Nigeria Loses Compensation Bid over Glencore Bribery

Nigeria’s bid to claim compensation from a British subsidiary of mining and trading group Glencore  over bribes paid to officials at Nigeria’s state oil company has been denied by a London court.

Lawyers representing the country told London’s Southwark Crown Court that Nigerian officials should be permitted to address the court on November 2 and 3, when Glencore Energy is to be sentenced having pleaded guilty to seven counts of bribery in connection with oil operations in five African countries including Nigeria.

But Judge Peter Fraser ruled that Nigeria does not have the right to be heard, as only the prosecution, in this case the UK Serious Fraud Office (SFO), and the defence can make arguments at a sentencing hearing, Reuters reported.

Nigeria said in written arguments it is “an identifiable victim of Glencore’s admitted criminal activity”, as two of the charges to which Glencore Energy has pleaded guilty relate to payments made to Nigerian National Petroleum Company (NNPC) officials.

The SFO had argued that individuals or entities who are not involved in a criminal case do not have the right to address the court at sentencing, “even if they consider themselves to be the victims of crime”.

Alexandra Healy, representing the SFO, also said in court filings that “there is no link between the bribes paid and any loss suffered”.

Nigeria’s lawyers said Glencore is not prepared to engage on the issue of compensation, but Clare Montgomery, representing Glencore Energy, told the court that her client rejected the “attack on the corporate morals of Glencore”.

She also said the contention that Glencore is “hiding behind the SFO to avoid paying anything to [Nigeria] is simply untrue”.

Sam Tate, a partner at law firm RPC which represented Nigeria, told reporters after the hearing that the ruling demonstrated the “very urgent need to reform the rules on compensating foreign countries where we have foreign bribery offences”.

Pressure group Spotlight on Corruption said the court’s decision is “a powerful illustration of why the current compensation framework simply isn’t fit for purpose”.

Glencore International and Glencore Ltd., both part of a Switzerland-based multi-national commodity trading and mining firm, were earlier named in massive bribery of officials of Nigeria’s state-owned oil company, pleaded guilty and agreed to pay over $1.1 billion fine over their involvement in a corruption scheme.

A former United Kingdom-based trader for Glencore Plc, Anthony Stimler,had confessed to bribing officials in Nigeria in exchange for favourable contracts from the NNPC.

Mr Stimler, acting through subsidiaries of Glencore, conspired with others to make millions of U.S. dollars in corrupt bribe payments to officials in Nigeria. The former trader pleaded guilty over what prosecutors in the United States described as his role in a scheme to bribe and he admitted to conspiring to violate the Foreign Corrupt Practices Act and commit money laundering at a hearing in Manhattan federal court conducted by video.

Prosecutors said millions of dollars in bribes were paid to officials in Nigeria, in exchange for NNPC awarding oil contracts and providing “more lucrative grades of oil on more favourable delivery terms.

The US’ Department of Justice said that Glencore had agreed to a criminal fine of more than $428 million and to criminal forfeiture and disgorgement of more than $272 million. Glencore had also agreed to retain an independent compliance monitor for three years.

Between 2007 and 2018, Glencore and its subsidiaries caused approximately $79.6 million in payments to be made to intermediary companies in order to secure improper advantages to obtain and retain business with state-owned and state-controlled entities in the West African countries of Nigeria, Cameroon, Ivory Coast, and Equatorial Guinea.

“Glencore and its subsidiaries engaged two intermediaries to pursue business opportunities and other improper business advantages, including the award of crude oil contracts, while knowing that the intermediaries would make bribe payments to Nigerian government officials to obtain such business.
“In Nigeria alone, Glencore and its subsidiaries paid more than $52 million to the intermediaries, intending that those funds be used, at least in part, to pay bribes to Nigerian officials,” the DOJ stated. The Nigerian government had thereafter asked for compensation.