Previous posts here and here focused on the recent net $17.7 million FCPA enforcement action against Amec Foster Wheeler and John Wood Group concerning conduct in Brazil.
In a parallel enforcement action, the U.K. Serious Fraud Office also announced that Amec Foster Wheeler and John Wood Group will pay “a financial penalty and costs amounting to £103 million in the UK.”
The enforcement action involved a ten count Indictment. One count (Count 10) concerned the same Brazil conduct at issue in the FCPA enforcement action and charged failure to prevent bribery, contrary to section 7 of the Bribery Act 2010.
The other nine counts in the Indictment (concerning conduct in Nigeria, Saudi Arabia, Malaysia, and India) charged conspiracy to make corrupt payments, contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Prevention of Corruption Act 1906. The conduct at issue in these counts allegedly between 1996 and 2010 (in other words 11-25 years prior to the enforcement action).
Counts 1 and 2 (conspiracy to make corrupt payments, contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Prevention of Corruption Act 1906) concern Nigeria and the particulars of the offenses were as follows.
“Amec Foster Wheeler Energy Ltd. … between the 1st day of March 1996 and the 30th day of June 2004, conspired with certain of its employees and others to make corrupt payments to officials in the Nigerian National Petroleum Company, the Eleme Petrochemical Company Limited, and the Central Bank of Nigeria, as an inducement and / or reward to ensure that payments were made to FW Management Operations (U.K.) Limited for invoices submitted under contracts for services in Nigeria.”
Amec Foster Wheeler Energy Ltd. … between the 1st day of November 2003 and the 30th day of May 2004, conspired with certain of its employees and others to make corrupt payments to Nigerian police and tax officials as an inducement and / or reward to settle an allegation of tax evasion against Foster Wheeler (Nigeria) Limited.”
Counts 3 and 4 (conspiracy to make corrupt payments, contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Prevention of Corruption Act 1906) concern Saudi Arabia and the particulars of the offenses were as follows.
“Amec Foster Wheeler Energy Ltd. … between the 1st day of June 2004 and the 30th day of November 2007, conspired with certain of its employees and others to make corrupt payments, namely 403,000 Saudi Arabian Riyals, to officials in the Saudi Arabian Ministry of Labour Offices, as inducements and / or rewards to ensure that block visas were granted and / or processed more quickly for Foster Wheeler Energy Ltd. and/or Foster Wheeler Arabia, Ltd. projects in Saudi Arabia.”
Amec Foster Wheeler Energy Ltd. … between the 1st day of April 2007 and the 31st day of May 2007, other than as set out in Count 3, conspired with certain of its employees and others to make corrupt payments, namely 400,000 Saudi Arabian Riyals to officials in the Saudi Arabian Ministry of Labour Offices, as an inducement and / or reward to ensure that block visas were granted for Foster Wheeler Energy Ltd. and/or Foster Wheeler Arabia, Ltd projects in Saudi Arabia.”
Counts 5, 6, 7 and 8 (conspiracy to make corrupt payments, contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Prevention of Corruption Act 1906) concern Malaysia and the particulars of the offenses were as follows.
“Amec Foster Wheeler Energy Ltd. … between the 1st day of March 1997 and the 31st day of January 2005, conspired with certain of its employees and others to make corrupt payments to one or more officials in the Malaysian state oil company Petronas, as inducements and / or rewards to ensure that Petronas would award Foster Wheeler (Malaysia) Sdn. Bhd. a contract for services under the Central Utility Facility project.”
“Amec Foster Wheeler Energy Ltd. … between the 1st day of October 1997 and the 31st day of January 2005, conspired with certain of its employees and others to make corrupt payments to one or more officials in the Malaysia state oil company Petronas, as inducements and / or rewards to ensure that Petronas would award to Foster Wheeler (Malaysia) Sdn. Bhd. a contract for services under the MLNG Tiga Plant project.”
“Amec Foster Wheeler Energy Ltd. … between the 1st day of September 2002 and the 31st day of March 2005, conspired with certain of its employees and others to make a corrupt payment, namely GBP 819,338, to one or more officials in the Malaysia state oil company Petronas, as a reward for Petronas awarding to Foster Wheeler (Malaysia) Sdn. Bhd. a contract for services under the MLNG Tiga Plant project.”
