Sunday, October 24, 2004

'How I Paid Out Money to Etete and Others'

'How I Paid Out Money to Etete and Others'
In this court proceedings, Jeffrey Tessler, the consultant at the centre of the $180 million bribe scandal involving Halliburton and the NLNG contracts reveals how he pays out money to several Nigerian public officials and politicians in what has become a glaring evidence of monumental corruption. Excerpts:

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Did not the awarding of these concessions granted to MALABU depend on Chief Etete as Petroleum Minister?

I don't know but I think he was involved. Judging by the time he took, he certainly wasn't the only one. Actually when negotiations started, Chief Etete indicated that these concession would be awarded fairly quickly, and I had absolutely no idea things were going to drag on until 1998. There was also a rather strange clause that we should have talked about last time, saying that the bonus payable to the Government would be $20 million.

What's the situation now?

I believe that in 1999 the concession of block 214 was cancelled, and subsequently awarded to a consortium including EXXON MOBIL, CONOCO-PHILIPS and I think AGIP.

Concerning block 245, its award to MALABU was reconfirmed by the new Government (led by Mr Abubakar) in 1999. In 2001, MALABU was again confirmed by Mr Obasanjo as the owner of parcel 245. Later the Government changed its mind and cancelled the concession made in favour of MALABU. Since that time there has been an arbitration process involving the new Government and SHELL which is the new holder of the parcel.

Chief Etete asked me if I could act on behalf of MALABU in proceedings against the Federal Government and perhaps against SHELL. I refused. It is a rule of mine never to be involved in proceedings against the current Government.

Are you not personally involved in these proceedings owing to the fact that you bought 5 per cent of the shares and are in fact in possession of 40 per cent of the shares in MALABU?

It's a rule of mine, I don't want to be involved in litigation against the current government which might turn into litigation of a political type, and in any case my role as a consultant for TSKJ is more important to me than the investment in MALABU. It would hardly be appropriate for me as a consultant to TSKJ to be involved in litigation of a 'political' nature. Between 1999 and 2001 it appeared that Chief ETETE was the owner of the whole of MALABU. I had nothing to do with his acquisition of shares from the shareholders who had them. I believe that by 2001, perhaps a year or two earlier, he himself claimed to be the owner of MALABU. This information came from the press.

The Judge: Let us return to the bank accounts used by Mr Etete. Apart from the PAPA account opened in the name of Buzaki Etete, which was credited with $296,542 in the first quarter of 1996, two other accounts opened in the name of Dan Etete were credited with the following payments from the TRISTAR UBP account:


$482,795 between July 1996 and February 1997 (Credit Suisse account no. 2300095 in the name of Omoni Amafegha (D319)


$500,000 on 10 February 1998 (Banque HOFFMAN account no. 12423 in the name of Omoni Amafegha under the code name PAPA (D320).

Do you contest any of these payments?

No. My reply is the same as before.

That represents nearly half of the $2.5 million. Did you pay any other sums into other accounts in favour of Mr Amafegha account number (D 311/15)?

I thought I was paying these sums into Mr Amafegha's account, and that was confirmed when I learned later that Amafegha was listed as a shareholder of MALABU. As I said, and I have tried to be as clear as possible, my belief was that Mr Amafegha was not the same person as Etete, I paid the money into Amafegha's account but the account details were supplied to me by Etete.

Mr. Etete stated on 24/04/2003 (Page D 260) that the MALABU company, of which he was the legal representative, had owned block 245 since 1997 or 1998, in other words since a time when he had been Petroleum Minister. Is that the block which you acquired?

MALABU had owned two parcels, block 214 and block 245, I think since their concession in mid-1998. The register of shareholders presented to me showed that Mr Amafegha held 30 per cent of MALABU and in fact 70 per cent was held by Alu Mohammed whom I knew personally.

Alu Mohammed is a relation of another of my clients, Wakili Adamu. Alu Mohammed was chairman of Bulkship Nigeria limited and chairman of the Nigerian Shippers' Alliance. He was an independent, apolitical businessman. Mr Wakili Adamu had for a while been chairman of the Chamber of Commerce.

Towards the end of 1998 there was a reorganization of the shareholders but I still think that Alu Mohammed was the majority shareholder at the end of 1998. In 1999 MALABU lost parcel 214 but retained parcel 245, as was reconfirmed in 2001. The discussions I had with Chief Etete concerned the purchase of part of Amafegha's 30 per cent holding in MALABU. These shares thus included rights over parcels 214 and 245.

During the discussions I had with Chief Etete in 1995, 1996 and 1997 I was unaware of MALABU as an entity. The object of the discussions was the acquisition of rights and titles to these parcels. I didn't know how many parcels would be allocated, I thought there would be at least one but I didn't know there would be two. So far as I can remember I paid $2.5 million during 1996 and 1997, but perhaps I didn't pay the whole of this sum.

In return, I received documents transferring 40 per cent of the MALABU shares to me.

Today I also hold transfer certificates relinquishing MALABU's share of the parcels then known as 214 and 245.

Are they blank transfer certificates?

No, they're made out by MALABU to the order of EXXON MOBIL. MALABU sold 40 per cent of its shares to EXXON MOBIL in September or October 1998. I have retained these original documents to protect my investment.

Why are the shares made out to EXXON MOBIL when the payments were made by TRISTAR?

Only a big company like EXXON MOBIL could develop the project, To the best of my memory, I think I agreed to pay $2.5 million but it's possible I haven't paid the lot.

Are we really to believe that you can't remember whether you've paid half the sum or all of it?

The figure in my mind is 2.5 million.

Have you checked since last time?

I can't verify it in a real or effective way. I don't know who the beneficiaries are. It is possible that that's all I paid.

Can you verify before the next session the exact amount you paid into the accounts whose details were supplied to you by Mr Etete?

I will do my best.

The TRISTAR account was credited in the first instance, between 27/12/1995 and 1/03/2000, with $59,960,000 in a series of payments from LNG Servicos carrying the reference numbers 5 to 52 (the first few payments having no reference numbers). This total corresponds to the one specified in the first TRTSTAR contract signed on 20/03/1995. Is that correct?

I think there were sixty payments which represent a total of sixty million dollars for tranches 1 and 2. Some payments, I think, credited accounts at UBP Geneva and HSBC Monaco.

The second contract was signed on 18 March 1999. A whole series of payments was made between 30 March 1999 and 30 June 2000 into the UBP Geneva account carrying references that start at 101 (101 to 117). Do these payments which represent over $15 million correspond to the second contract?

That ought to be the case.

The Judge: If we look at payments 101 to 114 and compare them with the amounts debited to Mr Stanley's AMAL, we can see that the percentage stays constant at 3.0769 per cent. How did you decide on that percentage?

I didn't pay 3 per cent, I believe I paid $380,000.

The Judge: I will rephrase my question. How do you explain the fact that on twelve occasions the amounts retroceded to Mr Stanley are equivalent to 3.0769 per cent of the payments received from LNG Servicos in execution of the second contract signed on 18 March 1999?

I don't know why that percentage. I settled on the basis of a systematic percentage. If you multiply 3.0769 by 32.5 you don't get the amount that I paid. That wasn't what I paid.

Did these payments continue to be made?

No, they stopped in 2000, I believe.

Why?

There was no reason to continue them. In the matter of the acquisition of shares I dealt solely with him, in the matter of the parcel itself I had dealings with a large number of people.

You never had any dealings with the vendor?

Not directly. The conditions negotiated for these rights and shares were either negotiated by or suggested by Chief Etete alone.

Why?

Because I expected him both to recommend a vendor to me and to recommend me to the vendor.

In what capacity did you approach him?

A lot of people were approaching the Minister at that time to be allocated parcels, something that would normally have come under his Ministry's jurisdiction. I couldn't buy a whole parcel but I wanted to own an interest, albeit a minority one, in a company that might get a parcel allocated to it, because at that time there were a lot of parcels going to be allocated. They were deep-sea offshore concessions likely to become viable.

Did it seem normal to you for the Petroleum Minister in person to give the details of a corrupt Swiss numbered account into which you yourself were to make payments in the context of this transaction?

He didn't make it clear during the initial talks. It was after the discussions and negotiations, which went on for months and during which we met in London, that he gave me the details of that account. I think he gave them to me in London. We also had telephone conversations because we used to talk about a lot of things including fraud, which I was investigating for him.

He told me that the account in the name of Mr Amafegha was the one into which I was to pay funds in intermittent fashion, but later the accounts changed. In the first place he must have given me the details of the account you mention, and in the course of later discussions he gave me the details of other accounts, still in the name of Mr Amafegha.

When I asked you who had given you this account number, you replied: 'if it's the person I'm thinking of but can't remember, it should be Mr Amafegha'. Why do you now say that it was Chief Etete who gave you the account number?

I've never met Mr Amafegha and I thought I was paying these funds to Mr Amafegha. I will try to be perfectly categorical. I always believed that I was paying funds into Mr Amafegha's account. I believed Mr Amefegha to be a real and very distinct individual. Chief Etete informed me that Mr Amafegha wasn't him. The details of Mr Amefegha's account were communicated to me by Chief Etete. The negotiations and discussions that I had concerning the parcels were always, from the start, with Chief Etete.

Why didn't you declare in the previous session that it was Chief Etete who had given you that account number?

Because at the beginning of the discussion you indicated that there would be another meeting.

The Judge: According to Mr Gory all he knew about TRISTAR and about yourself was what he had been told by Mr Chodan whom we now know to have been being paid by you.

Mr Tesler: I would be surprised if Mr Gory were content to base his opinion on what Mr Chodan might have said to him about the effectiveness of my work and the services provided by TRISTAR since 1994 and between 1995 and 2003. The services provided by TRISTAR after 1995 were, I am sure, well known to all partners in the joint venture, including in particular the opening in 2003 of (trains) 1, 2, 3, 4 and 5.

The Judge: Exactly. Mr Gory has clearly explained that the key individual, who represented both KELLOGG and LNG Servicos and managed the interface between TRISTAR and the partners in the joint venture, was Mr Chodan and no one else.

I can't speak for Mr GORY but I should have thought the successful opening of (trains] 1 to 5 would have been the key factor. I believe that TSKJ didn't just bring me in as a consultant, there were other people, Mr B. PATEL was present at the meetings with TECHNIP and other shareholders, so it's difficult for me to believe that Mr Chodan was the only conduit leading to my nomination and giving details of my work.

Did you inform other people at KELLOGG, and the other partners, of the fact that you had been paying Mr Chodan through a Jersey account?

No, I didn't do that.

Why?

I believe that's Mr Chodan's business.

You paid Mr Chodan without the knowledge of LNG Servic,os and its associates?

It's absolutely correct that I didn't inform LNG Servicos.

For what services did you pay Mr. Chodan?

Mr. Chodan introduced me to more than twenty possible sub-contractors able and perhaps willing to work on the main project and, as was mentioned earlier, I worked with potential and actual sub-contractors on this project for my own greater good. It's been a nice little earner.

