Four former Yara International ASA executives went on trial in Oslo Jan. 5 on corruption charges related to bribery of officials in Libya and India. These include former CEO Thorleif Enger, former Head of Upstream Tor Holba, former Chief Operating Officer Daniel Clauw, and former Chief Legal Officer Kendrick Wallace. The four defendants, who face up to ten years in prison if found guilty, all pleaded not guilty. The trial is expected to take three months.
The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) announced the indictment of the four in January 2014 (GM Jan. 20, p. 14). Økokrim said the criminal acts concern bribery of a minister in Libya and a high-ranking public official in India.
Also in January 2014, Yara itself issued a statement (GM Jan. 20, p. 14) acknowledging guilt and accepting a corporate fine and confiscation totaling NOK 295 million (roughly US$48 million) related to Økokrim’s investigation. In addition, Økokrim imposed a confiscation of NOK 25 million related to earlier phosphate deliveries. “Our acknowledgement of guilt and acceptance of a fine reflect that the Økokrim findings are in line with those of our own investigation,” said Bernt Reitan, Yara chairman of the board said at the time. “The penalty is severe, but we accept it.”
The allegations concern the time period of 2004-2009. According to the Norwegian press, defendants reportedly paid at least $5 million to the son of Libya’s former oil minister. In India, the three defendants allegedly paid $3 million in bribes to the son of an official, though no joint venture was ever concluded.
The matter stems from historical irregularities linked to the establishment of Libyan Norwegian Fertilizer Co. (Lifeco), an unrealized project in India, and Yara’s activities in Switzerland. All four former executives were indicted for bribes in Libya, an Økokrim prosecutor reported, while Enger, Clauw, and Wallace were also indicted for corruption in India. Enger, who was Yara’s CEO from 1999 to 2008, was implicated in the case back in May 2012, along with Holba (GM May 21, 2012). The alleged corruption came to light after Enger left office and was succeeded by Jørgen Ole Haslestad, who is expected to testify at trial. Haslestad, who was to retire from Yara in February, 2015, was edged out of office early last fall (GM Oct. 13, p. 1).
Yara first reported the case in April 2011, when it launched its own external investigation and notified Økokrim of possible irregularities (GM April 18, 2011). Yara said it has cooperated with Økokrim throughout the process.
“This is a serious case,” said Haslestad when Yara accepted the penalties. “Both the company’s external investigation and the Økokrim investigation have uncovered unacceptable and disappointing behavior. We have throughout the process cooperated with Økokrim and given them access to all material. The incidents in question took place several years ago. We have since invested considerably in our compliance processes, based on our clear zero tolerance for corruption. Most importantly, we have worked with culture and attitudes to ensure that such incidents do not occur in the future.”
“Yara has zero tolerance for corruption, and the company initiated an investigation and contacted the authorities in 2011,” Esben Tuman, Yara vice president, communications, told Green Markets Jan. 9. “We have developed our compliance systems and routines to minimize the risk of something similar taking place again. Yara is not a party in the trial.”