Probe ordered into Namcor fuel deal

15 July 2020 | Energy



Public enterprises minister Leon Jooste has confirmed an instruction to the National Petroleum Corporation of Namibia (Namcor) board to investigate allegations that the parastatal is overpaying for the fuel that it procures from Swiss firm Gunvor.

According to a source at Namcor the parastatal's contract with Gunvor is in the region of N$28 to N$45 million. Gunvor has been embroiled in several international controversies, including in acts of corruption in Congo-Brazzaville and Ivory Coast, where it was reported that bribes of tens of millions of dollars were paid to public officials in order for the Swiss company to obtain oil shipments.

Jooste said he had initially asked the Anti-Corruption Commission (ACC) to investigate the matter.

“I received information on this and forwarded same to the Anti-Corruption Commission for investigation. The ACC replied by stating that this should be investigated by the board and I subsequently instructed the [board] chairperson to ensure that this is being done,” Jooste said.

The minister said he had thus asked the company's board chairperson, Engelhardt Kongoro, to investigate the claims.

A company insider also informed Namibian Sun that the state fuel company was overpaying for fuel without a contract in place.

“We have been buying fuel from that company but it seems that there is no contract in place. It looks like Namcor is buying fuel from the company at a higher price than usual,” the source said.

Procurement rules flouted

According to the source, there had been abuse of procurement policies that favoured it buying the fuel from Gunvor, allowing the state-owned entity to flout aspects of the Procurement Act.

“We have been abusing the restricted procurement process. Gunvor always comes out as a winner,” the source alleged. The restrictive bidding documents relating to Gunvor's procurement history also do not appear to have been published on the Central Procurement Board's website, as is required by the Public Procurement Act.

“The contract has been with Gunvor for over a year. This contract was supposed to have been reviewed by the Central Procurement Board but we manage this internally,” the source said.

According to the source, the contract is believed to be in the region of N$28 to N$45 million.

The company is said to have benefitted from the bid since August last year, insiders said. Officials say no due diligence was carried out in relation to this company, as is required under restrictive bidding processes.

The Swiss company is also allegedly earmarked to store its fuel at the N$5.6 billion Strategic Fuel Storage facility at Walvis Bay, from which it envisages supplying fuel to the Southern African market.

Gunvor Middle East DMCC, a subsidiary of the holding company, has been provisionally selected as fuel storage partner in the multibillion-dollar facility still under construction.

Strange bedfellow

Reuters reported in October 2019 that the Gunvor had been found criminally liable for corruption in the Republic of Congo and Ivory Coast.

It was the first time in Switzerland that a major trading firm had been found guilty on such charges, Swiss campaign group Public Eye said. It published an investigation into the deals in 2017.

“The Geneva commodities trader has been convicted of failing to take all the organisational measures that were reasonable and necessary to prevent its employees and agents from bribing public officials in order to gain access to the petroleum markets in the Republic of Congo and Ivory Coast,” a statement from the Swiss attorney-general's office said.

A former employee of the Geneva-based trader was sentenced to a suspended 18-month prison sentence for acts of corruption in Congo-Brazzaville and Ivory Coast.

Bribes of tens of millions of dollars were paid to public officials in order for Gunvor to obtain oil shipments, Public Eye reported.

The facts documented by the Office of the Attorney-General of Switzerland (MPC) confirmed the findings of Public Eye's investigation, that the employee did not act alone. Even CEO Torbjörn Törnqvist gave his approval for a Congolese public official to be hired as an intermediary.