When we look at the TRISTAR account chronologically (D 305/1) we note that very often the payments made into the account originating from LNG Servicos are followed by regular payments to Mr Chodan. These payments are not isolated. Very often, a sum equivalent to twice the payment to Mr Chodan is paid into the AMAL account. Who is the beneficiary of the AMAL account?

I don't know exactly, I think something like the FIDES TRUST.

I didn't ask for the name of a financial establishment or accountant, I asked for the name of the actual beneficiary.

I don't know.

You don't know the name of someone you're paying twice as much as Mr. Chodan?

I don't know. I believe that the final recipient of the FIDES TRUST account is Mr A.J. Stanley. I hesitated to mention it, I wasn't inclined to disclose it before because of his links with KELLOGGS. Mr. Stanley is a senior executive of KELLOGGS. I had negotiated currency exchange agreements with him between dollars and Nairas. I've known Mr Stanley since 1994 - 1995. I think I met him in London around 1994 or 1995 to discuss the LNG programme. He was introduced to me by Mr. Burerll and Mr. Chodan. Mr BURREL is a member of KELLOGG. He had a job similar to Mr. Chodan's. I think Mr. Burrel is of higher rank than Mr Chodan. I've known Mr Burrel since the time of NAFCON in 1992-1993. He was already there with the title of Africa director, executive vice-president Middle East and Africa.

Mr Chodan would have been responsible for a sector in the same area as Mr Burrel but on a lower level. I've known Mr Burrel longer than Mr Chodan. Mr Stanley is above both of them. He's chairman of KELLOGG. I believe that all the company bosses went to Nigeria once a year to meet General Abacha. The purpose of these meetings was to discuss the project's stage of advancement and the future. I believe they perhaps went twice and saw General Abacha twice. I think on one occasion they had a meeting with Abacha and he didn't turn up, which caused me a lot of trouble.

How did you go about arranging these meetings with General Abacha?

It was never me who organized the meetings, not myself. I used to talk to the Chief of 'Staff, I believe at the time it was Mr Abdullahi Mohammed. At first, in 1995 and then in 1996, I managed to organize one of the meetings through Mr D. Yussufu.

Was that the same Mr Yussufu to whom you gave $75,000 in two payments made on 25/02/1997 and 11/08/1998 which we mentioned yesterday?

Yes, it's the same man.

What were the links between Mr Yussufu and General Abacha?

Mr. Yussufu had known General Abacha very well since the time when he occupied a senior post in the police, something we were talking about yesterday. He told me he knew him personally. Mr Yussufu told us the best way to obtain an audience by saying that the consortium ought to write to the Presidency and the President's office offering to come and see him to talk about the project's state of advancement and all related matters. I thought I understood what happened. Someone in the joint venture wrote to the presidency and the president's office answered giving a date for the meeting. I'm sure Mr D. Yussufu followed the exchange of letters and made sure the correspondence stayed on the rails. Visits of this sort continued from 1995 to 2003 and the team asked to see the President every three years more or less.

So far as the present head of state is concerned, I think they saw him in 2002 and these meetings have always been obtained in the same way. I would talk to someone important, I'd ask if it was possible for someone from the joint venture to meet the head of state, the protocol stayed the same with different people according to the administration in place.

In 2002 for example, I asked the Chief Executive of the NNPC to set up a meeting between the bosses of the joint venture and the head of state. The meeting took place in 2002. We talked to him about [trains] 4 and 5 and the, plan for (train) 6. I believe there were two meetings in President Abacha's time and one meeting with his successor Abdulsalami Abubakar and one with President Obasanjo. I seem to remember organizing another meeting with Abubakar in New York when he was passing through New York and I organized that meeting through the Nigerian Ambassador to the US. That must have happened between June 1998 and June 1999 when all the heads of state were at the UN.

It was certainly afterwards. The deputy MD of each of the two firms was also present. There was Mr Krammer, it's possible Mr Krammer came to the meeting with Mr Abubakar, I used to have the photocopies of passports people needed to attend those meetings. Two or three of the companies would be represented each time, as no one really trusted anyone else's account of the facts. I think that when Mr Krammer had high-level responsibility for this project at TECHNIP he used to come to these meetings himself, but I'm not sure he went to the meeting with Mr Obasanjo

Did you live in Nigeria?

No.

Have you been to Nigeria?

Just once, in 1983 or 1985. But I've worked with Nigeria permanently since 1977, in fact on a daily basis. At the time by telex, by telephone and Nigerians would come to see me in London on a regular basis. I've given advice to Nigerians on all levels. They came to London regularly, it's a former colony. Hardly a day passes without my seeing one. London's their second home.

In 1956, at MARUBENI. I had dealings with Mr MATSUDA, Mr Endo and Mr Tida.

Why did you pay Mr MATSUDA $1,190,000 in payments made between 1996 and 2000?

He was a sub-consultant, he was my consultant on LNG. He worked for me.

Why did you on 9/10/1996 immediately repay to Mr MATSUDA $404,000 of the $424,000 you had received on 4/10/1996 from the company that was none other than his employer?

There's absolutely no connection.

Weren't you helping Mr Matsuda to embezzle $400,000 from the MARUBENI company?

No, the two are unconnected.

Just a fluke?

To the best of my knowledge, I don't see any link between the two things.

When Mr. Matsuda got the $404,000 he didn't know his company had just paid you $424,000? What were the other regular payments to Mr. MATSUDA for?

Mr. Matsuda used to go to Nigeria. He used to provide me with intelligence, information on Nigeria and more particularly on the gas and oil sector in Nigeria. He used to send me stuff every day, press articles, on the situation in Nigeria, that lasted four years.

We had agreed on a figure that I would pay over the duration of the contract. The $404,000 were part of the total. I paid an agreed amount, I think it was around a million dollars spread over four years, and I paid in proportion with my revenues.


I Was An Outsider in the Deal - Etiebet

I Was An Outsider in the Deal - Etiebet

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I think it was in 1965 that Shell incorporated the Bonny Gas Company to liquefy and export Nigeria's gas reserves. Political and commercial intrigues kept the project moribund till 1989, when Nigeria LNG Ltd. was incorporated with Shell, ELE, AGIP and NNPC as shareholders, with NNPC having the majority shares.

NLNG Ltd. under the Chairmanship of the late Dr. Pius Okigbo was set-up to realise the objective of this long awaited project, and his Board identified two consortia as qualified to bid for the award of the Engineering, Procurement and Construction (EPC) contract on a turnkey basis, namely:

(i) Technip, Kellog, Snamprogetti and Japan Gas Company (TSKJ).

(ii) Bechtel, Chiyoda, Spibat and Ansaldo (BCSA).

In 1992, it was stated that TSKJ was chosen as the preferred contractor by the NLNG Board while Shell Gas was appointed Technical Adviser.

But in October 1992, there was disagreement again as government apparently disapproved of the Board's choice and the NNPC Directors were suddenly withdrawn from the NLNG Board, and the project was stalled once more as the EPC contract was not awarded. Thereafter, there were all kinds tumults and acrimony in the company and in government concerning the project.

In August 1993, I became the Secretary of Petroleum and Mineral Resources under Chief Ernest Shonekan's Interim National Government (ING). Because of the chequered history of the Nigeria Liquefied Natural Gas project which had been moribund since 1965 as a result of control problems, management problems, funding problems, ownership problems, and government interference problems; because of the danger of losing the LNG market to other countries and new entrants like Indonesia, Malaysia, Qatar and Algeria, most of which were developed by Shell, and because of the need for government to develop another source of revenue in those difficult years when crude oil prices were crashing below production costs, the ING under Chief Shonekan had to take the hard decisions to relaunch the LNG project immediately to secure its market for Nigeria.

In re-launching the NLNG, we needed to take steps to address those factors that had militated against its progress and realisation since the past 29 years. Those factors included:

(i) Ownership Structure (ii) Management Control (iii) Funding and Financing (iv) Market Assurance

As the market for Nigeria's LNG had become weary over the years because of disappointments in the inability to award the EPC contract for its construction, lack of proper management structure in place, funding by NNPC (government) was not assured because as at that time Nigeria's finances were not in good shape - the Federal Government had just sold off 5% of its JVC holdings in the oil mining leases, oil prices were sliding below production cost, the country's economy was in bad shape with large foreign debts, huge deficits and declining Naira value left behind by the previous governments. Above all the foreign partners were very wary of an NNPC management to keep the plants functioning when they contend that they have been unable to keep the refineries working. Finally, they would not welcome any more government interferences in the execution of the project. So they demanded a change in the ownership structure to allow the foreign partners to be in control in ownership and management before further progress on the Nigerian LNG project can be made.

8. This was the basis on which I made recommendations to the government to approve a new ownership structure of 51% of the equity to the foreign partners (Shell, Elf and AGIP) and 49% to government through NNPC, which was approved by Government. The noise and resistance by particularly the Board of NLNG headed then by the late Dr. Pius Okigbo, and the NNPC management staff who had become afraid of losing their management positions, were so deafening that the late Dr. Pius Okigbo resigned as Chairman of the NLNG Board immediately and left Lagos for his home in the East, and remained incommunlcado.

