswered. After a reminder, there was general reply that C&K is looking into the issue. C&K was going to give a response to Moneylife by noon today, but there has been no response till the time we uploaded the article.
Across the world, corrupt corporates, government officials and individuals have been sent to jail or made to pay heavy damages. When will India act to punish the guilty?
The conviction of Rajat Gupta by a US court in the matter of insider trading has raised an important issue; can we expect anything like this in India? Will there be speedy trials not only in the case of insider trading but several other important cases involving corporate frauds and political corruption.
While we in India tend to believe that we have tremendous amount of corruption in our country as also there are several frauds involving corporate and rightly so, but we are not alone in this; countries across the world are facing these twin problems. However, the major difference seems to be the speedy justice provided to the victims with the guilty being hauled by sending them to jail or making them pay heavy damages so that it would teach them a lesson.
According to a recent issue of American Banker, ING Bank has agreed to pay $619 million to settle charges that it violated US sanctions; the report says this is the largest such settlement in history, said the Treasury Department. (http://www.americanbanker.com/issues/177_113/ING-OFAC-violations-settlement-1050065-1.html )The settlement resolves an investigation by the Office of Foreign Assets Control into charges that the bank intentionally manipulated information about US sanctioned parties in more than 20,000 financial and trade transactions between 2002 and 2007. The Treasury held that it was a historic settlement and it should serve as a clear warning to anyone who would consider profiting by evading US sanctions.
The case involving well-known pharma giant Johnson & Johnson (J&J) makes still more interesting reading. Pharma companies have been known for certain practices which can hardly be called ethical. According to a Bloomberg report J&J has agreed to pay as much as $2.2 billion to settle US probes of the marketing of its Risperdal antipsychotic drug and other medications. The report states that, “The settlement will include a misdemeanour plea and criminal penalty of as much as $600 million, said the people, who didn’t want to be identified because they weren’t authorized to speak publicly about the agreement. (http://www.bloomberg.com/news/2012-06-11/j-j-said-to-pay-2-2-billion-to-end-risperdal-sales-probe.html)
The accord also would resolve civil claims that J&J paid kickbacks to Omnicare Inc (OCR), a company that dispenses drugs at nursing homes, the people said”. The said report states that J&J officials said that on 8 June that the company was setting aside $600 million to increase its reserves for potential settlements of lawsuits over its marketing campaigns for Risperdal and other drugs. Officially, the spokesman of J&J has refused to comment on this matter.
In another case, this time from Singapore, former Singapore Central Narcotics Bureau director Ng Boon Gay was charged with four counts of corruption for obtaining sexual favours from a female information technology executive seeking contracts from the agency. The charges come less than a week after former Singapore Civil Defence Force commissioner Peter Benedict Lim Sin Pang faced similar charges involving three women seeking contracts for their companies. Singapore reviewed its public sector financial procedures after uncovering a S$12.5 million ($9.7 million) fraud in September 2010 by two former land authority workers in an incident prosecutors said severely shook public confidence in the internal controls at government agencies.
Mr Ng is out on bail and will contest the charges and seek more information on how he had allegedly helped in furthering the interest of Oracle and Hitachi Data. Hitachi Data said in an e-mailed statement “any alleged inappropriate behaviour attributed to our former employee during her time at HDS was undertaken without the knowledge of, or being condoned by, anyone at HDS.” Mr Ng faces a fine of as much as S$100,000 and a jail term of as long as five years for each charge.
Many years back Glenn Knight, a former director of the Commercial Affairs Department, was sentenced to a day’s jail in 1998 and suspended from legal practice on corruption charges in 1991. The Straits Times (Singapore) said the investigations this year rank among the highest- level probes of civil servants since Knight’s case.
China is well known for many things and corruption is one of them. But a recent case indicates the seriousness of the authorities to bring the guilty to book at the earliest.
According to a report by David Barboza from Shanghai, published in the New York Times (13th June), the former head of the Chinese soccer association and 10 other former national team players and executives were sentenced by Chinese courts to lengthy prison terms for accepting bribes and fixing matches (http://www.nytimes.com/2012/06/14/sports/soccer/lengthy-prison-terms-in-chinese-soccer-corruption-case.html).