“Amec Foster Wheeler Energy Ltd. … between the 1st day of September 2002 and the 30th day of November 2010, conspired with certain of its employees and others to make corrupt payments to one or more officials in the Malaysia state oil company Petronas, as inducements and / or rewards to ensure that Petronas would award to Foster Wheeler (Malaysia) Sdn. Bhd. a contract for services under the Melaka Co-Generation project.”
Count 9 (conspiracy to make corrupt payments, contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Prevention of Corruption Act 1906) concerned India and the particulars of the offense was as follows.
“Amec Foster Wheeler Energy Ltd … between the 27th day of December 2005 and the 30th day of November 2012, conspired with certain of its employees and others, to make corrupt payments to officials in the Indian Oil Corporation Limited as inducements and / or rewards in order that the Indian Oil Corporation Limited would award to Foster Wheeler Energy Ltd., and assist them in retaining, a contract for the provision of Front End Engineering and Design services on the Paradip Refinery Project.”
Count 10 (failure to prevent bribery, contrary to section 7 of the Bribery Act 2010) concerned Brazil and the particulars of the offense was as follows:
“Amec Foster Wheeler Energy Ltd. … being a relevant commercial organisation, between the 1st day of September 2011 and the 31st day of October 2014, failed to prevent its associated persons from bribing others, namely employees, servants or agents of Petróleo Brasileiro S.A, intending to obtain and/or retain business for Foster Wheeler Energy Ltd. namely the award and/or retention of a contract to design a gas-to-chemicals complex in Brazil called Complexo Gás Químico UFN-IV, including a contract for the provision of Front End Engineering and Design services.”
The criminal charges were resolved through a three year DPA.
As to Amec Foster Wheeler, the DPA mentions the following considerations.
i. past and future co-operation …
ii. lack of previous criminal convictions;
iii. inclusion in and adherence to the substantial remediation programme and ongoing improvements to Wood’s multi-year, group-wide ethics and compliance policies and procedures (the “E&C Programme”) …;
iv. agreement to remain in existence throughout the Term [of the DPA];
v. full disgorgement of profits in the amount of £47,815,914.14 (Counts 1 to 9 of the Indictment);
vi. full disgorgement of profits in the amount of US$3,531,260.40 (Count 10 of the Indictment) [The US dollar amount reflected a crediting arrangement with the US Securities and Exchange Commission as regards conduct in Brazil.]
vii. payment of a financial penalty in the amount of £46,033,891.97 (Counts 1 to 9 of the Indictment);
viii. payment of a financial penalty in the amount of US$4,593,750.00 (Count 10 of the Indictment); [The US dollar amount reflected a crediting arrangement with the US Department of Justice as regards conduct in Brazil].
ix. payment of the SFO’s reasonable costs of £3,367,088;
x. payment of compensation in the amount of £210,610.00 in order to provide suitable recompense to the citizens of the Federal Republic of Nigeria for the criminality reflected as Count 2 on the Indictment and committed in that jurisdiction; [As to this amount, the DPA states: “The SFO agrees that it shall initially hold the Compensation Amount for the benefit of the Government of Nigeria and that the Compensation Amount shall be deployed for the benefit of the citizens of Nigeria in a manner that is accountable and transparent.”] and
xi. agreement, at its own expense, to complete the actions required [by the DPA].
As to Woods, the DPA mentions the following considerations.
“i. provision of the Undertaking;
ii. substantial remediation following the acquisition of AFWEL and its discovery of the conduct described in the Statement of Facts, including:
1. modifying the E&C Programme to ensure that the bribery and corruption risks inherent in the use of third party intermediaries and sales agents/national sponsors was substantially mitigated;
2. integrating AFWEL into Wood’s management and governance structures, resulting in a complete change in the corporate management ethos at AFWEL; and
3. conducting a review of all existing sales agents/national sponsors and commercial intermediaries used by Wood (including AFWEL) and retaining only those sales agents/national sponsors mandated by law;
iii. assurance to the SFO that AFWEL will remain in existence and within Wood’s control and ownership throughout the Term; and
iv. agreement at its own expense, to complete the actions described [in the DPA].”