I was, then, seen as the villain and branded as such by the media and other interested parties who accused Chief Shonekan and myself of being Shell agents planted by Shell in government to sell off the nation's assets to them. Incidentally, Chief Ernest Shonekan had been a non Executive Director of Shell before his appointment to head the ING. Despite the criticisms the government kept its position and today we have been completely vindicated and applauded as that our singular action in 1993 is contributing over 20% to Nigeria's GDP within ten years, and still expanding. With that decision, which contained:
51% Foreign Partners
49% NNPC (FGN)
Shell Gas Appointed Technical Adviser
Shell nominee appointed Managing Director/Chief Executive.
A Nigerian appointed Deputy Managing Director/Deputy CE. in place, the takers (buyers) of Nigeria's LNG were ready to reopen discussions, which included putting the Final Investment Decision (FID) in place before they would sign the buyers contracts. It must be made categorically clear at this point that the start-off of an LNG project is dictated by the buyers, because they too have a lot to do in taking LNG into their country, which consists but not limited to: (i) Competitive pricing in the world market. (ii) Construction of receiving depots, which in all cases require government and in fact the peoples' approval as they impact on environment and the economy. (iii) Assurances of non-interruptions of supplies as lives may be involved. So the buyers must convince their home governments of these assurances before they can get approvals. In Italy, my presentation on assuring them of no interruptions in supply and the decisions on funding, construction and management was presented to the Parliament by the Minister in-charge for approval before the companies could sign the buyers contract. I was there, and I watched the parliamentary proceedings on TV with an interpreter. It was very interesting and educative politically. With all that completed, I was able to re-launch the NLNG again in early 1994 under the Abacha regime amidst lots of protests to stop the LNG project once again. Representations were made to Gen. Abacha in Abuja the day of the launching to stop it, but I had already finished it in Lagos. When I met him, he told me about the protest and brought up the case of the Deputy Managing Director, whom I had already announced as one Dr. Ihetu who was then the Managing Director of NLNG before the Board was dissolved. The Head of State, Gen. Abacha directed me to change him for one Alhaji Abba Gana who was then the Admin./Personnel Director of the Company, to appease everybody. I had to agree to his directives and subsequently I called Dr. Ihetu to explain to him the circumstances of his replacement. He showed a lot of understanding and the NLNG project lived again. The funding and financing of the NLNG project was another thorny issue. The Board through its technical advisory committee presented a budget of about $4.6 billion to the Head of State in Aso Rock, at a meeting with him, consisting of: (i) Engineering, Procuring and Construction (EPC) $2.5 billion (ii) New Pressure Vessels Purchases $1 .1 billion (iii) Management and Financing Cost $1.0 billion I cannot remember the exact amounts, but they were in those regions. I was not in a good frame of mind at that meeting because, without f~rst discussing with me, they sought and obtained an appointment with the Head of State, Gen. Sani Abacha to present the project-financing plan to him. I was informed by the Head of State of the meeting and asked to be present. After their well-prepared computerised presentation, projected on screen, some of the people present asked some questions. Finally I was invited to make my inputs by the Head of State. In my input and suggestions, I dismissed entirely the provision for management and fInancing cost, arguing that we did not need those services, having already retained Shell Gas as Technical Adviser and a Shell nominee to head the management as the Managing Director/Chief Executive. I advised that the purchase of new pressure Vessels be deferred till later while asking them to take steps to retrieve our existing vessels then on hire to be used initially. I continued that we should focus more on the financing of the EPC cost of about $2.5 billion so that construction of the plants may start immediately; that Government was ready to make its 50% of the 49% of $2.5 billion totalling about $600,000,000 immediately, which was what was required from all the shareholders to be in place in an escrow account before the construction contract can be awarded. I maintained that if the other shareholders would do the same there was no need for financing, thereby eliminating the financing and management cost as stated, and that if the foreign partners could not contribute their quota by themselves and want to borrow, such cost would be to their own account only. When they expressed doubts as to how NNPC would finance the balance, I proposed a plan of how the government will meet it through budgetary provisions in the succeeding year's annual budgets to completion of the construction, as a national priority project with first charge deductions from the federation account. The Head of State, Gen. Sani Abacha, who at this time was not very receptive to borrowing agreed with my proposal and ruled thus. I believe that decision was implemented in the succeeding years budgets. Some uneasiness was noticed among all of us. However the meeting ended on that note. We all left with straight faces. That my input saved this country over $1 billion on that project and also made it realisable. From there on, I turned everything over to the new Board headed by Alhaji M.D. Yusufu as Chairman, the Technical Advisory Committee and the Technical Adviser to implement. But before then an Escrow Account was opened for the immediate payment of the 50% contribution from all shareholders before the EPC contract is to be awarded. How was I able to mobilise about $500 million within NNPC to make our 50% contribution to the escrow account at a time we could not meet even our cash call payments from government? This is not a matter for this discussion, but suffice it to say that I worked with NNPC and the Head of State to realise it. By this time I realised that my relationship with everybody concerning the project had started to be sour. I guess it was because of this atmosphere that they were not keeping me abreast of the whole tender evaluation and contractor selection process from time to time. It was not until the 15th of September 1994, the eve of the award, that the Managing Director/Chief Executive, Mr. Theo Oerlemans informed me of their decision, through a memo, which he asked me to keep "strictly confidential". It was that week too that the Chairman, Alhaji MD Yusuf informed me of their Board meeting in the Hague, the Netherlands to consider and award the EPC contract, and that I was invited to witness the event on the 24th of September 1994 in the Hague. By the 20th of September, 1994 I was in London, staying at the Dorchester Hotel having arrived from an OPEC meeting in Vienna, waiting to leave for the Hague. At the hotel in the morning, I received a call from the Hotel Concierge, of people intending to see me. I asked my SA to enquire who they were. The first person told my SA that he should tell me that his name was "London Weather" and that his friend from Nigeria had asked him to see me. I told my SA to tell him that I do not talk to "London Weather" and would not give him appointment until he said who he actually was. He declined to reveal his true identity and left. Thereafter, another caller came, who told my SA that he was the President of Kellog from America, and I told my SA to tell him that a meeting had already been scheduled for his team later that day of the 20th of September 1994, and as such he should wait for that meeting. He left without any more messages, and I later learnt that he flew that same day in his corporate jet to Abuja to meet with some top government functionaries. People who heard of the incident always chided me for refusing to meet with a whole President of Kellog from America. However, later that day about a ten-man delegation of TSKJ met me in the Dochester Hotel in my Suite. Thereafter, the BCSA team numbering about 6 also met me in the same Hotel. During the two meetings, Mr. Gilbert Chagouri and Mr. Eli Chalil who introduced themselves as agents of TSKJ and BCSA respectively were present. The meetings were requested for by both consortia and I scheduled them accordingly for that day, the 20th of September 1994. It was as a result of the information I gathered from the meetings of the two consortia that necessitated my memo of 22/9/94 captioned "Nigeria LNG EPC Contract" to the Chairman of NLNG, Alhaji M.D. Yusuf who was already in the Hague after a telephone conversation during which he gave me a Fax Number to fax my memo to. His reply dated 23/9/94 captioned "Nigeria LNG Limited EPC Contractor Selection" is enclosed. Because of the contents of his reply, I considered it inappropriate for me to go to The Hague again. So I left that weekend, Sunday for Nigeria, but before then Alhaji M.D. Yusuf had got a fax delivered to me via Eline Investment on the decision of the Board. The letter just said that the Board had taken a "unanimous decision on the 24th of September 1994 to select the consortium of TSKJ as the preferred main contractor, and immediately to enter into further negotiations with this consortium". The letter did not contain the amount of the contract and up-till this moment I have no knowledge whatsoever of the exact amount of the EPC contract of that LNG project, and was never appraised of any further negotiations with the contractor, TSKJ. When I reached Abuja, I reported to the Head of State, Gen. Sani Abacha immediately what had transpired in the Hague, and the correspondence between the Chairman, Alhaji M.D. Yusuf and myself on the EPC contractor selection process, and that I did not, therefore, go to the Hague again. I told him I felt betrayed by the whole events but the Head of State told me to await the Chairman's arrival to discuss it. That was the end of the matter, as we never met again. Since then I have never met with any NLNG official or the contractor, TSKJ representative, on the project. NLNG did not even invite me for the commissioning of the project at completion, which I had laboured to bring about. Definitely I was an outsider in the whole project execution. In February 1995 our Federal Executive Council (FEC) was dissolved and I was butted out of the Ministry and succeeded by Chief Dan Etete. That is all I know about the execution of the Nigeria Liquefied Natural Gas project. I do not know anything about the alleged bribery against the TSKJ Consortium, and I have never met or known Mr. Jeffrey Tesler. But from what I read about the bribery allegation against TSKJ now in both national and international newspapers and from the subject of this investigation, I can now understand why I was kept in the dark on the whole process of the contractor selection and award.
Text of the memo submitted by former Petroleum Minister, Chief Don Etiebet to the House Committee last week.

Halliburton's $180 Million Bribe Scandal: A Can of Worms...

Halliburton's $180 Million Bribe Scandal: A Can of Worms...
By Olusegun Adeniyi

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In rating Nigeria as the third most corrupt nation on earth last week, Transparency International (TI) had provided insight into how oil fuels corruption. "In these countries, public contracting in the oil sector is plagued by revenues vanishing into the pockets of western oil executives, middlemen and local officials".

Of course the Federal Government, rather than accept the verdict in good faith, has resorted to name calling. But most observers believe TI report essentially captures what happens in the oil industry where rent seeking is the name of the game. And since oil accounts for most of Nigeria's revenue base, it is therefore not an accident that whatever happens in the sector must have informed the TI perception index.

While this government might have made some efforts to combat the malaise through some of its reforms, the reality on the ground is that corruption in Nigeria, especially in the oil and gas sector, is gargantuan. And nothing confirms this more than the on-going probe in the House of Representatives into the Halliburton $180 million bribe scandal. The Chudi Offodile-led Public Petitions Committee probing the Nigeria Liquefied Gas slush fund used to bribe Nigerian officials, has provided hint as to how our nation is so easily short-changed on the altar of official greed.

While there have been a few shocking disclosures in the course of the House probe, what is actually public knowledge in Nigeria about the scandal is a mere tip of the iceberg compared with the monumental revelations coming from the French court in which the central character in the whole saga, Jeffrey Tesler, is being tried.

What many Nigerians may not be aware of is that the $180 million bribe issue is already a subject of international inquiry with our nation attracting sordid headlines. But it was a French court which first blew the thing open when it launched an inquiry into allegations that one of the firms, KRB, paid $180 million to Nigerian government officials to win contracts for the construction of the first-two trains of the Nigeria Liquefied Gas (NLG) Project in the 1990s. This was followed by another probe of the TSKJ consortium by the United States Securities and Exchange Commission (SEC) last June.

Halliburton, the big corporation enmeshed in the dirty deal, has insisted on its innocence since investigations began last year by both the SEC of US and French authorities while maintaining that the alleged bribing of Nigerian officials occurred before its acquisition of KBR. But nobody is buying this marine tale and the Federal Government, on the recommendations of the Offodile committee, has since banned the company from carrying out any work in Nigeria because of its corrupting influence which has become evident with the on-going trial in France.

But there is a local dimension to the whole ugly drama. While testifying before the House Committee last week, former Chairman of the NLG, Alhaji Mohammed Dikko Yusufu, denied collecting any dirty money from TSKJ Consortium believed to have facilitated the bribe to Nigerian officials. He, however, admitted that those involved in the bribery scandal like Mr. Jeffrey Tessler had at various times advanced him some monies before he became chairman of the LNG and after he was removed. He, however, said the monies were loans and part of it he had repaid. "I was in London and needed money and he gave me as loan. Sometimes I pay back and sometimes I don't. We have been friends for long. Sometimes one thousand pound, sometimes two thousand pounds", he said.

Yusufu admitted that both Tessler and Mr. Gilbert Chagouri were old time acquaintances, but that neither tried to influence him to award the NLNG contract to TSKJ. Asked if the money he took from Tessler was not meant to influence his judgment on who should get the $2.9 billion contract, Yusufu shook his head and simply replied, "no".

He said that since he was taking orders from the Head of State, the late General Sani Abacha, he tried his best to get the best for the country and stemmed the prolonged delay in the project take off. Former Minister of Petroleum, Chief Don Etiebet, while giving evidence said he had no hand in the award of the NLNG contract to any of the consortia.

He said his problem with the TSKJ group arose from disregard of the simple rule of giving the contract to the lowest bidder. He said he was abroad when the contract was finally signed and awarded by the Board of the LNG headed by Yusufu. "I don't know anything about the bribery allegation, I only read about the investigation in foreign and local papers. I have never met Tessler. I was not part of the team that awarded the contract, I was not involved", he said.