According to the report, the sentences are part of a government effort to crackdown on gambling, match-fixing and bribery in the country’s beleaguered leaguers. So far, more than 50 former players, coaches, referees and other officials have been convicted of corruption. The authorities are trying to clean up the system that has long been tainted with corruption and also failed to produce a strong national team. China’s national team is ranked 73rd by FIFA, just ahead of Iraq. The country’s team has not qualified for the World Cup since 2002.
The country’s national league is also trying to strengthen itself after a decade of scandals. Some of China’s wealthiest real estate developers have bought clubs, and even hired European stars and coaches to enliven the game, which remains a popular sport in China.
The agency report states that a court in northeast China sentenced Nan Yong, a former top executive, to 10 years in prison for taking bribes of 1.19 million renminbi (about $187,000). His predecessor was the head of the Chinese association was also sentenced by another court in north China to 10 years in prison for taking about 1.36 million renminbi (about $214000) in bribes.
Two other members of the national soccer association, the team manager and the former technical department director also received long prison terms. Similarly, four national team players were also sentenced on 13th June to six years in prison for taking bribes to help fix the results of a professional match.
We have been importing so many things from China, can our cricket authorities learn a lesson or two from the way China has dealt with its players and officials indulging in corrupt practices.
According to a BBC news report South African President Jacob Zuma has fired police chief Gen Bheki Cele, who had been accused of corruption. (http://www.bbc.co.uk/news/world-africa-18414786) The general was promoted to become police chief in 2010, when his predecessor Jackie Selebi was convicted of taking $156,000 (100,378 pounds) in bribes from a drug dealer. Are the Indian authorities listening; here suspended police officers not only manage to come back to work but in due course are granted promotions as well.
The country has been debating whether to permit Wal-Mart into the country or not, what will be the consequences, will it be in the interest of consumers or will it kill the small retailers, etc. Now comes an Associated Press report which indicates the level of bribery indulged in by Wal-Mart officials in promoting its operations in Mexico. The same report states that the New York Times reported in late April that Wal-Mart’s Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favours. The Times said executives didn't notify authorities even after Wal-Mart found evidence of the scheme. However, the top management has said that a full investigation is going on it is co-operating with the authorities.
So when Wal-Mart comes to India, one thing we can be sure of is huge bonanza will be available for our babus who will be providing the necessary approvals to Wal-Mart for starting its operations in India.
What is evident from all the above cases is that bribery and corruption is all pervading but is also apparent is intention to fight the same by bringing the guilty to book at the earliest by giving them harsh punishments. Can we expect anything like this in India?
SD Israni is a corporate lawyer. Email: [email protected]
Army officers need to stand up and be counted at any cost or else, they will stay down for good and dent the image of the Armed Forces
Even as we get continuously desensitized to news of violence, immorality and corruption in all sections of society, news of such deviations by members of the Armed Forces draws special attention due to the severe contrast that such news has with the image of the Armed Forces as a disciplined and ethical organization. In recent years, there have been numerous cases of unbecoming conduct and misuse of the position held by senior Armed Forces officers. Having been a member of the Armed Forces and knowing that it is still one the finest institutions of our country, such news of alleged corrupt practices by officers make me cringe, just as it would appear shameful and painful for all serving and retired members of the Armed Forces. I reject the argument that it is difficult to maintain the traditional values of selflessness, integrity and morality in the Armed Forces and lay the blame on the value system of other institutions and society at large. We need to introspect and understand how and why unethical practices creep into an organized, disciplined and structured force and how it can be insulated from a decaying environment.
Even as the Indian Army, an internationally renowned fighting force, should not be really compared with the Enron case, I see some distinct similarities between the Enron culture and a sub-culture within the Indian Army. These significant and interesting parallels might explain the deeper systemic causes of the now rather frequent image fraying incidents of unethical practices involving senior Army officers that come to light through the media. What becomes known may be just a tip of the malaise. My focus is on two comparable aspects that could reveal systemic weaknesses.
