Bad smoke over CPC’s deal with controversial firm

By Rathindra Kuruwita
Ceylon Petroleum Corporation (CPC) has entered into a US $ 500 million agreement to obtain supplier’s credit for diesel with Trafigura Beheer BV, a Corporation which is renowned for controversy and questionable practices. The agreement is supposed to give CPC 6 months of supplier credit at the London Interbank offered rate, plus 1.6 percent said reports.

Although the CPC Chairman Asantha de Mel claimed that this deal will benefit the CPC, many question the wisdom of entering into such a deal when considering the accusations levelled against Trafigura Beheer BV over the years.

Trafigura which was created with the funds of billionaire Marc Rich who is considered as, “the most wanted white-collar criminal in US history,” is no stranger to controversies. In early 2006 Trafigura pleaded guilty and paid a US$8-million fine to two American energy companies when it sold 500,000 barrels of imported Iraqi oil to the two energy companies in 2001, which were not sourced in compliance with the United Nations Oil-For-Food Programme.

In 2006 it was accused of dumping 528,000 litres of toxic chemical waste at 15 sites in and around the west African city of Abidjan, Ivory Coast. The toxic waste has been blamed for the deaths of 15 people and led to more that 100,000 seeking medical assistance.

Trafigura Beheer BV officials have also been accused of bribery charges in many countries. In 2006 it gave a US $ 31 million donation to the People’s National Party, the governing party of Jamaica, a donation which many claim as a bribe to facilitate its activities in the country. In early 1990s Trafigura and its local partner High Beam Investments paid thousands of US Dollars to South African officials who ‘assisted’ Trafigura in making a US $ 1.5 billion deal.