A British subsidiary of Anglo-Swiss multinational mining giant Glencore has been ordered to pay £275m in fines after pleading guilty to seven charges of corruption over the summer for bribing officials in African countries to get access to oil.
On 2 November the Serious Fraud Office (SFO) told Southwark Crown Court that Glencore Energy UK had paid £23m in bribes to officials of crude oil firms in Nigeria, Cameroon and Ivory Coast between 2011 and 2016. The company also admitted failing to prevent agents from using bribes to secure oil contracts in Equatorial Guinea and South Sudan. The SFO stated that the firm’s aim was for officials to ‘perform their functions improperly, or reward them for so doing, by unduly favouring Glencore Energy UK in the allocation of crude oil cargoes, the dates crude oil would be lifted and the grades of crude oil allocated’.
This is not the first instance of corruption for the mining and commodities trader. In 2018, the US Department of Justice launched an investigation into Glencore’s compliance with US money-laundering and corruption laws dating back to 2007. This was in relation to the mining giant’s operations in Nigeria, the Democratic Republic of Congo (DRC) and Venezuela. Glencore was ordered to pay $700m to resolve bribery investigations and $485m to resolve market manipulation investigations. Glencore also faced investigations by Brazilian authorities in relation to similar charges of bribery, resulting in a further $40m in fines.
In 2021 Glencore paid out $2.8bn to shareholders after a ‘record performance for the first six months of the year’. Glencore is among the list of multinational mining companies, including Anglo American and Rio Tinto – all headquartered in London – that have boasted record profits and payouts to shareholders in the last year. This is because of increased demand for and the soaring prices of commodities such as copper, cobalt, oil and gas. Glencore has assured stakeholders that the recent UK fines will not differ materially from the $1.5bn that was set aside to cover these resolutions in the company’s 2021 financial statement. In other words, this was a calculated risk deliberately factored into their costs.
At the Tilwezembe mine in the DRC, children as young as ten were found working in hand-dug mine shafts, up to 150 feet deep, without any safety or breathing equipment, to dig out copper and cobalt. This site was directly owned by Glencore until 2009, but was then occupied by ‘artisanal’ miners who would exploit child labour. The minerals extracted from this site are still purchased by Glencore and sold on to tech companies like Apple, Tesla, Microsoft and Google.
In the Cesar mining region, which accounts for 61% of Colombia’s coal production, Prodeco, a subsidiary of Glencore operating in Colombia, has supported the actions of paramilitary forces to acquire land to expand mines. The people of the region have suffered greatly from paramilitary violence. In 2011 a Colombian court was told by former paramilitaries that they had stolen land so they could sell it to Prodeco to start an opencast coal mine. It was later found that in 2008 Glencore admitted to paying $1.8m for ‘improvements’ to the new occupiers of the land. In 2021 Glencore announced that it would be returning its mining titles to the Colombian government, leaving behind a destroyed environment and devastated communities.
Glencore’s actions will prove to be even more destructive as governments around the world scramble to secure resources to allow a ‘green transition’ away from fossil fuels. These rare raw materials are looted from underdeveloped countries across Asia, Africa and South America. Cobalt is crucial to modern electronics due to its role in lithium-ion batteries, which comprise of 15% cobalt. The demand for these batteries is increasing due to the increased demand for electric vehicles. Another use of cobalt is in the production of powerful electronic magnets which are used for wind turbines and other generators. Glencore is the world’s largest cobalt miner and already operates in the DRC, which has 50% of the global cobalt reserves and provides 70% of the world’s cobalt.
Multinational corporations like Glencore rely on the destruction of the environment, bribery, tax avoidance and market manipulation, exploitation of labour and violent intimidation of local communities in order to ensure continuous growth of capital. This is the essence of capitalism, the endless, self-expansion without limits in the insatiable drive for profits. Capitalism is accelerating the climate crisis and is incapable of solving it. The only way forward is a socialist solution, through planned national development prioritising the interests of the people and the environment over profit.
Bruno Sergi
