Shell, Panalpina corruption scandals

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From This Day in Nigeria:

Nigeria: Bribery Case – Shell, Panalpina to Pay $115 Million Fines

Chika Amanze-Nwachuku

19 October 2010

Royal Dutch Shell and Swiss Logistics company Panalpina are to pay $115million in penalties to settle charges stemming from a three-year investigation by the US Justice Department into illegal payments to Nigerian officials and others by the Swiss company to expedite services.

Shell, according to the Wall Street Journal is to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria. Panalpina Group, which has 14,000 employees and branches in more than 80 countries in connection with possible foreign bribery, on the other hand is expected to pay around $85 million in fines to settle charges that it violated the U.S. Foreign Corrupt Practices Act.

The Swiss company has been under investigation by the Securities and Exchange Commission 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, according to the Journal, 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 is currently being investigated by the U.S Department Department for alleged bribery-related activity in Yemen.

“The case could set new standards of vigilance for global companies that rely on contractors to operate in parts of the world where resources are plentiful but the rule of law is shaky” the report quoted attorneys familiar with such cases as saying.

The Department of State, according to the report is using an interesting tactic; going after contractors alleged to have paid bribes on behalf of their corporate clients. “Ignorance is no defense under this law, so companies have been advised they must know exactly what their agents are doing in order to avoid liability”, the report added.

The criminal inquiry of nearly a dozen oil and oil-services companies, which focused on potentially illegal payments to Nigerian Customs agents through Panalpina World Transport Holding, a Swiss-based shipping and logistics company begun in 2007.

Eleven oil and oil-service firms received a letter from the Justice Department asking them to detail their relationship with Panalpina. The oil and oil-service firms were asked to list the countries where Panalpina provided it with services in the past five years, and to specify what it paid for those services.

Panalpina had then announced that it was conducting an internal investigation and had been asked to provide documents to the Justice Department relating to services in Nigeria, Kazakhstan and Saudi Arabia for “a limited number of customers”.

Today, Dutch NOS TV also reports on this case.

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