Eni and Shell’s acquittal by an Italian court of foreign bribery threatens to undermine one of the major advances of the fight against corruption: the OECD Antibribery Convention. Italy and the 43 other wealthy nations parties to the Convention pledge to investigate, prosecute, and punish nationals who bribe officials of another government.  

The trial court’s acquittal of Eni, Shell, and four individuals of paying Nigerian officials over $1.1 billion in return for the rights to OPL-245, a lucrative offshore oil field, shocked those following the case. The bribery evidence on the public record was overwhelming. Rumors that the acquittal was bought immediately began circulating. When the prosecutor announced she would not to appeal the acquittal, the rumor mill went into overdrive and put the question Italy’s commitment to the Convention squarely on the international agenda.

And if a G-7 country backs away from it, how long before other parties follow? Especially when, as in Italy, one of their major companies is in the dock?

Below is a letter from a broad coalition of civil society groups, and the lawyer who represents Nigeria in foreign bribery cases asking U.S. Attorney General Merrick Garland to open a case against Eni and Shell for bribing Nigerian officials.  As the authors explain, because Eni and Shell are both subject to Foreign Corrupt Practices Act, when the allegations involving Nigeria first surfaced the U.S. had initiated an investigation. After Italy signaled it was also investigating the companies, the U.S. deferred and closed its case.  Now that Italy has utterly failed to see the case through, they urge the U.S. to pick up the ball. 

Dear Mr. Attorney General:

Urgent action required by US to defend the OECD Anti-Bribery Convention: The Department of Justice must reopen its investigation into Eni and Shell

President Biden has declared the fight against corruption to be “a core national security interest of the United States”. [1] A key stated priority of the Administration is to bolster anti-corruption efforts by “implementing existing agreements, pushing partners to live up to their obligations, and holding accountable those who fail to do so”.  Ensuring “the full implementation” of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions[2] [the “OECD Convention”] is specifically identified as a key strategic objective.

We therefore write, as anti-corruption advocates, to urge that the Department of Justice (“DoJ”) take immediate action to defend the OECD Convention, which is now threatened by recent judgments that have placed Italy (a signatory) outside of the Convention.

As a first step, we would request that the Department of Justice reopen its investigation into alleged corruption by oil multinationals Eni Spa and Shell (formerly Royal Dutch Shell) in their acquisition of the OPL 245 oil bloc in Nigeria; and of Eni Spa for allegedly paying bribes to obtain contracts in Algeria.

Our reasoning is set out in detail below.

The OECD Peer Review of Italy

In October 2022, the OECD Working Group on Bribery, which acts as the guardian of the OECD Convention, adopted its Peer Review of Italy’s implementation of the Convention.[3] The US was a member of the Peer Review team.

The Peer Review was excoriating, concluding that Italy was no longer in compliance with the OECD Convention. The Review States: “The Working Group indeed considered in the past that Italy’s foreign bribery offence complied with the Convention. But this was before the spate of recent acquittals that created jurisprudence on the offence”.[4]

Three recent rulings were singled out as being of particular concern, namely:

• The acquittal of two executives of Agusta-Finmeccanica for bribery in India (referred to in the Review as “the Helicopters (India) case”):
• The Acquittal of Saipem (a former subsidiary of Eni Spa) for securing contracts through bribery in Algeria (the “Oil and Gas (Algeria) Case”): and
• The acquittal of Eni Spa, Royal Dutch Shell and others for obtaining the OPL 245 oil bloc in Nigeria through bribery (the “Oil Prospecting (Nigeria) Case).

In the “Oil Prospecting (Nigeria) case”, the Working Group expressly determined that elements of the Italian acquittal judgment did “not conform to the Convention”.[5] The Working Group was particularly critical of the Milan Court’s ruling that the companies could not be liable for foreign bribery if there was a corrupt agreement between Nigerian officials and the former oil minister who held the oil license rather than between the companies and the Nigerian officials – even if Shell and Eni knew that the bribes would be paid.[6]

The Working Group also expressed “extreme concern” over the “systematic rejection of circumstantial evidence” [7] by judges in these cases, making convictions nigh on impossible. The examiners criticized the Italian Courts for examining “each piece of circumstantial evidence in isolation”,[8] with “arguably speculative and uncorroborated”[9] explanations then being put forward which do not stand up to scrutiny if the facts are considered as a whole rather than separately.

