Last week, Prime Minister Renzi of Italy said that reporting about a major case of alleged corruption should not be allowed to endanger jobs or economic policies. This apparent criticism raises a question as to Prime Minister Renzi’s commitment to Italy’s obligations under the OECD Anti Bribery Convention, which states that a corruption investigation “shall not be influenced by considerations of national economic interest.” On their face value, Mr Renzi’s comments appear inappropriate in the context of the ongoing investigation and the reporting on this scandal. The $1.1bn that Eni and Shell agreed to pay for this oil block should have gone to the Nigerian people, but was instead diverted into private purses.
Italian prosecutors have named as suspects the incoming CEO Mr Descalzi, along with the outgoing CEO Mr Scaroni, and Mr Casula the current Development, Operations and Technology Officer. Last week, Eni responded both to the public and to its staff about the developments in the investigation into its role in the OPL 245 deal.
Eni has denied any illegal conduct and said that it is, “cooperating with the Milan prosecutor’s office, and is confident that the correctness of its actions will emerge during the course of the investigation.” Mr Descalzi has also denied any illegal activities by ENI officials. In a letter he reportedly sent to Eni staff, he stated (originally in Italian), “I want you to know with certainty that the purchase of the block OPL 245 was conducted properly and in compliance with all regulations by all those who have worked on it, starting with me.” And “We acted properly and ethically as we always do.”[i]
Nigerian anti-corruption activist, Dotun Oloko, Global Witness, and Re:Common have repeatedly questioned Eni over this deal, including at the Eni Annual General Meetings in 2013 and 2014. In 2014 Eni finally provided some answers to some questions, but they have not yet provided full answers about some aspects of this deal. Here are 10 questions to which the Italian and Nigerian public, and the company’s shareholders deserve answers to:
- Does Eni accept the ruling by the UK High Court that Chief Etete, the former oil minister who awarded a company called Malabu the OPL 245 oil block in 1998, was at “all material times” a beneficial owner of Malabu, the company in possession of the oil block at the time of Eni’s deal?
- Eni said at its 2014 AGM “no clear evidence was found during the preliminary audits conducted by the Eni legal department under the anti-corruption procedures, particularly in relation to his [Etete’s] connection with the company.” But what did Eni know about the role of Chief Etete in Malabu when it signed the deal in 2011?
- Eni has said that it only paid the Nigerian Government for OPL 245. Did Eni, or its officials know that the funds would be paid onwards to Malabu?
- Eni has said this deal was with the Nigerian Government, and yet the Nigerian Attorney General has said that Shell and Eni agreed to pay Malabu through the Government acting as an “obligor”. Similarly a US judge found that the Government of Nigeria acted as a “straw man”. Does ENI contest the conclusions of the Attorney General and the US judge?
- Eni has stated that the deal was solely with the government and that the presence of Malabu at the crucial five days of negotiation was to address ongoing disputes. What possible role could Malabu have played in such a negotiation process, other than to agree the payment it would receive – bearing in mind that Malabu was in possession of the OPL 245 block at the time?
- Given Eni’s denial of any involvement in the payment to Malabu, please explain why Eni’s agreement for the block stated that the purpose its $1.1bn payment was for “settling all and any existing claims and/or issues over Block 245”. Only Shell – Eni’s partner in the deal – and Malabu, which had possession of the block at the time, had any potential claim. So who else but Malabu could credibly have been intended to receive these funds?
- There is understandable concern about the reported contact by Eni staff with Mr Luigi Bisignani, a businessman who struck a plea bargain agreeing to 19 months under house arrest for his role in a major Italian commercial and political scandal known in Italy as P4. Eni stated at its AGM this year that Mr Bisignani was not involved in the OPL 245 transaction in any way. Did Mr Bisignani have an interest in the earlier negotiations for the OPL 245 deal?
- According to public evidence from Mr Scaroni, either Mr Descalzi, or Mr Casula spoke on the phone to Mr Bisignani at an important moment during the negotiations for OPL 245. Mr Casula has denied that it was him. Can Eni confirm whether or not it was Mr Descalzi on the phone to Mr Bisignani?
- If it was Mr Descalzi talking to Mr Bisignani, why would they be talking about the OPL 245 deal?
- Given Eni’s apparent unwillingness respond to some of the previous questions can they assure their shareholders that ENI’s legal compliance department has taken the logical step of asking Mr Descalzi whether it was him on the phone with Mr Bisignani?
Barnaby Pace, Oil Team, Global Witness [email protected]witness.org +44 7525 592 738
Simon Taylor, Director, Global Witness [email protected] +44 7957 142 121
Antonio Tricarico, Programme Director, Re: Common [email protected] , +39 328 84 85 448
‘What Nigerians could have done with $1.1bn?’ – Available here: http://www.globalwitness.org/shellagm/
Some of Eni’s previous responses to these and other questions about the OPL 245 deal are available in the written Q&A from ENI’s 2014 Annual General Meeting, available at pages 45-50 at http://www.eni.com/en_IT/attachments/governance/shareholder-meeting/2014/Q&A_Eng-2014.pdf and in the meetings’ minutes. http://www.eni.com/en_IT/attachments/governance/shareholder-meeting/2014/Verbale-Assemblea-8-maggio-2014-inglese.pdf Pages 61-63 and 104-106 Their recent statement is available at http://www.eni.com/en_IT/media/press-releases/2014/09/2014-09-11-bribes_corruption_Nigeria_CEO_Claudio_Descalzi_Eni_denies_illegal_conduct.shtml?home_2010_en_tab=editorial[i] http://www.huffingtonpost.it/2014/09/16/eni-lettera-claudio-descalzi_n_5829440.html?1410880100