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AfDB fines Dutch firm $5.7 billion over corrupt practices in Nigeria gas project

By The Citizen
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The African Development Bank (AfDB) Group has announced the conclusion of a Negotiated Resolution Agreement with a Dutch company – Snamprogetti Netherlands B.V. following the company's acceptance of the charge of corrupt practices by affiliated companies in an AfDB-financed project in Nigeria.

The bank said in a media statement yesterday, that as part of the Negotiated Resolution Agreement, the Bank's Integrity and Anti-Corruption Department (IACD) levies a financial penalty of $5.7 million against the company.

According to the bank, the funds will flow into AfDB projects preventing and combating corruption in the Bank's member countries.

It disclosed that AfDB has collected a total of $22.7 million in fines from four companies, including Snamprogetti Netherlands B.V., involved in bribe payments in connection with the liquefied natural gas production plants project on Bonny Island, Nigeria.

Saipem SpA and parent company Eni SpA were earlier linked to the bribing scandal and were to pay $365 million to resolve U.S. probes into a Nigerian bribery.

The U.S. Department of Justice revealed in 2010, released the details surrounding Snamprogetti Netherlands B.V.'s consent to pay a $240 million criminal penalty. The charges relate to the company's breach of provisions of the Foreign Corrupt Practices Act.

The payment revolves around a decade-long bribery scheme of Nigerian government officials. The company used agents to surreptitiously pay the bribes to win contracts to construct natural gas facilities worth more than $6 billion on Bonny Island, Nigeria.

Court records show that Snamprogetti gave the go-ahead for the joint venture to bring onboard two agents to give bribes to a number of Nigerian government officials.

Records say the joint venture handed over about $132 million to a corporation, in addition to $50 million to the Japanese company. The court claims Snamprogetti directed that part of these payments be used as bribes to the Nigerian officials.

AfDB said in addition to the payment of a monetary sanction, the Negotiated Resolution Agreement foresees the debarment for a period of three years of TSKJ - Serviços de Engenharia Lda; TSKJ II - Construções Internacionais Sociedade Unipessola Lda; and LNG - Serviços and Gestão de Projetos Lda., based in Madeira, Portugal.

It stated: 'These companies are eligible for cross-debarment under the April 2010 Agreement for Mutual Enforcement of Debarment Decisions entered into by the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the World Bank Group and the Inter-American Development Bank Group. The Portuguese entities affiliated to Snamprogetti Netherlands B.V. played an active role in funneling bribes to public officials'.

Director of IACD, Anna Bossman said: 'Only about $200 million in monetary sanctions imposed on companies found to have engaged in bribing foreign public officials have ever been returned to the affected region. By reinvesting the fines in programs supporting our regional member countries' efforts to improve the performance of anti-corruption agencies, IACD contributes to redressing this situation in line with the AfDB's strategic focus on good governance.

'The financial penalties totaling  $22.7 million levied by IACD in relation to this case are among the highest ever imposed by any multinational development bank and send out a credible signal that the AfDB will not tolerate corrupt practices in any of its projects.'

In 1990, Snamprogetti Netherlands B.V. formed the above companies as joint ventures together with three other multinational engineering services providers for the purposes of bidding for engineering, procurement and construction services contracts for liquefied natural gas production plants on Bonny Island in Nigeria. From 1995 to 2004, the joint-venture companies made improper payments totaling $180 million in return for the award of these services contracts. The African Development Bank Group had contributed $100 million in financing to the overall contract volume of  $6 billion.