The United States government has slammed a punitive fine of N35.8 billion or $236 million on six foreign companies for offering hefty bribes to Nigerian government officials during the Olusegun Obasanjo presidency.
The United States government has slammed a punitive fine of N35.8 billion or $236 million on six foreign companies for offering hefty bribes to Nigerian government officials during the Olusegun Obasanjo presidency.
googletag.cmd.push(function() { googletag.display('content1'); });
The bribes were paid between 2002 and 2007 by Shell, the giant multi-national oil producing company, Panalpina, the Swiss-based freight forwarding company and Transocean, an oil drilling company and three other oil service companies.
Reports by Bloomberg and Reuters last night said the fines settled several years of probes of the companies by the US Justice Department and court actions by the US Securities and Exchange Commission over the illegal payments to Nigerian officials. All the six companies and some of their subsidiaries also agreed to violations in Angola, Brazil and Russia and Equatorial Guinea, all oil producing nations.
Panalpina will pay the heaviest penalty—$81.5 million. Shell will pay $48.1 and Transocean $20.6 million.
According to court documents as reported by Bloomberg, Panalpina admitted that bribes paid on behalf of Royal Dutch Shell Plc’s Nigerian unit came from “a culture of corruption”. The company admitted it paid at least $49 million in bribes to government officials not only in Nigeria, but also in Angola, Azerbaijan, Brazil, Kazakhstan, Russia and Turkmenistan. The bribes let its clients avoid the customs process, pass off phony documents or smuggle contraband including medicines and explosives, Panalpina said.
“Prior to 2007 a culture of corruption within Panalpina emanated from senior level management in Switzerland who tolerated bribery as business as usual,” the company said in a 34-page statement filed in federal court in Houston. “Dozens of employees throughout the Panalpina organization were involved in various schemes to pay bribes to foreign officials.” The company said Shell’s Nigerian employees “specifically requested Panalpina Nigeria to provide false invoices with line items to mask the nature of the bribes.” Shell wanted to “hide the nature of the payments to avoid suspicion if anyone audited the invoices,” Panalpina said.
Shell separately admitted paying $2 million to Nigerian subcontractors on its deepwater Bonga Project. Shell knew some money would go as bribes to Nigerian officials to circumvent the customs process and give the company “an improper advantage,” according to its admission in federal court in Houston.
Prosecutors charged Shell’s Nigerian subsidiary with conspiring to violate the anti-bribery and books and records provisions of the FCPA. The Justice Department will defer prosecution for three years as long as the company makes required reforms.
The SEC said Shell, based in The Hague, reaped about $14 million in profit as a result of the payments related to the Bonga Project.
Panalpina helped oil and gas industry customers move rigs, ships, workboats and other equipment in Nigeria. Its workers there had 160 different terms for bribes, like “evacuations” and “export formalities,” while its Kazakh workers called them “sunshine” and “black cash,” Panalpina said.
The bribes in Nigeria were spread throughout the government for specific transactions, while some were weekly or monthly allowances to ensure “officials would provide preferential treatment to Panalpina and its customers,” the company said.
Knowledge of the bribes reached the directors, where a former chairman “actively resisted” an outside auditor’s proposal in 2001 to adopt a code of ethics with an anti-bribery provision, according to the statement.
The criminal probe of Panalpina, which had 15,000 workers in 80 countries, began in 2006, and the company’s cooperation after 2007 was “exemplary,” according to a Justice Department filing yesterday.
“Panalpina acknowledged and accepted responsibility for misconduct, investigated and identified the nature and extent of the misconduct,” and undertook a global remediation programme, said a court filing by Panalpina and prosecutors.
The company replaced most of its top leaders, as well as U.S. managers implicated in improper conduct, ended its Nigerian business in 2007, and changed its operations in high-risk countries, according to the filing.
“The settlement of these claims marks the closing of an extremely burdensome chapter in Panalpina’s history and the end of a very demanding three-year effort to address and eliminate serious concerns,” Chief Executive Officer Monika Ribar said in a statement yesterday.
Prosecutors filed a two-count criminal charge accusing Panalpina World Transport of conspiracy to violate the Foreign Corrupt Practices Act and a violation of the law’s anti-bribery provisions. Panalpina U.S. will plead guilty to conspiracy to falsify books and records and to aiding and abetting those violations of the FCPA.
The company also settled a lawsuit with the SEC.
In Nigeria, the company established Pancourier Inc., which used distinctive packaging to alert Nigerian customs officials to bribed shipments. As a result of bribes, the unit’s shipments sailed through customs without required paperwork or a pre- inspection process that “could take weeks to complete,” according to the SEC.
Bribes were paid to sidestep Angolan immigration laws, the SEC said. Angolan officials were bribed to fake employees’ exit and entrance documents, overlook visa inspections, and avoid deporting employees who overstayed visas, the agency said.
One scheme involved bribing Angolan military officers so customers could “use military cargo aircraft to transport their commercial goods,” according to the SEC.
The other companies that settled with the U.S. were Transocean Ltd., Tidewater Marine International Inc., Pride International Inc., GlobalSantaFe Corp. and Noble Corp. GlobalSantaFe merged with Transocean in 2007. Transocean is the world’s largest offshore drilling contractor. Tidewater is the world’s largest offshore energy support-services company.
Pride International will pay $56.1 million; Tidewater will pay $15.7 million; Noble will pay $8.1 million; and GlobalSantaFe will pay $5.9 million, authorities said.
googletag.cmd.push(function() { googletag.display('comments'); });
googletag.cmd.push(function() { googletag.display('content2'); });