General Counsel

sharing some of the most difficult

corporate and legal issues of today

Eni’s experience

Massimo Mantovani

General Counsel

Eni S.p.A.

Kazakhstan/Iraq

Kazakistan/Iraq

Subject matter: alleged case of international corruption i)

in Kazakhastan, in connection with tender processes

managed by Agip KCO in the “Kashagan Project”, ii) in Iraq,

in connection with operations by eni Zubair

Authority: Public Prosecutor of Milan

Status of the proceedings: Still in the preliminary

investigation phase since 2009

2012

2013

2009

2011

2014

Service to eni of a subpoena calling for the production of

documents pursuant to art. 248 of the Italian Code of

Criminal Procedure

Service to eni of a notice of investigation pursuant to

Legislative Decree n. 231/2001 together with a seizure

order

Motion for interim measures (barring eni from all activities in Kazakhastan) by the Milan Public Prosecutor

Dismissal by the Court of the motion for interim measures

Dismissal by the Second Instance Court of the appeal by the Public Prosecutor through arguments that, in the merits, are favorable for eni

Filing to the Prosecutor by eni of a motion for dismissal of the case

TSKJ (1/3)

2009

2010

2011

2012

2004

2010

2012

2013

Investigation by the US Department of Justice

and Securities and Exchange Commission

July 2010 Execution by Snamprogetti

Netherlands BV of a two-year deferred

prosecution agreement with the DoJ ($240M).

Eni and Snamprogetti also entered into a

consent order with the SEC ($125M). NO

compliance monitor imposed

Snamprogetti entered into a settlement and

non prosecution agreement with the Nigerian

Authorities

August 2012 Expiration of the two-year

deferral period

March 2009: service to Eni of a subpoena calling for the

production of documents pursuant to art. 248 of the Italian

Code of Criminal Procedure

Motion for interim measures (barring eni and all subsidiaries

from carrying out business activities in Nigeria) filed by the

Milan Public Prosecutor against Saipem and Eni.

Interim Measures: Dismissal by the Court of the motion for

interim measures

Interim Measures: Dismissal by the Second Instance Court of

the appeal by the Public Prosecutor

Interim Measures: decision of the Supreme Court on the

appeal by the Public Prosecutor and referral to the First

Instance Court for new examination of the instance

Formal charges filed against 5 former employees from

Snamprogetti and Saipem (the charges do not involve eni)

Interim Measures: Withdrawal of motion for interim measure

by the Public Prosecutor as a consequence of a guarantee

payment performed by Snamprogetti Netherlands

Decision by the Milan Court on statute of limitations in favour

of the 5 individuals (former snamprogetti managers)

Saipem (as successor to snamprogetti) is sentenced by the

First Istance Court and appeals the decision

TSKJ Subject matter: international corruption case related to alleged payment of bribes to Nigerian officials in connection with the construction of the Bonny Island plant (liquefied natural gas ) in Nigeria: assumed period of the illicit conduct 1994-2004

TSKJ – consequences for members

of the TSKJ consortium - 2/3

Company USA Nigeria Other Countries

Halliburton/KBR

(USA)

SEC USD 177 M in disgorgement

20.12.2010 The company reached a settlement with the Nigerian government, agreeing to pay a USD 32,5 M penalty and USD 2,5 M in legal expenses.

England 16.02.2011 MWKL (subsidiary of KBR) entered in a civil settlement with S.F.O. for 7 M GBP. The S.F.O. recognized that MWKL took no part in the criminal activity which generated the funds, but rather was used by its parent company which participated in the JV and bribery scheme to bid for contracts on Bonny Island.

DoJ USD 402 M criminal penalty

11.02.2009 Plea agreement + independent compliance monitor for 3 years

Technip (France)

SEC USD 98 M in disgorgement

17.12.2010 Technip entered into an agreement with the Nigerian government fully resolving all potential claims by the Nigerian Governmentor any public or private corporation owned or controlled by itrelating to Technip’s participation in the TSKJ JV. Technip agreed to pay a fine and costs totaling USD 32.5M.