One consequence, evident in the “Oil and Gas (Algeria) case”, is that “large opaque payments to intermediaries have been rejected as evidence of foreign bribery”. [10]

The “Oil Prospecting (Nigeria) case” is also cited as illustrative of the Working Group’s concerns. The passage merits quoting in full:

“Half of the purchase money was laundered through multiple cash transfers to currency exchanges and then distributed, including to one official to purchase a USD 4.5 million property. It was nevertheless found that the property was compensation for legal services rendered earlier by the official when he was a practicing lawyer. However, the judgment did not refer to any documentary evidence (e.g., invoices) of the services rendered or the debt owed. It is also undoubtedly odd to pay for legitimate legal services with a sale of real property funded by numerous small cash payments cycled through money exchanges. A single direct cash transfer from the debtor to the official would have been more logical. The debtor in this case certainly had the means to pay the official directly: he had just pocketed USD 400 million from the sale of the Oil Prospecting License. In the same case, while internal company emails contained language suggestive of bribery, the reasons for the acquittals repeatedly adopted exculpatory interpretations of the correspondence.”

In sum, the interpretations of Italian law that require explicit proof of an agreement to bribe have placed Italy at odds with the OECD Convention. One consequence is that Italian companies (and companies working in joint venture with Italian companies) are now far less likely to be convicted for bribery than their non-Italian counterparts.

The Urgent Need for Action

Italy’s removal of itself from compliance with the OECD Convention poses a major threat to US policy objectives and to the competitiveness of US companies.

The OECD Convention is one of the principle international instruments criminalizing bribery. The US was a key initiator of the Convention, which was introduced expressly in order to ensure that US companies were not disadvantaged by US efforts to combat bribery through the Foreign Corrupt Practices Act. The aim of the Convention was to ensure a level playing field internationally.[11]

Now that recent rulings have effectively placed Italy outside of the Convention, that level playing field no longer exists. In line with President Biden’s Strategy on Countering Corruption, there is an urgent need for the US to take steps to hold Italy (as a non-compliant country) to account and to level the playing field once again.

A failure to do so would be a failure of the US’ stated anti-corruption policy goals. Moreover, delay in taking action can only discredit the OECD Convention as an effective anti-bribery instrument. In the “Oil and Gas (Algeria) case”, courts in Algeria (which is not a party to the OECD) have convicted an official of receiving bribes to award a contract to Eni’s subsidiary[12] while Italy (which is a party) has acquitted the company of international corruption. The Italian judgment is clearly to the detriment of the international fight against corruption. A similar outcome, which can only serve further to undermine the credibility of the Convention, may soon emerge in Nigeria, which is prosecuting Shell and Eni over the “Oil Prospecting (Nigeria) case”. The US should not stand by and allow confidence in the OECD Convention to be further undermined.

Investigate and Prosecute Eni and Shell

Where the US has jurisdiction, the most immediate, effective, corrective step that the US DoJ can (and must) take is to prosecute Eni and Shell for those cases where they have been acquitted in violation of the OECD Convention.

Double jeopardy rules do not preclude the DoJ from taking this course of action. Although US law prohibits a person from being tried twice for the same offence in the US, the US Supreme Court has ruled that the “double jeopardy” rule does not apply where a single act of a defendant simultaneously violates the laws of two sovereign states.[13] Under the so-called “dual sovereignty” doctrine, the defendant is held to have committed “two distinct” offences: and because each sovereign prosecutes under its own laws, the defendant is not put in double jeopardy for the same offence.[14] Indeed, as academic Michael P. Van Alstine documents, many of the criminal sanctions imposed by the US for bribery “cover actions that other member states to the OECD Convention were prosecuting or had already punished”.[15]

In both the “Oil Prospecting (Nigeria) case” and the “Oil and Gas (Algeria) case”, jurisdiction is also not an issue. The DoJ has already deemed that there was no jurisdictional bar to investigating Eni and Shell over the OPL 245 bribery allegations: and Eni over the Algeria allegations. Nor does the five-year statute of limitations applicable to foreign bribery cases pose a bar.  In the Nigeria case, the bribes Eni and Shell allegedly paid were a part of a conspiracy to violate the Foreign Corrupt Practices Act, and a number of acts in furtherance of that conspiracy occurred in the last five years.

