Cookie Consent by Free Privacy Policy Generator
25.8 C
Monday, June 24, 2024

Corruption cloud settles over Norway

NEWS ANALYSIS: Once considered squeaky clean and honest, Norwegian business and industry suddenly seem to have fallen under a cloud of corruption. Leading companies in which the state has a major stake have been hitting the headlines, suspected of bribery scandals, and now even the country’s enormous fishing industry is believed to be involved in some stinky business. It’s all said to be embarrassing for the country and its workers.

Yara, Telenor and Kongsberg are all in the midst of major corruption scandals, most of them involving tax havens and payments to various partners or agents that are suspected of amounting to bribes. Yara faces ongoing courtroom drama even though it agreed in January to pay the biggest corporate fine in Norwegian history in an effort to put its bribery case behind it. Telenor is currently linked to a major investigation into mobile phone company Vimpelcom because of its ownership stake in the firm, while Kongsberg Gruppen was raided last month on suspicions that one of its subsidiaries paid bribes to win contracts in Romania.

New concerns over Statoil, too
Newspaper Dagens Næringsliv (DN) reported late last month that Statoil’s operations in Angola are also raising concerns because of the “mysterious partners” the Norwegian oil company is doing business with in order to engage in oil exploration and production off Angola’s coast. DN noted that Statoil has invested more than NOK 60 billion (USD 10 billion) in Angola, which has become Statoil’s most important source of production outside Norway. Prospects for more exploration look set to increase the volume.

The problem is that Angola is known for “extreme corruption risks,” according to the international organization Global Witness. Two of the companies Statoil is cooperating with in Angola won’t reveal any information about their real owners and the country’s oil minister wouldn’t answer DN’s questions.

Statoil is involved in the Kizomba A oil field outside Angola, among other projects in the country that's viewed as presenting a high risk of corruption. Newspaper "Dagens Næringsliv" has reported that Statoil isn't sure who's behind its partners in Angola. PHOTO: Statoil/Harald Pettersen
Statoil is involved in the Kizomba A oil field outside Angola, among other projects in the country that’s viewed as posing a high risk of corruption. Newspaper “Dagens Næringsliv” has reported that Statoil isn’t sure who’s behind its partners in Angola. PHOTO: Statoil/Harald Pettersen

One of the companies has been represented by Angola’s vice president, Manuel Domingos Vicente, who also was for many years the chief of Angolan state oil company Sonangol, responsible for doling out oil concessions in the country. The other company is linked to another central oil politician in Angola, which has struck huge oil wealth while the vast majority of citizens live in abject poverty. Statoil, which already has been through a major corruption scandal in Iran several years ago, hasn’t wanted to comment on specific questions from DN about the two Angolan politicians’ ties to its partner companies, claiming that veiled ownership is legal in Angola.

Despite not knowing themselves who’s behind their partner firm Somoil, Statoil  agreed to deal with yet another partner in Angola with secret owners, China Sonangol, which holds stakes in nine of Angola’s 44 oil fields. Efforts to trace China Sonangol’s owners end at a postbox in the tax paradise of the British Virgin Islands,  reported DN. US authorities suspect China Sonangol is tied to China’s intelligence agency. Angola’s Sonangol owns 30 percent of China Sonangol. It’s unclear who owns the other 70 percent, but DN cited links to a Chinese conglomerate behind major construction projects all over Africa that may be controlled by a Chinese billionaire who goes by several names and once studied in Baku with the man who now is president of Angola. The construction projects are struck in return for the Chinese owners’ access to natural resources like minerals and oil.

Similarities to Telenor’s Vimpelcom trouble
It’s against this background that Statoil’s operations in Angola have raised questions that it can’t or won’t answer. It’s not known whether its partners have direct ties to visibly wealthy politicians and officials running the desperately poor country, similar to how Telenor’s Vimpelcom has claimed that it doesn’t know whether a company it dealt with to obtain mobile licenses in Uzbekistan had ties to the daughter of the country’s president.

Telenor has called on Vimpelcom and its boss Jo Lunder, a former top Telenor executive, to answer questions about how the company won rights to do business in Uzbekistan, but Lunder still feels he can’t respond to queries about an international investigation of both Vimpelcom and the president’s daughter, Gulnara Karimova. At issue is whether Vimpelcom’s payments to a company called Talikant, with suspected links to Karimova, amounted to bribes.

Kongsberg chairman didn’t read internal probe report
Meanwhile, over at Kongsberg Gruppen, chairman Finn Jebsen admitted that he never read a report on his company’s own internal probe of how it obtained lucrative contracts in Romania. Kongsberg’s probe stopped upon finding payments made to a company registered in a tax paradise, even though such payments are often a strong reason for suspecting bribery.

Jebsen has claimed that management handled the probe and informed Kongsberg’s board about it but that the board wasn’t otherwise involved. The state has a major stake in Kongsberg, as it does in Yara, Statoil and Telenor, but the government minister in charge of the state’s ownership in stocklisted companies said as late as March 1 that she still had confidence in Kongsberg’s board. Kongsberg’s internal probe is similar to one Yara also conducted, without taking much action themselves until Norway’s white collar crime unit Økokrim showed up at the door. In Kongsberg’s case, the internal probe that wasn’t acted upon is believed to have been leaked to Økokrim.

Chorus of concerns
It’s this rash of recent corruption suspicions and halting internal probes, followed on Tuesday by reports of another sort of corruption within Norway’s fishing industry, that have sparked concern from various professors, politicians, media commentators and consultants. There’s also been a chorus of executives claiming they have “zero tolerance” for corruption, yet Yara ended up paying a huge fine and trouble has been allowed to take root in the other companies despite the alleged lack of tolerance. State officials in charge of taxpayers’ shareholdings in the firms under investigation, meanwhile, often seem to be the last to know that trouble is afoot. Some politicians have called on Business and Trade Minister Monica Mæland to fire Jebsen at Kongsberg, but she hasn’t taken any real action as of yet.

“This is embarrassing for Norway,” wrote Lise Lyngsnes Randeberg, president of Tekna, the country’s largest professional organization for those working in academia. “And it’s embarrassing for everyone who goes to work every day to build up companies through the credibility and solidarity tied to new technology and better knowledge.”

At Yara, a major fertilizer firm that serves the agricultural industry worldwide, a much-used slogan has been “Knowledge grows,” but trouble grew with it. Yara’s chief executive, Jørgen Ole Haslestad, told newspaper Aftenposten recently that he found some peace from the corruption scandal at his company by spending time on his tractor at his farm in Vestfold, southwest of Oslo.

“In the days just after the corruption fine was issued, we got the winter’s biggest snowfall,” Haslestad told Aftenposten. “Then I had to use most of the weekend to plow and get rid of the snow with my tractor at home. That kind of farmwork does be good in stressful periods.” Berglund



For more news on Arctic developments.



If you like what we’re doing, please consider a donation. It’s easy using PayPal, or our Norway bank account. READ MORE