Monthly Archives

December 2015

landmark_prosecutions

Landmark prosecutions under Australian Foreign Fighters Legislation and the role of international law

By | IAL, International Administrative Law, News | No Comments

Returning foreign fighters from Syria have posed a legal challenge for domestic prosecuting authorities. BWL Academic Member and Australian Barrister, Rishi Gulati has undertaken work in the national security law area. In an interview with Radio National of the Australian Broadcasting Corporation on 17th November 2015, Rishi discusses a landmark case in Melbourne that is likely to set a legal precedent for returning foreign fighters.

 

http://www.abc.net.au/radionational/programs/breakfast/landmark-case-in-melbourne-to-set-legal/7036200

 

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Bretton Woods Law speaking in at British Embassy in Vienna and La Sapienza University in Rome

By | Administrative Law, IAL, International Administrative Law, News | No Comments

On 27th November, Bretton Woods Law presented a seminar on international administrative law in Vienna. Hosted in conjunction with the British Embassy in Vienna and UK Trade and Investment (‘UKTI’) at the Residence of HE the British Ambassador, some 38 delegates from 25 different international organisations attended for a selection of lectures presented by members of BWL covering themes such as fundamental and essential rights, harassment, the big issues of IAL and litigating before administrative tribunals and legal insurance.

This event follows BWL’s participation in the Round Table at La Sapienza University in Rome on 6th November, which focused on the theme of ‘right of appeal in international administrative courts. The Round Table was organised by the Committee of Staff Representatives of the Co-ordinated Organisations (‘CRP’), the Association of Scholars of International and European Law, the University of Rome La Sapienza’s Department of Communication and Social Research, the Journal of the International Legal Cooperation, KorEuropa (On-line Journal of the European Documentation Centre of the Kore University of Enna), the International Law and European Union Law Series (Aracne Ed.). Jazz Omari delivered a presentation entitled ‘Should an appeal mechanism be introduced against rulings by the courts of International financial institutions?’ which compared the current structure of the internal justice systems at multilateral development banks and examined possible structural reforms devised by Lee Marler. The Round Table received a Medal of the Presidency of the Italian Republic and the presentations shall be published by Aracne Editions in the new year.

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BREAKING NEWS

By | Development Banks, Multilateral Development Banks, News | No Comments

The African Development Bank with BWL Assistance Settles Sanction Case with Hitachi Ltd of Japan

The African Development Bank (“AfDB”) has today announced in Abidjan that it has entered into a Settlement Agreement with Hitachi Ltd of Japan, which brings to an end the three-year investigation undertaken by the AfDB’s Integrity and Anti-Corruption Department (“IACD”).  IACD had alleged that two Hitachi companies – the German based Hitachi Power Europe GmbH (“HPE”) and its South African subsidiary Hitachi Power Africa (Pty) Ltd (“HPA”) – had engaged in sanctionable practices in order to be awarded in South Africa in 2007 the AfDB financed Medupi Power Station Boiler Works Contract.

BWL’s Lee Marler, Neil Macaulay and Alex Haines have represented IACD in this matter for the past two years and an international BWL team instructed by IACD (and comprised of Marler, Macaulay, Alan Sarhan and Ayman Daher (the latter two from BWL Canada)) will now proceed to assist Hitachi Ltd in fulfilling its settlement obligations to the AfDB.

The full text of today’s AfDB press release reads as follows:

“Abidjan, Côte d’lvoire Wednesday, 2nd December 2015 – The African Development Bank Group (“AfDB”) announces that on 2nd November 2015 it concluded a Settlement Agreement with Hitachi, Ltd.  (“Hitachi”) of Tokyo, Japan.

The Settlement Agreement follows a three year investigation by the AfDB’s Integrity and Anti-Corruption Department (the “IACD”) into allegations of sanctionable practices by certain Hitachi subsidiaries on the AfDB financed Medupi Power Station Boiler Works Contract in the Republic of South Africa. The IACD alleged that at the material time Hitachi Power Europe GmbH (“HPE”) based in Germany and its South African subsidiary, Hitachi Power Africa (Pty) Ltd (“HPA”), engaged in sanctionable practices in order to be awarded the boiler works contract.

The AfDB acknowledges that Hitachi and its affiliates co-operated fully and openly with the IACD investigation, and that Hitachi was determined throughout to maintain its good relations with the AfDB and to protect the integrity of the Medupi project.  Despite their differences, both parties shared a desire to resolve the current difficulties by way of settlement.

Due in part to the high level of assistance provided to the IACD by Hitachi, the AfDB has agreed to impose the sanction of debarment for twelve months with conditional release upon HPE and HPA, the two companies at the centre of the IACD investigation.  Debarment will be terminated as soon as Hitachi enhances its integrity compliance programme to the standard set by the AfDB’s Integrity Compliance Guidelines.  Moreover, Hitachi has voluntarily agreed (1) to make a substantial financial contribution to the AfDB, which will be used to fund worthy anti-corruption causes on the African continent; and (2) to co-operate with the IACD on a variety of matters, including enhancing where necessary its existing integrity compliance programme referenced above.