Chagouri, Tessler, Dan Etete among others were billed to appear before the House committee to testify on the issue but none of them did last week and there are indications that they may not. Etete on his part deposed to an affidavit at an English court which he sent to the House Committee, claiming innocence. But a source described the contents of his letter as "mere cock-and-bull story".

The bribery saga began when TSKJ, the Portugal-registered company owned jointly by Halliburton's Kellogg Brown & Root (KRB), Technip SA of France, Eni's Snampro-getti Netherlands and JGC Corp. of Japan, only recently, in the early nineties won the contract to build the $1.7 billion Train six of the LNG plant. On the face value, they bidded fair and square. But facts now emerging indicate they may have secured the contracts after greasing the palms of several business men, politicians and public officials and that is what is at the root of the current probe. Although the names of several people have come up and many others will yet surface as the investigation and trial progress, the principal characters appear to be Gilbert Chagouri, the Lebanese business man friend of the late Head of State, General Sani Abacha; former oil Minister, Chief Dan Etete and Abacha himself as well as Jeffrey Tessler, the British "Consultant" who has only been to Nigeria once in his life yet has been making hundreds of millions in dollars from our oil since 1977. It was Tessler who allegedly gave bribes running into $180 million dollars to Nigerian politicians, business men and public servants. There are, however, insinuations that another principal character could be the United States Vice President, Mr Dick Cheney but there is yet no direct link to him and nobody has mentioned his name as being involved in anyway. Curiously, Halliburton officials had last year complained that the whole bribery investigation in France was targeted at Cheney who was Chairman and Chief Executive of Halliburton between 1995 and 2000, the period the whole scandal played out. Incidentally, of all the current investigations into Halliburton and its subsidiaries, the Nigerian case is the only one that covers the period Cheney was running the company and that is why in the US opposition politicians believe he has questions to answer on the issue. Perhaps to save Cheney any embarrassment on the scandal, Halliburton had to sack and disown former KRB President, Albert Jack Stanley, who incidentally, was appointed by Cheney into the position in 1998 and another official, William Chaudan because they were said to have facilitated the bribe slush funds for Nigerian officials. In the inquiry proceedings instituted following statements made by Mr Kramer, an executive of Technip, on 1 October 2002, he confirmed the existence of a secret fund established in Madeira via LNG Servicos and Tristar, on 8 October 2003 while the main charges against Tessler were:
corruption of foreign public employees (deeds committed in part in December 2001 and May 2002 in Rome and Paris by approving, as part of the board of directors of LNG
abuse of public property, complicity in and concealment of this offence (deeds committed in Paris, Courbevoie to the detriment of SA Technip Coflexip at the time of the conclusion in 1999, July and December 2001 and June 2002, of 3 contracts 'of logistical support and assistance' by the companies LNG Servicos and Tristar. The bids were related to the construction of gas liquefaction plants in Nigeria. The Nigerian Liquefied Natural Gas company (NLNG) is jointly owned by the Nigerian National Petroleum Corporation (NNPC), Shell, Total-Fina-Elf and Agip (D12). In 1994, according to the court document, NLNG invited interested parties to tender for the construction of two natural gas liquefaction plants ('trains') on Bonny Island. Four engineering companies, Technip, Snam Progetti, Kelloggs Brown and Root, and JGC (Japan), formed a joint venture called TSKJ, registered in Madeira, to tender for the work. The consortium was led by Kelloggs Brown and Root. The subsequent bids, concluded in l990 and 2002, were negotiated amicably, without public tender, with the same partners. According to Mr Desseilligny, a senior Technip executive, Shell was the operator. The bids sought were three in number: the first for trains 1 and 2, the second for train 3 and the last, signed in 2002, for train 4. They were concluded between Nigerian LNG on the one side, and on the other three companies registered in Madeira, TSKJ Servicos, TSKJII Constructoes and LNG Servicos. The first contract, worth a total of $2.2 billion, was concluded in 1995 (with effect from 1 December 1995). The second was concluded on 6 March 1999 for a total of $1.4 billion. The third was concluded on 22 March 2002 for a total of $1.7 billion. The partners in the joint venture are four in number:
Technip
JGC
Kellogg Brown and Root
(Snam Progetti missing NB] Christine Wahnon (married name Lopez) and Mr Galliano Tristar concluded contracts of logistical support and assistance with LNG Servicos. According to an LNG Servicos document dated 17 March 2003, Tristar (owned by Mr. Tessler) was engaged as consultant on the recommendation of Mr W. Kellogg, over the strong objections of Technip and in particular Mr Kranimer who favoured other consultants. It was for that reason that Tristar supplied its information directly to Kelloggs. Mr Tessler has a personal relationship with Kelloggs having been its consultant on other projects dating back to the l980s. Tristar has numerous contacts in Nigeria gathered over thirty years, especially among senior officers and politicians. It acts as consultant to several construction companies. According to the Technip Financial Director Mr Burlin, Tristar was introduced by Kelloggs to its partners, who accepted it. A message or memo from Mr Chodan of the Kelloggs company confirms that Tristar was chosen on Kelloggs's recommendation over opposition from Technip and in particular Mr Kranimer, who favoured other consultants. Mr Tessler in fact had close relations with Kelloggs having been their consultant in Nigeria on a number of projects since the 1980s. He also seems to have been the private adviser of numerous personalities from that country including businessmen, military officers and politicians. Mr Tessler also seems to have been a consultant to many firms operating in Nigeria. A memo of 17 March 2003 from, the director of LNG Servicos, Mr Chodan, says that Tristar had been engaged by the joint venture on the recommendation of Kelloggs over the strong objections of Technip and in particular Mr Kranimer who favoured other consultants. Mr Tessler has professional and personal relations with Kelloggs. As he had already acted as the company's consultant in other projects since the 1980s, both parties wished to continue their collaboration. Tristar's capacity to succeed as the joint venture's consultant resulted from its deep knowledge of the country and its numerous contacts assembled over thirty years spent working there. Mr Tessler was also described as the personal legal adviser of many people including businessmen, military officers and politicians in Nigeria while operating as consultant to many firms operating within our country. "As a result, his advice may well have been crucial in deciding what strategy to adopt during the negotiation of contracts, and contributed to the success of the joint venture in obtaining and carrying out three successive major projects. Mr Gory, a senior Technip executive who admits to having been involved in negotiating the contracts with Tristar, confirmed that this agent had been brought in by Kelloggs. He described him as a London lawyer who has an office in Lagos. It is a high profile company in Nigeria, he explained, which had worked with Kelloggs in the past." According to Mr Kranimer, Tristar is directly involved in the corruption of public officials in Nigeria while his job basically consisted of "providing a permanent flow of information on (events in) Nigeria and on the strategies of the Nigerian government and administration, providing the client with commercial follow-up and continuity and supplying logistical and administrative assistance on site." The first contract was signed on 20 March 1995 by Mr Tessler (Tristar) and Richard Northmore on a basic sum of 660 million, adjustable according to the size of the main contract. Tristar's address is that of the UBP in Geneva. This contract is not named in the first indictment. The second contract was signed on 18 March 1999 between the same two companies, represented by Mr Kaye (Tristar) and Robert Parker, on a basic figure of $32.5 million. A specific clause stipulates, on pain of cancellation of the contract, that no payment can be made to any third party including government employees, officials, political parties or political campaigns. This clause was repeated in the contracts that followed. The consultant guaranteed that the principle had been followed with the 1995 contract. The third contract was signed on 12 July 2001 by Mr Tessler and Mr Parker. Tristar's address was given as that of the HSBC in Monaco. Tristar undertakes to assist LNG Servicos with its claims on the client for execution of the project (trains 1 and 2), for a percentage of the sums obtained. This contract is not named in the first indictment. Tristar, according to Mr Gory, would compile reports for Kelloggs, which would then pass them on to the other members of the joint venture. In reality, according to Mr Krammer, Tristar's reports on its activities were servile, complacent and uninformative. Yet Tristar's fees were:
$60 million for the first contract (20 March 1995)
$37.5 million for the second contract (18 March 1999)
$51 million for the third (24 December 2001)
$23 million for the fourth (28 June 2002). It is from these sums of money that Tessler was able to dispense favours and THISDAY checks reveal that reports before the French investigators implicate many top officials currently working with NNPC and its subsidiaries who were at different times beneficiaries of sums of money ranging between $50,000 to millions of dollars depending on status and relevance to the LNG project though there was no evidence that bribes were solicited by them. Incidentally, even before the contract was awarded, there were mutual suspicion between Etiebet, the then Minister and Yusufu, the LNG Chairman going by the contents of the memos they exchanged. On September 22, 1994, Etiebet had written a two-page memo to Yusufu, calling into question the integrity of the whole bidding process. Part of the letter read: "Information available to me indicates that NLNG Ltd have seriously tinkered with the integrity of the pending award of the EPC contract. I thought it was supposed to be handled with utmost confidentiality, without interference from any quarters. It seems that is not the case now as members of the two consortia are jostling around the place armed with very relevant and important data to canvass for support from one quarter or another. "Members of the two consortia have met me in London discussing the projects EPC's tender evaluations and recommendations with such details that beat my imagination. While one group talks with all assurances and exciting glee of clinching the contract because of being technically capable and financially much cheaper and competitive, the other group talks of unfair discretionary evaluation with unequal and unclear penalty levies, which have contributed to tilt the scale on cost towards a 'preferred' consortium" But Yusufu would not allow Etiebet's allegation to go unchallenged. He fired back a memo just 24 hours later: "I would like to register my concern for your insinuation that 'NLNG Limited seriously tinkered with the integrity of the pending award of the EPC contract'...I am surprised that you met members of the two consortia in London. You may wish to note that this is an International Tender with strict procedures. At the time you met them, no decision had been taken by the Board of the Company. It is difficult to see the reason for your meeting them. Even more serious was the fact that you listened to them, seem to believe them, and clearly indicted the company who in my view have done a good job." Notwithstanding this acrimony, however, the contract was approved by the NLNG Board forty eight hours later in what Yusufu called a 'unanimous decision'. But questions are now being raised as to whether the letter was written and the contract awarded even before the Board meeting. Because the letter titled Nigeria LNG Limited 44th Board Meeting was dated September 23 yet the first paragraph of the letter to Etiebet with the prefix 'Dear Chief' read: "The Board of Nigeria LNG Limited has today, Saturday 24th September 1994, taken a unanimous decision to select the Consortium of Technip, Kellogg, Snamprogetti and JCC as the preferred main contractor, and immediately to enter into further negotiations with the consortium, to be concluded by mid-October. The two consortia have already been informed accordingly." Now that French investigators are after Tessler, he not only seems to be cooperating, he is said to have provided a lot of information about the dirty deals in the Nigerian oil and gas sector of which he is an authority notwithstanding that fact that he has only been in the country once and even that was more than two decades ago. Curiously, Tessler had his hands in other lucrative oil deals. He was the same man who fronted for Etete to buy the juicy Block 256 for a mere $8 million from Sherwood Petroleum in January 1999 during the General Abubakar Abdulsalami era. When Obasanjo took over three months later, he seized the oil block and sold it to Ocean Energy for $240 million, a decision that did not go down well with Etete and his now subject of litigation. But the former petroleum Minister who was once in the news for keeping two lions in his personal zoo has said he is above corruption. His affidavit was deposed to by one Martin Emil Buchner, Notary Public of the city of London and elsewhere in England who attested that: "The signature set to the hereunto annexed document is genuine, the same having been this day subscribed thereto in my presence by Dauzia Loya Etete, born on 10th January 1945, who identified himself to me by means of his Federal Republic of Nigeria Passport No. A2114294, issued on 14th November 2003." Etete's own statement was titled The Case of Alleged Bribery Against TSKJ (RE: NLNG Project) and it reads: "Mr Chairman, House Committee on Public Petitions, Abuja. You may wish to recall that I was appointed to the office of the Hon. Minister of Petroleum Minister by the late General Sani Abacha in March of 1995. You may also recall that this NLNG project has been handled by some previous Petroleum Ministers and Secretaries of Petroleum. In fact at the time of my appointment as the Hon. Minister of Petroleum, this project has already gone through both tender pre-qualifications, the so-called international open tender bidding which was handled and managed by Shell in their Hague head offices in the Netherlands. The negotiations, selections and award of the contract to TSKJ was in 1987. The signing of the contract took place in London, UK, the records are there for anybody to see. Now, when I came into office, I met the NLNG project at the stage of implementation. It is also correct to say that different Boards and top Managers have handled this NLNG project at different times. "Let me be very categorical and be very firm to say here as follows. There has never been a time that any one or group of persons has come before me in private or in my office as the Minister of Petroleum resources to discuss more to be given to me or anyone in government. My late boss neither discussed this issue of bribe taking with me nor did he instruct me to do so. No one from Shell or Halliburton (TSKJ) has approached me to offer me bribe for any contract. Nobody from the shareholders has approached me for this same reason either. I guess that as you make progress with your investigations into this matter, you may discover the truth that I was not involved in this matter. "Finally, if anyone persons contradict me on this my statement and you need any clarification, please do not hesitate to contact me. I wish you the best in your investigations. Based on the above: I Dr. Dauzia Loya Etete has never been involved in any discussion or negotiation for kickbacks or bribery with anybody or group" he concluded. From what has been revealed about the LNG contract award and how bribes were allegedly given several officials by Tessler, it is easy to see how rent seeking destroys the oil industry. This much was confirmed by a top official of the NNPC though while discussing a different issue yesterday. THISDAY had sought to know the reason that informed jerking up the turnover requirement from $500 million to $5 billion for companies importing fuel, a decision that has edged out several Nigerians and he replied: "Which people have been edged out? What happens essentially is rent seeking and I can assure you that since we adopted that policy, we have had some peace. Most of those people who were getting those licences were young boys with no visible means of livelihood yet were making millions of dollars and pounds just because their father or mother could peddle influence." The NNPC official argued further that it took gut to take the decision because it was one of the avenues by which Nigeria was being milked by many Nigerian politicians and their so-called foreign partners. "It took a lot of courage and a man like Funso Kupolokun to do that because they could not do it in the past. If he too wanted to continue the old regime, it was an easy way to make Chief money as many unscrupulous officials do but the man had to put his foot down to say 'thus far and no more' and I believe Nigeria should salute him for that. Of course some people are unhappy because their source of cheap money is gone but Nigeria is the better for it." But even from the way things are today, rent seeking is so entrenched in the Nigerian oil sector that it would take some time before a new culture becomes the norm. And as the LNG bribe investigation and the court case continue in France, there are indications that many more Nigerians, especially within the public service may run into problems As the investigation and drama continue, not in Nigeria but in France, (because the relevant authorities here, including the Economic and Financial Crimes Commission, have not done much to unearth what happened), Nigerians may yet have an idea of where the oil revenues have been going. But in this first part of our series into the saga, we bring you one of the court proceedings involving the testimony of Tessler and the letter of Etiebet to the House Committee which sources hinted at the weekend may open other Pandora boxes on the scandal that will not go away...