Culture and Leadership
A nation’s survival depends on the quality of its armed forces and that inevitably depends on the quality of the leadership. The quality of the armed forces and its leadership has a decisive influence on national power. Today, several behavioural and ethical tendencies borrowed from the business world threaten the displacement of the military ethos.
In 1986, General Sundarji as Chief of the Armed Staff had expressed his concern to all officers (this term is used to include the wider meaning of leaders) of the Indian Army about how the Army “is becoming increasingly careerist, opportunist, and sycophantic; standards of integrity have fallen and honour and patriotism are becoming unfashionable.” Even the current chief of Army Staff, Gen VK Singh had resolved to address this issue seriously. The crucial question to examine is that in the present climate of values and imperatives of the system are the officers who are successful the best or are they those best fitted to cope with the circumstances? Survival of the fittest need not mean survival of the best. In particular cases, survival may be achieved through degeneration or the compromise of ethical values.
While the spectacular failure of Enron is primarily attributed to its accountancy practices, its internal culture and leadership practices also contributed to its collapse. At Enron, the culture was characterized by promotion of conformity and a parallel suppression of dissent. Just as in cults, employees were so over-aligned with the company that they never asked uncomfortable questions of their leaders. The leaders at Enron displayed narcissism. The leaders had a strong need for power, were over-confident and held strong convictions. They tended to be very sensitive to criticism, were poor listeners, lacked empathy, hated advice and had an intense desire to compete. Such a silencing culture created and promoted an insular homogenous group mentality that could never challenge the mis-judgments of their superiors. Subordinates were thus made vulnerable to manipulation by leaders of the organization through a corrosive value system.
At Enron, communication was primarily one way, from the top to bottom and used only to reinforce the demanding goals set by Enron’s leaders. Corrective feedback was not sought, but stifled. Dissent was considered as resistance to be overcome rather than as useful feedback. An unwritten rule demanded “no bad news”. The messenger would invariably get shot, as was evident in the case of Sherron Watkins, a senior employee in the finance department of Enron, who broke the hierarchical chain of command and voiced her concerns about the financial position of the company directly to Ken Lay, the CEO. Soon after that meeting, Ken Lay contacted his lawyers to find ways of firing her.
In the Army too, cultism can exist in some quarters, as military ranks bestow enormous authority over their subordinates. Conformity to rules and customs is critical and backed by an Army Act. Newcomers are ingrained with the ethos of discipline, loyalty, integrity and team work. They are always referred to as ‘the cream of the nation’. Compliance with professional norms earns them rewards and recognition. The profession also monopolizes their time. “You are always on duty round the clock” is the norm. All these rituals of integration and socializing are necessary to inculcate the desired values for a fighting force. What goes wrong is the extent to which the norms of loyalty and obedience can get stretched by some errant leaders to suit their own personal ends.
Many failings arrest worldly success but in the Army non availability of sufficient high grade assignments to mathematically match the large availability of officers with a high grade profile was a systemic problem which in recent restructuring has been corrected to some extent. Thus, many good officers become victim of comparative merit.
The lifestyle of military leaders improves with rank as more and more organizational resources come to be placed at their disposal. Some of the military leadership is prone to opulence within its own domain. At higher ranks, some may justify to themselves that they have earned their position through relentless efforts and they must enjoy all the possible ‘perks’ in their tenured appointments.
Also, for some military leaders, debate may be unnecessary and the only thing that they consistently seek is enthusiastic expressions of agreement from their subordinates on their ideas and proposals. As negative information or feedback is generally seen as subordinates’ inability to cope and is deemed by the superior to reflect poorly on the subordinate, much of upward communication can get distorted through filters at different levels of hierarchy in order to please or pacify the final recipient. Only the inescapable negative information may get fed upwards by subordinates to give leaders the illusion of control.
