TIDMGLEN
RNS Number : 6757M
Glencore PLC
24 May 2022
Glencore plc
Baar, Switzerland
24 May 2022
Glencore Reaches Coordinated Resolutions with US, UK and
Brazilian Authorities
Glencore cooperated with authorities and has made substantial
investments to enhance its Ethics and Compliance Programme
Resolutions involve separate payments to resolve investigations
into bribery and market manipulation
Payments for these resolutions not expected to differ materially
from existing provision
Swiss and Dutch investigations remain ongoing
Glencore has resolved the previously disclosed investigations by
authorities in the United States, the United Kingdom and Brazil
into past activities in certain Group businesses related to
bribery, and separate US investigations related to market
manipulation. Glencore cooperated with these investigations.
Under the terms of the US resolutions, Glencore will pay
penalties of $700,706,965 to resolve bribery investigations and
$485,638,885 to resolve market manipulation investigations by the
Department of Justice ("DOJ") and the Commodity Futures Trading
Commission ("CFTC"). Of this amount, up to $165,930,959 will be
credited against other, parallel matters, including in the UK, so
that the net amount payable to the US authorities is expected to be
$1,020,414,891. Glencore has further agreed to pay $39,598,367
under a resolution signed with the Brazilian Federal Prosecutor's
Office ("MPF") in connection with its bribery investigation into
the Group.
Glencore Energy UK Limited has also today indicated that it will
plead guilty to charges brought by the UK Serious Fraud Office
("SFO") in respect of its bribery investigation. The penalty to be
paid will be determined following a sentencing hearing currently
scheduled for 21 June 2022.
Glencore does not currently anticipate that the amount to be
paid in respect of the UK resolution will result in the aggregate
amount being paid for all of the above resolutions differing
materially from the $1,500 million provision recorded in the
Company's 2021 financial statements.
The plea agreements entered into by Glencore International AG
and Glencore Ltd. with the DOJ each provide for the appointment of
an independent compliance monitor for a period of three years to
assess and monitor the Company's compliance with the agreements and
evaluate the effectiveness of its compliance programme and internal
controls.
Glencore continues to cooperate with a previously disclosed and
ongoing investigation by the Office of the Attorney General of
Switzerland ("OAG") into Glencore International AG for failure to
have the organisational measures in place to prevent alleged
corruption, and an investigation of similar scope by the Dutch
Public Prosecution Service. The timing and outcome of these
investigations remain uncertain (see further note 32 of Company's
2021 financial statements ).
Starting before the Company knew of the DOJ's investigations,
Glencore has invested substantial resources towards developing a
best-in-class Ethics and Compliance Programme. Glencore has also
taken extensive remediation actions, including through the
separation or discipline of employees involved in the wrongdoing.
The Company has a refreshed Board and management team, who are
dedicated to fostering a culture of integrity, responsibility and
transparency. The DOJ noted certain enhancements to Glencore's
compliance programme and internal controls in the resolutions.
Kalidas Madhavpeddi, Chairman of Glencore, commented : "Glencore
today is not the company it was when the unacceptable practices
behind this misconduct occurred. The Board and the management team
are committed to operating a company that creates value for all
stakeholders by operating transparently under a well-defined set of
values, with openness and integrity at the forefront. We want the
Glencore of today to be an employer of choice, attracting and
retaining the best talent and competing across its sectors not only
in terms of the unique value proposition that Glencore has to
offer, but also in its commitment to act ethically and responsibly
across all aspects of its business."
Gary Nagle, Chief Executive Officer of Glencore, commented : "We
acknowledge the misconduct identified in these investigations and
have cooperated with the authorities. This type of behaviour has no
place in Glencore, and the Board, management team and I are very
clear about the culture that we want and our commitment to be a
responsible and ethical operator wherever we work. We have 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."
Significant Steps taken to Enhance Ethics and Compliance
Programme
The Group has bolstered its compliance structures and controls
through a comprehensive programme built around risk assessment,
policies, procedures, standards and guidelines based on
international best practice, associated training and awareness
initiatives as well as monitoring systems. This has included:
-- Strengthening the Group's Code of Conduct and launching a
comprehensive global awareness and training campaign designed to
embed Glencore's Values throughout its business, set expectations
and ensure accountability for all employees;
-- Establishing a centralised, independent and empowered
compliance function and, in 2020, appointing a new dedicated Head
of Compliance;
-- Making a significant investment in compliance systems and
resources, as well as experienced personnel;
-- Significantly enhancing and expanding the Group's ethics and
compliance training programmes;
-- Instituting a comprehensive business partner management
programme, including significantly reducing the Company's use of
third-party business generating intermediaries and employing
end-to-end controls to oversee their engagement;
-- Implementing extensive monitoring and testing mechanisms,
including through the use of data analytics, to assess whether our
controls are entrenched and effective across the Group and ensure
continuous improvement; and
-- Engaging leading external advisors to review Glencore's
systems and verify that controls are working as intended.
Glencore is committed to transparency about its programme and
this year published its first dedicated Ethics and Compliance
report, providing a detailed overview of Glencore's Ethics and
Compliance Programme, including a summary of its approach,
compliance structure and the various systems and processes that
Glencore implements to support its programme and promote an ethical
culture.
Further details on Glencore's compliance initiatives can be
found in the presentation and Ethics and Compliance report
available here .
