Mining giant Glencore to pay a billon dollars after bribery probes
The announcement came after Glencore Energy UK indicated in a London court it will plead guilty.
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Your support makes all the difference.Mining giant Glencore is to pay more than a billon dollars after bribery investigations, with the firm’s chairman admitting “unacceptable practices” had taken place.
The company announced it had reached agreements with authorities in the US, UK and Brazil who were investigating claims of bribery and market manipulation.
The announcement of penalties to be paid came after Glencore Energy UK indicated in a London court on Tuesday that it will plead guilty to seven bribery charges brought by the Serious Fraud Office (SFO).
In an update on Tuesday evening, Glencore said it will pay penalties of 700,706,965 US dollars (about £560 million) to resolve bribery investigations and 485,638,885 dollars (£388 million) to resolve market manipulation investigations by the Department of Justice (DOJ) in the US and the Commodity Futures Trading Commission (CFTC).
The firm said up to 165,930,959 dollars (£132 million) will be credited against parallel matters, including in the UK, resulting in the net amount payable to the US authorities expected to be 1,020,414,891 dollars (£1.02 billion).
The company said it has also agreed to pay 39,598,367 dollars (£31 million) under a resolution signed with the Brazilian Federal Prosecutor’s Office (MPF) in connection with its bribery investigation.
The London-listed miner had previously set aside 1.5 billion dollars (£1.2 billion) to cover the investigations it faces in the US, the UK and Brazil.
Glencore chairman Kalidas Madhavpeddi said: “Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred.
“The board and the management team are committed to operating a company that creates value for all stakeholders by operating transparently under a well-defined set of values, with openness and integrity at the forefront.
“We want the Glencore of today to be an employer of choice, attracting and retaining the best talent and competing across its sectors not only in terms of the unique value proposition that Glencore has to offer, but also in its commitment to act ethically and responsibly across all aspects of its business.”
Glencore said it had pleaded guilty to one count of conspiracy to violate the US Foreign Corrupt Practices Act related to the group’s past actions in certain overseas jurisdictions, and one count of conspiracy to commit commodity price manipulation related to past market conduct in certain US fuel oil markets.
It said the agreement to resolve the CFTC investigation related to “past market conduct in certain US fuel oil markets as well as past corrupt practices in certain overseas jurisdictions”.
As part of the plea agreements with the DOJ, Glencore said an independent compliance monitor will be appointed for three years “to assess and monitor the company’s compliance with the agreements and evaluate the effectiveness of its compliance programme and internal controls”.
This type of behaviour has no place in Glencore
Gary Nagle, chief executive of Glencore, said: “We acknowledge the misconduct identified in these investigations and have co-operated with the authorities.
“This type of behaviour has no place in Glencore, and the board, management team and I are very clear about the culture that we want and our commitment to be a responsible and ethical operator wherever we work.
“We have taken significant action towards building and implementing a world-class ethics and compliance programme to ensure that our core controls are entrenched and effective in every corner of our business.”
The charges in the UK relate to an SFO investigation which began in December 2019 and claims to have exposed bribery and corruption in Glencore’s oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.
Lawyers for the fraud office will argue that Glencore’s agents and employees paid more than 25 million dollars (£20 million) in bribes to get preferential access to oil, and that the company approved it.
The next UK court hearing will be at Southwark Crown Court in London on June 21.
SFO director Lisa Osofsky said: “This significant investigation, which the Serious Fraud Office has brought to court in less than three years, is the result of our expertise, our tenacity and the strength of our partnership with the US and other jurisdictions.
“We won’t stop fighting serious fraud, bribery and corruption, and we look forward to the next steps in this major prosecution.”
Glencore said it is still co-operating with investigations by the Office of the Attorney General of Switzerland and the Dutch Public Prosecution Service, adding that the the timing and outcome of both remains uncertain.