Some military leaders in their appointments may seek to be surrounded by subordinate staff with proven and tested loyalties to themselves and who will facilitate the achievement of their personal and professional interests. Subordinates are also far too willing to be affiliated with senior ranks and may proactively seek to be posted under them. Like within cults, if the message is that the subordinate is valued and very much wanted- it increases the person’s tendency to affiliate and conform and engage in yet further behaviours pleasing to the leader. “Always try and serve under someone you know” was the advice given publicly by a serving Lt. General to a colonel during the latter’s farewell function at the Staff College some years ago. This not only revealed how the general might have risen in his career but also reflected some of the current values in the organizational culture of the Army.
A sub-culture of submissiveness, servility and appeasement combined with rigid controls ensuring conformity may result in a lack of genuine upward communication. The absence of debate and insulation of the top leadership by a selected coterie of staff officers can generate a feeling of omnipotence and omniscience in the leader. Such a mistaken assumption on the part of a leader prepares the ground for incorrect decisions and unethical practices.
When careerism is held as the highest value, there is increased willingness to acquiesce in policies and orders that are detrimental to the good of the service. Officers then may then have to make a choice between pleasing one’s superior and staying ‘loyal’ or staying loyal to oneself and one’s values. The individual then assesses whether to object or obey purely in terms of his ascending career interests.
Subordination of self interest to organizational interest is essential for the excellence of Armed Forces. A proven example of selflessness is that of the German military which was one of the most efficient military of the twentieth century. To become a member of the German General Staff, what was required was the absence of the quality of ambition. If an officer of the General Staff was regarded as a climber, they had no further use of him. In our case, it is possible that senior commanders may fail to stand up to the establishment in matters of conscience if the bait of ambassadorship, governorship or some cushy job after retirement looms large.
Even though the Defence Service Regulations make it incumbent upon subordinates to report any type of irregularity in which their superiors are involved, this provision of whistle blowing is rarely invoked or at best may be used by the officer in retaliation to an injustice done to him.
The Rank and Yank Appraisal Policy of Enron
Enron had a punitive internal culture in which all that has been so painstakingly gained in a career could be withdrawn at the whim of senior managers. Enron’s appraisal system was known as “rank and yank”. An internal performance review committee rated employees twice a year. They were graded on a scale of one to five on 10 separate criteria, and then categorized into three groups. Group A were to be challenged and given large rewards; ‘B’s were to be encouraged and affirmed and ‘C’s were told to shape up or ship out. Those in ‘C’ category were given time to improve until their next review. Whatever they did, 15% of all employees would find themselves in the bottom category twice a year. So sufficient improvement was almost impossible and they tended to leave quickly. The A and B categories were also at risk to be downgraded every six months. A cut-throat culture was created which pitted employees against each other. It was clearly in every individual’s interest that someone other than themselves received a poor rating.
Through this appraisal system, Enron created an environment where employees were afraid to express their opinions or to question unethical and potentially illegal business practices. Because the rank and yank system was both arbitrary and subjective, it was easily used by managers to reward blind loyalty and invalidate brewing dissent.
The Army’s Appraisal System
Officers in the Army are graded each year on about a score of parameters on a scale of zero to nine. A niner is considered outstanding and gradings of seven and eight are both considered above average. The 20 parameters are graded by two levels up in the hierarchy and reviewed at the third level. The hierarchical pyramid is steep, getting very narrow at the top. Till recently, so drastic was the differentiation with the civil services that while in 18 years of service, one could rise to the level of a joint secretary; a similar status of major general could only be attained after 30 years of service or more.
Promotions are vacancy based and relative merit with an exaggerated emphasis on quantitative assessment plays a major role in selection procedures. So, no matter how good the overall standards of a batch of officers, a certain percentage has to be yanked. So intense is the competition that a single grade of seven in any of the 20 qualities over the entire length of the career could become the cause of elimination from the promotion process.
While getting superseded is an inevitable reality due to lower performance than peers and must be accepted with stoic indifference, it is also an accepted fact that human judgments across the board are not equitable and much can depend on the nature of superiors that one is placed under. A superior’s frame of reference is much influenced by his own ethical standards and his own model of success. Quite often, a careerist superior would expect attitudes and behaviour of his subordinates to conform to ways and means he adopted to achieve success. If such values extend across the organization on a wide scale, only individuals deemed appropriate by the dominant group will rise in their career.