Notes for Editors
Terms of the Resolutions
The coordinated resolutions announced today comprise five
separate resolutions:
-- In an agreement with the DOJ, subject to final approval by
the Court, Glencore International AG has agreed to pay $428,521,173
in fines and $272,185,792 in forfeiture and disgorgement and has
pleaded guilty to one count of conspiracy to violate the US Foreign
Corrupt Practices Act related to the Group's past actions in
certain overseas jurisdictions. The Company will pay $262,590,214
to the United States, with up to $136,236,140 to be credited
against the resolution with UK authorities and up to $29,694,819 to
be credited against any potential resolution with Swiss
authorities, both in connection with investigations into related
conduct. The DOJ resolution provides for forfeiture of $181,457,195
and credits Glencore for $90,728,597 in disgorgement to the CFTC.
The DOJ agreement provides for the appointment of an independent
compliance monitor for a period of three years to assess and
monitor the Company's compliance with the terms of the agreement
and evaluate the effectiveness of its compliance programme and
internal controls.
-- In a separate agreement with the DOJ, Glencore Ltd. has
agreed to pay a fine of $341,221,682 and forfeiture of $144,417,203
and has pleaded guilty to one count of conspiracy to commit
commodity price manipulation related to past market conduct in
certain US fuel oil markets. Of this amount, $242,819,443 will be
credited against the resolution with the CFTC. The DOJ agreement
provides for the appointment of an independent compliance monitor
for a period of three years to assess and monitor the Company's
compliance with the agreement and evaluate the effectiveness of its
compliance programme and internal controls.
-- Glencore International AG, Glencore Ltd. and Chemoil
Corporation (a Glencore subsidiary) have reached a separate
agreement to resolve an investigation by the CFTC in relation to
civil violations of the Commodity Exchange Act and CFTC
regulations, in connection with past market conduct in certain US
fuel oil markets as well as past corrupt practices in certain
overseas jurisdictions. The companies have agreed to pay
$333,548,040 in civil penalties and disgorgement to the CFTC, with
the $852,797,810 balance of the penalty to the CFTC being offset
against penalties imposed by other authorities.
-- Glencore Energy UK Limited has been charged with five counts
of bribery and two counts of failure to prevent bribery under the
UK Bribery Act 2010. Glencore Energy UK Limited appeared today
before the Westminster Magistrates' Court and indicated that it
will plead guilty to the SFO's charges. Glencore Energy UK will now
be transferred to the Crown Court for sentencing and determination
of the financial penalty.
-- Glencore International AG has separately agreed to pay
$39,598,367 under a resolution signed with the MPF in connection
with the investigation by the MPF into certain Glencore affiliates
in relation to bribery allegations concerning the Brazilian
state-owned energy company Petrobras arising from the "Operation
Car Wash" global probe.
The aggregate penalties and amounts payable to the US and
Brazilian authorities are as follows:
Authority Aggregate Credits and offsets Amount
penalty payable
by Glencore
--------------- ---------------- ---------------------------------------- ---------------
(up to $136,236,140 credit for payments
to the SFO)(2)
(up to $29,694,819 credit for payments
to the Swiss)(3)
($90,728,597 credit for disgorgement
DOJ-FCPA $700,706,965(1) to the CFTC) $444,047,409
=============== ================ ======================================== ===============
DOJ-market ($242,819,443 credit for payments
manipulation $485,638,885 to the CFTC) $242,819,442
=============== ================ ======================================== ===============
($852,797,810 offset against the
CFTC $1,186,345,850 DOJ and SFO) $333,548,040
=============== ================ ======================================== ===============
MPF $39,598,367 N/A $39,598,367
=============== ================ ======================================== ===============
Total (excluding SFO and any Swiss/Dutch resolution) $1,060,013,258
=========================================================================== ===============
(1) This amount includes $181,457,195 in forfeiture to the DOJ
and $90,728,597 in disgorgement to the CFTC, which is also included
in the CFTC aggregate penalty.
(2) The credit assumes resolution within six months. As noted
above, the SFO penalty will only be determined following
sentencing.
(3) The credit assumes resolution within twelve months. The
Swiss/Dutch investigations remain ongoing with their timing and
outcome being uncertain.
For further information please contact:
Investors Media
Martin Fewings Charles Watenphul
t: +41 41 709 2880 t: +41 41 709 2462
m: +41 79 737 56 42 m: +41 79 904 33 20
martin.fewings@glencore.com Charles.watenphul@glencore.com
Glencore LEI: 2138002658CPO9NBH955
This announcement contains inside information.
Notes for Editors
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 60 responsibly - sourced commodities that advance
everyday life. Through a network of assets, customers and suppliers
that spans the globe, we produce, process, recycle, source, market
and distribute the commodities that enable decarbonisation while
meeting the energy needs of today.
Glencore companies employ around 135,000 people, including
contractors. With a strong footprint in over 35 countries in both
established and emerging regions for natural resources, our
marketing and industrial activities are supported by a global
network of more than 40 offices.
Glencore's customers are industrial consumers, such as those in
the automotive, steel, power generation, battery manufacturing and
oil sectors. We also provide financing, logistics and other
services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative.
Glencore recognises our responsibility to contribute to the
global effort to achieve the goals of the Paris Agreement. Our
ambition is to be a net zero total emissions company by 2050. In
August 2021, we increased our medium-term emission reduction target
to a 50% reduction by 2035 on 2019 levels and introduced a new
short-term target of a 15% reduction by 2026 on 2019 levels.
Disclaimer
The companies in which Glencore plc directly and indirectly has
an interest are separate and distinct legal entities. In this
document, "Glencore", "Glencore group" and "Group" are used for
convenience only where references are made to Glencore plc and its
subsidiaries in general. These collective expressions are used for
ease of reference only and do not imply any other relationship
between the companies. Likewise, the words "we", "us" and "our" are
also used to refer collectively to members of the Group or to those
who work for them. These expressions are also used where no useful
purpose is served by identifying the particular company or
companies.
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