GLENCORE INTERNATIONAL PLC (BRAZIL, VENEZUELA AND AFRICAN COUNTRIES)

Industry

Extractive Industries/Mining/Oil & Gas

Corporate Headquarters

Baar, Zug, Switzerland

Summary of Allegations:

Nationality of Foreign Officials: Brazil, Cameroon, Equatorial Guinea, Ivory Coast, South Sudan, Venezuela

Summary of Allegations:

Glencore and its subsidiaries allegedly participated in a decade-long scheme to make and conceal corrupt payments and bribes through intermediaries for the benefit of foreign officials across multiple countries.

Between 2007 and 2018, Glencore and its subsidiaries paid more than $100 million to third-party intermediaries, while intending for a significant portion of these payments to be used to pay bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela and the Democratic Republic of the Congo.

The U.K. SFO indicated that Glencore Energy UK Ltd allegedly paid over $28 million for preferential access to oil in Africa.

Approximate Alleged Payments to Foreign Officials:

Business Advantage Allegedly Obtained:

Nationality of Foreign Officials: Dem. Rep. of the Congo

Summary of Allegations:

In April 2012, third-party watchdog group Global Witness wrote a report urging Glencore to conduct an independent internal audit of the Company's acquisition of the Katanga, Kansuki and Mutanda mines in the Democratic Republic of the Congo's southern Katanga province in 2010 and 2011.

According to the Global Witness report, at the center of the high-risk African acquisitions is Israeli businessman Dan Gertler, a close friend of Congo's President Joseph Kabila. The report alleged that since 2010, the Congolese government had secretly sold stakes in six lucrative mining projects, including Kansuki and Mutanda, at undervalued prices to entities associated with Gertler.

Gertler has been involved in controversial deals in Africa for years, often accompanied by government concessions and a raft of offshore-companies. He is currently a partner in the three mining ventures in which Glencore has acquired stakes, cumulatively worth an estimated $4.6 billion, according to Global Witness.

Investigations over the past decade have alleged that Glencore's agents and employees made illegal payments to secure market access in Bahrain, Belgium, Iraq, and Panama.

According to the Wall Street Journal, on 9 May 2012, members of the U.K. parliament said that they would launch an inquiry into the involvement of London-listed mining companies, including Glencore, in deals in Congo.

Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: Unspecified

Nationality of Foreign Officials: Nigeria

Summary of Allegations:

Between 2007 and 2018, former Glencore trader Anthony Stimler bribed public officials in Nigeria and other countries to secure lucrative oil contracts and favorable oil delivery terms with Nigerian National Petroleum Corporation. Stimer and a few other conspirators inflated and falsified invoices submitted to the company to conceal the nature of these illicit payments.

Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: Contracts and favorable logistics terms with an SOE oil company.

Enforcement Results

Agencies: Brazil: Brazilian Federal Prosecutors

Results:

Year Resolved: 2022

Compliance Monitor:

Ongoing: No

Details:

On 11 February 2019, the Switzerland Office of Attorney General confirms it is providing legal assistance to Brazilian prosecutors regarding a probe into Vitol, Glencore and Trafigura for potential illegal payments to Petrobras executives.

On 24 May 2022, it was disclosed that Glencore had agreed to pay $39.6 million under a resolution with the Brazilian Federal Prosecutor's Office.

Agencies: Canada: Ontario Securities Commission

Results:

Year Resolved: 2018

Compliance Monitor:

Ongoing: No

Details:

The Wall Street Journal reported in July 2017 that Canada’s Ontario Securities Commission (OSC), the country’s biggest regional securities regulator, is investigating more than $100 million in payments Glencore subsidiary Katanga Mining made to a company owned by Israeli businessman Dan Gertler, potentially violating rules requiring that companies disclose business done with their own investors.

On 20 November, 2017, Glencore issued a company statement announcing that after an internal review of Katanga's accounting practices revealed material weaknesses in Katanga’s internal controls over financial reporting, three Katanga Board directors have resigned, to be replaced by three new Glencore-nominated directors. Glencore also disclosed Katanga's announcement that the OSC is investigating previous Kantanga public disclosures were misleading in a material respect, and that OSC is reviewing Katanga's risk disclosure to determine whether it meets anti-corruption legal requirements.

On 18 December 2018, Katanga Mining with its former board of directors Aristotelis Mistakidis, Tim Henderson, and Liam Gallagher, former chief financial officers Jacques Lubbe and Matthew Colwill, former director and CEO Jeffrey Best, and current CEO Johnny Blizzard reached a settlement with the OSC agreement to make a payment of US$22.5 million regarding its inadequate internal control and misleading disclosure to investors.

Agencies: Netherlands: Public Prosecution Service

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 16 March 2022, Glencore disclosed that the company has been notified by Dutch authorities of a criminal investigation into Glencore International AG related to potential corruption pertaining to the DRC. Glencore indicated that it is in contact with the Dutch authorities regarding this investigation.

