The state-controlled Norwegian metal producer Hydro Aluminium has been called to public account on the terms of contracts the company signed last December with the Tajikistan Aluminium Plant – Talco. By this contract, Hydro announced it had agreed to sell the plant 150,000 tonnes of alumina per annum and purchase up to 200,000 tonnes of aluminium metal produced by the plant. The subject of public concern in Norway is allegations of corruption among Tajik government officials involved in the aluminium business, and what Hydro knows and is doing about it.
The agreement between Hydro Aluminium and Talco has a long pre-history. The Tajik state-onwed company is currently turning out about 450,000 tonnes of aluminium a year – that is worth about $1.2 billion on the international market. In December 2004, the Tajik government defaulted on sale and purchase agreements with with Hydro. The Norwegians sued for recovery in London, won a $150 million award in compensation for non-delivery of 80,000 tonnes of aluminium.
Now, answering the public concerns, Hydro passed all the responsibility to TML, as in practice it is making all the deals not with Tajikistan but with an intermediary company Talco Management Ltd. (TML), registered in the British Virgin Islands. So, all the corruption problems have no connection to Hydro, but are completely the business of TML, which is 70% owned by the Tajik government, and 30% – by wealthy Tajik individuals. It became known unofficially that, although the Norwegian company has announced direct supply, sale and purchase agreements with Talco, all the cash flows are made through the BVI company.
TML does not respond the publicly listed contact number, and nor does BVI-registered Talco. Hydro’s refusal to answer confirms that the Norwegian company does not know, or does nto want to admit that it has not seen auditor’s report on the cashflow of TML, which was last time made in 2004 by PriceWaterhouseCoopers (PWC). This allows to suggest that Hydro’s money is flowing not through a transparent and audited channel of the Tajik state company, but through the BVI company claiming legal control over 100% of the inputs and outputs of the smelter.