Danger to Shell from Class Action Lawsuits Arising from Bribery
By John DonovanTwo articles have just been published about bribery that have relevance to Shell and its shareholders.
An article by The Economist under the headline “Graft work” makes the point that“The most briberiddled sectors are oil, gas, mining, construction and transport.”
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GONE are the days when multinationals could book bribes paid in far-flung countries as a tax-deductible expense. These days would-be palm-greasers have to contend with ever-tougher enforcement of old laws, such as America’s Foreign Corrupt Practices Act of 1977, and a raft of new ones in countries from Britain to Brazil.
The other article worth reading is also in relation to the U.S. Foreign Corrupt Practices Act. Published by the Legal Newsline, it reports on the filing of a class action lawsuit alleging that an oil company – Cobalt International Energy – has violated United States federal law by engaging in bribery with foreign officials.
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The lawsuit alleges the company violated the Foreign Corrupt Practices Act (FCPA) by paying foreign officials through third parties…
Shell has already been fined by the US authorities for using third parties to facilitate bribes paid to Nigerian officials. In Ireland, Shell has used a third party company, OSSL, to distribute bribes on behalf of Shell, including to senior police officers. The bribery was authorised and subsequently covered up by Shell senior management.
It appears based on these new articles, that such activity could potentially result in a class action lawsuit against Shell.
RELATED
Shell to pay $48m Nigerian bribe fine: Daily Telegraph 4 November 2010
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Royal Dutch Shell has been ordered to pay $48m (£29.4m) in civil and criminal fines over its contractor’s involvement in bribing Nigerian customs officials.
These companies, including Shell, admitted they “approved of or condoned the payment of bribes on their behalf in Nigeria and falsely recorded the bribe payments made on their behalf as legitimate business expenses in their corporate books, records and accounts”.
SHELL IN BRIBERY FINE: Daily Express 6 November 2010
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Shell must pay a $30million “criminal penalty” over charges it paid $2million to a sub-contractor “with the knowledge that some or all of the money” would be used to bribe Nigerian officials to allow equipment into the country without paying duty. Shell, which has not admitted guilt, must pay a further $18million to repay profits and interests.
COMMENT RECEIVED
If Shell paid a $30 million penalty as a result of paying a $2 million bribe, can we expect to see a $15 billion penalty for the $1 billion bribe paid by Shell and ENI to acquire OPL245 ?
The TRUTH will set you FREE.
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