In October 2022 the Federal Republic of Nigeria (“FRN”) made a bid to claim compensation from Glencore Energy (UK) (“Glencore”). The oil and commodities trading company was convicted of bribery that occurred in Nigeria and four other African nations. Lawyers for the FRN were seeking to address the court at Glencore’s sentencing hearing after the Serious Fraud Office (“SFO”) declined to seek a compensation order on the country’s behalf.
Case Against Glencore
In June 2022 Glencore was convicted of seven counts of bribery to gain preferential access to oil in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan. Following an investigation by the SFO that began in 2019, Glencore pleaded guilty to all counts and was fined £280,965,092.95, the largest ever financial penalty for an SFO case following a conviction.[1] The case was also significant in that it was the first time a company has been convicted of substantive bribery offences (specifically making bribes contrary to section 1 of the Bribery Act 2010) rather than failing to prevent bribery (section 7 Bribery Act 2010).
Of the seven counts two related to Nigeria – one concerning bribery being committed in the country and one regarding the inducement of Nigerian officials. In Nigeria, Glencore was found to have used local agents to funnel bribes to officials of the Nigerian National Petroleum Corporation (“NNPC”) in order to be awarded advantageous quantities and grades of crude oil .[2]
Nigeria Seeks Order
Ahead of Glencore’s sentencing, the SFO had advised the FRN via letter that they would not be seeking a compensation order in its favour. Subsequently, lawyers for the FRN notified the court that they intended to apply for a compensation order. The SFO challenged this, claiming that the FRN had no standing to be heard in court. However, the Mr Justice Fraser agreed to hear FRN’s representations de bene esse and a hearing was held on 26 October 2022.[1]
The FRN’s submissions were that the SFO had to refused to engage with the nation on whether it was a victim of Glencore’s offending at all and, if so, how the harm caused could be compensated. Focussing on the two counts that relate to Nigeria, it was clear that the FRN had suffered as a result of the corruption. The FRN also argued that the SFO was overstating the difficulties in assessing quantum for compensation and that it would not be impossible for the Crown Court to asses. FRN also made a general plea for justice and for some of the funds to go back to the people of Nigeria instead of benefitting the UK by way of the Consolidated Fund.
The SFO’s position was that the amount of compensation could not be easily ascertained and, due to the nature of the offending by Glencore, calculating compensation would be extremely complex. It was also not possible to identify any entities that had suffered quantifiable loss that could be compensated. The SFO submitted that in cases such as this, claims by third parties that they have suffered loss are better dealt with in civil proceedings where causation, liability and loss can be properly assessed.
Decision of the Court
Mr Justice Fraser concluded that the FRN did not have standing to apply for a compensation order. He noted that the Sentencing Act 2020, which provides for compensation orders, states that a compensation order must specify the amount to be paid under it. Additionally, the amount must be what the court considers appropriate after having regard to any evidence or representations made by or on behalf of the offender or prosecution.
The judge decided that, as a matter of statutory interpretation, third parties have no standing to make representations about a compensation order. He stated that “the Crown Court is not a suitable venue for hearing representations from the wide range of victims (or those who submit they are victims) who may want to have compensations orders made in their favour. There would be a risk of deluging the criminal justice system were that to be permitted.”
Furthermore, Mr Justice Fraser ruled that compensation orders are to be used only in clear-cut cases. Due to the complexity of the offending and the number and type of issues that would need to be resolved in order to arrive at the relevant figure, plus the potential need to hear contested evidence, the case was not one suitable for making a compensation order in any event. The judge noted that it was still open to the FRN to seek recompense in civil proceedings and that the SFO’s decision to not seek a compensation order did not affect this.
Analysis
Whilst not creating any new law, this unusual case illustrates the difficulties that victims in complex cases can face in obtaining compensation following conviction. In order for compensation to be considered, the victim must rely on the prosecutor to make representations to the court at sentencing or for the court to make an order of its own volition. By bringing a private prosecution, a victim would have the right to be heard as the prosecutor, enabling them to directly assist the court in establishing what loss has been caused by the offending and to obtain an order in its favour.
Drafted by Georgina Diamanti
[1] The Federal Republic of Nigeria v Serious Fraud Office, Glencore Energy UK Limited [2022] EWCR 2, 2022 WL 16556410
[1] See SFO news release “Glencore to pay £280 million for ‘highly corrosive’ and ‘endemic’ corruption” dated 03/11/2022
[2] Serious Fraud Office v Glenore Energy UK Ltd [2022] 10 WLUK 459
