Global Witness: Mystery Figure Behind SOCAR

The new report released today by Global Witness, reveals a shadowy figure in the oil industry of Azerbaijan, a key EU energy supplier. A little-known businessman, Anar Aliyev, has gained ownership stakes, some highly profitable, in at least 48 deals with Socar, the state oil company of Azerbaijan, though it is not clear why he is involved and how his involvement is of benefit to the country.

The research raises the concern that private individuals, including Anar Aliyev and others he may be fronting for, could be benefiting at the expense of the citizens of Azerbaijan. While Socar and its partners may well have acted within the law, the lack of transparency about how these companies came to be involved in the Azerbaijani oil industry raises serious questions over potential conflicts of interest and preferential treatment.

This opacity highlights a credibility problem for the Extractive Industries Transparency Initiative (EITI), of which Azerbaijan is a long-standing member. Currently, a country can comply with the EITI’s rules while other key aspects of its energy industry are kept in the shadows, raising the risk of corruption. The EITI is beginning to tackle this issue by piloting the voluntary publication of extractive companies real beneficial owners ahead of making this a mandatory requirement in 2016, although the exact nature of the final requirement has not yet been agreed.

"Our report raises serious concerns that the Azerbaijani people are not seeing the full benefit of their country’s oil boom," said Simon Taylor, Global Witness Director. 

"To stamp out any suspicion, Azerbaijan’s authorities should incorporate the disclosure of the beneficial owners of its extractive and oil trading companies into its EITI process and explain Anar Aliyev`s relationship with Socar as a matter of highest priority."

Global Witness findings in Azerbaijan Anonymous  include:

* Companies owned by Anar Aliyev have announced profits of US$375 million in deals involving the handling of Azerbaijani oil, though in most cases, Global Witness could find no evidence that these companies were selected through proper bidding processes or public tenders.

* In just one example, Anar Aliyev made US$118 million in profit in exchange for an investment of just US$5 million in Socar`s Swiss-based oil trading arm Socar Trading. The reasons for his company’s involvement have not been adequately explained.

* The ownership of many other companies that have partnered with Socar has not been made public, so it is unclear who is benefiting from some of Azerbaijan’s oil deals.

* Socar has created a further oil trading subsidiary in Dubai – Socar International DMCC of  which 50% is owned by hidden private shareholders.

"The EITI should be wary of unwittingly giving credibility to countries that remain mired in corruption and opacity," said Simon Taylor, Director of Global Witness. "It should ensure that identifying beneficial owners means exactly that  not just the names of proxies or companies in obscure ownership chains, but the real people who reap the benefits.

* Global Witness:  Established in 1993 by the three friends working from their front rooms, Global Witness now numbers over sixty staff divided between its offices in London and Washington DC, and has a truly impressive track record of success.

We have gone on to campaign internationally against natural resource-related corruption and conflict using a number of countries as case studies – including Burma, Indonesia, Liberia, Sudan, Zimbabwe, Equatorial Guinea, Turkmenistan, and the Ukraine. Initially focusing on specific resources, we have also broadened out to look at the general policies that enable state looting and prevent transparency. -0-