'How I Paid Out Money to Etete and Others'

'How I Paid Out Money to Etete and Others'
In this court proceedings, Jeffrey Tessler, the consultant at the centre of the $180 million bribe scandal involving Halliburton and the NLNG contracts reveals how he pays out money to several Nigerian public officials and politicians in what has become a glaring evidence of monumental corruption. Excerpts:

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Did not the awarding of these concessions granted to MALABU depend on Chief Etete as Petroleum Minister?

I don't know but I think he was involved. Judging by the time he took, he certainly wasn't the only one. Actually when negotiations started, Chief Etete indicated that these concession would be awarded fairly quickly, and I had absolutely no idea things were going to drag on until 1998. There was also a rather strange clause that we should have talked about last time, saying that the bonus payable to the Government would be $20 million.

What's the situation now?

I believe that in 1999 the concession of block 214 was cancelled, and subsequently awarded to a consortium including EXXON MOBIL, CONOCO-PHILIPS and I think AGIP.

Concerning block 245, its award to MALABU was reconfirmed by the new Government (led by Mr Abubakar) in 1999. In 2001, MALABU was again confirmed by Mr Obasanjo as the owner of parcel 245. Later the Government changed its mind and cancelled the concession made in favour of MALABU. Since that time there has been an arbitration process involving the new Government and SHELL which is the new holder of the parcel.

Chief Etete asked me if I could act on behalf of MALABU in proceedings against the Federal Government and perhaps against SHELL. I refused. It is a rule of mine never to be involved in proceedings against the current Government.

Are you not personally involved in these proceedings owing to the fact that you bought 5 per cent of the shares and are in fact in possession of 40 per cent of the shares in MALABU?

It's a rule of mine, I don't want to be involved in litigation against the current government which might turn into litigation of a political type, and in any case my role as a consultant for TSKJ is more important to me than the investment in MALABU. It would hardly be appropriate for me as a consultant to TSKJ to be involved in litigation of a 'political' nature. Between 1999 and 2001 it appeared that Chief ETETE was the owner of the whole of MALABU. I had nothing to do with his acquisition of shares from the shareholders who had them. I believe that by 2001, perhaps a year or two earlier, he himself claimed to be the owner of MALABU. This information came from the press.

The Judge: Let us return to the bank accounts used by Mr Etete. Apart from the PAPA account opened in the name of Buzaki Etete, which was credited with $296,542 in the first quarter of 1996, two other accounts opened in the name of Dan Etete were credited with the following payments from the TRISTAR UBP account:


$482,795 between July 1996 and February 1997 (Credit Suisse account no. 2300095 in the name of Omoni Amafegha (D319)


$500,000 on 10 February 1998 (Banque HOFFMAN account no. 12423 in the name of Omoni Amafegha under the code name PAPA (D320).

Do you contest any of these payments?

No. My reply is the same as before.

That represents nearly half of the $2.5 million. Did you pay any other sums into other accounts in favour of Mr Amafegha account number (D 311/15)?

I thought I was paying these sums into Mr Amafegha's account, and that was confirmed when I learned later that Amafegha was listed as a shareholder of MALABU. As I said, and I have tried to be as clear as possible, my belief was that Mr Amafegha was not the same person as Etete, I paid the money into Amafegha's account but the account details were supplied to me by Etete.

Mr. Etete stated on 24/04/2003 (Page D 260) that the MALABU company, of which he was the legal representative, had owned block 245 since 1997 or 1998, in other words since a time when he had been Petroleum Minister. Is that the block which you acquired?

MALABU had owned two parcels, block 214 and block 245, I think since their concession in mid-1998. The register of shareholders presented to me showed that Mr Amafegha held 30 per cent of MALABU and in fact 70 per cent was held by Alu Mohammed whom I knew personally.

Alu Mohammed is a relation of another of my clients, Wakili Adamu. Alu Mohammed was chairman of Bulkship Nigeria limited and chairman of the Nigerian Shippers' Alliance. He was an independent, apolitical businessman. Mr Wakili Adamu had for a while been chairman of the Chamber of Commerce.

Towards the end of 1998 there was a reorganization of the shareholders but I still think that Alu Mohammed was the majority shareholder at the end of 1998. In 1999 MALABU lost parcel 214 but retained parcel 245, as was reconfirmed in 2001. The discussions I had with Chief Etete concerned the purchase of part of Amafegha's 30 per cent holding in MALABU. These shares thus included rights over parcels 214 and 245.

During the discussions I had with Chief Etete in 1995, 1996 and 1997 I was unaware of MALABU as an entity. The object of the discussions was the acquisition of rights and titles to these parcels. I didn't know how many parcels would be allocated, I thought there would be at least one but I didn't know there would be two. So far as I can remember I paid $2.5 million during 1996 and 1997, but perhaps I didn't pay the whole of this sum.

In return, I received documents transferring 40 per cent of the MALABU shares to me.

Today I also hold transfer certificates relinquishing MALABU's share of the parcels then known as 214 and 245.

Are they blank transfer certificates?

No, they're made out by MALABU to the order of EXXON MOBIL. MALABU sold 40 per cent of its shares to EXXON MOBIL in September or October 1998. I have retained these original documents to protect my investment.

Why are the shares made out to EXXON MOBIL when the payments were made by TRISTAR?

Only a big company like EXXON MOBIL could develop the project, To the best of my memory, I think I agreed to pay $2.5 million but it's possible I haven't paid the lot.

Are we really to believe that you can't remember whether you've paid half the sum or all of it?

The figure in my mind is 2.5 million.

Have you checked since last time?

I can't verify it in a real or effective way. I don't know who the beneficiaries are. It is possible that that's all I paid.

Can you verify before the next session the exact amount you paid into the accounts whose details were supplied to you by Mr Etete?

I will do my best.

The TRISTAR account was credited in the first instance, between 27/12/1995 and 1/03/2000, with $59,960,000 in a series of payments from LNG Servicos carrying the reference numbers 5 to 52 (the first few payments having no reference numbers). This total corresponds to the one specified in the first TRTSTAR contract signed on 20/03/1995. Is that correct?

I think there were sixty payments which represent a total of sixty million dollars for tranches 1 and 2. Some payments, I think, credited accounts at UBP Geneva and HSBC Monaco.

The second contract was signed on 18 March 1999. A whole series of payments was made between 30 March 1999 and 30 June 2000 into the UBP Geneva account carrying references that start at 101 (101 to 117). Do these payments which represent over $15 million correspond to the second contract?

That ought to be the case.

The Judge: If we look at payments 101 to 114 and compare them with the amounts debited to Mr Stanley's AMAL, we can see that the percentage stays constant at 3.0769 per cent. How did you decide on that percentage?

I didn't pay 3 per cent, I believe I paid $380,000.

The Judge: I will rephrase my question. How do you explain the fact that on twelve occasions the amounts retroceded to Mr Stanley are equivalent to 3.0769 per cent of the payments received from LNG Servicos in execution of the second contract signed on 18 March 1999?

I don't know why that percentage. I settled on the basis of a systematic percentage. If you multiply 3.0769 by 32.5 you don't get the amount that I paid. That wasn't what I paid.

