November 3, 2022

Anglo-Swiss mining and commodities trader to pay £280 million bribery sentence, the highest ever ordered in a UK corporate criminal conviction

The UK subsidiary of Baar, Switzerland-based multinational commodities trading and mining company Glencore plc has been sentenced to pay over £280 million (more than $300 million) after pleading guilty in June to five counts of bribery and two counts of failure to prevent bribery under the UK Bribery Act 2010.

The investigation dates to June 2019, when the SFO began investigating suspicions that the company’s UK subsidiary, Glencore Energy (UK) Ltd., had engaged in bribery in several African countries.  At the same time, enforcement authorities in the United States, Brazil, the Netherlands, and Switzerland were conducting their own investigations into improper behavior on the part of Glencore companies.  On May 24, 2022, Glencore Energy (UK) Ltd was charged in the United Kingdom with five counts of bribery under section 1 of the Bribery Act 2010, and two counts of failure to prevent bribery under section 7 of the Act.  In June 2022, the company pleaded guilty to all seven counts, marking the first conviction of a company under section 1 where it was established, as Mr. Justice Fraser noted at sentencing, that senior individuals within Glencore had been “closely involved” in the criminal activity.  In the United States, Glencore International AG, and Glencore Ltd. pleaded guilty to criminal violations of the Foreign Corrupt Practices Act and the Commodities Exchange Act.  On the same day, the company announced that it had entered into an agreement with Brazilian authorities to resolve an inquiry into the company’s conduct in connection with the Lava Jato (Operation Car Wash) investigation.

To satisfy the penalties, disgorgement and costs of the global settlement, Glencore anticipated payments of approximately $1.1 billion.  Today’s sentencing, imposed by Mr. Justice Fraser at Southwark Crown Court, requires that Glencore pay the costs of the SFO’s investigation — £4.5 million – as well as a £182.9 million fine and a £93.5 million confiscation order.

In sentencing the company, Mr. Justice Fraser said that Glencore’s culture of bribery was accepted as a way of doing business in West Africa, and that the corruption was “of extended duration” and “endemic amongst traders [on the West Africa desk].”  At the sentencing hearing, the prosecutor described how Glencore executives travelled to South Sudan on a private jet, for example, with bags of cash to use for bribes.  Altogether, Glencore was found to have paid approximately $29 million in bribes to obtain access to oil in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan through the use of local agents, generating a financial benefit of nearly $105 million for the company.  The SFO indicated that its investigation of individuals at Glencore is ongoing, and that some of the individuals involved in the conduct were business ethics officers or on the business ethics committee in Glencore’s London office.

Glencore said in its press release about the sentence, “The conduct that took place was inexcusable and has no place in Glencore,” and that the company “has taken significant action towards implementing a word-class Ethics and Compliance Programme built around risk assessment, policies, procedures, standards and guidelines based on international best practice.”  Glencore also noted that it is continuing to cooperate with ongoing investigations by the Office of the Attorney General of Switzerland and the Dutch Public Prosecution Service.  These investigations are focused on Glencore International AG’s failure to implement the organizational measures necessary to prevent corruption.

SFO news release | Glencore press release