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Explained: Why is France’s environment minister facing a probe over shares?

France's environment minister is facing an investigation into alleged conflicts relating to the fossil fuel industry and tax havens over shares owned by her children.

Published: 9 November 2022 16:57 CET

Explained: Why is France's environment minister facing a probe over shares?

France's Minister for Energy Transition Agnes Pannier-Runacher speaks to the press at the Eqiom cement plant in Lumbres, northern France (Photo by FRANCOIS LO PRESTI / AFP)

France’s Environment Minister, Agnès Pannier-Runacher, is under fire for having potentially failed to disclose conflicts of interest, after the release of an investigation by the online medias Disclose and Investigate Europe.

The investigation centres on Pannier-Runacher’s three children (aged 19, 16 and 11) who all hold shares in a company created by their grandfather, Jean-Michel Runacher, the former director of oil and gas company, Perenco.

The company, Arjunem, was set up as an early-inheritance scheme by Runacher. The minister’s three children have held their shares since 2016, at which time they were all minors, meaning that Pannier-Runacher had to sign on their behalf. The company’s capital, which amounts to over €1 million, is linked to three investment funds, two of which are operated in tax havens or low-tax regimes in Guernsey and Ireland.

There are two potential areas of concern;

The first alleged transgression lies in the fact that Pannier-Runacher did not disclose her children’s shares in the company to the High Authority for the Transparency of Public Life (HATVP), the French government watchdog for conflict of interest. The minister says that she did not breach any disclosure rules, as the law requires only that she disclose her own holdings and those of her spouse, not those of her children.

The second is the possibility that Arjunem could have investments linked to oil and gas, as the three hedge fund firms “have fossil fuel-linked investments in their portfolios,” according to Investigate Europe. As environment minister, Pannier-Runacher has been tasked with aiding the country in moving away from dependence on fossil fuels.

However, as of November 8th, there was no evidence that Arjunem specifically had any investments in oil and gas.

Pannier-Runacher has called allegations “false and slanderous”.

She told Disclose that the company “is not my inheritance, but that of my children” and added that her children “have no power to manage the company to date.” The minister explained that is her father alone who manages Arjunem and its investments – meaning Jean-Michel Runacher has “full control of [the investments] and can keep dividends”, according to Investigate Europe.

The response to the investigation has been swift by French politicians, particularly those on the left who have slammed the environment minister. Fabien Roussel, the head of the French Communist Party commented that “the difference between tax optimisation and tax evasion is the thickness of a prison wall.”

Another left-wing politician, MP Clémence Guetté from the hard-left La France Insoumise (LFI) doubted Pannier-Runacher’s ability to “push forward renewable energies” if she has “indirect financial interests that are visibly linked to oil companies,” according to Franceinfo.

On Tuesday, the HATVP announced it would be opening its own investigation following the report by Investigate Europe and Disclose.

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Azerbaijan vehemently rejects the accusation it bears responsibility for the riots that have led to the deaths of five people and rattled the Paris government.

But it is just the latest in a litany of tensions between Paris and Baku and not the first time France has accused Azerbaijan of being behind an alleged disinformation campaign.

The riots in New Caledonia, a French territory lying between Australia and Fiji, were sparked by moves to agree a new voting law that supporters of independence from France say discriminates against the indigenous Kanak population.

Paris points to the sudden emergence of Azerbaijani flags alongside Kanak symbols in the protests, while a group linked to the Baku authorities is openly backing separatists while condemning Paris.

“This isn’t a fantasy. It’s a reality,” interior minister Gérald Darmanin told television channel France 2 when asked if Azerbaijan, China and Russia were interfering in New Caledonia.

“I regret that some of the Caledonian pro-independence leaders have made a deal with Azerbaijan. It’s indisputable,” he alleged.

But he added: “Even if there are attempts at interference… France is sovereign on its own territory, and so much the better”.

“We completely reject the baseless accusations,” Azerbaijan’s foreign ministry spokesman Ayhan Hajizadeh said.

“We refute any connection between the leaders of the struggle for freedom in Caledonia and Azerbaijan.”

In images widely shared on social media, a reportage broadcast Wednesday on the French channel TF1 showed some pro-independence supporters wearing T-shirts adorned with the Azerbaijani flag.

Tensions between Paris and Baku have grown in the wake of the 2020 war and 2023 lightning offensive that Azerbaijan waged to regain control of its breakaway Nagorno-Karabakh region from ethnic Armenian separatists.

France is a traditional ally of Christian Armenia, Azerbaijan’s neighbour and historic rival, and is also home to a large Armenian diaspora.

Darmanin said Azerbaijan – led since 2003 by President Ilham Aliyev, who succeeded his father Heydar – was a “dictatorship”.

On Wednesday, the Paris government also banned social network TikTok from operating in New Caledonia.

Tiktok, whose parent company is Chinese, has been widely used by protesters. Critics fear it is being employed to spread disinformation coming from foreign countries.

Azerbaijan invited separatists from the French territories of Martinique, French Guiana, New Caledonia and French Polynesia to Baku for a conference in July 2023.

The meeting saw the creation of the “Baku Initiative Group”, whose stated aim is to support “French liberation and anti-colonialist movements”.

The group published a statement this week condemning the French parliament’s proposed change to New Caledonia’s constitution, which would allow outsiders who moved to the territory at least 10 years ago the right to vote in its elections.

Pro-independence forces say that would dilute the vote of Kanaks, who make up about 40 percent of the population.

“We stand in solidarity with our Kanak friends and support their fair struggle,” the Baku Initiative Group said.

Raphael Glucksmann, the lawmaker heading the list for the French Socialists in June’s European Parliament elections, told Public Senat television that Azerbaijan had made “attempts to interfere… for months”.

He said the underlying problem behind the unrest was a domestic dispute over election reform, not agitation fomented by “foreign actors”.

But he accused Azerbaijan of “seizing on internal problems.”

A French government source, who asked not to be named, said pro-Azerbaijani social media accounts had on Wednesday posted an edited montage purporting to show two white police officers with rifles aimed at dead Kanaks.

“It’s a pretty massive campaign, with around 4,000 posts generated by (these) accounts,” the source told AFP.

“They are reusing techniques already used during a previous smear campaign called Olympia.”

In November, France had already accused actors linked to Azerbaijan of carrying out a disinformation campaign aimed at damaging its reputation over its ability to host the Olympic Games in Paris. Baku also rejected these accusations.