Nigeria’s exclusion from Glencore settlement sparks calls to reform anti-bribery laws

Earlier this month, the Southwark Crown Court ordered Swiss multinational commodity trading and mining company Glencore to pay £281m ($334m) in fines, confiscated profit and sanctions. The ruling came in June after Glencore pleaded guilty to seven charges of bribing officials at the state oil company Nigerian National Petroleum Corp (NNPC) and other energy firms across Africa.

Cash deliveries in private jets to senior NNPC officials were coordinated by “sustained criminality” from Glencore’s oil trading desk in London, the court found. Traders were reported to have sought to secure preferential access to Nigeria’s oil cargoes through illicit payments found to total $28m. The court also determined that corrupt activity by one the world’s biggest players in crude oil products had inflicted harms estimated at $128m across the five African markets affected: Nigeria, Côte d’Ivoire, Cameroon, South Sudan and Equatorial Guinea.

However, despite the extent of the damage caused by Glencore’s corruption, and the size of the company’s financial punishment, lawyers representing the Nigerian government have failed to secure compensation for the country itself. 

The government’s lawyers argued that Nigeria was an “identifiable victim” of Glencore’s illegal activity and that the country should therefore have the right to demand compensation on behalf of its citizens.

Funds that were meant for the state for development purposes found their way into the pockets of corrupt state officials

Even so, the court found that Nigeria had no legal right to address the court during Glencore’s sentencing. Under English law, that right is reserved solely for the prosecution authorities – in this case Britain’s Serious Fraud Office (SFO). As a result, the Nigerian government was unable to seek compensation – raising wider questions about the fairness of existing legal frameworks in international bribery cases. 

Rotimi Ogunyemi, an attorney based in Lagos who chairs the Nigerian Bar Association Section on Business Law, argues that “the victim here is the Nigerian citizenry” and that they should therefore be eligible for compensation. 

“Funds that were meant for the state for development purposes found their way into the pockets of corrupt state officials,” Ogunyemi tells The Africa Report. “One of the implications of Glencore’s admission of corrupt practices is that these compromised state officials looked the other way, allowing beneficiaries of shady contracts to circumvent compliance and regulatory obligations in the industry, further weakening our institutions.” 

Justice for all?

Despite the serious impact that corruption has on citizens, the Glencore case shows that legal frameworks in Nigeria as well as in foreign countries are not up to scratch. Deficient laws in countries damaged by corruption, as well as in those where the bribes originate, make it very difficult for citizens to receive the compensation that many believe they are entitled to. 

The victim here is the Nigerian citizenry.

Ogunyemi says Nigeria needs to better enforce its own anti-corruption rules, while also working to reform laws on an international level. 

“Nigeria’s anti-corruption laws currently provide the state with such remedies as the forfeiture of proceeds of crime and restitution, among other penalties,” Ogunyemi says. “Weak enforcement of these laws has perhaps been the bane of the state’s anti-corruption efforts. Stronger enforcement and stiffer penalties would send clearer signals to would-be perpetrators.” 

However, it is also true that anti-corruption and bribery laws in foreign markets must be reformed in order to offer victims the ability to recover a fair amount of compensation. The activist group Spotlight on Corruption denounced the London court’s decision not to allow Nigeria to seek compensation in the Glencore case as “a powerful illustration of why the current compensation framework simply isn’t fit for purpose”. 

Many times penalties are limited to fines, which are paid to the prosecuting country and not necessarily the victim country

Ogunyemi noted that there is a precedent for “victim countries” getting confiscated funds as a means of compensation.

“We have seen confiscation orders in countries like the United States, where proceeds of graft are seized and funds sometimes repatriated to the victim country,” he says. 

However, as the Glencore episode demonstrates, too often this simply is not the case. It is still rare for the countries affected by corruption to receive any benefit from confiscated funds. In fact, perversely, the prosecuting country from which the bribes originate is more often the one which keeps the proceeds of crimes. 

“Many times penalties are limited to fines, which are paid to the prosecuting country and not necessarily the victim country,” Ogunyemi says. “There would be a need for reform in these cases.”