France An investigation in France commenced in 2004 and was concluded in 2010 with no prosecution of Technip.

DoJ USD 240 M criminal penalty

28.06.2010 Deferred Prosecution Agreement + independent compliance monitor for two years.

JGC (Japan)

SEC No SEC action 31.01.2011 The company reached a settlement agreement with the Nigerian government, agreeing to pay a USD 28.2 M penalty

DoJ USD 218.8 M Criminal penalty

6.04.2011 Deferred Prosecution Agreement + independent compliance monitor for 2 years

TSKJ (3/3)

Company USA Nigeria Other Countries

Snamprogetti (Italy)

SEC USD 125 M in disgorgement of profits and prejudgment interest

20.12.2010 Snamprogetti entered into a settlement agreement and non prosecution agreement with the Nigerian government to resolve the investigation. Snamprogetti agreed to pay a criminal penalty of USD 30 M, along with USD 2,5 M for legal costs and expenses incurred by the Nigerian Authorities.

Italy The TSKJ matter has been investigated by the Milan Public Prosecutor’s office against unidentified persons since 2004. On July 31, 2009, a decree issued by the Judge for Preliminary Investigation at the Court of Milan was served on Saipem spa (as the legal entity incorporating Snamprogetti spa). The decree set for a hearing in camera on September 22, 2009 in relation to proceedings pursuant to Legislative Decree No. 231 of June 8, 2001 on corporate liability, under which the Milan Public Prosecutor was investigating Saipem spa and eni spa as a consequence of alleged international corruption purportedly carried out by two former managers of Snamprogetti spa. The Milan Public Prosecutor requested as an interim measure that Saipem and eni, pending the investigation, be debarred from activities involving any agreement with the Nigerian National Petroleum Corp and its subsidiaries. On February 18, 2011, following payment by Snamprogetti Netherlands BV of a deposit of 24,530,580 Euro (also on behalf of Saipem spa), the Milan Public Prosecutor’s office withdrew its request for interim measures vs both eni spa and Saipem spa. On July 11, 2013 The Court of Milan issued the ruling in relation to the investigation on the alleged offences in Nigeria by Snamprogetti Netherlands BV and ordered the Company to pay 600.000 Euro and the confiscation of the deposit of 24,530,580 Euro paid by Snamprogetti Netherlands BV to the Milan Prosecutor in February 2011. Saipem appealed the decision. Appeal ongoing.

DoJ USD 240 M criminal penalty

07.07.2010 2-year Deferred Prosecution Agreement. At the conclusion of the two-year deferral period, on 19.09.2012 all charges against the company in the U.S. were dismissed.

Algeria

2011

2010

Eni Anti-Corruption Compliance

Program

Massimo Mantovani

General Counsel

Eni S.p.A.

Anti-Corruption Compliance Program • In 1994 eni adopted the Code of Conduct (subsequently named Code of Ethics) which clearly states the

prohibition and repudiation of any form of corruption: bribes, illegitimate favors, collusion. Offering, giving,

requesting, accepting personal benefits for oneself or others, either directly or through third parties, are

prohibited without any exception.

• To guarantee the highest respect of the Code of Ethics, in November 2009 eni extended its compliance

program by focusing on corruption risks and adopting the Anti-Corruption Guidelines and the related Anti-

Corruption Ancillary Procedures, setting out principles, rules and controls on activities considered at-risk.

• The compliance program has been defined in compliance with the applicable anti-corruption laws, the US

FCPA and the Italian Legislative Decree 231/01, and the International Conventions (the UNCAC and the

OECD Convention on Combating Bribery of foreign officials in international business transactions).

• On December 15th, 2011, eni BoD approved the Anti-Corruption MSG, which updates the anti-corruption

compliance program in order to render it complaint with the UK Bribery Act.

