Can A Case Be Made To Justify Corporate Bribery From The Corporation’s Perspective?

Imagine that you are the chief executive officer of a global energy corporation. You are attempting to secure a contract to drill for oil on the territory of an emerging African nation. If you believe that a bribe might help “facilitate” the securing of the contract, would you offer to pay one? And if so, how much would you offer?

That is the situation that Royal Dutch Shell (i.e. Shell Oil) and the Italian firm ENI faced in 2011 while they pursued drilling rights for an oil field in Nigeria named OPL 245. The field was believed to contain nine billion barrels of oil, valued at approximately $500 million.

The corporations paid $1.3 billion to the Nigerian government prior to securing the contract. In April 2017, the BBC reported that $466 million of this payment may have been diverted to the personal bank accounts of various politicians.

Two weeks ago, Italian prosecutors arrested 15 individuals in connection with the contracting process. One would think that it would be difficult for the individuals to justify the payment, wouldn’t it?

But let’s think about the situation from the contrarian perspective. What if such payments are legal activities in the emerging nation? What if other energy corporations, based in nations where such payments are commonplace, are ready and able to step in and develop the oil field? And what if these other corporations are already well established in the emerging nation?

If Shell and ENI didn’t decide to pay the $1.3 billion and then recoup the cost from the contract’s operating revenue, another company would have likely done so. The Chinese economy, for instance, has become the African continent’s largest economic partner. It supports many firms that can manage oil fields.

The question is not a simple one. Although some can certainly argue that bribery is a pernicious activity that must remain illegal, others can reply that the types of payments made by Shell and ENI are justified because they support the development of the Nigerian and European economies and societies. Without such payments from European firms, the Nigerian economy and society will simply become more interdependent on firms from societies where bribery is commonplace.

Incidentally, this is not an isolated case. Global energy corporations have grappled with such questions for decades. And several years ago, Michael Kraten (the author of this blog) developed a corporate training case with other professionals to address this issue amid other business concerns.

It’s called Save The Blue Frog, and it is available online at The case is named after a different issue that challenges global energy corporations; namely, the existence of an endangered species on the proposed oil field site.

If you’re feeling aghast at the very idea that bribery may be justifiable, you need not worry. At the moment, there are no significant initiatives underway to repeal the Foreign Corrupt Practices Act in the United States or similar laws elsewhere.

But you may wish to keep in mind that there are reasons why China has become Africa’s largest economic partner. In other words, there are costs to be paid — and opportunities to be lost — when a nation enacts laws that are based on moral codes of conduct.