Glencore fined $314m for ‘endemic’ bribery of African oil officials

CNN Business

Merchandise Oil giant Glencore ( GLCNF ) has been ordered to pay a record £281 million ($314 million) fine by a UK court for bribing officials in Africa to gain access to oil.

The UK government’s Serious Fraud Office (SFO), which brought the case against Glencore Energy UK, said on Thursday that the penalty was the largest ever handed down for a corporate criminal conviction in the country.

In June, the commodities trader admitted seven bribery charges in a London court. The penalty announced Thursday includes a fine, legal costs and the forfeiture of the profits Glencore made from its bribes.

“The conduct that took place was inexcusable and has no place at Glencore,” company chairman Kalidas Madhavpeddi said in a statement on Thursday, adding that the company had taken “significant actions” to build a new ethics and compliance program.

The SFO investigation found that Glencore had funneled around $29 million in bribes between 2011 and 2016 through its workers and agents at its oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan.

The money was used to secure preferential access to larger cargoes and the most valuable oil grades, as well as preferred delivery dates, the OFS said earlier this year.

Judge Peter Fraser said on Thursday that “the bribe was accepted as part of it [Glencore’s] the West African desk way of doing business” and was “endemic among [its] traders”.

Bribes paid to state oil companies and government ministries in Nigeria, Equatorial Guinea and Ivory Coast were often disguised as a “service fee”, “signing bonus” or “success fee”, the SFO, citing Glencore’s financial reports.

It also found that between 2012 and 2015, a Glencore trader and a Nigerian agent withdrew a total of $13.7 million in cash from Glencore’s Swiss coffers. The cash was flown on a private plane to Cameroon, where it was used to bribe officials of the country’s national oil and gas companies.

In August 2011, two Glencore executives flew $800,000 in cash on a private jet from Switzerland to South Sudan. The money was recorded as a necessary expense to open an office in the country, the OFS said. The money was paid through a local agent to officials of the newly established government in South Sudan.

Glencore said in May it had settled investigations into separate bribery charges brought by US and Brazilian authorities.

The company has set aside $1.5 billion to settle its legal cases, including the U.K. bribery action, it said Thursday.

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