Glencore hit with $490m fine for bribing its way across Africa

Less than four weeks after South Sudan became an independent country in 2011, a delegation of Glencore traders arrived by private jet in search of oil. They were carrying with them $US800,000 ($1.2 million) in cash to pay bribes.

The revelation was among several detailed in a London courtroom this week that showed how, decades after Glencore founder Marc Rich created the popular image of commodity traders crisscrossing the globe to dispense bribes in exchange for lucrative contracts, remarkably little had changed in the way some traders at the company were doing business.

The UK Serious Fraud Office showed how Glencore paid more than $US28 million in bribes across five African countries over five years to 2016, using methods that were in some cases carbon copies of deals that Rich had put in place in the 1970s and 1980s. On Thursday, a judge handed down a penalty of £276 million ($490 million) for Glencore’s conduct, on top of around $US1.1 billion the company has already paid in related cases in the US and Brazil.

Glencore traders hand-delivered large quantities of cash to government officials, they sought to profit from political turmoil, and they inserted themselves into government-to-government deals that had been negotiated at preferential rates.

In South Sudan, Glencore wasted little time. The east African country became independent on July 9, 2011. By July 21 a Glencore executive – identified by the SFO only as “GE7” and as the company’s Business Ethics Committee member for the London office – was on a plane “to persuade the President of South Sudan and others in government” to give Glencore’s joint venture there a contract to sell its oil.

Two other employees arrived in the capital Juba with $US800,000 in cash a few days later. They said it was for “opening office in South Sudan, cash for office infrastructure, salaries, cars,” but Glencore’s local agent in fact used some of it to pay bribes, the SFO said.

A few months later, the assistant to the President of South Sudan visited Glencore executives in Zurich and London. A Glencore executive withdrew a further $US275,000 from the company’s “cash desk” at its Swiss headquarters, and the next day Glencore’s South Sudanese unit was offered an oil deal.

Commodity traders have spent years trying to distance themselves from the image of their industry forged in the days of characters like Marc Rich, instead presenting themselves as logistics businesses, moving oil, metals and grain from A to B in response to market signals.

But the revelations about Glencore’s trading in Africa come just six months after the London-listed company pleaded guilty in related US cases, while top oil trader Vitol Group admitted to paying bribes in three Latin American countries, and Brazilian prosecutors accused Trafigura Group of involvement in a kickback scheme, in a civil case. Trafigura has denied the allegations.