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INDONESIA: Monsanto Agrees to US $1.5m Penalty Over Crop Bribe

by Jonathan BirchallFinancial Times
January 7th, 2005

Monsanto, the US agro-chemical company, is to pay Dollars 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 Justice Department (DoJ) on Wednesday under US anti-bribery laws, the company paid Dollars 50,000 to an unamed senior Indonesian environmental official in 2002. The DoJ said this was an unsuccessful 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 Dollars 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 co-operation and acceptance of responsibility for the wrongdoing. "Companies cannot bribe their way into favourable treatment by foreign officials," he said.

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

Monsanto said it had first become aware of financial irregularities in its Indonesian affiliates in 2001, and had begun an internal investigation.

The company also said it had voluntarily notified US government officials of the results of this investigation, and had fully co-operated with the investigations by the DoJ and the SEC.

Monsanto is campaigning to win public support in the European Union for its genetically modified crops.

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