While you were sleeping: The SFO Dropped High-Profile Corruption Probes into ENRC and Rio Tinto

In a surprising turn of events, the Serious Fraud Office (SFO) has recently closed two significant corruption probes, raising eyebrows and sparking questions about the effectiveness of the UK’s anti-corruption efforts.

For those new to the world of corruption, the Serious Fraud Office (SFO) is the UK agency that investigates and prosecutes complex fraud and corruption cases. The dropped SFO investigations into Kazakh (and ex Soviet Oligarchs-founded) miner ENRC and Australian-British miner Rio Tinto have left many questioning the strength of the evidence and the integrity of the decision-making process within the SFO.

The ENRC Case: A 10 Year Long and Winding Road

The ENRC corruption probe, which was opened by the SFO in 2013, focused on allegations of bribery related to securing mining contracts in the Democratic Republic of Congo between 2009 and 2012.

During this period, ENRC’s acquisition of copper and cobalt mines in Congo, totaling over $2 billion, has been cast under a cloud of suspicion. These acquisitions have raised eyebrows due to their apparent connection with the controversial businessman Dan Gertler, who shares a close association with Congolese President Joseph Kabila.

The acquisitions have been marred by accusations of collusion, with ENRC allegedly engaging in deals that involved sizeable payments to offshore shell companies linked to Gertler. The opaque offshore entities purportedly acquired valuable mining assets at significantly undervalued prices, only to swiftly transfer them to ENRC. These transactions have raised concerns that the beneficiaries of such dealings could potentially include corrupt Congolese officials.

Global Witness, a prominent advocacy group, had expressed alarm over the implications of these deals. The organization has voiced apprehension that the considerable mineral wealth of the Democratic Republic of Congo might be channeled to corrupt officials at the expense of the Congolese population. Global Witness, stressed the gravity of the situation by asserting that the Congolese state had potentially foregone billions in revenue by covertly selling off valuable assets to offshore entities at below-market rates.

However, the investigation opened by the SFO into ENRC dealings in Congo garnered substantial public interest due to the complex legal battles it triggered. ENRC, not only denying all corruption allegations but also adopting an aggressive legal stance, initiated multiple lawsuits against parties involved in investigating the company.  The SFO’s investigation into ENRC resulted in years of litigation, including lawsuits in London against the SFO, senior officers and ENRC’s former lawyers.

The litigation spree has consumed significant resources and time for the SFO, potentially impacting its ability to combat economic crime.

The SFO’s recent decision to close the investigation due to “insufficient admissible evidence to prosecute” has raised concerns along those lines.

While the SFO has declined to comment on the matter, ENRC’s spokesperson expressed satisfaction with the closure, further hinting at the need for clarity regarding the agency’s actions.

The Rio Tinto Inquiry: Public Interest Prevails

Simultaneously, the SFO dropped another investigation, this time involving suspected corruption by mining giant Rio Tinto in the Republic of Guinea. The reason given for discontinuing the probe was that it was “not in the public interest to proceed with a prosecution in the UK.”

This decision is even more puzzling considering that just earlier this year the US SEC brought charges against Rio Tinto plc, for violating the Foreign Corrupt Practices Act (FCPA) due to a bribery scheme with a consultant in Guinea. As part of the settlement for the SEC’s charges, Rio Tinto agreed to pay a $15 million civil penalty.

I cover the alleged corruption scheme to former Guinea’s President Alpha Condé, through a consultant, in this earlier article.

This decision to close this case has spurred debates about the considerations that guide the SFO’s determinations on “public interest”.

Critics and Concerns regarding the SFO

The dropping of these high-profile investigations casts a spotlight on the complexities and challenges faced by anticorruption authorities. Discussions have been ignited surrounding the efficacy of the UK’s anticorruption efforts and the decision-making processes within the agency.

The SFO has faced challenges in securing convictions for bribery offences due to various factors such as insufficient evidence, legal loopholes, jurisdictional issues, and jury acquittals. These factors can make it difficult for the SFO to prove its case beyond a reasonable doubt in court.

For example, legal loopholes can allow defendants to avoid prosecution by exploiting technicalities in the law. Jurisdictional issues can arise when the alleged offence occurs outside the UK, making it harder for the SFO to gather evidence and bring charges. Jury acquittals can occur when the jury is not convinced beyond a reasonable doubt of the defendant’s guilt, even if the SFO has presented strong evidence.

Despite these challenges, the SFO continues to investigate and prosecute bribery cases to the best of its ability to uphold the rule of law and deter corrupt practices.

While it’s crucial to demand transparency, accountability, and a thorough investigation into corruption allegations and hold corrupt companies accountable, it’s equally important to recognize that anticorruption agencies operate within a challenging landscape, navigating legal complexities and striving to maintain the integrity of their actions.

As the dust settles, the anticorruption community, legal experts, and concerned citizens will continue to scrutinize these cases, advocating for a just and corruption-free society.

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