Indeed, in the Nigeria case, the conspiracy is a continuing one. Eni applied for the Oil Prospecting License for OPL 245 to be converted to an Oil Mining License in 2018. The application was explicitly made based on the corruptly obtained agreements under which Eni and Shell had been awarded the oil block. The Nigerian government refused to convert the prospecting license to a mining license until OPL 245-related corruption cases in the UK, Italy, and Nigeria had been completed. Eni then challenged the refusal before the International Centre for Investment Disputes. The Centre accepted Eni’s request for arbitration October 9. 2020, arbitrators have been appointed, and hearings begun. Eni’s arbitration claim is based upon the corruptly acquired prospecting license, making its filing with the Centre and every subsequent step it has taken in the arbitration proceeding acts in furtherance of conspiracy to violate the FCPA.

Although the investigations in both the Nigerian and Algerian cases were closed in 2019, the then acting Chief of the DOJ’s Foreign Corrupt Practices Act unit made it clear that the decision was taken because Italian authorities were prosecuting the case, not because of lack of evidence. The DoJ stated that, if circumstances changed, “the Department may reopen its inquiries”.[16]

The circumstances clearly have changed. Not only has the judgment of the First Court of Milan been found to be at odds with the OECD Convention but there is now no chance of correcting this in Italy as the Italian authorities have withdrawn their appeal against the judgment. And, in the new circumstances, the course of action is crystal clear: to defend the OECD Convention, restore the anti-bribery level playing field, and uphold the rule of law internationally, Eni and Shell must again be investigated.

We urge the Department of Justice to reopen its investigation.

Yours Sincerely

ReCommon, Antonio Tricarico                 

HEDA Resource Centre, Olanrewaju Suraju,                                     

The Corner House, Nicholas Hildyard,         

Ethic Alliance, Scott Williams

Publish What You Pay United States, Carly Oboth

Counsel to the Federal Republic of Nigeria, B. Olabode Johnson

ONE Campaign, Joseph Kraus

---

[1]                  The White House, Strategy on Countering Corruption, (2021), https://www.whitehouse.gov/wp-content/uploads/2021/12/United-States-Strategy-on-Countering-Corruption.pdf

[2]                  Organization for Economic Cooperation and Development (OECD), Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, https://www.oecd.org/corruption/OECDantibriberyconvention.htm.

[3]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[4]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, paragraph 116, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[5]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 128, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[6]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 127, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[7]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 103, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[8]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 103, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[9]                  OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 108, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[10]              OECD, Implementing the OECD Anti-Bribery Convention: Phase 4 Report – Italy, Commentary below paragraph 104, https://www.oecd.org/daf/anti-bribery/italy-phase-4-report.pdf

[11]              For discussion, see: Van Alstine, M. P., “Treaty Double Jeopardy: The OECD Anti-Bribery Convention and the FCPA”, Ohio State Law Journal, Vol. 73, No. 5, p. 1321, 2012, U of Maryland Legal Studies Research Paper No. 2013-6, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2202177

[12]              https://www.jordantimes.com/news/region/algeria%C2%A0ex-energy-minister-gets-20-year-jail-term-graft

[13]              Van Alstine (op.cit.) cites the following judgments: Heath v. Alabama, 474 U.S. 82 (1985); Abbate v. United States, 359 U.S. 187 (1959); Bartkus v. Illinois, 359 U.S. 121 (1959). 

[14]              Van Alstine, M. P., Treaty Double Jeopardy: The OECD Anti-Bribery Convention and the FCPA, Ohio State Law Journal, Vol. 73, No. 5, p. 1321, 2012, U of Maryland Legal Studies Research Paper No. 2013-6, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2202177

[15]              Van Alstine, M. P., Treaty Double Jeopardy: The OECD Anti-Bribery Convention and the FCPA, Ohio State Law Journal, Vol. 73, No. 5, p. 1321, 2012, U of Maryland Legal Studies Research Paper No. 2013-6, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2202177

[16]              Letter from Christopher Cestaro, US Department of Justice, “Re: Eni SpA”, 27 September 2019, available at https://www.eni.com/content/dam/enicom/images/canali/media/5%20copy.jpg | Reuters, “U.S. DOJ says Eni probe not closed for lack of evidence, could re-open”, 2 October 2019, https://www.reuters.com/article/us-eni-nigeria-doj-idUSKBN1WH250