Glencore installs legal monitors following bribery conviction
Glencore has installed independent legal monitors to oversee its internal conduct as part of an agreement with the US government, marking a key milestone in the Swiss-based commodities house’s closely watched corruption case.
Judge Lorna Schofield agreed on Tuesday to impose the sentence recommended in a plea deal Glencore struck with prosecutors in May when it admitted to bribery and market manipulation, agreeing to pay more than $1.1 billion (CHF1 billion) in penalties and install legal monitors for three years.
US law firms Ropes & Gray and Jenner & Block are running the monitorship with assistance from Swiss firm Bär & Karrer. Ropes & Gray partner Alex Rene will be lead monitor, according to a person familiar with the matter.
The corruption investigation, conducted by authorities in the US, UK and Brazil, centred on the use of bribes to secure favourable contracts, and on efforts to manipulate the benchmark price of fuel oil.
Between 2007 and 2018, Glencore paid more than $100 million to third-party intermediaries across seven countries, of which a significant portion was used to pay bribes, according to the DOJ investigation.
The legal monitors have the power to conduct interviews, request documents and communication, and attend meetings. Their remit is to evaluate the effectiveness of Glencore’s compliance programme and internal controls.
Barry Vitou, who leads the global investigations practice at law firm HFW said that such monitorships were sometimes “considered just as or more burdensome than the fine”.
“A monitor continues to oversee the business long after the resolution with government, and can be more intrusive than an auditor,” said Vitou.
The trading house will have to foot the bill for the lawyers and their teams of assistants. Such fees have run into the hundreds of millions of dollars for comparable monitorships.
Judge Schofield said Glencore had produced more than 1mn documents, some of which were beyond the scope of US prosecutors’ subpoena powers.
“I view it important for sentencing that the defendant has co-operated with the government since 2018,” she said.
However, she noted that some of Glencore’s subsidiaries had been the subject of enforcement action in the past, and that the company did not voluntarily disclose the wrongdoing until it was approached by the US government in July 2018.
A lawyer for Glencore confirmed in court that more than 20 employees implicated in the investigation had been “moved out from one position or another”, including some senior executives.
Glencore declined to comment on the appointment of the monitors.
In a statement last May, chief executive Gary Nagle said the company acknowledged “the misconduct identified in these investigations”, had “co-operated with the authorities”, and had “taken significant action towards building and implementing a world-class ethics and compliance programme to ensure that our core controls are entrenched and effective in every corner of our business”.
Copyright The Financial Times Limited 2023
In compliance with the JTI standards
More: SWI swissinfo.ch certified by the Journalism Trust Initiative
Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at email@example.com.