Geneva-based Nestlé has revealed that poor workers from developing countries such as Thailand, Myanmar and Cambodia often end up trapped in illegal and brutal working conditions as part of the company’s supply chain. The unusual disclosure concluded a near yearlong investigation by the Swiss food and beverage company into its supply chain following allegations by various media outlets and non-governmental organisations. They claimed that such working conditions were connected to the sourcing of shrimp, prawns and Purina brand pet foods which mirrored similar reports by The Associated Press (AP) of slavery in the seafood industry.
Volkswagen is set to face a new inquiry from German prosecutors following its admission of irregularities in the carbon dioxide (CO2) emissions of approximately 800,000 vehicles earlier this month. The German carmaker’s publication of incorrect emissions data may have led to unjustified tax breaks for some drivers. If confirmed, this would have also enabled VW to bypass taxes as many European countries base their tax rates for vehicles on their CO2 emissions. German regulators are currently investigating five unnamed individuals related to the case.
Outgoing FIFA president, Sepp Blatter, and Uefa president and potential Blatter successor, Michel Platini, have been charged with corruption by the FIFA ethics committee and could be banned from football for life. The committee has recommended the sanctions based on the allegation that Platini accepted a payment of £1.3 million (US$1.96 million) in return for ‘a specific action’ in the lead up to Blatter’s re-election as president for a fourth time in 2011. Both men have acknowledged that there was no written contract for the payment, which they say was for work completed as special adviser to Blatter between 1998 and 2002.
Trafigura has confessed to paying US$4.3 billion to national oil companies (NOCs) in Colombia, Ghana, Nigeria, Norway, Peru and Trinidad in 2013. The Dutch multinational commodity trader made the disclosure in its first ‘responsibility’ report since joining the Extractive Industries Transparency Initiative (EITI) last year. Among the payments was US$2.5 billion-worth of product swap deals with Nigeria’s national oil company, whereby petroleum products such as gasoline were traded for crude oil.
Appliance manufacturer Electrolux is claiming that recent testimony by its chief executive during an antitrust trial was incorrect as it seeks to keep its planned purchase of General Electric’s appliance business on track. A lawyer for the Swedish company has told a United States federal judge that Keith McLoughlin’s facts about product offering developments by rival companies were incorrect. The United States Department of Justice (DOJ) is attempting to block the proposed US$3.3 billion acquisition of GE’s appliance business due to concerns that it will increase the price of cooking appliances.
South Korea’s Fair Trade Commission (FTC) has launched an antitrust probe into Qualcomm, after concluding that a number of the practices at the United States mobile chip company violate the country’s competition law. The news comes at bad time for Qualcomm, which announced earlier this month that licensing deal negotiations with handset makers in China were not going well due to an earlier antitrust settlement in the country. The company’s shares fell nearly 10 percent to a four-year low on news of the Korean probe which, combined with its problems in China, has wiped approximately US$20 billion off its valuation.
Japan’s infrastructure ministry has announced that it will widen the scope of its investigation into piling data management to cover the entire piling industry, as concerns grow over the falsification of data involving building foundation piles. The announcement follows the recent statement by Asahi Kasei Construction Materials in which it admitted to falsifying data for at least 266 projects over the last decade. Piling work contractor Japan Pile meanwhile has confessed to six counts of misconduct over the last five years.
Bribes were allegedly paid as part of Petrobras’ US$1.2 billion purchase of Texas-based Pasadena Refining Systems in 2006, according to Brazilian police and prosecutors investigating corruption at the state-run oil company. Federal prosecutor Carlos Fernando dos Santos Lima made the announcement following further arrests, adding that confirmation of the bribes could cause the cancellation of the purchase. Two people have been arrested and a further five brought in for questioning in relation to the alleged misconduct.
The collapse of two dams at the south-eastern Brazilian state of Minas Gerais, directly north of Rio de Janeiro, has prompted Brazilian authorities to impose an initial fine of US$66.2 million on the dams’ co-owners as well as rethink its existing mining regulatory framework. Multinational mining company BHP Billiton and Brazilian company Vale, which co-own the Samarco Mineração SA joint venture that operates the iron ore mine where the dams collapsed, are being investigated for alleged environmental crimes. In addition to imposing the fines, Brazil’s environmental regulator is probing for violations such as river pollution and damages to urban areas.
