Corporate Governance » Oil Industry Corruption

Oil Industry Corruption

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April 10, 2020

In an interview with Alexandra Gillies, Richard Bistrong discusses her work and her recently-published book, Crude Intentions: How Oil Corruption Contaminates the World. She decided to write the book after researching governance issues in the oil sector for her PhD, and realizing that the 2008-2014 oil boom offered a petri dish “for observing how corruption works across a diverse set of countries and players, from Goldman Sachs to the national oil company of South Sudan.” The boom is over, and in her view austerity helps control corruption, but there are risks related to low prices as well. Storage facilities are in such high demand that incentives for bribery exist, and oil companies are already importuning public officials to help them weather the downturn. The latter is particularly true in countries like the U.S. and Russia where oil companies are closely tied to political elites, and public funds are used to prop up the industry at the expense of the wider public interest. Gillies sees some progress being made, More governments are actively enforcing anti-bribery laws and collaborating on cases across national lines. Law enforcement is getting better at pursuing offshore dirty money, but middlemen who pay bribes on behalf of big companies remain a particularly difficult problem. She points to the fixer company Unaoil, which channeled bribes to oil sector officials in nine different countries on behalf of clients from the Netherlands, the United Kingdom, the United States.

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