Royal Dutch Shell and Italian oil giant Eni, along with a number of their senior executives, will on Monday face charges of “aggravated international corruption” for their role in a $1.1bn deal for the controversial Nigerian deepwater oil block OPL 245, TheCable Petrobarometer has learnt.
No company as large as Royal Dutch Shell or such senior executives of a major oil company have ever stood trial for bribery offences.
Earlier on, confidential internal documents of Shell had suggested the oil giant capitalised on the 2011 presidential election to arm-twist the federal government into a “cheap” deal over the disputed OPL 245.
The international oil company also used an arbitration case it filed with the International Centre for the Settlement of International Disputes (ICSID), an organ of the World Bank, to blackmail the government into brokering truce with the original licensee, Malabu Oil and Gas Ltd.
OPL 245 was awarded on a discretionary basis to Malabu in 1998 by the Sani Abacha government, although it was later discovered that the beneficial owners included Abacha’s son, Mohammed, and Dan Etete, then-minister of petroleum.
“This trial should be a wake-up call to the oil industry. Some of the most senior executives of two of the biggest companies in the world could face prison sentences for a deal that was struck under their watch,” Barnaby Pace of global anti-corruption crusader Global Witness said.
“This trial is a clear signal that it is no longer business as usual for oil companies in Nigeria. It’s time justice was served,” said Lanre Suraju, executive director of Nigerian NGO, HEDA.
Eni’s current CEO Claudio Descalzi, former CEO Paolo Scaroni, and chief operations and technology officer Roberto Casula are also standing trial alongside four former Royal Dutch Shell staff members including Malcolm Brinded CBE, former executive director for Shell’s upstream international operations and two former MI6 agents employed by Shell.
The prosecution by the Milan public prosecutor was triggered by a complaint filed in Autumn 2013 by Global Witness, The Corner House, Re:Common and Nigerian anti-corruption campaigner Dotun Oloko.
The case has also been investigated in Nigeria and the United States following the groups’ complaints. Public prosecutors in The Netherlands are also investigating the case.
Shell, Eni and their executives have denied all charges.
Antonio Tricarico of Italian NGO Re:Common said: “This case heralds the dawning of the age of accountability, a world where even the most powerful corporations can no longer hide their wrongdoing and avoid justice.”
For years, Shell had claimed that it only paid the Nigerian Government for the oil block. But after the joint investigations of Global Witness and Finance Uncovered, Shell confessed it had dealt with convicted money launderer and former oil minister Dan Etete. Etete had awarded the OPL 245 oil block to his secretly owned company, Malabu, while serving as oil minister.
The case against Eni and Shell brought by the Milan Public Prosecutor alleges that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials. The prosecutor further alleges that money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s then Head of Business for Sub-Saharan Africa, Roberto Casula.
“This is not a case involving a few rotten apples,” said Nick Hildyard of Corner House. “The evidence points to systemic corruption – from the top down. In this case Italy has championed the rule of law over abusive corporate power.”
A Shell spokesperson had referred inquiries to the company’s statement following the company’s indictment: “We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees. We believe the trial judges will conclude that there is no case against Shell or its former employees.”
Eni has said in a statement on their website regarding the case that the trial “will give the opportunity to Eni to fully defend its position and to provide full evidence of the correctness of the actions taken with respect to the OPL 245 transaction.”
Regarding the allegations against Eni’s CEO the company has said “Eni’s Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction. The Board of Directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct.”