By Bassey Udo
The Board of the Nigerian Extractive Industries Transparency Initiative (NEITI), otherwise called the National Stakeholders Working Group (NSWG), on Wednesday called on the Federal Government to immediately constitute a Special Panel to investigate the Glencore bribery scandal.
The call is coming on the heels of a similar panel constituted recently by the Federal Government to probe the growing incidence of crude oil theft which have culminated in multibillion dollar losses in the country oil and gas industry.
Since May this year, Swiss-based multinational commodity trading firm, Glencore International A.G., pleaded guilty to the crimes of bribery and corruption in its oil trading operations since 1993.
The guilty plea, which saw Glencore announce its readiness to pay over $1.1 billion in fines for infractions relating to its operations in the UK, US and Brazil, followed years of investigations by US and UK authorities’ into the crimes in Glencore’s oil trading operations around the world.
The investigations, which began in 2018 and 2019 respectively, were pursuant to the Foreign Corrupt Practices Act of 1977.
Details of the crime were contained in a US Southern Court Southern District of New York presided over by Justice Schofield in Case No. 22CRIM297 between the United States and Glencore International AG.
The court documents showed that Glencore made various illicit payments in bribes and other settlements to scores of intermediaries, including Glencore Energy UK Limited, its affiliate in charge of the West African operations.
The purpose of the bribes, the court said, were to help the Swiss trader secure an improper advantage in approvals and award of oil contracts and business deals in Nigeria, Cameroun, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of Congo.
In Nigeria, Glencore AG and Glencore U.K. subsidiaries were said to have entered into a series of agreements to purchase crude oil and refined petroleum products from Nigerian National Petroleum Corporation (NNPC), now Nigerian National Petroleum Company Limited.
Glencore and its subsidiaries engaged two intermediaries – West Africa Intermediary Company and Nigeria Intermediary Company – to pursue business opportunities and other improper business advantages, including the award of crude oil contracts, with the understanding that bribes would be paid to Nigerian government officials to obtain such businesses.
How the bribery happened
In his testimony in a London court in 2021, one of Glencore Energy UK Limited former senior officials, Anthony Stimler, a UK citizen, who was in charge of Glencore operations in West Africa between 1993-2009; 2010-2012, and 2015-2017, pleaded guilty to a seven-counts charge of bribery and money laundering involving millions of dollars paid in bribes to several Nigerian officials.
The court document obtained from the court’s official website showed how most of the bribery occurred.
Between 2010 and 2015, it said an unnamed high-ranking official of the Federal Ministry of Petroleum Resources colluded with a senior official in the Pipelines and Products Marketing Company, a wholly-owned subsidiary of the NNPC, to commit the crime.
The crime, the court document revealed, involved the use by Glencore Energy of a third-party agent and consultant, to dispense bribes to top government officials in Nigeria and other countries in West Africa in order to secure oil contracts and other business advantages.
Between 2007 and 2018, Glencore and Glencore subsidiaries set up multiple agreements to purchase crude oil and refined petroleum products from the NNPC and its subsidiaries.
During the period, the court documents revealed that Glencore and its UK subsidiary engaged the services of two intermediary companies – West Africa Intermediary Company and Nigeria Intermediary Company to pursue business opportunities and other improper business advantages, with the primary role of handling the payment of bribes to Nigerian officials to secure those business opportunities and advantages.
Under the terms of the agreement with the Nigerian Intermediary Company, Glencore offered to pay an agency fee for facilitating the process for allocation of refined petroleum products from NNPC; fronting for Glencore UK subsidiaries by purchasing crude oil cargoes from NNPC and immediately reselling them to the Glencore UK subsidiaries.
Between 2007 and 2018, Glencore, through West Africa Intermediary Company, provided over $100 million for payment of bribes and other settlements to various intermediaries to secure an improper advantage and to influence the approval of oil contracts and businesses in Nigeria, Cameroun, Ivory Coast, Equatorial Guinea, Brazil, Venezuela and the Democratic Republic of Congo.
Specifically, between 2007 and 2018, Glencore, through its agents and intermediaries, provided about $79.6 million to be paid to West Africa Intermediary Company and Nigerian Intermediary Company to be paid as bribes to Nigerian officials and others in Cameroun, Ivory Coast and Equatorial Guinea to secure improper advantages in the award of juicy contract.
Commissions paid to the agents and consultants for oil contracts were used as a ploy to conceal the bribes paid to top officials in government and the oil companies.
An additional $39.9 million was paid to West Africa Intermediary Company and Nigeria Intermediary Company through correspondent bank accounts in financial institutions in the Southern District of New York for use to bribe the Nigerian officials.
In total, the documents showed Glencore intermediaries and agents paid over $52 million to fund the bribery schemes, which earned the Swiss oil trading firm profits of about $124 million over the period.
