Glencore AG is a company based in Switzerland, one of the world’s largest commodity traders. Yesterday it reached a settlement with the US Department of Justice (DOJ), the key points of which are:
- A three-year compliance programme of monitorship and;
- A fine of more than USD 1 Billion. ($1,186,000,000) and;
- $39.6m payment to the Brazilian Authorities and;
- Payments by Glencore Limited and Chemoil Corp of $428m and $341 respectively.
Alleged bribery in multiple countries
The DOJ looked at Glencore’s activities over a ten year period. The allegations centred on bribes allegedly paid to officials in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to 2018.
On 24 May 2022 Glencore reached these terms of settlement with US and Brazilian authorities for alleged breaches of the Foreign Corrupt Practices Act. In addition, the settlement deals with allegations of market manipulation were filed by the Commodity Futures Trading Commission.
Separately, Glencore Energy UK Ltd has indicated a guilty plea to bribery charges, seven in all, brought by the UK’s Serious Fraud Office (SFO). There are investigations ongoing in Switzerland and the Netherlands.
Finally the DOJ will appoint a compliance and monitoring officer who will monitor the company for the next three years.
All in all, a bit of a regulatory spanking. Yeah? Right. On the 15 February 2022, the Glencore group released preliminary results for 2021 of $21.3 Billion, up 84% y/y.
What can the UK director learn from all of this?
In the UK, bribery is dealt with on the criminal level by the Bribery Act 2010 (BA2010). Largely, there are offences for bribing (section 1) and being bribed (section 2). But what will worry most directors is section 7.
The failure of commercial organisations to prevent bribery
1. A relevant commercial organisation (“C”) is guilty of an offence under this section if a person (“A”) associated with C bribes another person intending:
- to obtain or retain business for C, or
- to obtain or retain an advantage in the conduct of business for C.
2. However, it is a defence for C to prove that C had in place adequate procedures designed to prevent persons associated with C from undertaking such conduct.
3. For the purposes of this section, A bribes another person if, and only if, A:
- is, or would be, guilty of an offence under section 1 or 6 (whether or not A has been prosecuted for such an offence), or
- would be guilty of such an offence if section 12(2)(c) and (4) were omitted.
The Act is structured so that if someone acting on your company’s behalf bribes someone to benefit your business, then your company can be found guilty of an offence. The penalty is an unlimited fine on indictment. It matters not that the bribe was paid or received outside the UK. The Act is designed to catch that point. However, there is a defence to the Section 6 offence and that is that your organisation had in place adequate procedures to prevent it.
For more information on the above article please contact Dispute Resolution and Litigation Partner
Jonathon Compton on 01483 467 433 or
by email.