Nigeria loses major corruption case against oil majors

Mar 19, 2021 News

---

Despite damning evidence…

Kaieteur News – Even though the government of Nigeria was armed with compelling evidence that implicated Royal Dutch Shell and Italy’s Eni in a major case of alleged corruption with one of its oil blocks, a court recently ruled that no wrongdoing could be found. That judgment was handed down by a court in Milan on Wednesday.
According to Bloomberg, which reported on the case, the verdict ends a three-year legal saga that loomed large over the tenure of Eni’s Chief Executive Officer, Claudio Descalzi. Italian prosecutors were hopeful that with the evidence they had, they could put him away for eight years. But Descalzi and several former executives of the companies, including Malcolm Brinded, who ran Shell’s exploration and production division at the time, and Paolo Scaroni, who was Eni CEO before Descalzi, were cleared of all corruption charges.
Prosecutors had charged the named executives for being involved in a 2011 deal to secure Nigeria’s Offshore Oil Prospecting License 245. It was alleged that they knew that much of the US$1.1 billion they deposited into an escrow account for the licence was controlled by the Nigerian government at the time and would have been disbursed as bribes. Unfortunately, several of the key witnesses called by the Italian prosecutors failed to back up those allegations when called to testify.
It should be noted that in 2018, by way of a separate trial, two middlemen were found guilty of corruption in connection with the foregoing matter. It is also crucial to note that one of Eni’s biggest shareholders is the Italian Ministry of Economy and Finance. It has de facto control of Eni by virtue of interests held either directly or via the Cassa Depositi e Prestiti SpA (CDP), a prominent Italian investment bank.
Following the judgment, Nigerian President, Muhammadu Buhari, who assumed office six years ago, expressed disappointment that the country had failed in its bid to secure US$1.1 billion in court-ordered compensation from Eni and Shell, while adding that the oil resources of the licence at the heart of the case, OPL 245, remain undeveloped. Bloomberg reported that a representative of the Federal Republic of Nigeria said the country would wait to review the Italian court’s written judgment before considering its position.
In Italy, sentences are not definitive until appeals are exhausted. It could take years before there is a final decision.
It should be noted that Eni had initiated international arbitration proceedings against Nigeria in September, alleging the government has breached its obligations by refusing to let the firm develop the licence, which will expire in May.

SETBACK FOR GLOBAL WITNESS
Bloomberg also noted in its report that the verdict represents a setback for Global Witness, the non-governmental that seeks to expose corruption and human-rights abuses around the world. It was Global Witness’ investigative work that uncovered documents that informed the decision of Italian prosecutors to take up the case.
In 2011, the Global Witness had reported that Shell and Eni paid over US$1.1 billion in a murky deal for the block that is located off the coast of Nigeria. Following a lengthy investigation by the NGO, it was able to access documents showing that this money for the rights to exploit the country’s natural resources did not go to benefit the Nigerian people, as it should have done.
Instead, it went to convicted money launderer and former Oil Minister, Dan Etete, who had awarded himself ownership of the block in 1998 via a company he secretly owned, Malabu Oil and Gas. Global Witness in a special report said that for six years, Shell has denied it did anything wrong, and said it only paid the Nigerian government in securing rights to the block.
In 2015, Shell’s CEO, Ben Van Beurden, responded to the allegations by stating the payments were “morally OK” and “in accordance with the law of Nigeria and international practice.” However, what this carefully worded statement did not say is that Shell executives knew the money would go to Malabu and Etete, and was then likely to flow to some of the most powerful people in the country.
In February 2016 as well, Global Witness reported that Shell’s headquarters were raided by 50 police in a joint Dutch–Italian investigation into the deal. Global Witness was able to document the details of a phone call between Shell’s CEO, Van Beurden, and the then Chief Financial Officer, Simon Henry, soon after the raid, as their phone lines were wiretapped by Dutch authorities.
Van Beurden suggested that Shell should not disclose the raid to shareholders, saying to Henry: “The last thing you want of course is some sort of request to issue a stock exchange release when there is nothing to be said other than that we are being asked to provide information.” He also told Henry: “don’t volunteer any information that is not requested,” to police investigating the OPL 245 deal.
The Global Witness stated that the money paid for the block equals more than the African nation’s 2016 health care budget. It is also one and a half times what the United Nations says is now needed to respond to the current famine crisis. Research indicates that approximately 8.5 million people in Nigeria are in need of humanitarian assistance, while 5.1 million Nigerians are malnourished. The deal, which allegedly paved the way for billions to be siphoned off to agents and middlemen in corrupt payments, had also sparked law enforcement inquiries in six other countries.

---

---