Did these payments continue to be made?

No, they stopped in 2000, I believe.

Why?

There was no reason to continue them. In the matter of the acquisition of shares I dealt solely with him, in the matter of the parcel itself I had dealings with a large number of people.

You never had any dealings with the vendor?

Not directly. The conditions negotiated for these rights and shares were either negotiated by or suggested by Chief Etete alone.

Why?

Because I expected him both to recommend a vendor to me and to recommend me to the vendor.

In what capacity did you approach him?

A lot of people were approaching the Minister at that time to be allocated parcels, something that would normally have come under his Ministry's jurisdiction. I couldn't buy a whole parcel but I wanted to own an interest, albeit a minority one, in a company that might get a parcel allocated to it, because at that time there were a lot of parcels going to be allocated. They were deep-sea offshore concessions likely to become viable.

Did it seem normal to you for the Petroleum Minister in person to give the details of a corrupt Swiss numbered account into which you yourself were to make payments in the context of this transaction?

He didn't make it clear during the initial talks. It was after the discussions and negotiations, which went on for months and during which we met in London, that he gave me the details of that account. I think he gave them to me in London. We also had telephone conversations because we used to talk about a lot of things including fraud, which I was investigating for him.

He told me that the account in the name of Mr Amafegha was the one into which I was to pay funds in intermittent fashion, but later the accounts changed. In the first place he must have given me the details of the account you mention, and in the course of later discussions he gave me the details of other accounts, still in the name of Mr Amafegha.

When I asked you who had given you this account number, you replied: 'if it's the person I'm thinking of but can't remember, it should be Mr Amafegha'. Why do you now say that it was Chief Etete who gave you the account number?

I've never met Mr Amafegha and I thought I was paying these funds to Mr Amafegha. I will try to be perfectly categorical. I always believed that I was paying funds into Mr Amafegha's account. I believed Mr Amefegha to be a real and very distinct individual. Chief Etete informed me that Mr Amafegha wasn't him. The details of Mr Amefegha's account were communicated to me by Chief Etete. The negotiations and discussions that I had concerning the parcels were always, from the start, with Chief Etete.

Why didn't you declare in the previous session that it was Chief Etete who had given you that account number?

Because at the beginning of the discussion you indicated that there would be another meeting.

The Judge: According to Mr Gory all he knew about TRISTAR and about yourself was what he had been told by Mr Chodan whom we now know to have been being paid by you.

Mr Tesler: I would be surprised if Mr Gory were content to base his opinion on what Mr Chodan might have said to him about the effectiveness of my work and the services provided by TRISTAR since 1994 and between 1995 and 2003. The services provided by TRISTAR after 1995 were, I am sure, well known to all partners in the joint venture, including in particular the opening in 2003 of (trains) 1, 2, 3, 4 and 5.

The Judge: Exactly. Mr Gory has clearly explained that the key individual, who represented both KELLOGG and LNG Servicos and managed the interface between TRISTAR and the partners in the joint venture, was Mr Chodan and no one else.

I can't speak for Mr GORY but I should have thought the successful opening of (trains] 1 to 5 would have been the key factor. I believe that TSKJ didn't just bring me in as a consultant, there were other people, Mr B. PATEL was present at the meetings with TECHNIP and other shareholders, so it's difficult for me to believe that Mr Chodan was the only conduit leading to my nomination and giving details of my work.

Did you inform other people at KELLOGG, and the other partners, of the fact that you had been paying Mr Chodan through a Jersey account?

No, I didn't do that.

Why?

I believe that's Mr Chodan's business.

You paid Mr Chodan without the knowledge of LNG Servic,os and its associates?

It's absolutely correct that I didn't inform LNG Servicos.

For what services did you pay Mr. Chodan?

Mr. Chodan introduced me to more than twenty possible sub-contractors able and perhaps willing to work on the main project and, as was mentioned earlier, I worked with potential and actual sub-contractors on this project for my own greater good. It's been a nice little earner.

When we look at the TRISTAR account chronologically (D 305/1) we note that very often the payments made into the account originating from LNG Servicos are followed by regular payments to Mr Chodan. These payments are not isolated. Very often, a sum equivalent to twice the payment to Mr Chodan is paid into the AMAL account. Who is the beneficiary of the AMAL account?

I don't know exactly, I think something like the FIDES TRUST.

I didn't ask for the name of a financial establishment or accountant, I asked for the name of the actual beneficiary.

I don't know.

You don't know the name of someone you're paying twice as much as Mr. Chodan?

I don't know. I believe that the final recipient of the FIDES TRUST account is Mr A.J. Stanley. I hesitated to mention it, I wasn't inclined to disclose it before because of his links with KELLOGGS. Mr. Stanley is a senior executive of KELLOGGS. I had negotiated currency exchange agreements with him between dollars and Nairas. I've known Mr Stanley since 1994 - 1995. I think I met him in London around 1994 or 1995 to discuss the LNG programme. He was introduced to me by Mr. Burerll and Mr. Chodan. Mr BURREL is a member of KELLOGG. He had a job similar to Mr. Chodan's. I think Mr. Burrel is of higher rank than Mr Chodan. I've known Mr Burrel since the time of NAFCON in 1992-1993. He was already there with the title of Africa director, executive vice-president Middle East and Africa.

Mr Chodan would have been responsible for a sector in the same area as Mr Burrel but on a lower level. I've known Mr Burrel longer than Mr Chodan. Mr Stanley is above both of them. He's chairman of KELLOGG. I believe that all the company bosses went to Nigeria once a year to meet General Abacha. The purpose of these meetings was to discuss the project's stage of advancement and the future. I believe they perhaps went twice and saw General Abacha twice. I think on one occasion they had a meeting with Abacha and he didn't turn up, which caused me a lot of trouble.

How did you go about arranging these meetings with General Abacha?

It was never me who organized the meetings, not myself. I used to talk to the Chief of 'Staff, I believe at the time it was Mr Abdullahi Mohammed. At first, in 1995 and then in 1996, I managed to organize one of the meetings through Mr D. Yussufu.

Was that the same Mr Yussufu to whom you gave $75,000 in two payments made on 25/02/1997 and 11/08/1998 which we mentioned yesterday?

Yes, it's the same man.

What were the links between Mr Yussufu and General Abacha?

Mr. Yussufu had known General Abacha very well since the time when he occupied a senior post in the police, something we were talking about yesterday. He told me he knew him personally. Mr Yussufu told us the best way to obtain an audience by saying that the consortium ought to write to the Presidency and the President's office offering to come and see him to talk about the project's state of advancement and all related matters. I thought I understood what happened. Someone in the joint venture wrote to the presidency and the president's office answered giving a date for the meeting. I'm sure Mr D. Yussufu followed the exchange of letters and made sure the correspondence stayed on the rails. Visits of this sort continued from 1995 to 2003 and the team asked to see the President every three years more or less.

So far as the present head of state is concerned, I think they saw him in 2002 and these meetings have always been obtained in the same way. I would talk to someone important, I'd ask if it was possible for someone from the joint venture to meet the head of state, the protocol stayed the same with different people according to the administration in place.

In 2002 for example, I asked the Chief Executive of the NNPC to set up a meeting between the bosses of the joint venture and the head of state. The meeting took place in 2002. We talked to him about [trains] 4 and 5 and the, plan for (train) 6. I believe there were two meetings in President Abacha's time and one meeting with his successor Abdulsalami Abubakar and one with President Obasanjo. I seem to remember organizing another meeting with Abubakar in New York when he was passing through New York and I organized that meeting through the Nigerian Ambassador to the US. That must have happened between June 1998 and June 1999 when all the heads of state were at the UN.

It was certainly afterwards. The deputy MD of each of the two firms was also present. There was Mr Krammer, it's possible Mr Krammer came to the meeting with Mr Abubakar, I used to have the photocopies of passports people needed to attend those meetings. Two or three of the companies would be represented each time, as no one really trusted anyone else's account of the facts. I think that when Mr Krammer had high-level responsibility for this project at TECHNIP he used to come to these meetings himself, but I'm not sure he went to the meeting with Mr Obasanjo

Did you live in Nigeria?

No.

Have you been to Nigeria?

Just once, in 1983 or 1985. But I've worked with Nigeria permanently since 1977, in fact on a daily basis. At the time by telex, by telephone and Nigerians would come to see me in London on a regular basis. I've given advice to Nigerians on all levels. They came to London regularly, it's a former colony. Hardly a day passes without my seeing one. London's their second home.

In 1956, at MARUBENI. I had dealings with Mr MATSUDA, Mr Endo and Mr Tida.

Why did you pay Mr MATSUDA $1,190,000 in payments made between 1996 and 2000?

He was a sub-consultant, he was my consultant on LNG. He worked for me.

Why did you on 9/10/1996 immediately repay to Mr MATSUDA $404,000 of the $424,000 you had received on 4/10/1996 from the company that was none other than his employer?

There's absolutely no connection.

Weren't you helping Mr Matsuda to embezzle $400,000 from the MARUBENI company?

No, the two are unconnected.

Just a fluke?

To the best of my knowledge, I don't see any link between the two things.

When Mr. Matsuda got the $404,000 he didn't know his company had just paid you $424,000? What were the other regular payments to Mr. MATSUDA for?

Mr. Matsuda used to go to Nigeria. He used to provide me with intelligence, information on Nigeria and more particularly on the gas and oil sector in Nigeria. He used to send me stuff every day, press articles, on the situation in Nigeria, that lasted four years.

We had agreed on a figure that I would pay over the duration of the contract. The $404,000 were part of the total. I paid an agreed amount, I think it was around a million dollars spread over four years, and I paid in proportion with my revenues.






Monday, October 11, 2004

DEVASTATION, WHERE WE HAVE LIVED

DEVASTATION, WHERE WE HAVE LIVED

By Jane Toby

DEVASTATION, WHERE WE HAVE LIVED.
?Havoc to where we ounces lived? of Jane Toby
from FON Newsletter, Spring 2000?
Translation of Nadia Scardeoni

The Nigeria of years sixty does not exist more. Of the communities once it has been made massacre.
My per diem one describes the life to Benin from 1964.

The children come from we and entirety we eat pears under l?albero and we suck the fruits dell?anacardio.
Way between the trees ricolmi of fruit with the young Patience and she interlaces my hats.
While way towards the school, is called from one house in order to repair me until the end of the rain with all the family. A child in the grembo puts me -- tender quiet brown and - dressed with a perline thread that encircles it to the life. Then, the mother wraps it in the cloth, alloy the child to the shoulders, and it continues to sleep, he does not cry while it steps on the sweet potato and softens the garri.

In our days Immaculate - ventisei years - Ogoni of the Niger Delta, producer of oil, writes from an encampment of profughi:
While we cultivated the earth, and I was still small, the earth was thick and black. Hour seems sand. The puttinges do not grow. The cassava he was large, two persons pulled it from the earth. Hour the cassava much food is small... not c?è. On our earth... a great iron oil pipe-line is looked at. If it bursts... it sees the crude oil. To times it slides in the cunetta. To times on the earth. When we were children we painted the face with that oil. Not we knew that it was a great evil therefore for we?

