Dodgy deals and lack of accountability: NGO take sobering stock at first Glencore AGM

Dodgy deals and lack of accountability: NGO take sobering stock at first Glencore AGM

Zug, May 9, 2012. Shady deals, tax evasion, disrespect of human rights and environmental standards: One year after going public, allegations against Swiss commodity giant Glencore grow ever louder. At today’s first Annual General Meeting (AGM), non-governmental organizations (NGO) are calling for increased transparency and better regulation of Switzerland’s risky commodity sector.

Just in time for the first AGM of Zug-based commodity company Glencore, “Global Witness” published its research into their business practices in the Democratic Republic of Congo (DRC). It shows an intricate web of non-transparent dealings, primarily with Israeli businessman Dan Gertler, a close friend of Congo’s President Joseph Kabila. There is strong evidence suggesting the Congolese government sold licenses for copper and cobalt mines dramatically below their market value, many of them to companies associated with Gertler. Such corrupt practices might have deprived the people of the DRC of more than 5 billion dollars in badly needed revenues.

Glencore, Switzerland’s second biggest company at a turnover of 186 billion Dollars (2011), went public a year ago and is now listed in London and Hong-Kong. However, the 2011 annual report features desperately little information on the controversial deals in the DRC . Glencore also provides no answers to recently published allegations of buying and processing commodities, through middlemen, that heavily involve child labour. Those accusations include disrespect of working standards and massive pollutions of river Luilu in the southern province of Katanga.

In Colombia, where Glencore is running coal mines, the company was fined in January 2012 for not registering its majority stake in several subsidiaries. Currently, the authorities are investigating the assignment of some of Glencore’s extraction licenses and alleged irregularities in in obtaining them. To shed light on such transactions, taxes and other payments to host governments must be published on a country-by-country basis, as impending legislation in the US as well as in the EU is proposing.

Producing recently many negative headlines is due to Glencore’s risky business strategy. In terms of asset values, 70 percent of production facilities in 2011 were located in countries prone to corruption and internal strife such as the DRC, Colombia, Kazakhstan, and Equatorial Guinea. At the “Global Commodities Summit “ in Lausanne, a senior official with the Swiss State Secretariat for International Financial Matters stressed that both, state and private sector, have to mitigate the social and ecological risks inherent to the commodities industry. Therefore, companies such as Glencore and Swiss authorities must implement mandatory reporting and due diligence standards for the sector, as called for by the Swiss NGO’s “Corporate Justice” campaign.

 

For additional information, please contact:

  • Lorenz Kummer, SWISSAID: 079 307 25 92
  • Oliver Classen, Berne Declaration: 076 334 42 25
  • Stephan Suhner, Working Group Switzerland Colombia: 079 409 10 12
  • Chantal Peyer, Bread for All: 079 759 39 30