Niko under the corruption spotlight in Bangladesh

Vol 12, PW 17 (29 Jan 09) People & Policy

Canadian authorities have launched a corruption probe into the activities of Niko Resources and its subsidiary in Bangladesh.

But the host government in Dhaka clearly thinks any investigation is a complete waste of time. Should we be surprised, when one of the key players under scrutiny just happens to be the prime minister Sheikh Hasina Days before general elections last December saw the fabled Hasina sweep back to power with a massive mandate PETROWATCH learns the country’s Anti Corruption Commission unsurprisingly dropped all charges against her for favouring Niko during an earlier term as prime minister between 1996 and 2001.

Similar charges filed against ex-prime minister Begum Khaleda Zia in December 2007 for failing to recover monetary compensation from Niko for environmental damage following the devastating blow-out in 2005 at the Tengratilla gasfield in Sunamganj were likewise dropped. The ACC cited â€کinsufficient evidence’ to proceed (!) When Niko freely admitted two weeks ago that it was under investigation by Canadian authorities over its Bangladesh operations, it did so safely, knowing that the appetite for probes in the host country is losing its appeal.

Look at proceedings in the Third Metropolitan Magistrate’s Court in Dhaka, where Bangladeshi authorities are seeking compensation equivalent to $133m for the 2005 blow-out. If you believe a government inquiry, the blame for this environmental catastrophe lies squarely with Niko, which the report accuses of operational failure and inappropriate casing design at the doomed Chhatak-2 well, drilled without Joint Management Committee approval.

In Dhaka, a source at the Third Metropolitan Magistrate’s Court tells us the case was heard last month and that the next hearing is scheduled for next month. He adds, however, that we should not “expect the government to show any seriousness.