• Main changes in respect to the 2009 Anti-Corruption Guidelines:

• expansion of the prohibited conduct (“bribery of a private person”);

• express prohibition of facilitation payments;

• specific provisions related to gifts and other benefits offered to and/or received by eni’s personnel, and

creation of a “gift register”.

• The Anti-Corruption Legal Support Unit (“ACSLU”) was established at the end of 2009 within the Legal

Department of eni. ACLSU is in charge of providing expert assistance in the field of anti-corruption in relation

to operational activities managed by eni spa and its unlisted subsidiaries in Italy and abroad, and represents a

focal point on the subject both inside and outside eni.

Anticorruption Regulations

• Joint Venture agreements

• Intermediary agreements

• Covered business partners

• Gifts

• Entertainment expenses

• Whistleblowing reports (including

the anonymous ones)

• No-profit initiatives

• Sponsorship agreements

• Sales and acquisitions

• Appointment of external lawyers

• Procurement of consulting and

professional services

• Selection of personnel

• Travel expenses

• Accounting regulations

Adoption and Implementation

The adoption and implementation of the Anti-

Corruption compliance program it is compulsory for

eni spa and for all its Controlled companies in Italy

and abroad.

Moreover, eni uses its influence, to the extent

reasonable under the circumstances, to cause the

companies and entities in which has a non-

controlling interest to meet the above mentioned

standards.

Internal regulations:

•Eni Code of Ethics

•Anti-Corruption MSG, approved by Eni’s Board of Directors on December, 15 2011. The MSG replaced the Anti-Corruption Guidelines dated 12

November 2009 and identifies the areas of activities at risk of corruption establishing the relevant principles for their management.

•Specific regulations: they discipline in detail the system of rules and behaviors to follow in the management of areas at risk of corruption.

Top Level Commitment:

Top Management commitment in

the fight against corruption.

Anti-Corruption Legal Support Unit:

•Constitutes focal point on the subject both inside and outside eni;

• Monitors the adoption of the Anti-Corruption regulations by eni subsidiaries

•Identifies and evaluates the risks of commission of corruption crimes;

• Elaborates, monitors and updates the design of the anti-corruption compliance program (clear and accessible politics and procedures);

• Oversees the training of eni Personnel;

• Makes periodic reports on the activities carried out to the control bodies (Statutory Audit Board, Internal Control and Risk Committee, Watch Structure, CFO).

eni anti-corruption

Compliance program Constitutes a system of rules and

controls for the prevention of crimes

of corruption and aimed to strengthen the

implementation of the “zero tolerance”

principle already

contained in the eni

Code of Ethics.

Managing Red Flags

i.e. Internal audit outputs,

whistleblowing and initiation of

court inquiries.

Communication and

Training

• Circulation of the adopted

regulations;

• Training of eni Personnel (e-

learning; workshop).

Due diligence:

due diligence activities on third

parties

Disciplinary actions and contractual

remedies

Application of disciplinary measures against employees

or actions and remedies against business partners in the

event of violations.

Due Diligence and standard contractual

provisions

Preliminary phase: due diligence

• It is necessary to prevent any possible risk of corruption, carrying out a preliminary anti-corruption due diligence with the aim of evaluating the integrity, professional reliability, the present and past reputation of all third parties with which eni may have contractual relationship in at risk areas.

• “due diligence”:

– Manager’s responsibility

– It has to be promptly carried out and in any event it has to be concluded before the signing of the agreement

– It is carried out through the following tools

• Questionnaire and required documents and certifications;

• Anti-corruption letter;

• Searches on open sources;

• Check of “Red Flags”.

