Nick McKenzie, Emmanuel Freudenthal, Michael Bachelard, Richard Baker
Two Australian companies are embroiled in bribery scandals that reach into the offices of the presidents of Sri Lanka and the Republic of Congo, as the firms sought to secure multi-million dollar contracts.
AFP to focus in on foreign bribery
Alleged bribery by Australian companies of foreign governments remains a serious issue at the centre of international business. The man in charge of catching these businesses, AFP Commander Peter Crozier, says we need to encourage companies potentially implicated in such behaviour to come forward. Vision courtesy ABC.
Coming in the wake of foreign bribery allegations implicating Tabcorp, Leighton Holdings and BHP Billiton, the revelations will put pressure on the Turnbull government to reform Australia’s failing anti-corruption framework.
A Fairfax Media and 7.30 investigation has uncovered internal documents from Perth-based listed mining company Sundance Resources that suggest it bribed the leader of the Republic of Congo as it sought presidential approval in 2007 for one of Africa’s most ambitious iron ore projects.
Hard to please … Republic of Congo President Denis Sassou Nguesso, left, pictured with Chinese President Xi Jinping.
Hard to please … Republic of Congo President Denis Sassou Nguesso, left, pictured with Chinese President Xi Jinping. Photo: AP
The documents, now being evaluated by the Australian Federal Police (AFP), reveal a secret share deal worth millions of dollars was brokered with the son of Congo’s despotic president, Denis Sassou Nguesso. In return, the company allegedly secured the President’s backing for its project. Sundance has launched an internal inquiry into the claims.
A Fairfax Media investigation has separately uncovered evidence – which is the subject of a major AFP probe – involving the iconic Snowy Mountains Engineering Company (SMEC).
The firm’s overseas staff allegedly bribed officials to secure a $2.3 million aid-funded sewerage project in Sri Lanka in 2011 and, in partnership with a Canadian company, a $2.2 million power plant project in Bangladesh in 2007.
Company emails also reveal Sri Lankan President Maithripala Sirisena and his adviser allegedly demanded a political “donation” to be paid by SMEC when Mr Sirisena was a cabinet minister.
Sri Lankan President Maithripala Sirisena.
Sri Lankan President Maithripala Sirisena. Photo: AP
The emails show a plot to skim the money off a World Bank-funded dam project in 2009. In return, Mr Sirisena was to approve the awarding of the dam contract to SMEC, worth $1.82 million .
SMEC’s Sri Lankan manager, who was recently sacked, wrote in emails to two Australian colleagues that he wanted to “inform the minister/co-ordinating secretary” of the size of an alleged kickback to be paid and that he needed to “prioritise” certain payments to unnamed parties “since the signing of the contract would depend” on it.
SMEC has confirmed a “request for a political donation”, but insists an internal investigation found no donation was made and the firm “continues to fully cooperate with the AFP.”
Australia prides itself on being a clean place to do business, but revelations by Fairfax Media and others over a decade show that many companies agree to corrupt practices in developing countries.
The government gave the AFP an extra $15 million in April to fight corporate bribery after Fairfax Media revealed the global Unaoil bribery scandal, which involved construction giant Leighton Holdings, and allegations that Tabcorp bribed the sister of Cambodia’s president.
Sundance Resources, Snowy Mountain Engineering Co embroiled in bribery scandals in Sri Lanka and Congo
Two Australian companies are being investigated over alleged bribery scandals linked to the presidents of Sri Lanka and the Congo, after the firms sought to secure multi-million dollar contracts in those countries.
- Sundance Resources agents allegedly involved in plot to bribe son, nephew of Republic of Congo’s President
- SMEC staff involved in alleged kickback request from office of Sri Lanka President when he was a minister
A Fairfax Media and 7.30 investigation can reveal Perth’s Sundance Resources is implicated in an alleged bribery plot involving some family members of Republic of Congo President Denis Sassou Nguesso.
