Glencore in the sights of the United States on suspicion of corruption

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The mining giant Glencore is the subject of a new investigation on suspicions of corruption. This was acknowledged by the Swiss company in a statement. After the US Department of Justice, the regulator of raw materials in the United States is interested in transactions led by Glencore.

It is notably for suspicions of corruption in Venezuela, Nigeria and the Democratic Republic of the Congo that Glencore is today the object of all these attentions of various American institutions which point to its links with a businessman already under sanctions. , the Israeli Dan Gertler, a personal friend of Joseph Kabila.

Do the companies that buy cobalt from Glencore make sure that this supply is made without corruption? This is the question that the NGO Resource Matters and Science Po Paris pose in their report Ni seen, nor known .

In this case, Glencore is most at risk, continuing to pay royalties to Dan Gertler. Despite sanctions against the Israeli businessman, the Swiss mining giant would have paid some $ 74 million to his former business partner last year.

Companies that source from Glencore cobalt, including Congolese cobalt, difficult to identify. Of 14 large companies suspected to be likely buyers, only one-third admitted to cobalt supply at Glencore. This is Samsung, Renault, BMW, LG Chem.

Others, like Apple, Peugeot, Volvo or even Volkswagen, have never responded to the survey. And for the NGO Resource Matters, that’s where the shoe pinches. While recognizing efforts in the traceability of cobalt supply chains in the Congo, these efforts focus mainly on artisanal mining and on all human rights issues, such as child labor. .

But for large companies, traceability quickly reaches its limits. Only two of the official clients of this company claim to have raised the problem of corruption. But Glencore having denied all the accusations, these companies felt that this answer was enough to buy.

In this case, Glencore takes the risks, according to Elisabeth Caesens, director of Resource Matters. ”  For now, the biggest risk is taken by Glencore itself. Glencore makes the payments. And so, if additional measures are taken by the US administration, they would probably target Glencore first, rather than those who source from Glencore.

That said, there is still some risk these companies take, by buying cobalt from Glencore. Because, depending on where they are located, there are certain notions of complicity and corruption. There are certain notions of receiving, that is to say redeeming the product that is the product of a crime.

The crime has not been proven for now, the investigation is underway … but the risk is there. Many companies consider the issue really taboo, prefer not to talk about it, prefer to deny that Glencore is in their (trading) chain, while there are indications (that it is).

So the first thing is to recognize that there is a problem. Once they recognize the problem, steps should be found to contain the risk of corruption that this payment represents.

One way to do this would be, for example, to tell Glencore that an audit of these payments is required. What are these payments used for, how are these payments used once they arrive at Mr. Gertler’s, what is done with them? For the moment, these measures are not taken.  “

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