The sanctions imposed under the settlement agreement reflect the level of cooperation provided by Hitachi, Ltd. in the investigation of the Medupi matter, for which the IACD is grateful”, said Anna Bossman, Director of the IACD.  “Hitachi has shown by its actions that it is committed to doing business in an ethical manner and the IACD believes in giving credit for such dedication.  As I have said before, the IACD is ever willing to resolve amicably allegations of sanctionable practices with companies that show a sincere commitment to integrity, who collaborate in the resolution of allegations and who elect to enhance their compliance polices and procedures.

On 30th October 2007, Eskom awarded the AfDB financed Medupi Power Station Boiler Works Contract for the design, manufacture, supply, erection and commissioning of six coal fired steam generator units at its Medupi plant at Lephalale in the Limpopo Province of South Africa to the consortium of HPE and HPA.  Mr Johann Benöhr led the IACD investigation with support from Ms Funmilayo Akinosi and Mr Simeon Obidairo.  Lee Marler, Neil Macaulay and Alex Haines of Bretton Woods Law, London represented the IACD.”

Separately, Hitachi Ltd also settled on 28th September 2015 with the United States’ Securities and Exchange Commission (“SEC”) and its press release of the same day, in which it acknowledged the assistance provided by IACD and by implication BWL, reads as follows:

“Washington D.C., Sept. 28, 2015 — The Securities and Exchange Commission today charged Tokyo-based conglomerate Hitachi, Ltd. with violating the Foreign Corrupt Practices Act (FCPA) when it inaccurately recorded improper payments to South Africa’s ruling political party in connection with contracts to build two multi-billion dollar power plants.

Hitachi has agreed to pay $19 million to settle the SEC charges.

The SEC alleges that Hitachi sold a 25-percent stake in a South African subsidiary to a company serving as a front for the African National Congress (ANC).  This arrangement gave the front company and the ANC the ability to share in the profits from any power station contracts that Hitachi secured.  Hitachi was ultimately awarded two contracts to build power stations in South Africa and paid the ANC’s front company approximately $5 million in “dividends” based on profits derived from the contracts.  Through a separate, undisclosed arrangement, Hitachi paid the front company an additional $1 million in “success fees” that were inaccurately booked as consulting fees without appropriate documentation.

“Hitachi’s lax internal control environment enabled its subsidiary to pay millions of dollars to a politically-connected front company for the ANC to win contracts with the South African government,” said Andrew J. Ceresney, Director of the SEC’s Enforcement Division.  “Hitachi then unlawfully mischaracterized those payments in its books and records as consulting fees and other legitimate payments.”

According to the SEC’s complaint filed in U.S. District Court for the District of Columbia:

  • Hitachi was aware that Chancellor House Holdings (Pty) Ltd. was a funding vehicle for the ANC during the bidding process.
  • Hitachi nevertheless continued to partner with Chancellor and encourage the company to use its political influence to help obtain government contracts from Eskom Holdings SOC Ltd., a public utility owned and operated by the South African government.
  • Hitachi paid “success fees” to Chancellor for its exertion of influence during the Eskom tender process pursuant to a separate, unsigned side-arrangement.

Hitachi’s misconduct violated the books and records and internal accounting controls provisions of the federal securities laws, specifically Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934.

Without admitting or denying the SEC’s allegations, Hitachi agreed to a settlement that would require the company to pay a $19 million penalty, and it would be permanently enjoined from future violations.  The settlement is subject to court approval.

The SEC’s investigation was conducted by Jon Jordan and Thierry Olivier Desmet of the FCPA Unit in Miami with assistance from Kathleen Strandell, David S. Johnson, and Matthew P. Cohen.  The SEC appreciates the assistance of the Justice Department’s Fraud Section, the Federal Bureau of Investigation, the Integrity and Anti-Corruption Department of the African Development Bank, and the South African Financial Services Board.

“We particularly appreciate the assistance we received from the African Development Bank’s Integrity and Anti-Corruption Department and hope this is the first in a series of collaborations,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.””

BWL barristers are renowned experts in the sanctions procedures operated by the world’s multilateral development banks (“MDB’s”), such as the African Development Bank (“AfDB”), the Asian Development Bank (“AsDB”), the Inter American Development Bank (“IADB”) and the World Bank Group.

Lee Marler, BWL’s co-head of Chambers, is quoted as saying that “we are very proud to be IACD’s standing counsel and we are delighted to have assisted the Department these past years in bringing the Medupi case to a successful conclusion, but we are equally proud to be able to represent our other clients before the anti-corruption units, sanctions boards and committees of the other MDBs.  Our strength is our depth of knowledge and unparalleled experience, for at BWL we prosecute for the AfDB but defend everywhere else and it is this rich mix that serves to ensure that we give balanced and objective advice to all of our MDB clients”.

The BWL MDB team can be contacted at enquiries@brettonwoodslaw.com