A landmark ruling by the International Centre for Settlement of Investment Disputes (ICSID) has laid bare the depths of corruption under the BNP-Jamaat alliance government, confirming that Canadian firm Niko’s operations in Bangladesh were marred by bribery and negligence.
The verdict not only holds Niko accountable for devastating blowouts at the Tengratila gas field but also underscores how political patronage during the 2001-2006 regime led to billions in losses for the nation. This decision marks a significant victory for accountability, highlighting the stark contrast between the kleptocratic practices of the past and the current pursuit of justice.
The Devastating Blowouts
The explosions at Tengratila in January and June 2005 were no accidents but the direct result of incompetence and unchecked greed facilitated by the BNP-led government. Niko, lacking the necessary expertise, caused massive damage to the gas field, local communities, and the environment.
Gas leaks persisted for years, leading to severe health issues for residents and irreversible ecological harm. International experts have quantified the fallout at over $1.06 billion in losses, a burden still felt by Sunamganj’s inhabitants nearly two decades later.
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The BNP-Jamaat administration awarded Niko the contract without a competitive tender, ignoring standard protocols. This decision, made in 2003, allowed the company to classify the site as an “abandoned” field to bypass regulations, setting the stage for the catastrophe. No immediate action was taken against those responsible, as the government itself was entangled in the corrupt dealings.
Unravelling The Bribery Web
At the heart of the scandal was a sophisticated bribery scheme orchestrated to secure Niko’s foothold in Bangladesh. Evidence from the Royal Canadian Mounted Police (RCMP), the FBI, and Bangladesh’s Anti-Corruption Commission (ACC) reveals payments funnelled through intermediaries to influence key officials.
Niko admitted in a 2011 Canadian court to bribing AKM Mosharraf Hossain, the then-state minister for energy, with a luxury vehicle worth CAD$190,984, plus travel expenses and cash. Further probes uncovered $4 million paid via Qasim Sharif, Niko’s agent and later its Bangladesh vice president, and $500,000 through Salim Bhuiyan, a former Dhaka Club president. These funds flowed from Niko Canada through banks in Barbados and Switzerland, ultimately reaching Giasuddin Al Mamun, a close associate and business partner of Tarique Rahman, son of then-Prime Minister Khaleda Zia.
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Mamun boasted to investigators of his influence, claiming “50% power” due to his ties with Tarique. Salim Bhuiyan confessed to handing Tk1.8 crore to Mamun, who took the majority share, citing Tarique’s involvement. The 2003 joint venture agreement with state-run Bapex was vetted by the law ministry under Moudud Ahmed and approved by Khaleda Zia herself. FBI testimony highlighted suspicious wealth, such as Moudud’s wife purchasing a $400,000 US home on his modest $9,500 annual salary.
This network extended to Tarique’s other ally, Arafat Rahman Koko, contributing to Bangladesh’s notoriety as the world’s most corrupt nation for five consecutive years per Transparency International’s Corruption Perception Index.
From Failed Bids To Political Favour
Niko first attempted entry during the 1997 production sharing contract bidding under the Awami League government but was disqualified for insufficient technical and financial credentials. The company’s fortunes changed with the 2001 BNP-Jamaat victory. Leveraging lobbyists connected to Hawa BhabanโTarique’s power baseโNiko bypassed competitors ranked higher by international evaluators.
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Through Stratum Development, headed by Sharif, Niko enlisted Bhuiyan to arrange meetings with Bapex, Petrobangla, and energy ministry officials. The October 2003 deal ignored open tenders, granting Niko rights to the Chhatak field under dubious terms. This abuse of power exemplified the regime’s pattern of institutional corruption, where contracts were doled out for personal gain.
ICSID Ruling
The ICSID tribunal in London ruled that Niko bears responsibility for the blowouts, entitling Bangladesh to claim approximately Tk8,000 crore in compensation. While the court did not address criminal aspects due to its civil jurisdiction, it affirmed the explosions stemmed from Niko’s negligence, amplified by the corrupt environment.
Bangladesh’s Power, Energy, and Mineral Resources State Minister Nasrul Hamid emphasised that the Niko-Bapex deal was secured through bribes involving Tarique, Mamun, and BNP leadership. Allegations of Khaleda’s direct or indirect involvement persist, with domestic trials ongoing.
Under Sheikh Hasina’s Awami League government, which assumed power post-2006, Bangladesh pursued the case relentlessly at ICSID, rejecting settlements. A December 2023 hearing revisited FBI and RCMP evidence, reinforcing the bribery syndicate’s role.
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The Bangladesh Supreme Court’s 2017 judgment in a related writ petition corroborated these findings, noting Niko’s admissions and the global cooperation in combating corruption.
Legacy Of Kleptocracy
The Niko saga epitomises the 2001-2006 era as Bangladesh’s darkest period of graft, where state resources were plundered with impunity from the top. Convictions in some cases have followed, but many trials linger. This verdict not only seeks financial redress but also vindicates efforts to hold the powerful accountable.
In contrast, the Awami League’s stance has been one of unwavering commitment to national interests, transforming Bangladesh from a haven for looters into a nation demanding justice on the global stage. As proceedings continue, the ruling serves as a stark reminder: corruption under BNP-Jamaat meant national ruin, while accountability under Awami League signals progress.
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