Glencore faces hefty fine over African bribery scandal

Mining giant flew cash by private jet to pay officials

GLenCore faces fines running into the hundreds of millions over a string of corruption offences that saw it fly cash by private jet to bribe officials across several African states.

A subsidiary of the FtSe 100 commodities giant pleaded guilty in June to paying multiple bribes to access oil shipments. it was the first ever conviction of a company for bribery under UK law and came after a series of charges were brought by the Serious Fraud office (SFo).

Glencore could be fined over £243m while the SFo is seeking a £93.4m confiscation order – the largest imposed on a corporation in Britain – and £4.5m in costs.

the final amount will be decided during sentencing at Southwark Crown Court in London today.

At a hearing yesterday, Glencore’s lawyer said the firm ‘unreservedly regrets the harm caused’. But prosecuting barrister Alexandra Healy said ‘offering of bribes was an acceptable way of doing business for the company’ and that ‘corruption was endemic within the corporation’. the sentencing comes after a long-running investigation revealed Glencore’s London-based oil trading desk paid bribes of over £24m for preferential access to shipments in nigeria,

Cameroon, the ivory Coast, equatorial Guinea and South Sudan.

Among a litany of offences, the probe found a Glencore agent in nigeria withdrew around £3.6m from a slush fund and flew the cash to Cameroon, often via private jet, to bribe officials.

So blase were Glencore’s agents, executives and traders, they often called each other ‘senorita’ and ‘bro’ even when discussing bribes.

Another agent was paid £870,000 in 2011 to bribe officials in equatorial Guinea for access to oil cargo, with the firm also authorising £5,000 in ‘hotel expenses’ for him during a trip to London. Also that year a Glencore executive requested nearly £700,000 from the company’s Swiss cash desk, ostensibly for ‘opening office in South Sudan’ shortly after it became independent.

two executives then transported the money to the country on a private jet before it was passed to a local agent for bribes. Another £240,000 in cash was flown out later that year to cover the ‘operating cost for the new office’ despite there being no evidence of a Glencore site there.

the withdrawal coincided with meetings between company executives in London and Zurich and an assistant of the president of South Sudan. other offences included Glencore channelling money through a separate entity to officials at the nigerian national Petroleum Company, which partners with foreign companies to exploit oil resources, as well as paying bribes to people working for Cameroon’s national oil and gas firm and the ivory Coast’s statebacked energy group Petroci.

the convictions followed a three-year-long probe by the SFo, which worked with authorities in the US while also collaborating with the netherlands and Switzerland, where the company faces ongoing investigations.

in may, the company agreed a £957m settlement with the US Department of Justice and previously said it had set aside £1.3bn over the scandal.

But the SFo left open the possibility that former Glencore employees could also be subject to prosecution.