Finally the International Criminal Court (ICC) has issued a warrant for the arrest Libyan dictator Muammar Gaddafi! Nothing to celebrate here. The action only betrays a disturbing trend in the international justice system. So far, most of the candidates for prosecution are individuals who have fallen out of favor with the west. They are developing world thugs who once served the West’s strategic interests.
Multinational companies operating in Libya have had to deal with many obstacles, including a government rife with corruption that often asked for what amounted to bribes.
Sometimes those companies balked; sometimes they paid them, the New York Times reported today.
The Times story doesn’t actually mention the word “bribes,” using instead the phrase “payoffs to keep doing business.” U.S. companies are barred from paying bribes to foreign officials by the Foreign Corrupt Practices Act.
In 2009, Libya’s Muammar Qaddafi demanded that oil companies operating in Libya pay him to offset the cost of reparations to victims of Libyan terror attacks, according to the Times. (Several major oil companies had also previously lobbied against the law that ensured American victims would be compensated by Libya, arguing this could harm business ties between the two countries.)
The Times cited an example of two oil companies who made other payments to Libya:
In 2008, Occidental Petroleum, based in California, paid a $1 billion “signing bonus” to the Libyan government as part of 30-year agreement. A company spokesman said it was not uncommon for firms to pay large bonuses for long-term contracts.
The year before, Petro-Canada, a large Canadian oil company, made a similar $1 billion payment after Libyan officials granted it a 30-year oil exploration license, according to diplomatic cables and company officials.
The Dodd-Frank financial reform bill includes a disclosure rule that would require such payments to be disclosed to the Securities and Exchange Commission. Occidental Petroleum was one of several companies that lobbied against that rule. Oil companies have argued that the disclosure law will hurt their competitiveness ($) and perhaps violate laws in the countries they are dealing with.
Last fall, representatives from ExxonMobil, Anadarko Petroleum, Chevron, ConocoPhillips, Marathon Oil and Occidental—all members of the American Petroleum Institute, an oil and gas trade group—met with SEC officials to raise objections to the rule, the Wall Street Journal noted at the time.
According to a memo published by the SEC [PDF] after the meeting, the disclosure rules would apply to the seven oil companies operating in Libya that report to the commission. They are: Hess Corporation, Chevron, Occidental Petroleum, Shell, Eni, Husky Oil, Petro-Canada, Repsol, StatoilHydro and Canadian Occidental.
The American Petroleum Institute has touted a separate transparency program called the Extractive Industries Transparency Initiative, which it describes as a “voluntary, multilateral, multi-stakeholder global effort to promote revenue transparency in resource-rich countries.”
The UN Security Council has narrowly voted to authorizing a no-fly zone over Libya. We’re told the resolution seeks to keep Libyan strongman Muammar Gadhafi’s warplanes out of the sky to protect civilians from attacks by his forces.
So much is not being said here.