The Swiss government opened a criminal investigation into Glencore over its failure to prevent alleged corruption in the Democratic Republic of Congo, where it mines copper and cobalt.
The move by the Switzerland’s attorney-general adds to the legal troubles facing the world’s most powerful commodities trader and its long-serving chief executive Ivan Glasenberg, who has hinted that he could step down soon.
The Swiss Federal Prosecutor’s office said the probe was the result of a wide-ranging investigation by law enforcement agencies opened last month into the activities of commodity traders based in the wealthy alpine country. Glencore is the first company to be specifically targeted as a result of the process.
The case against the Baar-based company relates to “a suspicion of criminal liability” concerning “the bribery of foreign officials,” the prosecutor told the Financial Times.
“The presumption of innocence applies to all parties to the proceedings,” the prosecutor’s office said. No timeframe has been set for the investigation to come to a conclusion.
In a statement Glencore said it had been informed by the prosecutor’s office that it had opened criminal investigation into its “failure to have the organisational measures in place to prevent alleged corruption” in the DRC. Glencore said it would co-operate with the investigation.
Glencore is the world’s biggest commodities trader, shifting millions of tonnes of metals, minerals and oil across the globe. It is also a leading miner and the biggest western company operating in DRC, Africa’s largest copper producer and the source of half of the world’s cobalt.
The company’s operations in the country have faced scrutiny because of its relationship with Dan Gertler, an Israeli businessman, who was placed on a US sanctions list in December 2017.
At the time, the US Treasury said Mr Gertler had amassed his fortune through hundreds of millions of dollars’ worth of “opaque and corrupt mining and oil deals” in the DRC.
Glencore has always maintained that it did not secure its entry into the DRC’s through deals with Mr Gertler, but rather ended up in business alongside him when they independently acquired interests in some of the country’s mining assets. Glencore subsequently bought Mr Gertler out of those projects.
In July 2018, Glencore was subpoenaed by the US justice department over possible violations of the Foreign Corrupt Practices Act relating to its operations in Nigeria, Venezuela and the DRC.
The UK’s Serious Fraud Office opened a probe into Glencore over “suspicions of bribery” in December 2019, saying it was examining the “conduct of business by the Glencore group of companies, its officials, employees, agents and associated persons.”
It is also under investigation by the Commodity Futures Trading Commission, the US commodity market regulator
Glencore’s response to the various investigations is being led by its chairman Tony Hayward, the former chief executive of BP.
The company is not alone in facing probes into possible corruption and bribery. Mining and large-scale physical commodity trading often involves operating in developing countries where it is difficult to secure business without well-connected intermediaries.
Rio Tinto is being investigated by the US Department of Justice and the UK’s SFO over a questionable $10.5m payment it made to a French consultant who helped the company win the rights to a giant ore deposit in Guinea.
Privately owned commodity traders Vitol and Trafigura are also under investigation (along with Glencore) on suspicion of paying bribes to employees of Brazil’s state-controlled oil company Petrobras in exchange for contracts.
Gunvor, a Geneva-based energy trader, paid $95m to settle a Swiss bribery case last year.