The oil has been uncovered in 1956 to Oloibiri, to 90 km to the west of Port Harcourt. L?esportazione is begun in 1958. Great amounts of oil have begun to flow from 1965. Today the State of the Nigeria is the fifth producer dell? OPEC and the greatest dell?Africa with its 95% of exports. A third party of oil of the Nigeria is boarded for Stati-Uniti but from the years the sixty Nigeriani is becomes to you more and more poor.

To Sapoba, c?è a deep, clear river, that it flows quickly; the persons who live sull?isola go and come with the canoe. Rain and immense tranquillity reign in the green forest. The women chinano like dancers, levano water from the river and raise the water jugs of zucca on the head. Here we rest ourselves, listening to nothing other that the crepitìo of the rain on the roof of pond.
The rain that door the attended coolness, a lot to along.

From the moment in which and? l?industria NATO of the oil in Nigeria, the oil societies have misused dell?ambiente, threatening the life of the persons, dell?acqua and of the earth. Every 24 hours, 400 barrels of crude oil end burn to you, 75% of gas come wasted.
Hundreds of trillions of dollars of crude oil have been extracted from the Niger Delta. But seven million inhabitants of the Niger Delta are between poor of the Nigeria and deprive of the fundamental resources. The disparities are much obvious in the regions where the gas eruptions illuminate the sky night and day. ?Un strongly boom and a large column of smoke hits l?area with gases and the intense heat. The night is swallowed in the strange and intense light. The rain acida hits the roofs of pond one or two, destroying them in years. Not c?è drinkable water. The increase of the puttinges and? arrested?

L?Ufficio of the public relations of the east unit of the Shell Nigeria denies to have brought damages the community and asserts that the local residents can dry their cibarie - without to pay! - putting them beside gases it sets afire to you.

After the school, I return to long house the red path dell?argilla where some family lives. To times I see a mother that she washes its children, pouring l?acqua from a bucket over the small bodies. On the shoulders door a child. Them salute: Koyo, Omomo. The face of the mother is increased in a smile, takes my hand and it tightens it; china the head and anch?io chino mine. Welcome, welcome. Polli and the black goat with its goat one walks with me along the path. People make signals and she calls to me: Onybo. (That is: peeling, white woman). And the children me run encounter and they touch to me.

The oil pipe-lines - someone has beyond 40 years of age - cross the countries and the fields; many are outside of the earth. In Ogoni they pass of forehead to the houses. The rusted oil pipe-lines grow tall until all?orizzonte in Umuechem. The chronic disattenzione to the maintenance cause constant losses of liquid and disasters. In average, in the Niger Delta, at least three deposits of oil to the month are recorded.
In the june of 1998, an oil pipe-line (of 16 inches) of the Shell, of which it was known makes it, has poured 800,000 barrels of crude oil on the fields near Otuegwe. Successive Nell?ottobre, more than 1.000 persons has been hit from mortal ustioni them when an oil pipe-line of the NNPC (Nigerian National Petroleum Corporation) is exploded to Jesse, neighbor to Warri.

Patience, runs to me next in its dressed of flowers brown and the children play in the earth with lean only little yellowed pezze. We walk along the red clay roads and the children dance and laugh and clap the hands, happy and spensierati.

Friday, 17 september 1999, to the Shell Ughelli West Flow Station has been notified the escape of an oil pipe-line. The responsibles of the Shell have identified the escape point, have promised to return later that same day. To the 4 of morning, c?è be un?esplosione. People ran via from the houses, urlando and crying. L?incendio was spreaded everywhere.

A day comes Charity from its country until house ours. Me door the fresh eggs and two walnuts of coconut, I give the oranges to them dall?albero that grow in our courtyard.

Problems of respiration, cough with blood, diseases of the skin, tumors, disturb gastrointestinal and cancer is the newer diseases today in the villages of the Niger Delta. Kwashikor? and other diseases of the malnutrizione - they are scattered ovunque because l?industria of the oil it contaminates l?acqua and the earth. The small farms are failing, the palm trees do not give fruits, the fish are in extinction, the women cannot nourish their families, cannot send the children to school, cannot allow the medical cures. Many are forced to the prostituzione. Nevertheless these same women mobilitano entire communities in order to make demonstrations and to give voice to the claims against the oil companies.

The protests for the dell?ambiente protection are intercrossed with orrendi abuses of the human rights. L?organizzazione Human Rights Watch has found frequent cases in which the persons came brutalizzate why they have tried of esternare theirs you protest to the oil Societies. Agents of emergency have threatened, beaten and put in prison the members of the delegations of the communities that they tried to protest.

In December 1998, 5000 coming from Ijaw young people from 500 communities of the Niger Delta are themselves meet to you to Kaiama in order to discuss about their serious difficulties. The Declaration of Kaiama is risen some that more strongly demands for the local communities a voice that it represents them in order to discuss the development about the Delta. The Council of the Ijaw young people has been formed in order to coordinate the fight of the Ijaw people in order autodeterminar and for having justice. The Ijaws has been accused to foment putsches against the near ethnic groups.

Joined arms, the school boys, carry the books on the witness. The larger boys carry fratellini and the sorelline on the shoulders, as they make their mothers. Of night, the boys walk for the roads buie with emergency, with the saldezza that comes they gives the custom to embraces familiar, to feeling itself united.

Tertius, one student activist of 27 years and an associate of the Niger Delta Human Rights Organizaton (Organization for the human rights in the Niger Delta) has been interviewed after one manifestation: Many persons ran. She had herself to be escaped in order to save the own life, why the deliveries were to talk nonsense. Therefore we are run in the forest, we have gathered and we continued to defend to us. She was like being in war, an armed war between students without crews and soldiers?

From the moment in which the civil government of Obasanjo has been insediato, the abuses of the human rights continue and dell?ambiente.
?Non c?è a solo... watt of national or federal electricity, nothing convogliata water to means of pipages, a single federal road (22 km), nothing institutes of post-secondary education, and the primary and secondary systems are collapse to you. The alluviums infuriate in the region. Migliaia of persons is dispersed. The fields cultivate to you, the destroyed houses and schools, and c?è threat of epidemics for l?inquinamento dell? water.

In the september of 1999, nine activists of the group Essential Action, from Stati-Uniti are themselves bring in Niger Delta to you. The group has visited the communities that suffer caused dell?inquinamento give: Shell, Mobil, Elf and Agip, and have found that it had not been made un?adeguata pulizia of the losses of oil.
The residents dell?Umuebulu have explained as the Shell had acquired their earth promising to construct equipments for the workers; instead he has dug a great pit in order to unload to us within the toxic refusals. The near populations are affette from diseases of the several skin and other problems of health. Moreover to the delegates of the group Essential Action they have been documented the news on the extinction of some species of fish and the cassava, happened after l?avvento of the search of the oil.
?La Delta and? be snaturata from the incomplete plans, it abandons and not-functional puttinges in action without consultations or planning to you adapted to the life of the existing communities? it says a document from the United Nations.

L?Human Rights Watch believes that us its people not participerà to just the government could not be a solution to the conflict in the Niger Delta finchè.


--------------------------------------------------------------------------------

famous

Jane Toby, from New York, and? brought in Nigeria with l? Governmental organization LAST PEACE CORPS (Bodies of Peace) and has taught from 1963 to the 65 to the Eghosa Anglican Grammar School di Benin City.
The news of the brutal exploitation of the earth and the people of the Niger Delta has given origin to this return of the memory in the places where it had lived very other experiences of life sharing.
Dall?articolo DEVASTATION, WHERE WE HAVE LIVED of Jane Toby, the per diem one of the memory is ollowed to the report of the loss of the existence right of people.

Nadia Scardeoni

Ken Saro-Wiwa's Closing Statement To The Military Appointed Tribunal

Ken Saro-Wiwa's Closing Statement To The Military Appointed Tribunal


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Port Harcourt, Rivers State, Nigeria
My lord,

We all stand before history. I am a man of peace, of ideas. Appalled by the denigrating poverty of my people who live on a richly endowed land, distressed by their political marginilization and economic strangulation, angered by the devestation of their land, their ultimate heritage, anxious to preserve their right to life and to a decent living, and determined to usher to this country as a whole a fair and just democratic system which protects everyone and every ethnic group and gives us all a valid claim to human civilization, I have devoted my intellectual and material resources, my very life, to a cause in which I have total belief and from which I cannot be blackmailed or intimidated. I have no doubt at all about the ultimate success of my cause, no matter the trials and tribulations which I and those who believe with me may encounter on our journey. Nor imprisonment nor death can stop our ultimate victory.

I repeat that we all stand before history. I and my colleagues are not the only ones on trial. Shell is here on trial and it is as well that it is represented by counsel said to be holding a watching brief. The Company has, indeed, ducked this particular trial, but its day will surely come and the lessons learnt here may prove useful to it for there is no doubt in my mind that the ecological war that the Company has waged in the Delta will be called to question sooner than later and the crimes of that war be duly punished. The crime of the Company's dirty wars against the Ogoni people will also be punshed.

On trial also is the Nigerian nation, its present rulers and those who assist them. Any nation which can do to the weak and disadvantaged what the Nigerian nation has done to the Ogoni, loses a claim to independence and to freedom from outside influence. I am not one of those who shy away from proesting injustice and oppression, arguing that they are expected in a military regime. The military do not act alone. They are supported by a gaggle of politicians, lawyers, judges, academics and businessmen, all of them hiding under the claim that they are only doing their duty, men and women too afraid to wash their pants of urine. We all stand on trial, my lord, for by our actions we have denigrated our Country and jeapordized the future of our children. As we subscribe to the sub-normal and accept double standards, as we lie and cheat openly, as we protect injustice and oppression, we empty our classrooms, denigrate our hospitals, fill our stomachs with hunger and elect to make ourselves the slaves of those who ascribe to higher standards, pursue the truth, and honour justice, freedom, and hard work.

I predict that the scene here will be played and replayed by generations yet unborn. Some have already cast themselves in the role of villains, some are tragic victims, some still have a chance to redeem themselves. The choice is for each individual.

I predict that the denoument of the riddle of the Niger delta will soon come. The agenda is being set at this trial. Whether the peaceful ways I have favoured will prevail depends on what the oppressor decides, what signals it sends out to the waiting public.

In my innocence of the false charges I face Here, in my utter conviction, I call upon the Ogoni people, the peoples of the Niger delta, and the oppressed ethnic minorities of Nigeria to stand up now and fight fearlessly and peacefully for their rights. History is on their side. God is on their side. For the Holy Quran says in Sura 42, verse 41:"All those that fight when oppressed incur no guilt, but Allah shall punish the oppressor." Come the day.

