Posted on July 1, 2024
The Dutch Public Prosecution Service (OM) is investigating the international marine contractor Van Oord. A spokesperson confirmed this after a report by Follow the Money. The investigative journalism platform claims that Van Oord is suspected of bribery in Kazakhstan.
The OM would not provide any details about the investigation, which is currently ongoing. Van Oord will not comment on the Follow the Money article at this time.
Sources told FTM that the OM suspects that an agent who helped Van Oord win contracts in Kazakhstan may have transferred money to a company that had ties to the country’s former president, Nursultan Nazarbayev. Van Oord secured half a billion dollars in orders in that country in 2015. One of those jobs was dredging an access channel for an oil and gas loading and unloading facility.
The case revolves around an agent with whom Van Oord prematurely ended its collaboration, Follow the Money reported. The dredging firm tightened its internal procedures in 2017 to comply with legislation. Contracts with a number of agents were not extended, and Van Oord terminated an existing agreement with one agent, the annual report stated.
That agent received 5 million euros in compensation for the contract termination, plus 19 million euros regarding a non-competition clause. The 2017 annual report stated that this transaction may not comply with legislation and regulations, because it “was concluded despite the lack of immediate, demonstrable factual consideration,” the company said. It is unclear what the agent promised in exchange for that sum of money.
“Due to the fact that this non-compete agreement cannot be proven to have been concluded at arm’s length, there is a risk of material consequences for the annual financial statements in connection with possible non- compliance with laws and regulations,” the company cautioned its investors in a few paragraphs written on page 91 of the 106 page report.
According to Follow the Money, the Public Prosecution Service saw this payment as grounds for an investigation into Van Oord. That investigation has been running since 2020.
“We have our own management teams in place in many parts of the world, but we also work with agents in our efforts to win and/or execute contracts. This can lead to an increased risk of non- compliance with laws and regulations. Some countries require us to engage an agent, and an agent can also provide local support during the execution of a project,” the company wrote.
“Agents usually receive a (fixed) percentage of the contract price for their work, sometimes in the form of a (partial) success fee,” Van Oord explained. “In 2017, as a consequence of our more stringent compliance approach, a limited number of agency agreements were not extended, and one contract with an agent was terminated prematurely.”
Nazarbayev ran uncontested to become the first president there in 1991. He remained in office for five terms until his resignation in the spring of 2019. His rise to power developed quickly after he became Kazakhstan’s prime minister in the mid-1980s. He gradually grew more powerful, developing relationships with both Mikhail Gorbachev and Boris Yeltsin towards the end of the Soviet Union.
