AfDB hits Bonny Island contractors with US$ 17 million penalties

The African Development Bank (AfDB) has hit contractors KBR, Technip and JGC with penalties totalling US$ 17 million for their role in an historic corruption case on a bank-financed project in Nigeria.

The contractors or their affiliated companies were part of the TSKJ consortium that bribed Nigerian public officials over a decade in order to win contracts to build liquid natural gas (LNG) plants on Bonny Island.

From 1995 to 2004, the joint venture companies made improper payments totalling US$ 180 million in return for the contracts. The AfDB contributed US$ 100 million to the overall project cost of US$ 6 billion.

As part of the negotiated resolution agreement, the AfDB’s Integrity and Anti-Corruption Department (IACD) fined the contractors US$ 6.5 million (KBR), US$ 5.3 million (Technip) and US$ 5.2 million (JGC). AfDB said the funds would flow to projects preventing and combating corruption in its member countries on the African continent.

In addition to the financial penalties, the contractors connected with the case have also been barred from winning AfDB contracts for three years. They are liable for cross-debarment by other development banks, including the World Bank, under the April 2010 agreement for mutual enforcement of debarment decisions.

Anna Bossman, director of IACD, said the settlement demonstrated a strong commitment from the AfDB to ensure that development funds were used for their intended purpose.

“At the same time, it is a clear signal to multinational companies that corrupt practices in Bank-financed projects will be aggressively investigated and severely sanctioned,” Ms Bossman said. “These ground-breaking negotiated resolution agreements substantially advance the Bank’s anti-corruption and governance agenda, a strategic priority of our institution.”