The trial judge held that the companies and defendants had been discharged as there was no case to answer.
The Organisation for Economic Co-Operation and Development (OECD) has strongly condemned Italy for recent judgments that now place Italy at odds with the OECD's Anti-Bribery Convention.
An Italian court sitting in Milan had a few months ago acquitted energy companies, Eni and Royal Dutch Shell along with a series of past and present managers, including Eni Chief Executive, Claudio Descalzi in one of the oil industry’s biggest corruption scandals.
The trial judge held that the companies and defendants had been discharged as there was no case to answer.
Italian prosecutors had alleged corruption in the deal while campaigners said the Federal Government of Nigeria was short-changed in the deal. They said $1.1 billion of the purchase price was siphoned off to politicians and middlemen, including the then Minister of Petroleum, Dan Etete.
They also called for Eni and Shell to be fined and for a number of past and present managers from both companies, including Descalzi, to be jailed.
The defendants all denied any wrongdoing. They said the purchase price for OPL 245 was paid into a Nigerian government account and subsequent transfers were beyond their control.
Recall that on April 9, 1998, the Federal Military Government of Nigeria awarded OPL 245 to Malabu Oil and Gas Limited, which was said to be owned mainly by Mohammed Abacha, the son of the late Head of State, General Sani Abacha, and Dan Etete, who served as his Minister of Petroleum. On July 2, 2001, President Olusegun Obasanjo revoked Malabu’s licence and assigned the oil block to Shell without a public bid.
Malabu went to court, and ownership was reverted to it in 2006 after it reached an out-of-court settlement with the federal government.
Shell challenged the decision and commenced arbitration against the federal government, but when President Goodluck Jonathan came to power in 2010, the controversy appeared to have been resolved with Shell and Eni agreeing to buy the oil block from Malabu for $1.1 billion.
The oil companies also paid $210 million as signature bonus to the Federal Government of Nigeria. Both payments were made to the government account at JP Morgan, London, from where Malabu’s share was transferred to Nigerian bank accounts of Abubakar Aliyu, owner of AA Oil Limited.
When President Muhammadu assumed power 2015, EFCC under Ibrahim Maga, as part of his effort to hound down officials of the previous government, in 2017, charged Adoke, Shell Nigeria Exploration Production Co. Limited, Nigeria Agip Exploration Limited, Eni Spa and seven others at the Federal Capital High Court in Abuja with various offences involving their alleged roles in the transactions in which Nigeria was said to have been defrauded of about $1.8billion.
The transactions involved the chains of transfer of the ownership of the OPL 245 covering a lucrative oil field.
But in an excoriating report published on Tuesday, the OECD's Working Group on Bribery, which acts as guardian of the Convention, concluded that the Working Group indeed considered in the past that Italy’s foreign bribery offence complied with the Convention. But this was before the spate of recent acquittals that created jurisprudence on the offence.
“In the recent trial of oil giants Shell and Eni, who were controversially acquitted in 2021 of bribing Nigerian officials to obtain a licence to the OPL 245 offshore oil field, the Working Group explicitly states that elements of the judgment did "not conform to the Convention,” the report read.
“The Working Group was particularly concerned that the court had held that the companies could not be liable for foreign bribery if the bribes were paid as a result of a corrupt agreement between former oil Minister Dan Etete (who held the license that the companies sought to purchase) and Nigerian officials.
“The Working Group also expressed “extreme concern" over the "systematic rejection of circumstantial evidence" by judges in a number of foreign bribery cases, including the OPL 245 case, making convictions nigh on impossible.
“Describing the reasoning in these cases as demonstrating a "troubling pattern", the Working Group tears into the practice of examining "each piece of circumstantial evidence in isolation", with "arguably speculative and uncorroborated" explanations then being put forward which do not stand up to scrutiny if the facts are considered as a whole rather than separately.
“Again, the OPL 245 case is cited as illustrative of the Working Group's concerns: "Half of the purchase money was laundered through multiple cash transfers to currency exchanges and then distributed, including to one official to purchase a USD 4.5 million property. It was nevertheless found that the property was compensation for legal services rendered earlier by the official when he was a practising lawyer. However, the judgment did not refer to any documentary evidence (e.g. invoices) of the services rendered or the debt owed. It is also undoubtedly odd to pay for legitimate legal services with a sale of real property funded by numerous small cash payments cycled through money exchanges. A single direct cash transfer from the debtor to the official would have been more logical. The debtor in this case certainly had the means to pay the official directly: he had just pocketed USD 400 million from the sale of the oil prospecting licence. In the same case, while internal company emails contained language suggestive of bribery, the reasons for the acquittals repeatedly adopted exculpatory interpretations of the correspondence."
The Working Group also warns that interpretations of Italian law that require explicit proof of an agreement to bribe (for example, through video evidence) have placed Italy at odds with the OECD Convention.
The OECD recommends that Italy should change its laws to bring them back into line with the OECD Convention and provide training for judges to acquaint them of the Convention's provisions.
“The OECD report is utterly damning" says Olanrewaju Suraju of HEDA, a Nigerian human rights and anti-corruption group.
"The acquittal of Shell, Eni and other defendants in Italy must now be in doubt. Instead of upholding the OECD Convention, the judges shredded it.”
"The OECD vindicates our warning that Italy moved away from the OECD Convention", says Antonio Tricarico of the Italian non-governmental organisation ReCommon.
“It is a clear slap in the face of Italian judges and the Appeal Prosecutor dealing with the Opl245 case. Italy's Supreme Council of Magistrates and Italy's Minister of Justice should urgently open an investigation on their wrongdoing to restore Italy's credibility internationally.
"OECD Peer reviews are taken very seriously", says Nicholas Hildyard of the UK group Corner House Research. "Italy has effectively been put into special measures by the OECD. Urgent action is required if its credibility is to be restored. A first step would be to halt the malicious investigations into the prosecutors who sought to hold Shell and Eni to account."