If your company has conducted business with Libya during the Muamar Gaddafi era, chances are your senior management and corporate lawyers have probed deep to find out if the company has been involved in anything that Western authorities or international media could question. The process of discovery is still on going and we, at The North Africa Journal have received numerous inquiries from major investment firms inquiring about what consequences they should expect from companies in which they are invested and involved in on going scandals.
Indeed, the bigger the company, the more probing happens and no one is safe. In neighboring Algeria, there are ongoing probes in the questionable dealings involving international companies who worked with state-oil giant Sonatrach, took part to the East-West motoway project, or supplied equipment to utility firm Sonelgaz.
Consider some of the names that are on the radar screens of investigators and legal authorities around the world: Italian and French energy giants ENI and Total, which have also received formal requests from the U.S. Securities and Exchange Commission. The American enforcer of securities laws has been checking whether these companies have broken any law when they delt with the Gaddafi regime under the U.S. Foreign Corruption Practice Act. Interestingly, recent Libya’s oil minister Abdurahman Benyezza in the government of Abdurrahim El-Keib, used to be an executive at ENI. There is no proof of wrongdoing yet, but these companies, like many others are on the defensive, just like Yara International in Norway and SNC Lavalin in Canada, two companies that are facing a major damage to their reputation.
In Algeria, corruption probes are moving at slow pace but pressure from the press and investigations abroad are prompting judges to try to do something. Their hands are often tied because these cases involve very powerful men like ex-oil Minister Chakib Khelil and relatives of former Foreign Minister Mohamed Bedjaoui. Here’s a sample of cases we’ve been following:
The distribution of electricity and natural gas in Algeria is the domain of state-owned company Sonelgaz. Due to its mandate to push for electrification in remote areas, the company has been a big spender, investing billions of dollars per government mandate, and often through procurement contracts with foreign companies that are said to have been hugely inflated. Given the importance of this company and the investments it has committed over the years, it is no surprise that it could easily fall victim of corruption practices. Although these most recent allegations have not been proven yet, accusations against the Sonelgaz’s leadership are made when the company faces substantial losses, estimated at $1 billion for fiscal 2012, adding greater urgency to clean up business practices in that country. Continue here | Click here to subscribe
The murky nature of Algerian politics and lack of transparency mean that the country is suffering from a major credibility and accountability deficit that is allowing many of its top leaders to abuse their power. As we approach the Presidential elections, more political and financial scandals are making it to the public, dragging with them names of politicians who used to be seen internationally as credible. Foreign justice systems in countries like Italy, Switzerland, Canada and elsewhere are probing cases of illegal payments made by companies to Algerian officials, investigations that are turning out to be a PR nightmare for the Algerian government. Continue here | Click here to subscribe
The North Africa Journal | Italian oil and gas industry contractor Saipem is embroiled in a corruption scandal in its Algeria operation that forced the resignation of its veteran CEO Pietro Franco Tali. The company’s engineering and construction Chief, Pietro Varone was suspended pending the ongoing investigation. Energy giant ENI, which owns 40% of Saipem announced the resignation of its own CFO Alessandro Bernini. … Continue here | Click here to subscribe
Damage control and reputational risk are a few things the Canadian engineering giant SNC-Lavalin is currently experiencing firsthand. As the company celebrates one hundred years of business, it is facing unprecedented scrutiny related to its dealings with the Gaddafi family of Libya. Key senior executives have already lost their jobs as the company is going through damage control, and construction contracts in other parts of the world are being questioned. Now, a former Canadian ambassador to Tripoli could be dragged down into this affair, as the press continues to dig deep into corporate dealings that have gone bad like a Hollywood movie plot. The cost of doing business in Libya has suddenly increased rapidly for the company and its troubles may not be over…Continue here | Click here to subscribe
In the immediate aftermath of the end of the Gaddafi regime, scandals of all sorts involving alleged corruption, improper payments and bad business practices have began to surface. One of them involves Yara International, the Norwegian company that owns half of the Libyan Norwegian Fertilizer firm (Lifeco), which has been charged in its home country with “aggravated corruption” in connection with its Libyan joint venture. Continue here | Click here to subscribe
Although SNC-Lavalin’s case of dealing with the Gaddafi regime may be the most troublesome to emerge to date, the Canadian company is not only one being scrutinized for exercising bad judgment. Other companies and Western politicians are beginning to show on the radar screens of the media and independent observers, and we suspect many more to come. Among the latest to deal with the hot topic of the Gaddafi liability is France’s Amesys, which has sold spy technology to the Libyan regime at the heights of its dictatorship. Continue here | Click here to subscribe