Moreover, the system of appraisal is partially transparent. Only the portion of demonstrated performance rated by immediate superior is shown and not the assessment of the officer’s potential. Officially, these can be contrasting. The designing of the partially closed system has its merits but it allows revengeful assessing officers to commend subordinates in their visible reports and yet administer a “poison pill” in form of a grade of seven in abstract qualities of potential, without his knowledge. The assessee is not apprised of his potential and even if he knew he cannot protest much as seven is considered above average and yet turns out to be a career stopper.
The structural defect in design of the appraisal system can give rise to an ethos of appeasement particularly when value systems of the appraiser and assessee differ. If an assessee fails to act upon instructions that are clearly unethical and/or illegal, the errant superior may nurse a grudge against him and while being unable to wrongly assess him in the open portion of the appraisal because of his visible competence and which could lead to a justified protest, he may damage his promotion prospects by under rating him in the hidden portion of the appraisal report.
Cases of good officers being treated shabbily may arise because of their disagreeing with the proposed unethical action rather than their lack of objectivity or competence. The appraisal system thus reinforces the demand for conformist behaviour and is a disincentive to the articulation of voices even when things are going wrong.
The appraisal system is misused as a form of unobtrusive control and as an instrument of coercion by cultish organizations. By making their subordinates helpless and fearful, through a mix of approval and abuse, they suppress voices of dissent. Subordinates too, tend to find security in doing what they are told to do rather than think and make decisions for themselves.
The picture of certain sections of the Army practicing the ethics of the marketplace does not suggest a particularly inspired work performance. The optimistic view is that such sections are minimal and do not reflect on the integrity of the Army as a whole. But unless this malignant tumour is contained and excised, it poses the danger of weakening the body and finally overtaking it.
The following measures could help reduce the possibilities of ethical deviations without compromising on discipline:
A. The unintended birth of some sub cultures that work counter to the primary goals and identity of organizations need to be identified and kept in check by a continuous tracking of practices and the nature of sense-making by the members of the organization. This is only possible if feedback loops within the organization are effective and leaders at all levels have a propensity to listen, understand and act. Often times, an eerie bonhomie among top rungs of leadership, based on ‘quid pro quo’ relationships, prevent the curbing of the rise of destructive sub cultures within an organization. A formal system of ethical audits for both individuals and organizations needs to be instituted. At the individual level, a 360 degree evaluative process, at least on the critical qualities of leaders should be taken as another input for promotions. Such a process would reinforce values and measures aimed at ensuring correct conduct. At the organizational level, a stricter process of external audits with focus on ethically vulnerable points in the system needs to be put in place.
B. Military structures should have functional doctrines of protest that encourage the use of the instrument of moral protest through personal courage and a sense of morality. An officer must not betray his personal integrity or his position and such a doctrine would help individuals balance moral and career considerations. Valid whistle-blowing must be encouraged and rewarded.
C. Improve career management by reducing proportionate emphasis on a quantitative based selection system and increase value judgment on qualitative criteria. Reduce possibilities of senior officers choosing their subordinates and carrying them in service. The appraisal system needs to be made more transparent by disclosing judgments of potential and turning it into a developmental tool.
For any lasting change, efforts have to be both bottom-up and top-down. Systemic changes to encourage the growth of the right culture need to permeate from the top.
For those below, the advice is that you don’t have to go along to get along. Loyalty to one’s superior ought to be seen as a conditional relationship based upon the condition that the superior is acting honourably in his position of command. On issues that seem important to them, officers need to stand up and be counted at any cost or else, in any case, they will stay down for good and dent the image of the Armed Forces.
The preceding generations have brought into being our mighty Army with its strong traditions, values and a unique culture despite some imperfections. It is incumbent upon the present and future generations to endeavour to remove the imperfections, and build a greater Army that the nation can continue to be unquestionably proud of.