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Tuesday, March 19, 2024

Yara hit with record fine for bribery

Norway’s white-collar crime unit, Økokrim, has finally wrapped up its lengthy investigation of bribery at one of Norway’s biggest and most international companies, fertilizer producer Yara. The long-running case resulted in a record large fine that Yara’s board is not contesting, while more penalties are expected against involved executives.

Yara, which includes the state among its largest shareholders, was hit with a fine of NOK 295 million (USD 48.3 million), the highest ever doled out in Norway, for what the economic crimes police called “serious fraud” over a period of five years, from 2004 to 2009. The fraud involved the use of bribes directed at highly placed public servants in Libya and India, while investigators also uncovered bribes paid to a Russian supplier, reported website dn.no.

All told, the bribes amounted to around USD 12 million (more than NOK 70 million), according to Økokrim. In addition to a direct fine of NOK 270 million, the authorities are claiming another NOK 25 million of Yara’s revenues from earlier phosphate deliveries.

Biggest company fine in Norwegian history
It’s the biggest fine ever lodged in Norway against a Norwegian company, exceeding the previous record of NOK 20 million demanded of oil company Statoil after its own bribery scandal over an Iranian operation more than a decade ago.

“The punishment is hard, but we accept it,” Yara’s chairman, Bernt Reitan, said in a statement on Wednesday. The company, which had itself reported the suspected bribery to police in the spring of 2011, is admitting guilt in the bribery case and acknowledged that the results of Økokrim’s investigation over the last two years are in line with the findings of its own external investigation.

Yara linked the major portion of the fine to what it called “irregularities” related to its establishment of operations in Libya before the fall of the Gadhafi regime, and for an “unrealized” project in India along with operations in Switzerland.

‘Inadequate’ anti-corruption measures
Økokrim officials claimed that Yara’s anti-corruption measures were inadequate from the time of its creation in 2004, when the fertilizer and chemical operations of Norwegian industrial concern Norsk Hydro were spun off to form Yara AS, until 2008, when some Yara executives first presented suspicions of bribery to top management. That’s also when Yara underwent a major management change, leaving a new chief executive, Jørgen Ole Haslestad, to inherit the problem from his predecessor Thorleif Enger.

“The company should have paid more attention to preventing corruption,” Økokrim stated in its report, while also stressing that it took the new management three years to report their own suspicions to the police. Økokrim nonetheless said it gave Yara credit for both reporting the suspected bribery and for “good and constructive” contact with both company officials and the company’s own investigators. Yara’s cooperation with the authorities apparently prevented the fine from being even larger.

‘Unacceptable and disappointing’
Haslestad has claimed that Yara was “taking this case very seriously,” adding that “both the company’s external investigation and Økokrim’s investigation have uncovered unacceptable and disappointing conditions” at the Oslo-based company that employs around 8,000 people worldwide.

Økokrim investigators told Norwegian Broadcasting (NRK) that their probe of Yara’s alleged bribery was complicated and challenging, involving cooperation with police in many countries and demanding that they crack the highly sophisticated efforts taken to cover up the bribes.

Økokrim officials said they will now move forward with charges against individuals tied to the company at the time the violations took place. Both Enger and two of his senior executives were arrested during the course of the investigation but later released from prison pending the outcome of Økokrim’s probe.

newsinenglish.no/Nina Berglund

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