Negotiation phase: anti-corruption contractual provisions

• commitment to comply with the relevant anti-corruption laws and the Anti-Corruption MSG, and in case of contracts with high risk partners (i.e. Intermediaries, JV, etc.), maintain throughout the term of the contract regulations to ensure compliance;

• In case of sub-contracting:

• eni’s prior approval of any sub-contractor, in line with eni’s internal rules;

• assurance that any sub-contractor is subject to terms equivalent to those imposed on the partner;

• commitment to report any request for undue financial or other advantage of any kind, received by the partner in connection with the performance of the contract;

• eni’s right to have an audit carried out on the partner (in case of suspected violation of compliance-related provisions of the contract and/or anti-corruption laws);

• eni’s right to terminate or suspend performance of the agreement and to be indemnified in case of breach by the partner of the contractual anticorruption obligations, representations and warranties, or of the anti-corruption laws.

Contract Management – the Contract Holder

Contract management

• Contract management is assigned to a Contract Holder

• The Contract Holder is the person responsible to monitor the proper performance of the contract.

Duties of the Contract Holder

– Appropriately and continuously monitor performance by the partner, to ascertain the correct fulfillment of the contractual obligations;

– Monitor that the partner always acts in compliance with criteria of the highest diligence, honesty, transparency, integrity and in compliance with the Anti-Corruption Laws, the Code of Ethics, the Model 231, the Anti-corruption compliance program and the contractual provisions;

– Ensure the traceability of the relationship with the partner, also as evidence of the services rendered consistently with the contractual provisions;

– Point out any possible red flags in the operations carried out by the Partner and immediately alert the Anti-Corruption Legal Support Unit of any inadequacy, gap or suspected violation;

– In order to effect payment of the invoices, confirm that the performance has occurred - and that the invoiced amount is - in compliance with the contractual terms and conditions.

B20 ANTI-CORRUPTION TASK FORCE

Massimo Mantovani

General Counsel

Eni S.p.A.

B20 RUSSIA – Anti Corruption Taskforce Recommendation to G20 on creating incentives and removing disincentives for the private sector to cooperate with the authorities and to self-reporting

“We recommend that from June 2013 the representatives of the B20 Task Force and of the

G20 Anti‐Corruption Working Group should have regular meetings to identify regulatory

improvements and discuss their impact on the corporate sector. This would include identifying

consistent and effective enforcement measures that can discourage bribe payers; developing

incentives and removing disincentives for the corporate sector to take an active role in the fight

against corruption such as voluntary disclosure, self‐reporting and other means of cooperation

with law enforcement authorities.”

Focus on:

• International coordination and regulatory harmonisation

• Ne bis in idem (multiple jurisdiction issues, multiple sanctions)

• Alternative means of settlement (DPAs, NPAs)

• Leniency mechanisms

• Benefits to companies conducting internal investigations prior to self-reporting

Immediate effects of this recommendation:

• Roundtable between representatives of B20 companies and representatives of selected

G20 Governments, held in Panama at the Conference of the State Parties to the UNCAC

(November 27, 2013), organised with the support of UNODC and OECD

• The basis of discussion at the roundtable was a preliminary study on Development of a

Preliminary Study on Possible Regulatory Developments to Enhance the Private Sector

Role in the Fight against Corruption in a Global Business Context *

*by Richard Alderman, Director Serious Fraud Office 2008-2012. Copies of the study can be obtained by email to

panamapaer@eni.com

B20 RUSSIA – Anti Corruption Taskforce Recommendation to G20 on Encouraging Collective Action and Anti-corruption globally and in each G20 country

“We recommend that the G20 governments and B20 companies should continue to support the

establishment, by the end of 2013, of a Collective Action Hub to share best practices

throughout the G20 countries and beyond.”

Focus on:

• Importance of Collective Action: only through joint efforts of business, government and civil

society the risks of corruption can be mitigated

• Setting up a Collective Action Hub as a centre of competence which provides practical

advice on the implementation of Collective Action initiatives, share information on them and

analyse their effectiveness;

• Present the analysis on a dynamic Hub’s website, accessible by business, government and

civil society for them to learn more about how Collective Action can help them combat

corruption.

Immediate effects of this recommendation:

• Selection of Collective Action Hub completed in mid-2013:

the Collective Action Hub will be developed and managed by the Basel Institute on

Governance in close partnership with the UN Global Compact.