Amid allegations of corruption and bribery in Uzbekistan, Swedish telco giant TeliaSonera’s chief executive resigned today after an independent probe found faults with the company’s due diligence in securing the contract.
While the review cleared Teliasonera of allegations of bribery and money laundering, the auditor revealed the company had not performed proper background checks when it purchased a 3G license in 2007 from Takilant for 2.3 billion kronor (US $350 million). It was later discovered that Takilant had ties to Gulnara Karimova, daughter of Uzbek President Islam Karimov, who has been accused of hiring a ‘henchman’ to negotiate the license and an accompanying bribe.
Despite past comments from the Teliasonera board that they had “full confidence” in CEO Lars Nyberg, he had come under significant pressure about the company’s dealings. Nyberg from the beginning had been adamant that the company had not bribed anyone, but that he would step down if a crime was committed.
“Even if this transaction was legal, we should not have gone ahead without learning more about the identity of our counterparty,” Nyberg said in a statement today to the press. “This is something I regret.”
Nyberg’s resignation comes just a week ahead of the next meeting of the telco Industry Dialogue on Freedom of Expression and Privacy, the body charged with developing guiding principles on telecommunications, privacy, and freedom of expression. Teliasonera was a key player in the Industry Dialogue, and it is unclear what Nyberg’s resignation means not only for the telco itself, but for the entire telecom industry’s attempt to promote rights-respecting guidelines.
While the current probe was focused on corruption and money-laundering, not human rights abuses, there is a link between the two. Namely, in the absence of proper processes and due diligence, especially in emerging markets, crimes and abuses will occur and telcos will be questioned on complicity.
This should serve as a wakeup call to other CEOs. Two-years on from the failings of telcos during the Egyptian revolution, it is clear that the industry needs more CEO oversight. The global telecommunications industry has transformed the way people interact, participate in society, connect with the world, and, in the words of Lars Nyberg, “It is an undeniable fact that modern telecommunications speed up a country’s long journey towards democracy.”
But it’s also a business that deals with in contracts worth millions–if not billions–of dollars. In countries where officials does not put the interests of their citizens first, the potential for corruption is ripe. Not to mention, the very nature of its transformative power makes can pose a threat to ruling institutions.
TeliaSonera is part-owned by Sweden and Finland, two of the world’s leaders in advancing human rights at home and abroad. Surely taxpayers there demand more of their flagship telco than this, especially as TeliaSonera looks to expand into even riskier markets like Burma’s.
We hope that the CEOs of telcos see Nyberg’s resignation and recognize they are accountable for their company’s actions and have a moral obligation to their users, even if no crime is committed. Access will continue to work with members of the Industry Dialogue to ensure that Nyberg’s resignation does not disrupt the already fragile process to protect the rights of users around the world.