One of Norway’s major shipowning groups, The JJ Ugland Companies, is the latest Norwegian company to be dragged into the massive corruption scandal at Brazilian oil company Petrobras. Management at Ugland is investigating suspicions of bribery that may have occurred as long as 16 years ago, through a firm it owned jointly with Danish company DS Progress.
Oslo-based shipping newspaper TradeWinds reports that a Danish shipbroker involved with Ugland’s Danish venture is accused of having paid bribes to Petrobras director Pedro Barusco, via an agent, Julio Faerman. TradeWinds’ sister newspaper in Oslo, Dagens Næringsliv (DN), has earlier reported that both Barusco and Faerman have been heavily involved in the Petrobras scandal, with Barusco confessing to receiving bribes, paying a huge fine and cooperating with investigators.
DN reported recently that Faerman, also linked to bribery concerns at other Norwegian firms because of his role as an agent in deals involving Petrobras, is believed to have entered into an agreement with Brazilian authorities as well, and be cooperating with prosecutors in Rio de Janeiro.
Now the former director of Progress Ugland, the company that Ugland owned with Danish shipowning firm DS Progress, is accused of paying bribes in order to secure a contract for loading oil from a Petrobras oil field. The deal with Transpetro, which was responsible for transport of crude oil for Petrobras, involved an 11-year-old 40,000-dwt product tanker, the Nordholt, that was converted into a dynamically positioned shuttle tanker, the Campos Transporter, to load and transport crude from Petrobras’ Roncador field.
“It was a complicated structure, but we were in on the ownership side (of the vessel) and took part in the charter with the Brazilian company,” JJ Ugland chief executive Øystein Beisland told DN on Tuesday.
Beisland has now ordered an internal investigation of the deal, even though it was hammered out back in 1998-1999. “We’re looking into this now,” Beisland told DN. He added that the deal extends “many years back in time. I don’t have concrete details of what happened at that time, or its history, but we are working to attain some clarity in the case.”
‘Zero tolerance’ for corruption
Beisland stressed, as have several other managers facing ties to the widespread corruption charges at Petrobras, that Ugland has “zero tolerance” for corruption. Many Norwegian companies nonetheless have been charged with it, often through subsidiaries and so-called “agents” operating in countries where bribery is not unusual.
Ugland is among the scores of Norwegian shipping- and oil-related companies that have done business with Petrobras, which is caught in what’s been called the largest corruption case in the world. Called Lava Jato, it’s rooted in a cartel allegedly set up by 16 large companies in Brazil to gain control over bidding rounds for business with Petrobras. The huge state oil company was in many ways swindled, but Petrobras directors and employees, along with Brazilian politicians, have been charged with accepting bribes and many have been jailed. DN has reported that the corruption charges so far have resulted in 941 lawsuits and 75 convictions so far, involving bribes totalling around NOK 14.2 billion.
The family-owned Ugland group, based in Grimstad on Norway’s southern coast, has been undergoing change following the death in 2010 of Johan Jørgen Ugland, who passed on control of The JJ Ugland Companies to his grandson, Knut Nikolai Tønnevold Ugland. The company currently has around 1,150 employees.