SNC-Lavalin Group is trying to convince Canada’s new Liberal government to adopt an approach towards corporate corruption settlement deals similar to the one used in the United States. Canada’s largest engineering firm said that federal charges against the company, as a result of ongoing reputational issues, were harming its ability to compete against rivals from Group of Seven (G7) countries. In prepared comments made to the Montreal Council on Foreign Relations, SNC-Lavalin chief executive Neil Bruce said that the current business environment in Canada presented real challenges for “a company like ours”.
A journalist has been arrested in Kenya allegedly for writing about corruption at the African nation’s Interior Ministry. The arrest has sparked widespread criticism towards the Kenyan government for censoring the press and curtailing free speech, and is an example of the many obstacles faced by companies when trying to conduct due diligence in Africa. Media outlets are often state-controlled or censored in Africa, making it difficult for companies to obtain accurate and objective information as part of their background checks and screening processes.
Adidas is avoiding any reputational damage as a result of the FIFA scandal despite its close association with football’s disgraced world governing body. That is the view of Adidas chief executive Herbert Hainer, who has spoken with reporters on a conference call about his confidence in consumers being able to distinguish between his company’s brand and the ongoing corruption scandal at FIFA. Hainer said that the image of Adidas products has never been stronger.
A United States government contractor has pleaded guilty to accepting bribes in return for steering government subcontracts to a company based in the United Kingdom. Former director of operations at the United States Department of Defense Robert W Gannon admitted to soliciting and receiving US$193,665 in kickback proceeds. Gannon, who will be sentenced towards the end of January 2016, abused his authority to identify, evaluate and monitor government subcontracts by arranging kickback payments with executives from the United Kingdom company in return for purchase orders totalling almost US$6 million.
Volkswagen has admitted that an internal investigation into the diesel emissions scandal has also found irregularities with the carbon dioxide (CO2) levels emitted by at least 800,000 of its vehicles. The German carmaker’s confession has raised suspicions that Volkswagen (VW) cheated not only on its diesel emissions tests but also on its CO2 and fuel consumption tests. Combined with the diesel emissions scandal, the latest revelations have led to VW losing approximately 40 percent of its valuation (or €32.4 billion) since the crisis began.
The Volkswagen (VW) emissions scandal could be set to widen following allegations by United States regulators that cars with larger diesel engines manufactured by the company also had software designed to cheat tests. VW recently admitted to installing devices in almost half a million diesel cars in an effort to avoid complying with emissions laws, and now the United States Environment Protection Agency (EPA) has said that more of the company’s car models were affected than initially thought. VW cars with 3.0 litre engines made between 2014 and 2016 may also include the devices, although VW has vigorously denied the allegations.
The recent breach of the website of TalkTalk Telecom Group may have affected far fewer customers than the company first suspected. TalkTalk has approximately four million customers’ financial and personal details in its possession, but said that fewer than 21,000 unique bank account numbers and sort codes may have been compromised. The news follows the recent revelation that one 15-year old boy and one 16-year old boy had been arrested for allegedly stealing information during the breach.
The Hong Kong Court of Appeal has overturned previous rulings and convicted two men of accepting bribes in exchange for participating on a television show. Stephen Chan, general manager and presenter at Television Broadcasts Limited (TVB), and his assistant Tseng Pei-Kung had both previously been acquitted of accepting bribes from Hong Kong shopping centre Olympian City on two occasions. The prior rulings had claimed that Chan had a ‘reasonable excuse’ to accept a HK$112,000 (US$14,500) payment because TVB had implied its consent. However, the Court of Appeal’s judgment of the two men confirms the limitation of the ‘reasonable excuse’ defence in Hong Kong.
A senior official of a Vietnamese state-owned railway corporation and five other executives have been sentenced to up to 12 years in prison following their convictions for corruption relating to a Japanese financed railway venture. Pham Hai Bang, deputy director of Vietnam Railways Corporation’s Railways Project Management Unit, received a 12-year sentence for “abusing power and authority while carrying out official duty”. The five executives received sentences ranging from five and half years to 11 years. The railway project in Hanoi, which is a Japanese official development assistance (ODA) project, had to be temporarily suspended.