The environmental and social costs of living next door to Shell

The environmental and social costs of living next door to Shell

'... SPDC [Shell Petroleum Development Company] always tries to minimise the impact of operations on the environment but also to ensure that local communities gain real benefits from having a Shell company as a neighbour.'21 _ Richard Tookey, former Head of Public Affairs, SIPC
While this report focuses on the record of Shell in the Niger Delta, it serves as an example of the way in which oil companies operate in different parts of the world. While oil companies' operations in developed regions are usually accompanied by environmental impact assessments, social and environmental policies _ and not to mention a great deal of effort to appease the justified concerns of local communities _ these practices are not exported to lesser developed regions where little or no media attention is paid and where accountability is unheard of.

In what is the largest exploration and production venture in Nigeria, Shell's subsidiary, Shell Petroleum Development Company (SPDC), operates a joint venture agreement with the Nigerian National Petroleum Corporation (NNPC)22. Shell's Nigerian operations have a capacity of one million barrels a day and its importance to Shell as a source of revenue cannot be over- emphasized.

But Shell's operations in Nigeria have been dogged by local unrest and criticism from communities within the oil-producing areas and drawn increasing condemnation from abroad.

Since the beginning of Shell's operations in the Niger Delta, the company has wreaked havoc on neighbouring communities and their environment. Many of its operations and materials are outdated, in poor condition and would be illegal in other parts of the world. The problems described here in Ogoni are indicative of the problems experienced by other communities along the Delta.


Gas Flaring
Many of Shell's gas flares are situated very close to villages, sometimes within a hundred metres of Ogoni homes. The company has been flaring at some sites for 24 hours a day for more than 30 years23.

But Shell, responding to criticism over gas flaring at close range, has stated24:

'... Flares are usually located far from human habitation and protected by earth bunds. When communities have expanded in the direction of production facilities, SPDC has taken appropriate action, including relocation of flares. There is no evidence that flares affect crops.'

Local reports present evidence which proves otherwise25:

'... Apart from physical destruction to plants around the flaring areas, thick soots are deposited on building roofs of neighbouring villages. Whenever it rains, the soots are washed off and the black-ink like water running down the roofs is believed to contain chemicals which adversely affect the fertility of the soil.'

Ken Saro-Wiwa, author and spokesperson for the Movement for the Survival of Ogoni People (MOSOP), argues26:

'The most notorious action of both companies [Shell and Chevron] has been the flaring of gas, sometimes in the middle of villages, as in Dere, (Bomu oilfield) or very close to human habitation as in the Yorla and Korokoro oilfields in Ogoni. This action has destroyed wildlife, and plant life, poisoned the atmosphere and therefore the inhabitants in the surrounding areas and made the residents half-deaf and prone to respiratory diseases. Whenever it rains in Ogoni, all we have is acid rain which further poisons water courses, streams, creeks and agricultural land.'

Concerning the close proximity of its gas flares, Shell argues that this is a result of communities expanding into the vicinity of oil operations. The company maintains that once this happens, gas flares are relocated away from populous areas27. However, the Ogoni maintain that Shell has never relocated a gas flare28.


Pipelines
Shell's high-pressure pipelines pass above ground through villages and criss- cross over land that was once used for agricultural purposes, rendering it economically useless. Many pipelines also pass within metres of Ogoni homes.

Responding to criticism of Shell's pipelines, Richard Tookey stated in 199229: '... You suggest that pipelines should be buried as a means of preventing pollution. Much of the area in which SPDC is operating is swamp, so burying pipelines could, in fact, exacerbate the risk of fractures and spillages. From time to time the positioning of pipelines is reviewed, especially when it is known that communities have expanded onto land neighbouring a pipeline, and if considered a hazard then the pipelines are re-routed.'

However, the Ogoni claim that their land is neither swampy, nor has a pipe ever reportedly been re-routed30. No consultation takes place at all: before or during pipe-laying.

But to emphasize further the fact that Shell does not apply the same standards worldwide, consider one of it's operations in the UK. For Shell's pipeline from Stanlow in Cheshire to Mossmoran in Scotland, 17 different environmental surveys were commissioned before a single turf was cut31. The company explains32:

'A painstakingly detailed Environmental Impact Assessment covered every metre of the route, and each hedge, wall and fence was catalogued and ultimately replaced or rebuilt exactly as it had been before Shell arrived. Elaborate measures were taken to avoid lasting disfiguration and the route was diverted in several places to accommodate environmental concerns ...'

This is a far cry from Shell's practices in Nigeria. The Ogoni have never seen, let alone been consulted over, an environmental impact assessment.

Greenpeace and other organizations have approached Shell to release environmental impact studies it claims to have conducted since 198233 so that a full and open analysis can be made of the extent of environmental and social damage. No impact studies have been freely circulated.


Oil Spills
The communities in the Niger Delta have been said to be 'groaning under the perennial destruction of their property and environment by oil spillages'34.

As early as 1983, the Inspectorate Division of the Nigerian Petroleum Corporation drew attention to the impact of oil on the Nigerian environment35:

'We witnessed the slow poisoning of the waters of this country, and the destruction of vegetation, and agricultural land by oil spills which occur during petroleum operations. But since the inception of the oil industry in Nigeria more than twenty-five years ago, there has been no concerned and effective effort on the part of the Government, let alone the oil operators to control the environmental problems associated with the industry.'

In one of the most recent spills in Ogoni, oil leaked from a Shell flowline for 40 days between July and August 199336 without repair, further contaminating Ogoni farmland. Shell argued that its engineers were unable to get into the area to repair the pipeline for fear of violence, but this has been vehemently denied by the Ogoni.

According to an independent record of Shell's spills from 1982 to 1992, 1,626,000 gallons were spilt from the company's Nigerian operations in 27 separate incidents37. Of the total number of spills recorded from Shell _ a company which operates in more than 100 countries _ 40% were in Nigeria38.

Concerning the Ogoni region, Shell has recently argued that in 1992, 60% of its oil spills in Ogoni were caused by sabotage39 and therefore no reflection of the company's operating standards. This is refuted by Professor Claude Ake of the UN World Commission on Development and Culture400:

'... nobody can say that most of the pollution in Ogoniland is caused by sabotage. In fact, as far as I know, what the Ogonis have tried to do is to put out the flares, which is something that importantly reduces pollution ... I think that this is the kind of irresponsible propaganda that the oil companies are putting out in order to discredit those who are trying to do something about the environment ...'

So far, we only have Shell's word that most of the spills are caused by sabotage since attempts to gain independent access to the area in order to investigate the situation have been unsuccessful. However, it is widely known that most spills occur throughout Nigeria because of malfunction or corrosion of equipment. According to the Nigerian Ministry of Petroleum Resources, there were 2,676 recorded spills between 1976 and 1990, with the largest single cause of spill in general _ 38% _ due to equipment malfunction, with sabotage only responsible for 18%. Corrosion of equipment accounted for 21% of spills. Sabotage only accounted for 3% of the total oil spilt in the time period41.

Similarly, according to the independent ten year spill record, only 4 of the 27 spills recorded from Shell's operations in Nigeria were due to sabotage. Corrosion, equipment failure, pipe ruptures and blowouts were the main cause of spillages42.

Finally, it is difficult to estimate the exact figure for spillage because many go unreported. This makes the call for a full and open assessment of the region all the more urgent, so that the effect of oil pollution damage and the causes can be measured.

Villages in the Delta are impoverished as a result of the depletion of healthy fish and poisoned drinking water43. A report submitted by the Rivers Chiefs to the World Conference of Indigenous Peoples on Environment and Development at Rio's Earth Summit in June 1992, stated44:

'Thus apart from air pollution from the oil industry's emissions and flares day and night, producing poisonous gases that are silently and systematically wiping out vulnerable airborne biota and otherwise endangering the life of plants, game and man himself, we have widespread water pollution and soil/land pollution that respectively result in the death of most aquatic eggs and juvenile stages of life of fin-fish and shell-fish and sensible animals (like oysters) on the one hand, whilst, on the other hand agricultural land contaminated with oil spills become dangerous for farming, even where they continue to produce any significant yields.

'Apart from the basic fact that contaminated soils are rendered relatively but seriously infertile and polluted, sometimes for at least 30 years, the farmers and fishermen who have thus been dislocated then observe with great anger the extremely wide gulf between the lifestyles and incomes of oil-industry workers and themselves rendered economically impotent by the same oil industry: confrontations and anger in the oil producing areas occasionally explode into calamities.'


Oil Waste
Open and unlined pits for storing drilling waste are reported to litter the area48 This contradicts Shell's claim that the company builds access roads as part of its community assistance programme49.


Community Assistance
'Shell companies throughout the world have wide-ranging programmes of community involvement and sponsorship.'50 _ Shell and the Environment report

The people of the Niger Delta, who now live in a polluted environment, claim they have received precious little in return for living with Shell and dispute both the quantity and quality of community assistance.

Vast amounts of money have been generated from oil production in the region. From 1970 to 1988, the Federal Government received a total of $183.1 billion from oil extracted from the Delta51. From the Ogoni region alone it has been estimated that Shell has extracted over $30 billion of oil52. Although Shell maintains that it has operated a community assistance programme for over 25 years53, the money spent on community assistance during the same period has been estimated at only $200,00054 or put another way: just 0.000007% of the value of oil extracted.

One of Shell's first operations was in the town of Oloibiri, Rivers State. In 1990, a BP engineer remarked55:

'I have explored for oil in Venezuela, I have explored for oil in Kuwait, I have never seen an oil-rich town as completely impoverished as Oloibiri.'

The Nigerian government is supposed to direct 3% of its oil revenue back to the communities where the oil is produced. However little, if any, of that money has reached those in need of it. Even Shell has admitted as much but maintains that it is beyond the scope of its business activities to influence the government56. The Ogoni see it differently. They see Shell as a multinational company, supported by the federal government, which was influential enough to "persuade" the government to increase the oil revenue royalty from 1.5% to 3% in 198257, but unwilling to ensure that this money is made effective use of.


Compensation for Land
Another criticism of Shell is that the company has failed to compensate landowners adequately, if at all. Shell maintains that58:

'The company has never acquired land without paying due compensation or obtaining approval of landlords.'

However, it is widely reported that when Shell acquired land in the Delta, it paid for the crops growing on the land but not the land itself59. Furthermore, Shell and other oil companies negotiate land settlements with illiterate villagers who are not in a position to specify proper terms and conditions.

A Judicial Inquiry, following the Umuechem disaster (see page 18), in which 80 innocent villagers were massacred at the hands of the Mobile Police Force during a protest against Shell, concluded that60:

'What Shell Petroleum Development Company of Nigeria Limited is under obligation to do is to pay adequate compensation for lands acquired for oil operations and for crops and economic trees on such lands; to pay adequate compensation for pollution of water, rivers and streams by oil spillage and such other liabilities as may be stipulated by law ...

'Their streams get polluted with the disposal of waste products from oil operations rendering the river void of fishes ... their farm crops planted on the remaining areas of farmland get damaged by oil pollution; their economic trees are hewed down; their economic situation bites and there is no help for them. These deprivations without any compensatory benefits, cause frustration ... The compensations paid for these deprivations are just pittance, meagre pittance, on which people cannot subsist for even six months and they become frustrated with life ..'