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‘Guyana oil shipbuilder in hot water’
– as French law group files request to probe corruption allegations by SBM
Kaieteur News – French law association, Sherpa, recently filed a complaint asking the French National Financial Prosecutor’s Office (PNF) to open an investigation into corruption, money laundering and concealment of stolen goods in relation to the activities of extractive industry giant SBM Offshore.
The US$720M Liza Destiny made by SBM
Sherpa noted that SBM Offshore, the sole manufacturer of Guyana’s oil vessels namely the Liza Destiny, Liza Unity, and Prosperity, has been flagged in several countries because of its alleged extensive corrupt practices. And in light of those cases, Sandra Cossart, Sherpa’s Executive Director, believes the time has come to shed light on the role of SBM Offshore’s French managers in what could be widespread corruption practices.
Sherpa was keen to note in the firm’s complaint that in 2014, whistleblower Jonathan Taylor, who was at the time the legal director of SBM Offshore, a Dutch oil services group based in Monaco, had denounced an international network of bribes. He had denied that his former employer would have paid US$275 million to obtain oil contracts around the world.
Sherpa noted however that evidence subsequently provided to the Serious Fraud Office in England, to investigators in Brazil and in the Netherlands, and to the FBI and the U.S. Department of Justice, contributed to the opening of investigations in many jurisdictions which exposed damning levels of corruption and multibillion dollar fines levied against SBM.
Sherpa noted as well that other investigations have established the extent of SBM Offshore’s illegal practices, particularly in conflict zones, thus underlying the central issue of the systemic dimension of corruption in the sensitive sector of extractive industry.
Kaieteur News, during extensive research, also found that SBM Offshore has been accused in the past of allegedly bribing officials to win inflated contracts. In fact, the offshore drilling equipment manufacturer was fingered in five countries; namely Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. Kaieteur News found that SBM executives were accused of bribing officials in those nations with over US$180M. These bribes resulted in approximately US$2.8B in profits. Subsequent lawsuit actions led by the Public Prosecutor of its home country, the Netherlands; the US Department of Justice; and the Brazilian Federal Prosecutor which resulted in millions of dollars in fines being paid.
When SBM’s US subsidiary was hauled before the courts for breach of the Foreign Corrupt Practices Act (FCPA), it pleaded guilty and agreed to settle criminal charges of bribing officials in the five countries. It paid a US$238 million penalty.
In Brazil, the company had agreed to enter a settlement so that it could end all anti-corruption investigations against its subsidiary there. The US$189M settlement was done so that it could not only kill the probe into the company’s role, but also allow it to participate again in future tenders.
The investigation in Brazil was centered on allegations that SBM was one of several companies that paid massive bribes in exchange for inflated contracts to service Petrobras, Brazil’s National Oil Company.
In the case of its home country, the Netherland authorities launched its own investigations and got SBM to pay a US$40M fine as well as a US$200M disgorgement (having to do with repayment of ill-gotten gains) via an out-of-court settlement. Following this, SBM said it enhanced its anti-corruption compliance programme and related internal controls to prevent a reoccurrence of any kind. Owing to the fact that the Netherlands is considered one of the least corrupt within the European Union (EU), the authorities which settled with SBM were highly criticized by transparency bodies there for not going forward with the prosecution of such a high-profile corruption case, among others. It was believed that settlement lends to the perception of backroom politics while providing the opportunity for the authorities to abuse its power to allow settlements in cases where the suspect has more to gain by settling quickly.
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