Author: Syedur Rahman
17 November 2021
4 min read
Financial crime specialists Rahman Ravelli assesses the significance of the indictment of Sweden’s Lundin Oil for war crimes following its activities in Sudan.
After conducting about 270 interviews involving 150 individuals over 11 years, the Swedish Prosecution Authority charged two Lundin Oil executives on November 11, 2021 with complicity in grave war crimes in Sudan. While the preliminary investigation was opened on June 21, 2010, it was not until the end of 2016 that the two Lundin executives were formally declared to be under suspicion.
The two men, who are the Swedish company’s Chairman Ian Lundin and former chief executive Alex Schneiter, are suspected of being complicit in this wrongdoing in order to secure Lundin’s oil operations in the country. Lundin itself is now facing confiscation of the equivalent of £119 million which is said to be the value of the profit that the company made on the sale of the business in 2003.
Lundin had business operations in Sudan from 1991 onwards. During many of its years operating there, a vicious civil war was ongoing. The Swedish prosecutor claims that after Lundin found oil in one Sudanese territory in 1999, the company requested from the Sudanese government that the military should be made responsible for the security of its site, knowing that this meant that the military would then need to take control of said region via military force. “What constitutes complicity in a criminal sense is that Lundin made these demands despite understanding or, in any case being indifferent to the military and the militia carrying out the war in a way that was forbidden according to international humanitarian law,’’ the Swedish prosecutor said.
With their respective indictments confirmed, the Swedish prosecutor made it clear that he believes the evidence in this case is comprehensive. It includes details of large numbers of attacks on civilians and information that the indicted individuals were complicit in this activity. Earlier this year, Lundin had declared in an internal investigation report that “the allegations against the company and its representatives being considered by the Swedish Prosecutor are without merit and will be challenged in the Swedish Court.”
While the prosecutions are notable for both the nature and seriousness of the allegations, they are also an indicator of a more general issue. This is a case that emphasises that European prosecutors are now looking to use human rights litigation in order to hold to account corporates and individuals that are suspected of involvement in the most serious crimes committed abroad. Such involvement - in order to protect or develop a company’s interests in one or a number of countries - is likely to come under scrutiny now more than ever before.
The Lundin case itself shows that instances of such wrongdoing from years ago may not now go unpunished. Prosecutors are increasingly looking for corporate legal and moral failings that companies may have justified – or turned a blind eye to – in the interests of business. And Lundin comes in the wake of the recent indictment of French cement manufacturer Lafarge, which is facing allegations of paying €13 million to terrorist groups in Syria (including ISIS) in order to protect its business interests. Two months ago, France’s Supreme Court ruled that one can be an accomplice to crimes against humanity even if one does not intend to be associated with the commission of these crimes: it is sufficient to know of the preparation or commission of these offenses and know that such aid or assistance facilitated them. Furthermore, the Supreme Court held that it is not necessary to belong to a criminal organization or to participate in the conception or execution of the criminal plan to qualify as an accomplice. With this ruling, the French Supreme Court paved the way for the Paris Court of Appeals’ Investigation Chamber to indict Lafarge for complicity in crimes against humanity. It also confirmed Lafarge’s indictment on counts of terrorism financing.
Lundin and Lafarge are not, it should be emphasised, going to be isolated incidents. Human rights violations resulting from business operations are under greater scrutiny throughout Europe.
The past 12 months has seen several European NGOs, including the Berlin-based European Center for Constitutional and Human Rights (ECCHR) and Paris-based Sherpa, file a complaint against some major retail brands for allegedly benefiting from forced labour involving the Uyghur in China. Targeted companies include some of the most prominent players in the fashion industry, such as Uniqlo, Sketcher USA, Inditex (parent company of, inter alia, Zara, Bershka, Massimo Duty, Pull and Bear), Hugo Boss and C&A. But while the French prosecution office confirmed the opening of a preliminary investigation into concealment of crimes against humanity, German prosecutors have so far not launched criminal investigations due to lack of sufficient factual evidence substantiating allegations that the targeted persons were in effect involved in crimes against humanity or any other criminal offense.
Human rights protection when doing business is also becoming a bigger issue for the authorities.
Four years ago, France adopted its Duty of Vigilance Law, which compels companies to identify the human rights and environmental risks linked to their conduct – and devise measures to remove them. The oil giant Total has been targeted under the Law, over its behaviour in Uganda. Various other major corporations are under heightened NGO scrutiny, with several disputes launched in France for failure to comply with their Duty of Vigilance.
In Germany, the Supply Chain Due Diligence Act will come into force in 2023. This will make companies responsible for preventing the risk of forced labour, child labour, discrimination, violations of freedom of association, poor employment terms and working conditions, and environmental damage in their supply chains. Failure to meet these obligations could lead to fines of up to 2 percent of turnover or debarment from bidding for public contracts. With the adoption of this law, Germany is currently at the forefront when it comes to imposing mandatory human rights due diligence and greater scrutiny on the supply chain. This is in line with the draft EU directive on corporate accountability and corporate due diligence, which is currently in the pipeline.
Lundin may, therefore, be grabbing the headlines right now. But it seems likely that other corporations will follow.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.