Bribery and extortion, including of the so-called ‘petty’ type, is pervasive throughout Africa. Studies have shown that stringent anti-corruptions laws from other countries, such as those in the United States and European Union (EU), have actively helped to combat or at least minimize high-level bribery and extortion in certain parts of Africa. It is a trend that is certain to continue in the coming years.
The United States has formidable legislation in the form of the Foreign Corrupt Practices Act (FCPA), which prohibits firms and individuals from paying bribes or other corrupt practices to foreign officials in order to obtain business deals. The FCPA is enforced by both the federal Department of Justice (DoJ) and Securities and Exchange Commission (SEC), both of which have considerable financial and logistical heft to prosecute these cases. The Act applies to two broad categories of legal persons, namely those with formal ties to the US or those who are in violation of the Act whilst in the US. The FCPA potentially covers any illegal act of corruption committed anywhere in the world.
There was a time that corruption was viewed as a mostly ‘victimless’ crime in law. That is certainly no longer the case according to recent American court decisions. One such decision was handed down by the US Court for the Eastern District of New York in November 2020, in a judgement against OZ Africa, a subsidiary of New York City-based multi-billion-dollar hedge fund Och-Ziff. The applicant in the civil case was the DRC-based Canadian mning company Africo Resources Ltd, which contended that it had been shut out of bidding for mining concessions in the DRC due to the corrupt actions of OZ Africa.
The American hedge fund’s subsidiary was accused of ‘flipping’ multiple concessions in the region in favour of its own clients. In question, according to Africo, was the loss of their interest in a prospective concession for the Kalukundi copper and cobalt mine in southern Congo. The New York court held that Africo’s shareholders could be recognized as “victims of crime” due to the corrupt actions in Africa by the hedge fund and were duly awarded $135 million in restitution for investment losses. The Court further acknowledged that Och-Ziff had already paid a penalty of $213 million to the DoJ due to it pleading guilty to conspiracy to violate the FCPA and a further $199 million for any civil claims to the SEC as a result of the breach. Worth noting, however, is that the case did not consider nor provide any restitution to the poor Congolese communities surrounding the mine who were also impacted by the illegal bids.
Foreign courts can also be used by African complainants against Western companies that have facilitated corruption in its many guises. The government of Nigeria decided to do so against Wall Street investment banking giant, JP Morgan, in a court case before London’s High Court that commenced in February 2022 and first filed in April 2018. Nigeria accused JP Morgan of being “grossly negligent” in paying $875 million for a 2011 oil deal to a company, Malabu Oil & Gas, controlled by a former Nigerian minister for oil, Dan Etete. The Nigerian government contends that the investment bank knew fully well that there were many “red flags” with the deal. For example, Nigeria accused the bank of knowing that Etete would be involved in the transaction and had already been convicted of money laundering in France in 2007, a fact that JP Morgan would admit in court documents. Nigeria is seeking $1.3 billion in restitution for the Etete deal, including interest.
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