In one particular instance, the court papers said on November 17, 2008, one of the agents, in an email said Glencore UK subsidiary needed to make a $90,000 payment for use to settle PPMC officials to falsely undervalue a cargo load of petroleum products to Glencore.
Again, on January 18, 2011, about $325,000 was approved by Glencore to West Africa Intermediary Company for payment of bribes to Nigerian officials for the purchase of petroleum products from an NNPC subsidiary.
Securing crude oil term contracts
On crude oil term contracts, the court documents also revealed that between 2007 and 2014, Glencore entered multiple contracts to purchase crude oil from the NNPC.
To administer the contracts and service agreements, Glencore was said to have designated Glencore UK Limited to liaise with NNPC officials for the contracts.
To obtain these contract, Glencore UK subsidiaries facilitated bribe payments through West Africa Intermediary Company to NNPC officials.
The document cited the case of February 9, 2012 in which an email was sent to Stimler by another Glencore agent in respect of an approval for $1,050,981 bribe payment to be made to NNPC officials to secure a new crude oil contract. Payment for the amount was said to have been made on February 13, 2012.
A similar request for the payment of $500,000 was said to have been made on March 27, 2014 to assist Glencore and its subsidiaries win an annual contract for the purchase of crude oil contracts.
In March 2011, the court document revealed employees of Glencore UK subsidiaries agreed to pay West Africa Intermediary Company $14 million for onward transfer to PPMC officials for allocation of refined petroleum products on the crude oil Swap deal.
Prior to the payment of the bribe, one of Glencore agents was said to have met with the West Africa Intermediary Company and Nigeria Intermediary Company in London to agree on the bribe, which was wired on March 1, 2011 to West Africa Intermediary Company from Switzerland through a correspondent bank account in the Southern District of New York.
Again, on March 2, 2011, Glencore’s West Africa agent withdrew $1,020,000 case from a West Africa Intermediary Company account in Nigeria for the PPMC official connected with the Swap deal.
When Glencore decided not to pursue the swap deal any further, its West Africa agent was said to have returned about $8 million of the $14 million to the Glencore UK subsidiaries.
On September 25, 2014, employee of the Glencore Nigerian Intermediary Company was said to have sent an email to Stimler to demand the payment of $300,000 by all NNPC customers as an advance to the election campaign for a senior Nigerian official in exchange for receiving crude oil cargoes.
On October 3, 2014, Glencore Energy UK Limited, through Stimler, wired about $300,000 from its account in Switzerland to a Nigerian Intermediary Company bank account in Cyprus.
On May 5, 2015, the Nigerian Intermediary Company transferred $50,000 on behalf of Glencore as an advanced payment for the allocation of one of the June 2015 NNPC oil cargoes.
The crime was said to involve Glencore paying over $28 million in bribes through its representatives, employees and agents in exchange for favours in terms of preferential access to crude oil contracts, including increased cargoes, valuable grades of crude oil and preferable dates of delivery in its operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, and South Sudan.
Groups demand action
Since the announcement of the guilty plea by Glencore International A.G. linking Nigeria to the crimes, civil society groups, and the media have posed questions to the government to demand a probe.
So far, the response from the government has largely been silent. Late last month, two civil society groups, Policy Alert, a civil society group dedicated to promoting economic and ecological justice in the Niger Delta region, and the Civil Society Legislative Advocacy Centre (CISLAC), called on the management of the NNPC Limited to break its loud silence over the matter and speak out to defend the name of the national oil company.
Policy alert in its statement in Asaba, Delta State listed some of the companies it said its research uncovered to have been involved in the transactions, including Trafigura, AITEO, Televeras, Ontario, Duke Oil, Napoil and Calson.
The group said records available at its disposal showed that only AITEO and Televeras have cleared outstanding payments on the swap deals.
Further to the call for a probe by the government, other groups have suggested the suspension of the NNPC not only as a member of the Board of the NEITI, but also as one of the 65 EITI-supporting companies in the world, to compel the Federal Government to take steps to address the Glencore scandal.
NEITI demands probe
Following the calls, NEITI Board had written to the Federal Government through the Office of the Secretary to the Government of the Federation to demand that investigations be launched into the Glencore Bribery Scandal.
In a statement on Wednesday in Abuja, NEITI’s Head, Communications and Advocacy, Obiageli Onuorah, said the agency in charge of transparency and accountability in the extractive industries received assurances from the Federal Government that the matter was under investigation.
Onuorah said NEITI, which welcomed the decision by the government to set up a Special Investigative Panel on oil theft and losses in Nigeria, renewed its call for the establishment of a similar Panel on the Glencore Bribery Scandal.
“NEITI strongly believes that the special investigative panel on Glencore Bribery Scandal will fast-track the investigations towards apprehending the culprits in view of the huge implications to the country’s investment drive and global image,” Onuorah said.