International corporate political corruption the case of Niko Resources Ltd.

• Date: 01 July 2012
• Author: Bowal, Peter

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Founded in 1987 as a publicly-traded junior Canadian natural gas company headquartered in Calgary, Alberta, Niko Resources Ltd. (Niko) enjoyed a reputation as a gutsy natural gas explorer and producer by taking on projects in politically volatile and economically less-developed regions of the world. The company found early financial success, growing in market capitalization in the five years between 2001 and 2006 from $220 million to $2.5 billion, through its wholly owned subsidiaries in India. Today it operates in Pakistan, Kurdistan, Indonesia, Trinidad, Madagascar and Brazil, as well as throughout North America.

In 1997 Niko moved into Bangladesh which enjoys proven natural gas reserves of up to 425 billion cubic metres. Foreign companies like Niko have invested much financial and political capital to explore and produce gas there alongside state-run companies.

In January 2005, while drilling for gas, Niko accidentally caused an explosion that proved impossible to fully control. It resulted in considerable environmental damage and, while there was no loss of life, a local school was damaged and closed, and thousands of villagers were evacuated. Niko offered U.S. $525,000 to local villages and $100,000 to fund additional services.

Subsequently, Bangladesh's Daily Star pointed out that a very expensive Toyota Land Cruiser Cygnus had made its way from Niko to the junior Bangladeshi Energy Minister, presumably to buy time from government regulatory enforcement and civil compensation. The Minister, Mosharraf Hossain, was expected to decide on the Niko reparations.

The extensive critical coverage of this gift in the Bangladeshi press seems to have drawn the attention of the...