27 February 2013

Algeria: New Sonatrach Scandal Shocks Nation

Algiers — Algerian community groups, political parties and civil society are demanding sanctions against those responsible for the latest Sonatrach corruption case.

Algeria is beefing up anti-corruption measures within the all-powerful Sonatrach oil company.

The company finds itself at the heart of a huge corruption scandal involving former officials, including the company's former CEO Mohamed Meziane, in prison since 2011.

"We have just issued a new procedure - R18 - which has been reviewed and amended by all the managers," the company's current CEO, Abdelhamid Zerguine, told the press.

"We have also improved the audit department, giving it much greater independence from Sonatrach's other normal company structures. It will operate on a division-by-division basis, and will conduct investigations and impose higher ethical standards throughout," he added.

Zerguine was reacting to an investigation published on Thursday (February 21st) by the Canadian and Italian press revealing that the Canadian group SNC Lavalin managed to secure oil contracts from Sonatrach under dubious circumstances. According to the investigation, bribes were allegedly paid to Algerian officials.

These serious events led the general prosecutor's office at the court of Algiers to instruct the judge overseeing the 2011 Sonatrach corruption case to extend the investigation to these reported new dealings.

Algerian President Abdelaziz Bouteflika also broke his silence on Sunday.

In a message to Algerian workers on the occasion of the double anniversary of the nationalisation of the hydrocarbon industry and the creation of the General Union of Algerian Workers (UGTA), the president said that he could not "allow the scandals recently noted by the press and concerning Sonatrach's management to pass without comment".

"This information," he continued, "has provoked our outrage and disapproval." Bouteflika stated that he had "confidence in our country's legal system to shed light on this tangled web, to identify those who are responsible, and decisively and rigorously to apply the full sanctions set out in our laws".

This is not the first instance of corruption to rock the Algerian oil industry. The company's top executives were arrested in 2010 on corruption charges, including Meziane, his two sons and several of his associates.

They took advantage of their powerful position to secure Sonatrach contracts for foreign companies to which they had links, and to acquire property and benefits both in Algeria and abroad. Following that scandal which toppled senior managers at Sonatrach, Energy Minister Chakib Khelil lost his job in May 2010.

The so-called "Sonatrach 2" scandal has stirred up indignation among the political class, community groups and civil society in Algeria.

"The nation's economic security and dignity call out for urgent political and symbolic action," the opposition Rally for Culture and Democracy (RCD) stated on Sunday. The party called for the immediate dismissal of current ministers cited or implicated in corruption, and for the reopening of inquiries into previous scandals.

Islamist Society Movement of Peace (MSP) Chairman Bouguerra Soltani called on the Algerian people to take the case to the civil courts. "It's not for the Sonatrach CEO to file a civil suit in the latest affair to have besmirched his group, but the whole of the Algerian people," he told the press on Saturday.

"Algeria must join in with the investigations conducted in Switzerland, Italy and Canada," read the statement issued on Sunday from the Algerian Counter-Corruption Association (AACC). "The government must, at the highest level, bring an immediate end to its silence and announce its political willingness to facilitate all investigations of SNC Lavalin in Algeria."

Corruption is due to two main reasons, according to former Sonatrach official Abdelmadji Attar: "an abundance of money and the centralisation of decision-taking".

The Algerian public is shocked at this latest corruption scandal.

"This affair could harm the country's image," medical student Salim Mansouri, 23, told Magharebia. "I hope the courts will have the freedom and resources to punish the people involved, regardless of the level of responsibility they hold in the institutions of the state."

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