Eni vs Reputation

The Italian oil giant Eni is where it belongs!!!


Note: Read more at Reputation Institute Italy 

How is it possible?

How is it possible that a company accused of bribe payments and with its current and former CEO indicted by the Public Ministry for "international corruption" be part of the Standards Ethics and be at the top of the ranking? 

This is Eni's Way!

Eni's Investors & Shareholders

Investors and Shareholders don't care whether the company is unethical and unescrupulous... They only worry about dividends and profit... See the example of the Italian oil giant Eni!

Will this regrettable reality change one day?

Note: Read the article of the journalist Mr. Andrea Greco (La Repubblica Journal). 

Eni = ISO.37.001 x International Corruption

Today’s headline is inspired by two recent notices; the first is from a January 25 ENI Press Release crowing that “Eni is the first Italian company to receive that certification”. The second came from an article in the Financial Times (FT) entitled “Eni chief Claudio Descalzi charged with international corruption” by James Politi, where he began his piece with the opening, “Claudio Descalzi, chief executive of Eni, has suffered a setback after Italian prosecutors charged him with international corruption following a lengthy investigation into the Italian energy group’s 2011 purchase of a Nigerian exploration licence. Mr Descalzi was asked to stand trial along with Paolo Scaroni, the former chief executive of Eni, as well as nine other individuals who were involved in the $1.3bn transaction, according to Fabio De Pasquale, the lead prosecutor on the case.”

The international corruption, also involving Royal Dutch Shell, involved questions regarding “an offshore exploration bloc called OPL 245, which is estimated to contain up to 9bn barrels of oil and is considered one of Nigeria’s most highly-prized energy prospects.” It was further noted that “The main accusation is that Eni and Shell knew the money paid to the government for OPL 245 would then be funnelled to other Nigerian individuals, essentially as bribes.” In what can only be said is a non-denial denial, both “Eni and Shell have said that they simply transferred money to the Nigerian government, without making any arrangements with third parties or the ultimate beneficiaries.”

The problem I see with one headline is that it brings up the uselessness of the ISO certification process. One might reasonably ask how a company could receive a certification for its “AntiBribery Management Systems” when both its current and former chief executives are under indictment for ‘international corruption’? The ISO certification issue is separate and stands apart from the ISO 37001 standards themselves. When I sat down to read the more than 100 pages of what might constitute good compliance practices, I, for the most part, did not have too many disagreements with the articulation. However, in the global world of anti-bribery/anti-corruption enforcement there were multiple standards for an effective compliance program, including, but not limited to the Ten Hallmarks of an Effective Compliance Program, Six Principles of Adequate Procedures, the OECD 13 Good Practices and multiple others. Indeed, I published an entire book some 2 1/2 years ago to laying out what constitutes an effective compliance program. So while it is mildly interesting from an intellectual perspective, the reality is that it is not anything new, different or innovative.

Yet the title of this blog post makes clear that any ISO 37001 certification is much worse, for it can lead an unsuspecting person to conclude that because a company has the ISO 37001 certification, it is actually doing compliance. From the ENI Press Release it stated, “quality of the system of rules and controls aimed at preventing corruption”. If that does not sound like a paper compliance program I do not know what does. I should also note the same Press Release goes on to state that since 2009, Eni has enshrined the principle of “zero tolerance” as “expressed in its Code of Ethics.” I wonder if either the current or former ENI chief executive under indictment read or even knew about this robust ENI Code of Ethics. Interestingly, the Press Release also stated that Stage 2 of the ISO 37001 certification process involved “interviews with people on the ground” to assure compliance with the program. It is safe to assume these interviews did not include the current or former ENI chief executive.

What is a counter-party to ENI to conclude about the robustness of its anti-corruption compliance program? How about any other company which has an ISO 37001 certification? This is where the worse than useless part comes into play. People might actually think that this certification affirms the company which holds it is committed to doing compliance and will continue to do so going forward. The counter-party who does business with such an ISO 37001 certificate holder may well assume this certification forms some basis of protection against a Foreign Corrupt Practices Act (FCPA), UK Bribery Act or (you name the law) investigation for bribery and corruption. Nothing could be further from the truth.

