For FCPA violations, Glencore was fined $1 billion and placed under a three-year monitorship.
Glencore International AG, based in Switzerland, will be placed under a three-year compliance monitorship and will pay more than $1 billion to resolve multiple investigations into alleged bribes paid in several countries over a decade.
Glencore said in a statement that it has agreed to improve its ethics and compliance program by creating "a centralized, independent, and empowered compliance function" that will be supported by increased staffing and funding as part of settlements announced Tuesday with the Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), and Brazilian authorities.
Between 2007 and 2018, the settlements cover alleged violations of the Foreign Corrupt Practices Act (FCPA) in the form of bribes to officials in Nigeria, the Democratic Republic of the Congo, and Venezuela. The coordinated agreements also resolve market manipulation charges brought by the CFTC in connection with past market conduct in certain U.S. fuel oil markets and corrupt practices in other countries.
The CFTC settlement is the largest by money value in the agency's history, at $1.186 billion before offsets.
Glencore will also pay $39.6 million to Brazilian authorities to settle allegations that its affiliates bribed officials at the Brazilian state-owned energy company Petrobras, which were discovered as part of the "Operation Car Wash" investigation.
Glencore Ltd. and Chemoil Corporation, both Glencore subsidiaries, were also involved in the settlements. Glencore International and Glencore Ltd. both pleaded guilty to one count of conspiracy to violate the FCPA and one count of conspiracy to commit commodity price manipulation. According to the Justice Department, the violations resulted in criminal fines of more than $428 million and more than $341 million, respectively.
Another subsidiary, Glencore Energy UK Limited, said it would plead guilty to seven bribery charges announced by the Serious Fraud Office in the United Kingdom on Tuesday, but the court will not decide on a penalty amount until June 21. Law enforcement agencies in Switzerland and the Netherlands are conducting investigations.
Glencore's alleged use of bribes to win contracts and influence public officials was first investigated by the Department of Justice in 2018, followed by the United Kingdom a year later and Switzerland in 2020. The Paradise Papers investigation, published by the International Consortium of Investigative Journalists in 2017, detailed Glencore's misconduct.
Compliance improvements: According to Glencore, the independent compliance monitor will "ssess and monitor the company’s compliance with the agreements and evaluate the effectiveness of its compliance program and internal controls," which must be approved by the DOJ.
In a separate Q&A, Glencore stated that it is in the process of identifying candidates to submit to the DOJ.
Employees involved in the payment of bribes have been fired or disciplined, and the company's board of directors and management team have been overhauled.
Glencore claims it has put "substantial resources" into developing a "best-in-class ethics and compliance program" and is committed to cultivating "a culture of integrity, responsibility, and transparency."
Daniel Silver, the company's new head of compliance, was hired in 2020, and a global awareness and training campaign was launched to "set expectations and ensure accountability for all employees." According to his LinkedIn profile, Silver previously worked as a chief compliance officer for the Royal Mail Group and the BG Group, both based in the United Kingdom.
Furthermore, the company has implemented a comprehensive business partner management program with the goal of "significantly reducing the company’s use of third-party business generating intermediaries and employing end-to-end controls to oversee their engagement."
Glencore will be able to assess whether the controls put in place are "entrenched and effective across the group and ensure continuous improvement" thanks to extensive monitoring and testing mechanisms. Controls will be verified using data analytics and an outside consultant, according to the company.
Glencore released its first ethics and compliance report this year, which gives a comprehensive overview of its revamped compliance program and commitment to "promote an ethical culture."
Glencore Chairman Kalidas Madhavpeddi issued a statement saying, "Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred. The board and the management team are committed to operating a company that creates value for all stakeholders by operating transparently under a well-defined set of values, with openness and integrity at the forefront."
By fLEXI tEAM