Glencore fined record £281 million for bribery in Nigeria, other African countries

The United Kingdom subsidiary of mining and commodity trading group Glencore was Thursday asked by a London court to pay £281 million in fines, confiscated profit and as a sanction for its part in seven bribery offences pertaining to its oil business in Africa.

Described by Southwark Crown Court as “sustained criminality,” the act has attracted a unprecedented penalty imposed by a UK court on a firm.

While Glencore will pay £182.9 million as fine, £93.5 million from its profits will be held via a confiscation order, Judge Peter Fraser said during a ruling where he noted that the wrongdoings of the company’s UK unit indicated “corporate corruption on a widespread scale, deploying very substantial sums of money in bribes”.

“The corruption is of extended duration, and took place across five separate countries in West Africa, but had its origins in the West Africa oil trading desk of the defendant in London. It was endemic amongst traders on that particular desk,” he went further to say.

Glencore owned up to the bribery charges brought against it by Serious Fraud Office (SFO) – the UK government department in charge of investigating and prosecuting serious and complex bribery, fraud and graft) – enabling the company to get a one-third discount on the fine.

Glencore pleaded guilty to the malfeasances in June.

On Wednesday, the London court had been told by the SFO of how Glencore’s staff and middlemen gave kickbacks to the tune of £27 million to officials in Nigeria, Ivory Coast, Cameroun, South Sudan and Equatorial Guinea to the tune, triggering harms estimated at $128 million – £81 million at the time of the offences.

The SFO added that employees of Glencore moved bribes to the five countries by way of private jets, using false documents to conceal the real purposes of the money.

“The company unreservedly regrets the harm caused by these offences and recognises the harm caused, both at national and public levels in the African states concerned, as well as the damage caused to others,” said Clare Montgomery who represented Glencore.

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According to Justice Fraser, corruption was deep-seated in the African oil trading operation of Glencore Energy UK Limited, wholly owned by FTSE 100-listed Glencore.

Kalidas Madhavpeddi, Glencore’s chair, appeared in court for the second day, this time behind a facemask.

Glencore equally pleaded guilty to two charges of the similar offence of failing to prevent bribery.

Yet, the monetary sanctions the company will pay in the UK are way lower than what has been levied by authorities in the United States, even though Glencore’s shares are quoted in London.

Besides, the greater part of the corruption that happened involved Glencore’s West African desk located in London.

Glencore has for a while now provisioned $1.5 billion to settle expenses pertaining to the charges. In May, it decided to pay $1.1 billion to US authorities for contravening bribery laws and commodity price manipulation.

“Glencore has engaged in corporate reform and today appears to be a very different corporation than it was at the time of these offences,” Mr Fraser said.