A MAJOR dilemma is ongoing between American-based oil firms and the United States (U.S.) government over the involvement of some firms in that country in alleged bribery and corrupt business practices in Nigeria.
Informed sources hinted yesterday that officials of the U.S. Department of Justice and the State Department – the equivalent of the Foreign Affairs Ministry in Nigeria – have been receiving complaints from American-based oil firms on how difficult it has been conducting business in Nigeria without having to pay bribes.
Their worry is further compounded by the U.S. Foreign Corrupt Practices Act, which prohibits American firms from bribing foreign officials. Under that Act, the U.S. government has been investigating a number of American-based oil services firms recently. Only last week, the government announced the indictment of Willbros, a U.S. oil service firm for allegedly bribing Nigerian officials.
Sources confirmed that a meeting was held penultimate Monday in Washington DC, where officials of the U.S. State and Justice departments met with 11 oil firms on the subject and the determination of the American government to enforce its Foreign Corrupt Practices Act.
Reports last week said that the U.S. government was conducting a wide corruption probe of its firms doing business in Nigeria and had sent inquiries to several firms while others have also voluntarily been co-operating with the government.
According to the Associated Press, Dow Jones and Reuters, the U.S. Justice Department is conducting “a criminal inquiry of nearly a dozen oil and oil-service firms, focusing on potentially illegal payments to Customs agents who provided freight forwarding and other services” in Nigeria. Not only is a criminal investigation of some 11 U.S. oil firms and oil services firms is believed to be in progress, a civil investigation by the U.S. Securities and Exchange Commission (SEC) is also reportedly under way.
U.S. government officials in both Justice and State Departments yesterday held back on confirming the extent of the investigation.
Jaclyn Lesch of the Justice Department told The Guardian that official interaction between the U.S. and Nigerian government on such investigation would normally take place on higher levels of both governments. She directed further questions to the State Department.
The chief spokesperson on Africa at the State Department, Gary Garland, added that the sharing of such information between both countries would take place through the routine diplomatic channels on whether the U.S. government had specifically informed the Nigerian government about the on-going investigations of its oil firms. Garland said he could not divulge such information.
When asked to comment on the Nigerian government perspective of the claim by U.S. oil firms that doing business in Nigeria is difficult without giving bribes, Mr. Chidi Okafor, the Nigerian Consular-General in Atlanta who covers the U.S. oil region, including Texas, said such a claim is unacceptable. “We will not accept such claims,” Okafor, who is currently in Abuja, explained yesterday.
He referred to an event in Houston when the Heart of Africa project was launched, during which U.S. oil executives spoke highly of their experiences doing business in Nigeria. Okafor, who said he could not speak in details on the matter now, because he is away from the U.S., concluded that the views of the oil firms as reported in the U.S. media regarding having to bribe Nigerian officials is simply “rubbish.”
The indictment of an executive of Willbros on Tuesday last week mentioned the alleged bribery of top officials of the ruling Peoples Democratic Party (PDP). It also fingered some unnamed officials of the Nigerian National Petroleum Corporation (NNPC) and the National Petroleum Management Services (NAPIMS). The indictment only referred to a top official of the Nigerian executive, the ruling party, NNPC and NAPIMS officials as being involved in allegations of bribery received from Willbross.
A Nigerian U.S.-based entrepreneur, Mr. Bukola Oreofe, noted however that the “extent of the damage corruption has inflicted on Nigeria especially on our economy” is saddening.
For instance he recalled that “the Nigeria Extractive Industry Transparency Initiative reported that the NNPC could not account for 22 million barrels of oil sent to it that did not get to the refinery between 2001 and 2004. About four per cent of total oil exports are stolen daily. This apparently can only happen through a conspiracy between Nigerian officials and foreign oil firms collaboration. I do not believe we can excuse one or the other. It is a marriage of perfect convenience.”
Said Oreofe, who is also the Secretary of PRONACO-USA: “We are aware that even though the United States has the Foreign Corrupt Practices Act which prohibits American firms from bribing foreign officials to win businesses, the effective monitoring of private businesses plying their trades globally and in this case Nigeria would be difficult to determine.”
He said while the U.S. Energy policy demands for a more transparent, accountable and responsible use of oil resources yet it also emphasizes the context of “enhancing the security and stability of American investments”. Therefore, he asks: “Which one gets the priority: The former or the latter?”
According to U.S. laws on bribery of foreign country officials, consequences for such bribery carry very severe punishments including long years imprisonment for any American found guilty.
Some American firms have been punished by the U.S. government for engaging in corruption in Nigeria. For instance in February, Vetco Gray Controls, an oil-services firm from Houston, and two other Vetco International Ltd. subsidiaries, paid $26 million settlement to the Justice Department, an unprecedented measure for a criminal foreign corrupt practices case. The firms conceded that they paid about $2 million in bribes to Nigerian customs officials through an international freight forwarding and customs clearing firm.