The DPA states as follows regarding the “Corporate Compliance Programme”
“Following Wood’s acquisition of AFW in October 2017, AFWEL has been fully integrated into Wood’s governance and management structure, including the group-wide E&C Programme which applies uniformly across Wood’s business units (except in relation to certain joint ventures). Wood has also introduced significant enhancements to the E&C Programme, in particular to strengthen internal controls, policies, and procedures regarding compliance with the Bribery Act 2010 and other applicable anti-corruption laws. Specifically, in order to address the bribery and corruption risks inherent in the use of commercial intermediaries, including sales agents and national sponsors (the use of the latter is mandated by local law in certain jurisdictions), Wood has implemented the following relevant changes to the E&C Programme since its acquisition of AFWEL in October 2017:
a. The complete integration, under the senior supervision of Wood’s Chief Ethics and Compliance Officer, of the AFW ethics and compliance team, policies and processes into the E&C Programme;
b. The post-acquisition development and 2018 rollout of Wood’s Code of Conduct across the entirety of Wood, including AFWEL;
c. The termination of all sales agent relationships (aside from national sponsors mandated by local law in certain jurisdictions) in the legacy AFW business and Wood more widely;
d. The development and implementation of a risk-based due diligence, on-boarding and monitoring process in respect of commercial intermediaries (being any third party that engages with a government entity on Wood’s behalf), which includes a requirement for enhanced due diligence on national sponsors, including their wider group and officers/directors;
e. The development and implementation of risk-based due diligence processes around joint venture partners and supply chain partners;
f. The engagement of a third party consultant to carry out an anti-bribery and anticorruption programme review;
g. The reinforcement of the consistent, visible “Tone from the Top” across Wood from senior management and Ethics Responsible Officers around anti-bribery and anticorruption as well as ethics and compliance more widely;
h. The implementation of a practical and risk-based training programme, ensuring that all employees are trained in the importance of good ethics and compliance, and the consequent actions reflective of good compliance culture, tailored to the relative risk profiles of certain business units/functions and jurisdictions, as well as to the seniority or practical involvement of relevant staff members in those business units/functions; and
i. Specific remediation programmes for certain jurisdictions in which compliance deficiencies have been identified.”
Pursuant to the DPA, Amec Foster Wheeler ” agree[d] that it (or Wood on its behalf) shall report to the SFO annually during the Term on the work that it has undertaken to modify and enhance compliance measures and internal controls, policies and procedures which form the E&C Programme …. . Such reporting shall also include information relating to the continued enhancement of processes and procedures relating to the use of commercial intermediaries, including national sponsors mandated by local law in certain jurisdictions, and the engagement of Amec Foster Wheeler in joint ventures.”
Regarding a monitor, the DPA states:
“The SFO does not require that a monitor be installed in recognition of the substantial enhancements and modifications to the E&C Programme and remediation exercise that have already been undertaken by Wood following its acquisition of AFWEL and that will be taken throughout the Term.”
The DPA contained the following interesting statement:
“Implementation of additional controls, policies and procedures shall not be construed in any future proceedings as providing an automatic statutory defence, immunity or amnesty in respect of conduct occurring subsequent to their implementation. The provision of the above referenced reports to, and the subsequent review by, the SFO, and any positive or neutral comments made in this regard shall not be construed as approval by the SFO of the nature of any compliance programme.”
In the SFO’s release, Lisa Osofsky (Director of the Serious Fraud Office) stated:
“Over a period of 18 years, Foster Wheeler Energy Limited brazenly and calculatedly paid bribes to officials around the world to cut corners and secure contracts, going to great lengths to conceal its corrupt conduct.
“In doing so, the company subverted the rule of law and harmed the integrity of the economy in the United Kingdom. We will continue to deliver justice for the taxpayer by punishing such actions and forcing companies to change for the better.
“Justice also means recovering money to compensate victims wherever possible, and I am delighted that we have been able to secure compensation for the Nigerian victims in this case.”
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