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Bribery: African Energy Chamber writes EITI, seeks Glencore’s membership termination

By Saidu Abubakar

The African Energy Chamber has called for the termination of Glencore’s membership in the Extractive Industries Transparency Initiative (EITI).

Glencore’s two subsidiaries had in May pleaded guilty to multiple charges of market manipulation and bribery, including corruption related to the company’s oil operations in Africa and South America. The Anglo-Swiss multinational company, is expected to pay up to $1.5 billion after other subsidiaries pleaded guilty to bribery in Brazil and the US. The company was also named in a massive bribery scandal, in exchange for favorable contracts from the Nigerian National Petroleum Corporation (NNPC).

The Chamber in a letter dated June 10, 2022, and addressed to EITI’s chairperson of Directors, Rt Hon. Helen Elizabeth Clark, noted that Glencore’s guilty plea confirms that its actions were not in compliance with EITI’s mission, values and principles adding that Glencore’s violation calls for their termination from the prestigious organisation.

“In accepting its guilty plea in the Southern District of New York, Glencore agreed that it shall not, through present or future representatives, make any public statement, in litigation or otherwise, contradicting the acceptance of its guilty plea.”

Accordingly, it is undisputed that while committing the aforementioned crimes, Glencore was a member of EITI. Therefore, there can be no dispute that while a member of EITI, Glencore violated several of EITI’s rules and regulations. “

The Chamber in the letter signed by its Executive Chairman NJ Ayuk further stated that “due to Glencore’s admitted violations, the board of EITI should terminate Glencore’s membership as doing so will promote justice in the form of retribution, deterrence, incapacitation, and reparations for the admitted crimes Glencore has committed and quite frankly continues to commit in Africa and the developing world. More importantly, we believe Glencore’s termination will also ensure that the image of EITI, as well as the current complaint members, is upheld and will reassure stakeholders that EITI takes seriously its mission, principles, rules, and regulations”.

As it pushes for the termination of Glencore’s EITI membership, the African Energy Chamber is confident that the move will signal to current members that the admitted actions of Glencore were criminal in nature and will not be tolerated as those actions are not aligned with EITI’s mission, values, and principles.

“For years, Glencore has been allowed to continue operating with what seems like a ‘slap on the wrist’ compared to its world-spanning admitted criminal syndicate. What Glencore admitted to doing is not only illegal but completely immoral and unacceptable”.

The AEC further urges EITI to be firm and clear in protecting the African extractive industry so that integrity is maintained while EITI and its members continue improving the investment climate while minimizing corruption and mismanagement of revenue from extractives.

Valuechain reports that Glencore admitted in the US court to paying more than $100 million in bribes to officials in Brazil, Cameroon, Côte d’Ivoire, Equatorial Guinea, Nigeria, South Sudan, and Venezuela between 2007 and 2018.

The Anglo-Swiss multinational commodity trading and mining company’s penalties to the US alone for violating the US Foreign Corrupt Practices Act (FCPA) and manipulating commodity prices will total at least $1.5bn.

Glencore Energy UK Limited recently also indicated that it would plead guilty to charges brought by the UK Serious Fraud Office (SFO) in respect of its bribery investigation.

The penalty to be paid will be determined following a sentencing hearing currently scheduled for June 21.

Glencore is also being investigated by the Office of the Attorney General of Switzerland and by the Dutch Public Prosecution Service for failure to have the organisational measures in place to prevent alleged corruption.

The Nigeria Bribery Case
Reports last July detailed how a former United Kingdom-based trader for Glencore Plc, Anthony Stimler, bribed officials in Nigeria in exchange for favourable contracts from the NNPC.

Mr Stimler, acting through subsidiaries of Glencore, conspired with others to make millions of U.S. dollars in corrupt bribe payments to officials in Nigeria. The former trader pleaded guilty over what prosecutors in the United States described as his role in a scheme to bribe and he admitted to conspiring to violate the Foreign Corrupt Practices Act and commit money laundering at a hearing in Manhattan federal court conducted by video.

Prosecutors said millions of dollars in bribes were paid to officials in Nigeria, in exchange for NNPC awarding oil contracts and providing “more lucrative grades of oil on more favorable delivery terms.”

According to the US Department of Justice (DoJ), “For example, in Nigeria, Glencore and Glencore’s U.K. subsidiaries entered into multiple agreements to purchase crude oil and refined petroleum products from Nigeria’s state-owned and state-controlled oil company.

“Glencore and its subsidiaries engaged two intermediaries to pursue business opportunities and other improper business advantages, including the award of crude oil contracts, while knowing that the intermediaries would make bribe payments to Nigerian government officials to obtain such business. In Nigeria alone, Glencore and its subsidiaries paid more than $52 million to the intermediaries, intending that those funds be used, at least in part, to pay bribes to Nigerian officials,” the DoJ said.

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