Source: CRA
Multinationals doing business in developing countries, especially those with a well-known history of corruption, it is like walking through a minefield or swimming in a crocodile-infested river, attempting to make profit through the contract system, which in most cases is largely corrupt.
For while there are lucrative businesses to be made in such countries and regions, there are also huge legal and reputational challenges to encounter in such operating environments.
Accordingly, multinationals must weigh the size of the profit that could accrue to them in the course of such transactions against the damage that could also arise or emanate in the process of making such profit.
That is currently the scenario or dilemma facing two oil giants – Shell and Eni – in Nigeria over a $1.1bn oil block named OPL 245, allocated back in 2011.
According to criminal charges filed by Nigerian law enforcement agency, the Economic and Financial Crimes Commission (EFCC), in Abuja, Eni’s Nigerian subsidiary, Nigerian Agip Exploration, and Shell’s Nigerian subsidiary, Shell Nigeria Exploration Production Company, are accused of conspiring to commit “official corruption contrary to Section 9 of the Corrupt Practices and Other Related Offences Act, 2000”.
Also named in the charges for allegedly receiving more than $800m from Shell and Eni in the purported fraudulent deal were Mohammed Adoke, former Nigerian justice minister and Dan Etete, former oil minister.
To muddle the matter further, the EFCC also filed money laundering charges against Mr Adoke, alleging that he received the sum of $2,267,400 on 16 September 2013 as payment for brokering the deal in respect of the OPL 245 oil block, from Shell, Eni and a company owned by Mr Etete.
It has been proved beyond every reasonable doubt that in many African countries, companies must make a deal with top government officials before they win huge government contracts.
This could either be commissions, kickbacks, 10% or
outright bribery.
And for multinationals seeking such contracts, it could come down to either sticking to their cherished corporate values and losing the contract to competitors; or waiving such values and earning the contract to claim the profit margin.
And so it is alleged with oil block OPL 245, also known as the Malabu oil deal.
The lid on the deal was blown off not in Nigeria but in faraway Italy, where prosecutors in Milan sought the trial on international corruption charges of Shell, Eni and three individuals: Claudio Descalzi, Eni chief executive officer; Roberto Casula, Eni chief operations officer; and Malcolm Brinded, chairman of Shell Foundation.
The Italian prosecutors called for a trial in February, after closing their investigations into the case in December last year.
A court must now set a date for a hearing, at which a judge will decide whether to accept the prosecutors’ request or acquit the accused.
The base of the case is that in 2011, Shell and Eni were alleged to have paid the sum of $1.1bn to Malabu Oil and Gas, a company said to be owned secretly by Etete and which allegedly paid $500m to certain individuals said to be acting as fronts to former Nigerian President, Dr Goodluck Jonathan.
As of 1 March, the Eni board issued a statement denying any complicity in the deal.
Meanwhile, in January 2017, Nigerian authorities seized the contentious oil block OPL 245 in the process of prosecuting the entities and persons involved in the deal.
The Milanese prosecutors must be commended for bringing the case to the public arena despite whatever gain their country or Italian companies could have derived from the deal.
Through the years, critics in Africa have often accused Western nations, multinational companies and individuals of conspiring with corrupt government officials on the continent to engage in acts of graft to the detriment of the African continent’s citizens.
Of course, references have been made in the past to African leaders who stole and stashed their loot in Western banks, without much determination by Western leaders to confiscate such ill-gotten wealth and repatriate same to their countries of origin.
This explains why the prosecutors in Milan who blew the Malabu deal open deserve collective praise for standing up for transparency and integrity on behalf of the government and people of Nigeria.
As expected in such high-level allegations of corruption, Mr Adoke flatly denied any wrongdoing in the deal, insisting that the agreement was duly approved by three former presidents of Nigeria: Chief Olusegun Obasanjo, the late Umaru Yar’Adua and Dr Jonathan. He insisted that none of the three ex-presidents could disown or deny knowledge of the agreement.
Mr Adoke claimed he was merely a messenger executing the directives of his superiors in government, namely the three presidents, and hence, he should be spared the charges of money laundering brought by the anti-graft agency in Nigeria, the EFCC.
Some 24 hours later, Mr Obasanjo reacted, denying any part in the deal, while Dr Jonathan insisted that he did not send any person to transact any fraudulent deal or collect a bribe on his behalf.
The Malabu oil deal has dealt a serious blow to the international credibility of Nigeria and only strengthens the often-held impression that the country is endemically corrupt.
It also creates the impression, true or false, that the act of corruption in Nigeria operates at the highest level of governance in the country.
While Mr Obasanjo and Dr Jonathan have every right to distance themselves from the stench of OPL 245, it is important for them as former presidents under whose watch the transaction took place to make more detailed and comprehensive statements on what transpired in respect of that agreement.
Indeed, simply dismissing the accusation from Mr Adoke that they did not approve the deal is not enough. The government and people of Nigeria and the international business community need more facts from them in respect of the deal.
Given the nature of the case, it is important for the EFCC to look beyond Mr Adoke alone if it desires to bring all the perpetrators of the deal to justice, because it seems inconceivable that Mr Adoke could have acted alone in sealing the agreement without the knowledge and approval of certain superiors in the government he served under.
And considering that allegations are often levelled against EFCC as government’s attack dog against opposition from critics, it therefore becomes imperative for the anti-corruption agency to conduct a thorough investigation of the case via partnership with the Italian prosecutors, for effective prosecution of the matter.
There is no doubt that the Nigerian government, the opposition, civil society groups in Nigeria and the international business community will be watching the conclusion of the matter with keen interest, to learn whether the fight against corruption in Nigeria is either real or cosmetic.