To view the PDF file, sign up for a MySharenet subscription.

GLENCORE PLC - GLN: Glencore Reaches Coordinated Resolutions With US,UK and Brazilian Authorities.

Release Date: 25/05/2022 08:06
Code(s): GLN     PDF:  
Wrap Text
GLN: Glencore Reaches Coordinated Resolutions With US,UK and Brazilian Authorities.

(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
LEI: 2138002658CPO9NBH955
Baar, Switzerland
25 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
     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 behavior 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
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

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:

                                                                                                                        Amount payable
 Authority              Aggregate penalty     Credits and offsets
                                                                                                                        by Glencore
 DOJ—FCPA               $700,706,965(1)       (up to $136,236,140 credit for payments to the SFO)[²]                    $444,047,409
                                              (up to $29,694,819 credit for payments to the Swiss)[³]
                                              ($90,728,597 credit for disgorgement to the CFTC)

 DOJ—market             $485,638,885          ($242,819,443 credit for payments to the CFTC)                            $242,819,442
 CFTC                   $1,186,345,850        ($852,797,810 offset against the 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

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.
The credit assumes resolution within six months. As noted above, the SFO penalty will only be determined following sentencing.
The credit assumes resolution within twelve months. The Swiss/Dutch investigations remain ongoing with their timing and outcome
being uncertain.
                                                                                                                               Page 3

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                              

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.

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.

Absa Corporate and Investment Bank, a division of Absa Bank Limited

Date: 25-05-2022 08:06:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story