Panalpina World Transport (Nigeria) Limited was an agent of the global freight forwarding and logistics services company that operates in more than 160 jurisdictions. Yet, between June 2002 and October 2007, the Nigerian agent paid customs officials to ignore local and legal regulatory requirements for the importing of goods, specifically deep-water oil drilling rigs.
The bribes were allegedly knowingly paid on behalf of Panalpina’s clients (Transocean and Tidewater) and the amounts were subsequently charged to these clients as “load processing fees” or “administration/transport fees” on their invoices.
When Panalpina was finally investigated and charged for this corrupt malpractice by the US Department of Justice (DoJ) in August 2010, the company had to pay $ 70.56 million in criminal fines and $ 11.3 million in civil penalties. Since then, British and European regulators have targeted organizations suspected of engaging in corrupt malpractice in Africa.
At Zero Foundation Africa (Pty) Ltd, we provide comprehensive country risk profiles not only to identify the geopolitical, security and competitive risks you might face, but also to highlight the risk of corruption in that country. Some examples of our findings are indicated below.
In Uganda, the law does not distinguish between “a bribe” and “a facilitation payment”. Corruption risks exist in the police, judiciary and procurement areas where cash payments are the norm. A recent survey conducted by a Kampala-based business NGO (non-governmental organization) reported that one in six companies complain that the legal system is a major obstacle to their ability to conduct business in Uganda owing to political interference.
Botswana is generally perceived to be the least corrupt country on the continent. But, in November 2015, 17 Botswanan police officers at the Kopfontein border post were arrested for bribery when helping a syndicate of counterfeit cigarette smugglers. Also, in August 2018, former President Ian Khama and his Director of Intelligence Services, Isaac Kgosi, were accused of nepotism and patronage with the payment of nearly BWP 30 billion from operational funds to a company styled Power Force (Pty) Ltd. Other companies have since been implicated.
Therefore, mitigating reputational and financial risk in any organization relies on a clear understanding both of the terms used, and the practices involved. Reputational risk is based on the behavior of individuals, whereas financial risk is based on operational decisions.
When you are considering the implementation of an effective risk management programme to protect your reputational and financial assets, learn from our experience.
You can use our expertise of operating in many sectors and jurisdictions throughout Africa, especially when handling sensitive corruption issues. Always consider that reputational and financial risks occur because of adverse behavioural and operational circumstances within your company. By maintaining a comprehensive risk management programme that identifies, monitors, and responds to such risks, you will ensure the continued profitability of your organisation.
For a confidential discussion about your concerns and how to mitigate the reputational and financial damage caused by corrupt practices, give us a call.
Zero Foundation Africa (Pty) Ltd
+27 21 712 3024
+27 82 922 0512
Let us help you to maintain your reputation and minimize financial loses when conducting business in Africa.
Zero Foundation Africa
Phone: +27 21 712 3024
Cape Town, South Africa
Email: info@zerofoundationafrica.com
DISCLAIMER
The information contained in this website is for general information purposes only. The information is provided by Zero Foundation Africa and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
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