Engineering giant Snowy Mountain Engineering Company is being separately investigated over claims its staff sought approval to pay kickbacks to foreign officials, including a donation to the party of Sri Lanka’s president Maithripala Sirisena when he was a cabinet minister.
While these matters are still being investigated, the revelations place pressure on the Turnbull Government to reform Australia’s maligned anti-corruption framework, and come after foreign bribery allegations implicating Tabcorp, Leighton Holdings and BHP Billiton.
Iconic Australian firm facing bribery investigations
The iconic Snowy Mountains Engineering Company (SMEC) is the subject of a major AFP probe examining the firm’s overseas operations.
7.30 can reveal SMEC’s overseas staff allegedly bribed officials to secure a $2.3 million aid-funded sewerage project in Sri Lanka in 2011, and a smaller power plant project in Bangladesh in 2007.
Leaked internal company emails also reveal claims from SMEC’s Sri Lankan manager in 2009 that then senior minister Maithripala Sirisena and one of his advisers allegedly requested a political “donation” before signing cabinet papers for a $1.82 million dam contract sought by SMEC. Mr Sirisena is now Sri Lanka’s President.
“The minister … wants to know whether SMEC could make a donation for the elections,” an email from the SMEC manager states about his meeting with Mr Sirisena.
The same email states: “[Mr Sirisena’s] Coordinating Secretary said this is the way it goes prior to signing the cabinet papers. He wants us to produce an amount/percentage on the contract value.”
The President did not respond to questions from 7.30 including whether he was in fact aware of, or authorised, such a request.
The SMEC Sri Lankan manager also wrote he wanted to “inform the minister/co-ordinating secretary” of the size of a suspected kickback to be paid. In another email, the manager said he needed to “prioritise” certain payments to unnamed parties “since the signing of the contract would depend” on it.
In a statement, SMEC confirmed there was a “request for a political donation”.
But it said its internal investigation had found that no payment was ever made by the company in response, and the firm “continues to fully cooperate with the AFP”.
The secret Congo deal
Sundance Resources’ Mbalam‐Nabeba Iron Ore Project, on the border of Cameroon and the Republic of Congo, is touted as one of Africa’s biggest iron ore ventures.
But internal Sundance files reveal an alleged plot to bribe some family members of Congo’s most powerful man when the company first sought exclusive mining permits in 2006 and 2007.
A July 2006 report by Sundance’s African agents states the project needed the backing of “Head of State”, President Denis Sassou Nguesso.
Internal company files indicate the agents then brokered a deal potentially worth millions of dollars with the president’s son and nephew for a large parcel of shares in Sundance’s proposed Congo subsidiary.
“Denis Sassou Nguesso [the President’s son] was delighted by the project, but clearly had a problem with the shareholders standing that was proposed to the Congolese side in this deal.”
“Unless we give them [the Nguesso government] a good reason to do this project with us, they would want to … do the project with the Chinese,” the confidential July 2006 report states.
The President’s son was allegedly given shares worth millions of dollars. In mid-2007 his father, President Sassou Nguesso, personally signed off on Sundance’s mining permits in a move Sundance’s agents attributed to “our relations and network in Congo”.
A Sundance spokesman told Fairfax Media the firm “has commissioned an independent party” to conduct a “thorough assessment”.
The AFP said it was evaluating the case and took “these allegations very seriously”.
AFP warns Australian firms
The AFP says it is ramping up inquiries and pushing companies to dob themselves in before they get caught.
“For any company to think that, you know, this is just the cost of doing business, then they are going to, in due course, face the full effect of the law,” AFP Commander Peter Crozier told 7.30.
The Government gave the AFP an extra $15 million in April to fight corporate bribery after the global Unaoil bribery scandal, which involved construction giant Leighton Holdings, and allegations that Tabcorp bribed the sister of Cambodia’s president.
But experts including former NSW Supreme Court Judge and chair of NGO Transparency International Anthony Whealy say the latest revelations show far greater reforms are urgently needed.