The Department of Justice (DOJ), Securities and Exchange Commission (SEC) and Serious Fraud Office (SFO) continually make abundantly clear that a company is responsible for its counter-parties not violating applicable anti-corruption laws. Put another way, a third-party, with an ISO 37001 certification who violates the FCPA, UK Bribery Act or any other similar law puts your company at just as much risk as a third-party with no ISO 37001 certification. Putting it as simply as I can, an ISO 37001 certification from a counter-party is of less than zero worth to your company, your compliance program or indeed any defense against a FCPA enforcement action.

What about a company which thinks it needs an ISO 37001 certification? This is equally problematic but for different reasons. The DOJ and SEC jointly issued FCPA Guidance made clear that an effective compliance program is based upon a company assessing its own risks and then setting up a program to manage those risks going forward through training, incentives and discipline and ongoing monitoring. The Ten Hallmarks were designed to be flexible to allow each company to assess and then manage its risks. Moreover, this flexibility allows a Chief Compliance Officer (CCO) or compliance practitioner to put forward clear evidence of compliance with this approach if the government comes knocking in a FCPA investigation. The evidence from the Pilot Program is that the DOJ is taking this approach into account and has doled out multiple declinations and Non-Prosecution Agreements (NPAs) since its inception in April 2016.

So which headline is right: that ENI received an ISO 37001 certification or that the chief executive of ENI will stand trial for corruption? Unfortunately, they are both right and that simple answer communicates to every CCO and compliance practitioner across the globe that the ISO 37001 certification process is worse than useless. This is both for the company assessing the effect of such a certification from a potential third-party and a company considering whether it should obtain the certification to prove it is actually doing compliance.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. 

by © Thomas R. Fox, 2017 - The author can be reached at tfox@tfoxlaw.com.

After the investors' pressure Eni says something else

Eni says board member Litvack innocent of charges; company will meet legal costs

Board has full confidence in governance expert’s “competence, integrity and innocence”

Eni has said it believes corporate governance expert Karina Litvack is innocent of charges brought against her by authorities in Syracuse, which led to Litvack’s suspension from one of the Italian oil and gas company’s board committees.

Litvack, the former Head of Governance and Sustainable Investment at F&C Asset Management who joined the board of Eni in 2014, was removed from the company’s board-level Control and Risk Committee earlier this year, though she remains on the board.

At Eni’s investor presentation on its sustainable energy strategy in Paris today, an unidentified investor asked the firm to give its views on “concerns about the governance of the board, and the respect of minority shareholders” following the removal of Litvack – who the investor described as “our elected representative on the board”.

As RI reported yesterday, corporate governance activists have raised concerns about the issue.

Eni Chairwoman Emma Marcegaglia took to the podium to give the company’s views on the situation, explaining that in July the board was notified of the judicial investigation which involved “alleged wrongdoing and offences against Eni and its CEO” by Litvack and others.

“As we always do in these situations, the board took legal advice,” she said adding that they were informed “that when there is a risk of prejudicial circumstances, the board could be liable for negligence if it doesn’t take action”.

In this situation, the board felt in a certain way that it had no alternative but to remove, temporarily, Karina from the risk and control committee,” Marcegaglia said, clarifying that Litvack remained a member of the compensation committee and the sustainability and strategic committee. “She is also still a full member of the board, and works a lot with us.”

“The board has full confidence in Karina’s competence, integrity and innocence,” Marcegaglia said. “And as soon as the charges are dropped, it’s my firm intention to propose to the board to re-nominate her in the risk and control committee.”

The chairwoman also told the audience that Eni was financing the legal costs of the process, which she believed would be covered by insurance, “but if there is any problem with that then the company will pay”.

Marcegaglia, who as president of business lobby group BusinessEurope, has in the past clashed with investors over climate disclosure. 

“We will work together in the spirit of the best mutual trust and collaboration,” Marcegaglia concluded today. “We consider her work very valuable.”

by Sophie Robinson-Tillett | September 30th, 2016


Read more:

a) The red light is lit for the investors of Eni

b) Eni's Board of Director approves the replacement of a Director in the Control and Risk Committee

c) Luigi Zingales investigated in the conspiracy at Eni

The red light is lit for the investors of Eni

Activist groups raise concerns over governance at Italian oil giant Eni ahead of ESG presentation

Concern grows over Karina Litvack’s removal from board committee

Leading activist groups have said the recent replacement of corporate governance expert Karina Litvack at Italian oil and gas giant Eni’s Control and Risk Committee was “worrying and troubling”, calling on investors to demand a “clear rationale” for her removal.