Agencies: Switzerland: Office of the Attorney General

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 19 June 2020, the Office of the Attorney General of Switzerland ("OAG") confirmed that it has launched an investigation into the alleged corruption in Congo and Glencore's lack of relevant anti-corruption measures to prevent the incidence.

 

Agencies: United Kingdom: Crown Office and Procurator Fiscal Service (Scotland)

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 9 May 2012, members of the U.K. parliament said that they would launch an inquiry into the involvement of London-listed mining companies, including Glencore, in deals in Congo.

Agencies: United Kingdom: Serious Fraud Office

Results: Criminal Fine

Year Resolved: 2022

Compliance Monitor:

Ongoing: No

Details:

5 December 2019 - the Serious Fraud Office announced that a bribery investigation into the Glencore group of companies was ongoing. No further information is released.

On 24 May 2022, the Serious Fraud Office disclosed that it has charged Glencore Energy (UK) Ltd with seven counts of bribery in connection with its oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria, and South Sudan. The London court is set to sentence Glencore on 21 June 2022.

On 21 June 2022, the SFO disclosed that Glencore Energy (UK) Ltd had been convicted of bribery. The company admitted to multiple counts of paying bribes to secure access to oil and generate illicit profit. Sentencing will take place on 2 or 3 November.

On 3 November 2022, the UK subsidiary of Glencore, Glencore Energy UK Limited, was ordered to pay a financial penalty and costs of £281 (USD 314 million) by the UK Serious Fraud Office (SFO). The SFO investigation revealed that Glencore Energy UK Limited paid USD 29 million in bribes to gain preferential access to oil in Africa. In June, Glencore Energy UK Limited pleaded guilty to five counts of bribery and two counts of failure to prevent bribery under the UK Bribery Act 2010.

Agencies: United States: Civil Lawsuit

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 25 October 2022, a medical care company called Crusader Health RDC SARL, run by a South African husband and wife named Ian and Laurethe Hagen, filed a motion with the U.S. District Court requesting $50 Million USD in restitution for  harm caused by a bribery scheme involving Glencore PLC in the Democratic Republic of Congo.

Agencies: United States: Commodity Futures Trading Commission , United States: Department of Justice

Results: Criminal Fine, Deferred Prosecution Agreement, Disgorgement

Year Resolved: 2022

Compliance Monitor:

Ongoing: No

Details:

On 26 October 2018, the DOJ is reportedly collecting documents from Glencore related to its intermediaries and alleged practices of bribing public officials in Venezuela, Congo, and Nigeria. On 26 July 2021, Stimler pleaded guilty to conspiring to violate the FCPA by bribing officials in Nigeria and other countries utilizing intermediaries in Nigeria and Cyprus to secure contracts with Nigerian National Petroleum Corporation.

On 7 February 2019, according to Reuters, the U.S. DOJ is speaking with Houston-based oil trader Rodrigo Garcia Berkowitz charged in Brazil for his role in a bribery scheme involving Vitol, Glencore and Trafigura.

On 15 February 2022, Glencore announced that it had reserved approximately US $1.5 billion for probes into bribery and market manipulation in the U.S., U.K. and Brazil.

On 24 May 2022, Glencore disclosed that its subsidiaries Glencore International AG and Glencore Ltd. pleaded guilty to FCPA violations and agreed to pay $700 million to resolve the DOJ's foreign bribery investigation, with a $428 million criminal fine and $272 million for criminal forfeiture and disgorgement. Glencore has also agreed to retain an independent compliance monitor for three years. The DOJ has agreed to credit nearly $166 million in payments that Glencore makes to resolve parallel investigations by other domestic and foreign authorities.

Separately, Glencore Ltd. admitted to engaging in a multi-year scheme to manipulate fuel oil prices at two of the busiest commercial shipping ports in the U.S. As part of the plea agreement, Glencore Ltd. agreed to pay a criminal fine of over $341 million, pay forfeiture of over $144 million, and retain an independent compliance monitor for three years.

On the same day, the Commodity Futures Trading Commission (CFTC) announced a separate settlement with Glencore and its subsidiaries in connection with its FCPA and market manipulation investigation. Under the terms of the CFTC resolution, Glencore agreed to pay over $1.1 billion, which includes a civil monetary penalty of over $865 million, as well as disgorgement totaling over $320 million.

ENTITIES / INDIVIDUALS INVOLVED
  • Glencore International plc ("Glencore")
  • Ellesmere Global Limited (a British Virgin Islands company)
  • Interseal (a Cypriot company)
  • Glencore Grain Rotterdam (a Dutch subsidiary of Glencore)
  • Dan Gertler
  • Katanga Mining (Glencore subsidiary)
  • Atlantic Energy Holdings
  • Joseph Kabila
  • Glencore International A.G.
  • Glencore Ltd
  • Crusader Health RDC SARL
  • Ian Hagen
  • Laurethe Hagen
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