CORRUPTION AT BP

Bob Dudley, chief executive of BP, will be a member of the British trade delegation going to Russia with David Cameron. Photograph: Ben Stansall/AFP/Getty Images

By Terry Macalister guardian.co.uk, Friday 9 September 2011

BP's anti-corruption drive in Russia picks up 365 offences

TNK-BP joint venture confirms 37 criminal cases under way as chief executive Bob Dudley prepares for Moscow trade visit

Bob Dudley, chief executive of BP, will be a member of the British trade delegation going to Russia with David Cameron. Photograph: Ben Stansall/AFP/Getty Images

BP's difficulties in Russia intensified on Friday as its TNK-BP Russian joint venture confirmed that 365 cases of corruption or other violations of company rules had been identified by security staff.

TNK-BP said 92 employees had been disciplined and 37 criminal cases were under way as a result of an internal drive to combat fraud which was enhanced nine months ago with the launch of a new "security hotline".

The Moscow company said the voluntary release of the figures and the work being done underlined its determination to root out dishonesty, but industry experts said it also highlighted the scale of BP's problems inside TNK.

The information was released just days before BP's chief executive, Bob Dudley, flies into Russia as part of a trade delegation alongside the prime minister, David Cameron, who is to hold meetings with his counterpart, Vladimir Putin.

Dudley is already struggling to deal with a raid on BP's Moscow headquarters by armed police as part of a $3bn (£1.88bn) legal compensation claim being launched by a group of TNK-BP's Russian shareholders.

Dudley's ambitious plans to undertake a share swap and Arctic drilling programme with state-owned oil group Rosneft collapsed in May, at a time when the British company needed some successes following the Gulf of Mexico spill last year.

BP is understood to have been actively pushing the TNK business to adopt tough internal procedures. Maksim Barskiy, deputy chairman of TNK-BP, said "integrity" was now one of the company's core values, and the steps taken showed it would not tolerate any form of corruption or fraud.

"We shall continue to improve our anti-corruption system, while at the same time seeking out advanced methodology and applying the best international practice in this area," said Barskiy.

"We will also act openly and make public any significant violations of business ethics. This will help not only to combat fraud and corruption more effectively, but will also attract to the company employees and partners for whom honesty is the cornerstone of their personal values."

The Russian business, which produces almost a quarter of BP's global hydrocarbon production, is also trying to ensure greater transparency from its contractors, it says.

Dmitry Medvedev, the Russian president, has made the elimination of official corruption an important part of his political programme, after a 100% year-on-year increase in cases reported.

Criminal proceedings were launched against 10,000 officials in 2010, one-third of them for taking bribes, the government said earlier this year.

The official visit by Cameron is important as relations between the UK and Russia have been difficult. Putin has not met a British prime minister for four years.

Dudley will be hoping to get a better understanding of the government's view of BP, since the Kremlin refused to support the company in the row with TNK shareholders which scuppered its attempt to forge the Rosneft deal.

BP's situation was not helped when Medvedev called on his deputy prime minister, Igor Sechin, to step down from the chairmanship of Rosneft in the middle of talks. Rosneft signed an alternative deal with BP's rival ExxonMobil in August.