Monsanto fined $1.5m over Indonesia bribes

Minister notes Monsanto played fair

JAKARTA, January 13, 2005,The Jakarta Post, Muninggar Sri Saraswati:
Former state minister for environment Nabiel Makarim was cited as admitting on Wednesday that U.S.-based Monsanto Co., one of the world's leading developers of genetically modified (GM) crops, had lobbied him to facilitate its business in Indonesia, adding, "There was lobbying, but it was in line with the law. It's something common."

The story says that Monsanto agreed last week to pay a US$1 million penalty to the U.S. Department of Justice, which charged the company with violating the U.S. Foreign Corrupt Practices Act when it bribed certain Indonesian government officials to allow it to develop GM crops in this country. It also agreed to pay another $500,000 to the U.S. Securities and Exchange Commission (SEC).

Nabiel also admitted that he had a close relationship with Harvey Goldstein, the president director of the Jakarta-based Harvest International Indonesia business consulting company, which according to KPK was hired by Monsanto to lobby the Indonesian government for legislation and ministerial decrees supporting the development of GM crops.

However, Nabiel claims that he has no knowledge of Monsanto paying bribes to employees of the environment ministry.

January 6, 2005, Financial Times as reported by Monsanto, the agrochemical company, is to pay $1.5m in penalties to the US government over a bribe paid in Indonesia in a bid to bypass controls on the screening of new genetically modified cotton crops.

According to a criminal complaint by the Department of Justice on Thursday under US anti-bribery laws, the company paid $50,000 to an unamed senior Indonesian environmental official in 2002, in an unsuccesful bid to amend or repeal the requirement for the environmental impact statement for new crop varieties.

The cash payment was delivered by a consultant working for the company's Indonesian affiliate, but was approved by a senior Monsanto official based in the US, and disguised as consultants fees.

The company also admitted that it had paid over $700,000 in bribes to various officials in Indonesia between 1997 and 2002, financed through improper accounting of its pesticide sales in Indonesia.

As part of the agreement with the DoJ and the Securities and Exchange Commission, Monsanto has also pledged to appoint independent consultants to review its business practices over a three year period, when the criminal charges against it would be dropped permanently by the DoJ.

Christopher Wray, assistant US attorney general, said in a statement that the agreement required Monsanto's full cooperation and acceptance of responsibility for the wrong-doing. "Companies cannot bribe their way into favorable treatment by foreign officials," he said.

Monsanto's general counsel Charles Burson said that "Monsanto accepts full responsibility for these improper activities, and we sincerely regret that people working on behalf of Monsanto engaged in such behavior".

Monsanto said it had first become aware of financial irregularities in its Indonesian affiliates in 2001, and had begin an an internal investigation, which continued at the direction of its board of directors.

The company also said it had voluntarily notified US government officials of the results of this investigation, and had fully cooperated with the investigations by the DoJ and the Securities and Exchange Commission.

The attempt to circumvent environmental controls on genetically-modified crops in a developing country is a significant embarrasment for Monsanto, which is engaged in an ongoing campaign to win public support in the European Union for its genetically modified crops.

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