 http://www.thisdaylive.com/articles/bribe-for-contract-oil-firms-under-watch/104867/By Chika Amanze-Nwachuku
The United States Depart-ment of Justice (DOJ) is keeping an eye on some oil companies operating in Nigeria following reports of widespread corruption that has characterised oil and gas businesses in the country.
A highly placed industry source told THISDAY at the weekend that the DOJ, which is responsible for most law enforcement duties in the US, was concerned that some foreign oil companies and their contractors make illegal payments to high government officials to secure oil and gas contracts.
It was also revealed that oil companies often pay bribes to the tune of billions of dollars before they could obtain permits to do business in Nigeria.
Worried about the trend and coupled with recent cases in which oilfield contractor Halliburton Incorporated offered gratification to some oil companies’ executives as well as top government officials for the purpose of securing the award of the Nigeria Liquefied Natural Gas (NLNG) contract in Bonny Island, Rivers State, the department resolved to closely monitor activities of global oil companies with a view to ensuring that erring companies were tried in accordance with the US Foreign Corrupt Practice Act (FCPA).
Houston-based engineering firm, KBR, a former Halliburton unit, pleaded guilty in 2009 to US charges that it paid $180 million in bribes between 1994 and 2004 to Nigerian officials to secure $6 billion in contracts for the Bonny LNG project.
KBR and Halliburton reached a $579-million settlement in the US.
But Nigeria, France and Switzerland had conducted their own investigations into the case, culminating in the arraignment before a Nigerian court of former US Vice-President Dick Cheney, who was Halliburton Chief Executive Officer in the 1990s; Halliburton Chief Executive David Lesar and two other executives by the Economic and Financial Crimes Commission (EFCC).
However, in December last year, the anti-graft agency dropped bribery charges against Cheney, who served as vice-president to George W. Bush from 2001 to 2009; and Halliburton after the Federal Government agreed to an offer made by the firm to pay fines totalling $250 million.
Ex-Minister of Petroleum, Chief Dan Etiebet; former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funsho Kupolokun; as well as one-time Director-General of the defunct National Security Organisation, Alhaji Umaru Shinkafi, were among scores of persons quizzed by a presidential inter-agency panel set up by the Federal Government to unmask the Halliburton bribe takers.
Also last year, oil giant Shell reportedly paid $60 million to head off the threat of legal action for corruption in Nigeria.
In November 2010, Shell was said to have paid $48 million to settle the case with the US authorities.
The oil major, believed to be among the companies currently under watch, allegedly paid $3.5 million in bribes to Nigerian officials between 2002 and 2005 in connection with its Bonga deep water oil and gas project.
The Royal Dutch company and Swiss logistics company, Panalpina, also in 2010, offered to pay $115 million in penalties to settle charges stemming from a three-year investigation by the DOJ into illegal payments to Nigerian officials and others by the Swiss company to expedite services.
Shell offered to pay around $30 million in penalties to settle charges arising from its use of Panalpina as an agent in Nigeria.
On the other hand, Panalpina Group, which has about 14,000 employees and branches in more than 80 countries, was to pay around $85 million in fines to settle charges that it violated the US FCPA.
The Swiss company had been under investigation by the Securities and Exchange Commission (SEC) for paying bribes to officials of Nigeria, Saudi Arabia, Algeria and Kazakhstan to expedite services, such as clearing drilling rigs and other equipment through customs.
The criminal inquiry had expanded to the Panalpina's clients, including oil giant Shell, Transocean Ltd (one of the world's largest of offshore drilling contractors), Nabors Industries Ltd, Noble Corp and oil-services company Schlumberger Ltd, which was also being investigated by the department for alleged bribery-related activity in Yemen.
The criminal inquiry of nearly a dozen oil and oil-services companies focused on potentially illegal payments to Nigerian Customs agents through Panalpina began in 2007.
Eleven oil and oil-service firms had received letters from the DOJ asking them to detail their relationship with Panalpina.
The oil and oil-service firms were also asked to list countries where Panalpina provided them with services in the past five years, and to specify what they paid for those services.
The FCPA of 1977 is a US federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.
The anti-bribery provisions of the FCPA prohibit domestic concerns, and any person from making use of interstate commerce corruptly, in furtherance of an offer or payment of anything of value to a foreign official, foreign political party, or candidate for political office, for the purpose of influencing any act of that foreign official in violation of the duty of that official, or to secure any improper advantage in order to obtain or retain business.
Persons subject to the FCPA include any US or foreign corporation that has a class of securities registered, or that is required to file reports under the Securities and Exchange Act of 1934.
It also concerns any individual who is a citizen, national, or resident of the US and any corporation and other business entity organised under the laws of the US or having its principal place of business in the country.
The US Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system.
The Act was signed into law by President Jimmy Carter on December 19, 1977, and amended in 1998 by the International Anti-Bribery Act of 1998 which was designed to implement the anti-bribery conventions of the Organisation for Economic Co-operation and Development (OECD).
Regarding payments to foreign officials, the act draws a distinction between bribery and facilitation or "grease payments", which may be permissible under the FCPA but may still violate local laws.
The primary distinction is that grease payments are made to an official to expedite his performance of the duties he is already bound to perform. Payments to foreign officials may be legal under the FCPA if the payments are permitted under the written laws of the host country. Certain payments or reimbursements relating to product promotion may also be permitted under the FCPA. can you smell the fresh air - lets see how much longer ms petroleum can hold down the carpet |