Litvack, the former Head of Governance and Sustainable Investment at F&C Asset Management, who joined the board of Eni in 2014, was removed from the company’s board-level Control and Risk Committee earlier this year, though she remains on the board.

The company cited “ongoing investigations related to alleged conspiracy against the company, reported by the press”. Earlier this month, the company appointed Diva Moriani, an executive with Milan-based industrial group Intek, to take Litvack’s place on the committee.

“Eni’s zeal in replacing Litvack is astonishing, considering that both the company’s CEOClaudio Descalzi and its chief development officer Roberto Casula are under investigation, since September 2014, in a case of alleged international corruption in Nigeria for the acquisition of the (Nigerian oil field) OPL 245 concession and for which an alleged bribe of as much as $1.1bn would have been paid”, said Mauro Meggiolaro ofFondazione Banca Etica, the group for Italian ethical banking.

Eni denies any illegal conduct in the matter and says it is cooperating with the Milan prosecutor’s office; it has said it is “confident that the correctness of its actions will emerge during the course of the investigation”. In May last year Eni said an audit by an independent US law firm into the OPL 245 case found no evidence of illegal conduct.

Meggiolaro noted that Eni’s chief upstream officer Antonio Vella had also been sent to trial for alleged bribery in Algeria on July 27. Eni said at the time that it “continues to deny any illegal conduct and is confident that this will be ascertained in court proceeding”.

Meggiolaro said: “Nobody in the company has been proposed to replace him. Eni’s behaviour in the Litvack case is even more worrying if we consider that so little is known about the investigation in which Litvack would be involved, while we know much more about the investigations on Descalzi and Casula and on the trial involving the chief upstream officer Vella.”

UK-based group ShareAction said investors will be troubled by the lack of information given on Litvack’s removal, “particularly in the context of investigations into senior executives at the company.”

Chief Executive Catherine Howarth said: “Ms Litvack was elected by shareholders, no doubt in part because of her own strong track record on corporate governance; her removal is clearly a concern, and investors should demand a clear rationale for this decision.”

Separately, Eni was this week removed from the Dow Jones Sustainability Indices (DJSI) following a yearly review process in which its score was deemed “not good enough” for staying in the indices, said a spokeswoman for RobecoSam, the Swiss company that develops and updates the indices. The Italian group has been removed from both the global and European indices, she confirmed, calling it a “normal deletion”.

RobecoSam said while companies could choose not to respond to the questionnaire which forms the basis of the indices, it could not choose to not be a part of the indices. In such cases, RobecoSam would analyse the company based on publicly available information.

Standard Ethics, a London-based independent sustainability ratings agency, said it was also in the process of reviewing Eni’s rating. Director Filippo Cecchi added: “We need to understand if they followed the procedures in line with the best practice in governance.”

According to reports in the Italian media earlier this summer, Litvack is one of Eni’s independent directors being investigated by the Public Prosecutor’s Office of Syracuse in Sicily for defamation of Descalzi. As previously stated, Responsible Investor is in contact with the Italian authorities and is currently attempting to substantiate these reports.

Litvack is a non-executive independent director nominated by a group of Italian and foreign institutional investors.

Massimo Menchini, director of corporate governance at Assogestioni – the Italian asset management industry body – said: “The corporate governance of the Italian listed companies and the role of the independent minority directors are very important for both Assogestioni and the Italian Investment Managers Committee.”

“In line with the Italian Stewardship Code and the EFAMA [European Fund and Asset Management Association] Stewardship Code, the Italian and foreign institutional investors are monitoring the situation and its evolutions,” he added.

Eni declined to comment, directing queries to the “judicial authority”. Litvack herself also declined to comment.

Meanwhile, Eni is livestreaming an ESG presentation on sustainable energy from Paris tomorrow at which Descalzi and other senior managers will present the firm’s ‘Integrated Model’ to investors.

