Hydro is a Fortune 500 energy and aluminium supplier operating in ...

Dilemmas:
Looking for business opportunities in a new
region, Hydro identifies a very interesting project
in country Y. A National Oil Company and an
International Oil Company currently hold the licence.
An acquisition of a minority position in the
licence would fit perfectly with Hydro’s portfolio
and strategy. The majority of the population of
country Y lives in poverty and the corruption level
is high.
Hydro discovers a service contract with
a consultancy company in addition to the
Production Sharing Agreement (PSA). The company
has an overseas address and is registered
in a Caribbean tax haven. The ownership of the
company is not clear. The company provides a
variety of services to the licence related to facilitating
communication and negotiation with government
authorities. The agreed remuneration includes
substantial success fees and revenues from
oil production. Our partners are not in favour of
changing this arrangement. How should Hydro
proceed in this case?
Hydro plans to invest in a mining company in
Asia. You are responsible for concluding the deal.
While visiting the country, arrangements are made
for you and your spouse to stay at a luxurious
hotel, you are taken out to expensive dinners,
and at the end of your stay you are given a fine
and valuable piece of art. How do you handle
this situation?
27
Hydro acquires a factory in country X.
A large number of official documents have to
be produced within a short period of time. If not,
the business cannot start running. The most
critical problem is work permits. It takes several
months to get them through the authorities.
It is, therefore, common practice to order permits
through an agency that can arrange for permits
to be drawn up in two weeks for a reasonable
amount of money. You understand that speeding
up the process might involve corruption. What
do you do?