Glencore to pay $1bn settlement to US authorities after admitting bribery in Nigeria, DRC

Glencore, a mining and commodities trading firm, has agreed to pay over $1.1 billion as a settlement for various contract manipulations, including paying bribes to several African countries to secure crude oil deals.

In a recent press statement, the department of justice, United States, said the payment was to resolve the government’s investigations into violations of the Foreign Corrupt Practices Act (FCPA) and a commodity price manipulation scheme. 

According to the department, 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. 

It added Glencore and its subsidiaries caused about $79.6 million in payments to be made to intermediary companies in West Africa between 2007 and 2018.

The US department said the Swiss firm made the payments in order to secure undue advantage with state-owned firms, including the Nigerian National Petroleum Company (NNPC).

For over a decade, Glencore paid $100 million to third-party intermediaries through its employees and agents, it said.

“Admissions and court documents filed in the Southern District of New York, Glencore, acting through its employees and agents, engaged in a scheme for over a decade to pay more than $100 million to third-party intermediaries, while intending that a significant portion of these payments would be used to pay bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo (DRC),” the statement reads.

“Between approximately 2007 and 2018, Glencore and its subsidiaries caused approximately $79.6 million in payments to be made to intermediary companies in order to secure improper advantages to obtain and retain business with state-owned and state-controlled entities in the West African countries of Nigeria, Cameroon, Ivory Coast, and Equatorial Guinea.

“Glencore concealed the bribe payments by entering into sham consulting agreements, paying inflated invoices, and using intermediary companies to make corrupt payments to foreign officials.”

In Nigeria, the US department said Glencore and Glencore’s UK subsidiaries entered into multiple agreements to purchase crude oil and refined petroleum products from the NNPC through shady deals. 

“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,” it said. 

In the Democratic Republic of the Congo (DRC), Glencore admitted that it corruptly offered and paid about $27.5 million to third parties while intending for a portion of the payments to be used as bribes to DRC officials, according to the statement. 

“In Brazil, the company caused approximately $147,202 to be used, at least in part, as corrupt payments for Brazilian officials,” it added.

“In Venezuela, Glencore admitted to conspiring to secure and securing improper business advantages by paying over $1.2 million to an intermediary company that made corrupt payments for the benefit of a Venezuelan official.”

Last year, a former senior trader in charge of Glencore’s West Africa desk for the crude oil business pleaded guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.