It comes as Eni has agreed on a series of renewable energy projects in North Africa. In Egypt, its first project will be a 50 MWp photovoltaic plant in Sinai “in line with Eni’s vision for a low-carbon future”. In Algeria it has reached a strategic agreement with state-owned Sonatrach; the first fruits of this will be a 10MW photovoltaic plant in the Bir Rebaa North (BRN) field.

by Raji Menon | September 29th, 2016


Read more:

a) Eni's Board of Director approves the replacement of a Director in the Control and Risk Committee

b) Luigi Zingales investigated in the conspiracy at Eni

A complaint against the Internal Audit of Eni

When an internal auditor does't fulfill the International Standards for the Professional Practice of Internal Auditing (Standards) of the IIA Global nor its the IIA's Code of Ethics and presents a lying version of the results of an internal auditing in a (frivolous) lawsuit and also to the global market through the media, this professional may be terminated by IIA Global's Ethics Committee being subject to sanctions and appropriate punishments.

The IIA Global will receive a complaint about the "non compliance” -  through the "Complaint of Alleged Violation of The IIA Code of Ethics Form" - practiced by the members of the Internal Auditing Department of the Italian giant Eni, including the Senior Executive Vice-President of Internal Audit, Mr. Marco Petracchini which also is a member of the Executive Committee of the IIA Italy.

Note: Read the summary about my 15 years fight story against the Italian giant oil Eni and the “liar version” spoken by Eni. 

Why Eni is not saying the truth on DJSI?

Two weeks ago, the Italian oil giant Eni has been removed from the Dow Jones Sustainability Index (DJSI), the most important equity ethical index in the world. We have reported the news on Valori a couple of days ago. On the Italian website Eticanews, Eni has specified that the company «hasn’t been removed from the index. Eni has intentionally decided not to be part of DJSI because it has chosen to actively participate in the indexes that are currently better representing the reality and problems of the oil & gas sector, such as FTSE4Good or CDP».

Can a company choose not to be part of an ethical index? We have asked this question directly to RobecoSAM, the Swiss company that develops and updates the Dow Jones Sustainability Index. «Eni has been deleted during the normal and annual review (every year in September) because its score wasn’t good enough for staying in the index», François Vetri, Head of Corporate Communications of RobecoSAM, has answered. «Companies can not choose to be out of the DJSI. Of course, they can choose not to participate in our Corporate Sustainability Assessment (i.e. not answering to RobecoSAM’s questionnaire, our note), however, in this case RobecoSAM analyses (and rates) the company based on publicly available information».

This means that Eni’s statement is not true. The company has been deleted from the Dow Jones Sustainability Index because – according to RobecoSAM’s environmental and social criteria – it isn’t among the best companies in its sector any more. The specific reasons for Eni’s removal aren’t publicly available. «Detailed results of our assessments are shared with companies only», adds Vetri. In the meanwhile, Eni prefers to hide its head in the sand. At least for now.

by Mauro Meggiolaro (Eni's Critical Shareholders)

Why Eni is not saying the truth on DJSI?

Two weeks ago, the Italian oil giant Eni has been removed from the Dow Jones Sustainability Index (DJSI), the most important equity ethical index in the world. We have reported the news on Valori a couple of days ago. On the Italian website Eticanews, Eni has specified that the company «hasn’t been removed from the index. Eni has intentionally decided not to be part of DJSI because it has chosen to actively participate in the indexes that are currently better representing the reality and problems of the oil & gas sector, such as FTSE4Good or CDP».

Can a company choose not to be part of an ethical index? We have asked this question directly to RobecoSAM, the Swiss company that develops and updates the Dow Jones Sustainability Index. «Eni has been deleted during the normal and annual review (every year in September) because its score wasn’t good enough for staying in the index», François Vetri, Head of Corporate Communications of RobecoSAM, has answered. «Companies can not choose to be out of the DJSI. Of course, they can choose not to participate in our Corporate Sustainability Assessment (i.e. not answering to RobecoSAM’s questionnaire, our note), however, in this case RobecoSAM analyses (and rates) the company based on publicly available information».

