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Rahul Rose: Did F.H. Bertling ever repent and reform?

Image courtesy of F.H. BertlingNot much has changed at the F.H. Bertling Group since a former UK division and a number of top-level employees pleaded guilty. The logistics company continues to employ a corruption-convicted director, and its UK business appears to be going from strength to strength.

More worrying still, the Hamburg-based Bertling Group has not been forthcoming about the role that the director, who was convicted in March, plays at the company.

F.H. Bertling Limited, a former UK-based subsidiary of the 150-year-old family-run shipping and logistics group which has 60 offices in 30 countries, pleaded guilty in August 2017 after being accused by the UK Serious Fraud Office of paying hundreds of thousands of dollars in bribes to a top-level official at Angolan state-owned oil company Sonangol.

Six former and current employees, including a number of Bertling Group directors, also pleaded guilty over the course of the past year to offenses under the Prevention of Corruption Act 1906.

One of these convicted individuals, Dirk Jürgensen, has stayed on at the company, serving as a director of parent company F.H. Bertling Holding GmbH as well as being a shareholder in the business. However, this is less than clear from statements that the company has made in the past month or so.

In September, the Bertling Group put out a statement on its website that said: “None of the accused [in the SFO case] currently work for Bertling Logistics.”

A spokesperson later clarified via email that the online statement — despite being the only response on the Bertling Group website to the company’s guilty plea — just applied to the arm of the business that deals with logistics.

The spokesperson added that Jürgensen is not a director in the logistics arm of Bertling, which generates the majority of the group’s revenues. However, this is directly contradicted by a German company registry filing that lists Jürgensen as a director in F.H. Bertling Logistics Holding GmbH.

When presented with the filing, the spokesperson conceded that Jürgensen served as a director in the logistics company, but insisted that neither Jürgensen nor the company play an active, “operational role” in the logistics division.

Jürgensen is not the only individual implicated in the SFO’s investigation to have stayed on at Bertling.

Marianna Heinemeier — who is listed as an alleged co-conspirator on the SFO’s indictment and whose family has run the Bertling Group for over a century — serves as the sole director of the convicted UK subsidiary. Heinemeier, who, unlike her alleged co-conspirators has not been charged and will not face prosecution, is also one of the current directors in the ultimate parent company.

The Bertling Group says it has drawn a line under the Angola bribery scandal, citing the fact that its convicted UK subsidiary is no longer part of the shipping and logistics group having been sold to a third party. An Iraqi company — Time of Solutions General Trading, General Transport and Maritime Services — acquired the UK subsidiary’s entire shareholding in March 2017.

Of course, the UK company has not completely cut ties with the Bertling Group. As previously mentioned, Heinemeier continues to head the former UK subsidiary, although her role at the company is temporary, a spokesperson told Corruption Watch.

It also appears that the Bertling Group is doing exactly the same type of work in the UK despite offloading its convicted London-based subsidiary. This is made explicit in F.H. Bertling Limited’s 2016 annual report in which the subsidiary states that it was in the process of transferring its contracts to other parts of the Bertling Group before being wound down.

Indeed, Colin Mcisaac and Julia Burt — who were the sole directors of F.H. Bertling Limited for several years until 2016 when Heinemeier took over — are still employed in the UK. They now lead the Bertling Group’s Aberdeen subsidiary, which like its former London counterpart sells freight forwarding services to UK energy companies.

As F.H. Bertling Limited’s fortunes have dwindled, those of the Aberdeen subsidiary have soared. In 2016, F.H. Bertling Logistics Aberdeen Limited saw its revenue increase by over 70 percent.

What’s more, the Bertling Group says on its website that it continues to offer freight forwarding services from its London office in the suburb of Wembley. This is the very same office where F.H. Bertling Limited was located when the conspiracy to bribe an Angolan official was hatched.

That the Bertling Group seems to be continuing as before in the UK highlights one of the weaknesses in the UK’s debarment regime when it comes to holding large companies with complex corporate structures to account. The Bertling Group has over 110 subsidiaries; it matters little if one of its subsidiaries faces debarment, the parent company can simply bid for new contracts and continue doing the same work using another part of the group.

Of course, one way around this problem is to prosecute the parent company rather than the subsidiary. In the Bertling case, the SFO does not face the obstacle that often prevents prosecutions of large companies under the UK’s outdated corporate criminal liability laws: a lack of evidence that a senior employee, usually one who sits on the board of the ultimate parent, intended for the wrongdoing to occur. Unusually for a corruption case, the SFO uncovered emails sent by top directors of the Bertling Group openly discussing bribery.

It is unclear whether the SFO intends to take action against the parent. The prosecutor continues to investigate Bertling, and it has already filed charges in a separate F.H. Bertling Limited case concerning alleged bribe payments for freight-forwarding contracts relating to the Jasmine gas field in the North Sea, which is operated by ConocoPhilips.

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Rahul Rose is a senior researcher for Corruption Watch, a London-based NGO that undertakes cross-border investigations into grand corruption and pushes for effective enforcement of UK anti-corruption legislation. He can be contacted here.

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2 Comments

  1. As customer of Bertling I started to read this article with some interest wondered whether I needed to review my recent diligence and compliance checks on them. I have to be honest, I think the article totally misses the point.
    While the retention of individuals is one consideration, it is window dressing in some respects. Surely what is important is whether the company has actually taken steps to change their behaviour and their processes? Behaviour is at the heart of reform and yet this isn't even touched on. The fact that two entitles share the same registered office tells me absolutely nothing about their approach to compliance.
    The references to the UK's outdated corporate criminal regime and the need to show involvement of a senior employee is also badly informed. This is an issue for activities that took place before 2011 but following the introduction of the Bribery Act 2010 there is an offence of failing to prevent bribery which is intended to address exactly this issue.

  2. While accepting the need for case-specific assessment of commercial partners, I would disagree with the author of the previous comment on a number of points.

    Firstly, a corporate group's approach to employees found to be actively engage in corruption has to be central to any serious assessment of their culture and integrity. To use a harsh analogy, public trust in established churches faltered at revelations that paedophile priests were often just moved to new parishes.

    Secondly, while controls remediation and cultural reform are central to the assessment of corporate rehabilitation, the question only arises if a corporate is losing business and therefore needs to 'self-clean'. EU public procurement rules follow this approach in both requiring mandatory blacklisting for convictions of deliberate corruption and allowing 'self-cleaning' where corporates can show evidence of reform. The blog article is drawing attention to an imbalance of incentives in procurement law arising from the corporate veil, but sensible commercial partners can take a more realistic approach to their periodic monitoring.

    Thirdly, a minor point but corporate convictions for the Bribery Act's 'failure to prevent bribery' offence do not trigger mandatory procurement blacklisting, nor do Deferred Prosecution Agreements.


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