Sydney. 8 March 2012. The Australian government backed Export Finance and Insurance Corporation (EFIC) said in a statement it issued two performance bonds in January 2011 to help Leighton expand strategic oil export facilities in Southern Iraq.
Leighton Holdings last month said it voluntarily alerted Australian Federal Police to possible corruption by Leighton Offshore involving the project in Iraq.
In the statement dated March and sent to Dow Jones Newswires on Wednesday, EFIC said it is “aware that Leighton Holdings have referred a suspected breach in their organizational Code of Ethics to the Australian Federal Police for further investigation.”
Performance bonds are guarantees in the event of a contractor failing to perform as expected. The performance bonds are negotiated at very early stages of tender. Once a performance bond is issued it cannot be cancelled or withdrawn. Usually transactions involving bribery are shrouded in secrecy involving many proxies for both the giver and taker of bribe. Therefore EFIC could not have known about any irregularity in the contract especially at the early stages of performance bond negotiations.
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