Statoil corruption case
Encyclopedia
The Statoil corruption case refers to Norwegian
oil company Statoil
’s misconduct and extensive use of corruption
in Iran
in 2002/2003 in an attempt to secure lucrative oil contracts for the company in that country. This was mainly achieved by hiring the services of Horton Investments, an Iranian consultancy firm owned by Mehdi Hashemi Rafsanjani
, son of former Iranian President Hashemi Rafsanjani. Horton Investments was paid USD
15,2 million by Statoil to influence important political figures in Iran to grant oil contracts to Statoil. The corruption scandal was uncovered by Norwegian paper Dagens Næringsliv
on September 3, 2003.
20 million in fines. Director for international operations Richard John Hubbard was also ordered to pay NOK 200,000 in fines for his involvement in the case. The uncovering of the corruption scandal also led to the resignation of Statoil Chairman Leif Terje Løddesøl
, Statoil CEO Olav Fjell
and Director for international operations Richard John Hubbard. The charges against Olav Fjell was dropped due to insufficient evidence. Statoil did agree to pay the fines, but insisted that this did not imply any admittance of guilt on their part.
1. Statoil agreed that they had paid bribes to an Iranian public servant in June 2002 and January 2003, with the aim of securing contracts for Statoil in the development of stage 6,7,8 of the South Pars gas field in Iran.
2. Statoil agreed that bribes were paid to secure other contracts in the country, and to get hold of confidential information.
3. Statoil agrees that they had used wrong accounting procedures in order to hide the bribes from their records.
The settlement also stipulated that no Statoil employee or representative for the company could make any statements to the media that contradicts the verdict for the next three years.
This smells to high heavens of corruption. And this incident can contribute to the tarnishing of Norway's reputation.
He also went on record to say that the Rafsanjani family were known for their close links to corruption.
Jan Borgen of Transparency International Norway
was also highly critical of Statoil's conduct in Iran. When asked to make a comment on the case by Norwegian newspaper Aftenposten, he said,
It is true that you can hardly get into these countries without using agents or advisers. But here, like anywhere else, you should know your agents. It is always dangerous to get involved with a consultant who has close contacts to the political elite.."
Current CEO of Statoil, Helge Lund
, has also publicly admitted that the corruption scandal has tarnished Statoil and Norway’s reputation abroad.
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
oil company Statoil
Statoil
Statoil ASA is a Norwegian petroleum company established in 1972. It merged with Norsk Hydro in 2007 and was known as StatoilHydro until 2009, when the name was changed back to Statoil ASA. The brand Statoil was retained as a chain of fuel stations owned by StatoilHydro...
’s misconduct and extensive use of corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
in Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
in 2002/2003 in an attempt to secure lucrative oil contracts for the company in that country. This was mainly achieved by hiring the services of Horton Investments, an Iranian consultancy firm owned by Mehdi Hashemi Rafsanjani
Mehdi Hashemi Rafsanjani
Mehdi Hashemi Bahramani is a businessman and the fourth child of Ayatollah Akbar Hashemi Rafsanjani, former President of Iran.-Education:...
, son of former Iranian President Hashemi Rafsanjani. Horton Investments was paid USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
15,2 million by Statoil to influence important political figures in Iran to grant oil contracts to Statoil. The corruption scandal was uncovered by Norwegian paper Dagens Næringsliv
Dagens Næringsliv
Dagens Næringsliv, commonly known as DN, is a Norwegian tabloid specializing in business reporting with a claimed daily circulation of 82,775 copies in 2008, making it the 8th largest newspaper in Norway. The editor in chief is Amund Djuve. Its name is Norwegian for "Today's Business".Originally...
on September 3, 2003.
Verdict reached by the Norwegian court
On June 29, 2004 Statoil was found guilty of corruption by the Norwegian courts and ordered to pay NOKNorwegian krone
The krone is the currency of Norway and its dependent territories. The plural form is kroner . It is subdivided into 100 øre. The ISO 4217 code is NOK, although the common local abbreviation is kr. The name translates into English as "crown"...
20 million in fines. Director for international operations Richard John Hubbard was also ordered to pay NOK 200,000 in fines for his involvement in the case. The uncovering of the corruption scandal also led to the resignation of Statoil Chairman Leif Terje Løddesøl
Leif Terje Løddesøl
Leif Terje Løddesøl is a Norwegian businessperson.He was born in Oslo as a son of Aasulv Løddesøl and Liv Marie Bjørlykke . He has been married twice. He graduated from the University of Oslo with the cand.jur. degree in 1960, and studied further, among others at the Hague Academy of...
, Statoil CEO Olav Fjell
Olav Fjell
Olav Fjell is a Norwegian businessperson and chief executive officer of Hurtigruten Group since 2007. From 1999 to 2003 he was CEO of Statoil.-Career:...
and Director for international operations Richard John Hubbard. The charges against Olav Fjell was dropped due to insufficient evidence. Statoil did agree to pay the fines, but insisted that this did not imply any admittance of guilt on their part.
Verdict reached by the US court
On October 13, 2006 Statoil reached a settlement with US authorities for their involvement in the case and was ordered by a US court to pay USD 21 million in fines. As part of the settlement agreement Statoil had to agree to the following counts.1. Statoil agreed that they had paid bribes to an Iranian public servant in June 2002 and January 2003, with the aim of securing contracts for Statoil in the development of stage 6,7,8 of the South Pars gas field in Iran.
2. Statoil agreed that bribes were paid to secure other contracts in the country, and to get hold of confidential information.
3. Statoil agrees that they had used wrong accounting procedures in order to hide the bribes from their records.
The settlement also stipulated that no Statoil employee or representative for the company could make any statements to the media that contradicts the verdict for the next three years.
Views on the verdicts
Former Iranian ambassador to Norway, and defector, Perviz Khazai, criticized Statoil strongly for their business methods in Iran. In a statement he said that,This smells to high heavens of corruption. And this incident can contribute to the tarnishing of Norway's reputation.
He also went on record to say that the Rafsanjani family were known for their close links to corruption.
Jan Borgen of Transparency International Norway
Transparency International
Transparency International is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide...
was also highly critical of Statoil's conduct in Iran. When asked to make a comment on the case by Norwegian newspaper Aftenposten, he said,
It is true that you can hardly get into these countries without using agents or advisers. But here, like anywhere else, you should know your agents. It is always dangerous to get involved with a consultant who has close contacts to the political elite.."
Current CEO of Statoil, Helge Lund
Helge Lund
Helge Lund is a Norwegian businessman who is the Chief Executive Officer for the Statoil group, and former CEO of Aker Kværner....
, has also publicly admitted that the corruption scandal has tarnished Statoil and Norway’s reputation abroad.