French anti-corruption regulator continues investigation methods

Edward James, anti-corruption expert at Pinsent Masons, said: “The relatively young anti-corruption regulator has shown a willingness to be innovative and front-footed in the way it investigates and resolves corruption matter.”

Late last year the Parquet National Financier (PNF) announced a ‘convention judiciaire d'intérêt public’ (CJIP) – a French deferred prosecution agreement – with Areva that related to corruption in Mongolia. The matter highlighted the ever-present corruption risk that mining companies face when entering new jurisdictions and seeking to secure mining rights.

In the past, when corruption matters of this nature were resolved in other countries through non-prosecution deals, it has typically signaled the end of the matter with some exceptions involving the pursuit of individual wrongdoers. The PNF has, however, made it clear that the French prosecutors will pursue all parties involved and leave little room for anyone to avoid responsibility. This has been clearly signaled by the PNF’s indication that it continues its investigation into Eurotradia International, the intermediary company alleged to have been used as a middleman to pay bribes in the Areva matter.

James said: “Whilst the primary corruption investigation involving Ariva and Orano Mining was resolved through the CJIP, the door remains wide open for the PNF to pursue other parties involved in the corruption. The PNF has clearly signaled that no stone will go unturned and other parties involved in the corruption will be investigated.”

The PNF has already sanctioned contractual arrangements through which companies used the services of third party consultancy firms which, under the guise of acting as commercial intermediaries for their clients' international development, paid back part of their commission to carry out acts of bribery of foreign officials.

“This recent Areva matter shows again that the PNF intends to take a very firm stance against these practices of using intermediaries to pay bribes,” said Olivier Bustin, mining contract specialist at Pinsent Masons.

In terms of the wider considerations for mining businesses, the “recent case highlights a key risk that mining companies face – an investigation into one matter may result in wider investigations of corrupt intermediaries”, said James.

“Mines should ensure that they have strict controls around the engagement of any third party intermediaries especially when engagements involve obtaining prospecting and mining licenses,” he said. “Whilst the controls should definitely include strict due diligence processes, this is not a replacement for applying common sense and ensuring that you avoid an arrangement that has obvious corruption red flags.”

Bustin added: “Mining companies that are looking to enter new markets need to ensure that they do things the right way. Taking short cuts can simply create much bigger problems down the line. Whilst local knowledge and experience is important to tap into, mining companies should also seek rely on regional experts who know how to navigate the tricky balancing act between commercial wants and international compliance non-negotiables.”