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Glencore and the flying briefcases in South Sudan

Companies and/or individuals involved: Glencore Energy UK Ltd. (United Kingdom)

Charges: Bribery

Swiss lawyers used: None

Countries affected: South Sudan, United Kingdom, Switzerland

Proceedings: United Kingdom (Southwark Crown Court, London)

Outcome: Guilty Plea: Fines and forfeiture of profits totalling GBP 280,965,092.95 (relates to five African countries)

Asset recovery: None

The case

The activities of Glencore in South Sudan demonstrate how efficiently bribery can be organized.

South Sudan gained its independence on 9th July 2011. As early as August 2011, employees of Glencore Energy UK Ltd. in London set off on their journey. On board of the private jet: briefcases of money to pay bribes and pave the way for lucrative business. The cases contained USD 800,000 in cash withdrawn from the cash desk at Glencore’s Swiss headquarters and recorded as expenses for “opening the office in South Sudan”. The money was paid via a local agent to officials in the newly established government in South Sudan, and this was followed by a further USD 275,000 in cash.

Glencore’s annual and sustainability reports for 2011 and 2012 do not mention South Sudan. There is no reference either to opening a local office.

In the 2011 Annual Report, Glencore stated that there was a particularly high risk of being prosecuted for possible bribery, environmental damage, tax offences, market manipulation and many other potential breaches of the law. The company therefore stated: “Glencore is committed to comply with or exceed the laws, regulations and best practice guidelines applicable to its operations and products in the jurisdictions in which it operates and through continuous monitoring of legislative requirements and engagement with government and regulators it strives to ensure full compliance.”

The company does not reveal how this is compatible with having a cash desk that sends USD 800,000 in cash in a money case on its way to an unstable country.

In December 2019, the United Kingdom’s Serious Fraud Office (SFO) announced that it was investigating against the Glencore Group, its officials, employees, agents and associated persons for bribery. This investigation covered South Sudan and other countries.

On 3rd November 2022, a London court ordered Glencore Energy UK Ltd. to pay almost GBP 281 million. The SFO informed: “The investigation uncovered a trail of text messages, large cash withdrawals and deliberately concealed payments that showed Glencore paid bribes worth a total of $29m (sic!) to secure its access to oil in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.”

The SFO emphasized that this was the highest sum ever paid for a corporate criminal conviction. In addition, “[t]his has been a landmark case in UK anti-bribery enforcement, marking the first time since the introduction of the Bribery Act 2010 that a corporate has been convicted for the active authorisation of bribery, rather than purely a failure to prevent it.”

On 1st August 2024, the SFO charged five former employees of Glencore with conspiring to make corrupt payments in order to benefit commodities giant Glencore’s oil operations in Cameroon, Nigeria and the Ivory Coast from 2007 to 2014. Further charges against two of them relate to the falsification of invoices to Glencore’s London office marked as service fees to a Nigerian oil consultancy from 2007 to 2011. The events in South Sudan are not mentioned.

Document related to this affair

Timeline

Date

Event

Source

9th July 2011Independence declared for South Sudan. 
August 2011Employees of Glencore Energy Ltd. fly to South Sudan with USD 800,000 in cash. The money is paid via a local agent to officials in the newly established government in South Sudan. This is followed by a further USD 275,000 in cash.SFO 2
5th December 2019The UK Serious Fraud Office (SFO) investigates against Glencore for bribery.SFO 1
June 2022Glencore pleads guilty in a British court to committing bribery in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.SFO 2
3rd November 2022Southwark Crown Court in London orders Glencore to pay almost GBP 281 million (fine and forfeiture of profits) for systematic bribery in the African countries mentioned above.SFO 2
1st August 2024SFO charges five former employees of Glencore with conspiring to make corrupt payments in order to benefit commodities giant Glencore’s oil operations in Cameroon, Nigeria and the Ivory Coast from 2007 to 2014. Further charges concern the falsification of invoices to Glencore’s London office marked as service fees to a Nigerian oil consultancy from 2007 to 2011. The events in South Sudan are not mentioned. A hearing is scheduled for 10th September.SFO 3

Legislative loopholes

  • Concealment of responsibility by using intermediaries to pay bribes
  • Systematic bribery as an organizational problem
  • Worthlessness of voluntary commitments of the companies
  • Lack of monitoring of group-wide compliance with minimum legal standards
  • No detection of systematic bribery in the audit of the financial report
  • No disclosure of (bribe) payments to government employees in the (at that time still voluntary) sustainability report
  • Bribery as a financial risk for companies and investors
  • No specific supervisory authority in the commodities sector and no appropriate due diligence obligations for traders