This means that Eni’s statement is not true. The company has been deleted from the Dow Jones Sustainability Index because – according to RobecoSAM’s environmental and social criteria – it isn’t among the best companies in its sector any more. The specific reasons for Eni’s removal aren’t publicly available. «Detailed results of our assessments are shared with companies only», adds Vetri. In the meanwhile, Eni prefers to hide its head in the sand. At least for now.
by Mauro Meggiolaro (Eni's Critical Shareholders)

Eni depends of politicians to conduct their business

When a giant oil depends of politicians to conduct their business... And the investor? 

What the Board of Eni have to say?

Read the complete article (Eni delays $3 billion sale of retail arm over political turmoil - sources) in this LINK.

Eni is being sued for illegal oil exports

The Italian giant Eni is being sued by the government of Nigeria for illegal oil exports.

Of course! This is Eni's Way!

See more in this LINK.

Bye Bye DJSI 2016

The Italian giant Eni excluded from Dow Jones Sustainability Index 2016... A long due decision.

by Mauro Meggiolaro (Eni's Critical Shareholder - FCRE Foundation - Italy)

See more at: Robeco SAM Presentation and news about exclusion of Eni

When the corrupt protects the corrupter...

When the corrupt (the Nigerian government) protects the corrupter (the Italian giant Eni).

The United Kingdom is waiting for Nigeria to claim an $85million loot recovered from a former petroleum minister, Dan Etete, according to the Evening Standard of London.

The newspaper reported that federal government’s failure to send a proceeds-of-crime submission to the judge of a UK court is stalling the recovery of the money which is frozen in a NatWest bank account in London.

Federal government officials could not be reached last night for their reaction.

The situation has left the funds ‘frozen’ and the court case ‘languishing’, the newspaper said.

The $85m is believed to be part of the proceeds from the award of the licence of OPL 245 – an oilfield containing an estimated nine billion barrels of crude – made by Etete to Malabu Oil & Gas,  for $20 million, said to be  a tiny fraction of its real value.

The licence award sparked a multitude of legal suits between Shell and Malabu over the ownership of the field only for the federal government to sell the field to Eni and Shell. $1.09 billion of the money paid by the two companies later found its way to Malabu.

Shell and Eni claimed ignorance of who paid the $1.09 billion to Malabu.

The newspaper said investigators at Britain’s National Crime Agency who are trying to probe the alleged laundering of OPL 245 money through London banks and properties are frustrated by alleged inaction from Nigeria’s end.

“Last week, the two governments agreed criminal assets stolen in Nigeria and seized in Britain can be returned to the West African country, but such breakthroughs are rare,” it said.

“Buhari’s governing style is also a source of frustration. Critics say he is slow in his decision-making, which allows the EFCC to wallow in indecision.

“Buhari’s critics say his approach means that much-needed funds from corruption cases are not bringing in revenue for an ailing economy ravaged by low oil prices, and the oil blocks themselves are not being developed.”

The Malabu Oil deal is believed to have  led to the siphoning off of $1 billion from a $1.3 billion international investment in the lucrative oil block through ‘fees’ to Etete’s company and middlemen.

Justice Edis said: “Given the large sums of money involved that are effectively paid to a former minister to a bank account in the Middle East, the whole exercise is backed by murky instructions.”

Note: This text is the Today newspaper (Nigeria)

The Queen of Marketing

When a company uses all the Marketing Tools to hide their Unethical Practices!  

This is Eni's Way! 

Involving the President of Italy in my case

If the Board of Eni respected the "Best Practices" of the Corporate Governance - reflected on values as honesty, integrity and transparency - and honored the words and spirit of the Code of Ethics of the company, the Chairman, the CEO and the other directors would be the first ones to emerge the "real truth" about the 15 years story fight of a whistleblower that was fired - in retaliation - after reporting a millionaire scheme of fraud and corruption in the Brazilian subsidiary of the Italian giant Eni.

As three generations of the Board of Eni pretended nothing happened - they spread a "lying version" of facts and keep in the Italian Court a "frivolous lawsuit", demanding an indemnity of US$ 30 million - this whistleblower sent a letter - through the Brazilian Embassy in Rome - to the Chief of State of Italy, the President Sergio Mattarella, so he demands from Eni an "Independent Investigative Auditing" about this case. And this is because the Italian government is the major shareholder of Eni.

Know more:

1) Letter to the President of Italy

2) Eni's Whistleblower: 15 years in 15 paragraphs!

3) A victory to all the Whistleblowers!