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Shady business Traders collude in oil corruption, says Swiss NGO

Oil rigs in Nigeria's delta region have often been targets of attacks by militants

(Keystone)

Swiss-based commodity traders are profiting from “opaque joint ventures” with the Nigerian national oil company, according to a report by the Swiss non-governmental Berne Declaration group. The traders have denied the charge.

“Every year Nigerian state coffers lose billions of dollars as large volumes of oil are exported for well below market price and the subsidy scheme for imports of refined crude oil products is systematically defrauded,” the Berne Declaration said in a press release on Monday detailing its report.

“Ongoing investigations by the Nigerian authorities show that those Swiss traders dominant in oil exports have been making good business with dubious Nigerian import firms,” the NGO says.

Although Nigeria is oil rich, it does not have its own refining capacities, and as a result has to import refined products. The import business is heavily subsidised.

The Berne Declaration claims that $6.8 billion (CHF6.2 billion) of unjustifiable subsidies were paid out in 2009 and 2011 – the equivalent of nearly four times the Nigerian health budget for 2013.

It says the trading companies Vitol and Trafigura had “exclusive and intransparent partnerships” with the Nigerian National Petroleum Corporation (NNPC), which had given them over 26% of market share.

“Instances show that sales between the NNPC and its two Swiss partners were carried out at prices lower than the market rates,” the report says. “This type of operation appears incongruous: why would the NNPC sell its crude oil at a discount?”

It says the Nigerian authorities have requested legal assistance from Switzerland to help them investigate five Geneva trading firms.

Zero tolerance

Vitol, contacted by the Berne Declaration, acknowledged that it had received requests for information from the Swiss authorities on behalf of the Nigerians, and added that it was “happy to work with the competent authorities”.

A Vitol spokesman told the SonntagsZeitung newspaper that there were no indications of wrongdoing by the firm.

Both Vitol and Trafigura assured that paper that all their joint ventures obeyed all national and international laws.

“Trafigura has a zero-tolerance policy towards corruption,” a spokeswoman said.

The Berne Declaration is calling on the Swiss parliament and government to take urgent steps to ensure greater transparency in commodity dealing to ensure that Swiss-based companies do not take part in abusive trading.

A government white paper in March called for voluntary measures but stopped short of proposing tighter rules for the industry.

swissinfo.ch


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