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Article

22 Jun 2018

Author:
Margot Mollat du Jourdin, Global Witness

What price will Glencore pay for its murky deals in DR Congo?

See all tags Allegations

Last week, mining giant Glencore settled two legal disputes threatening its assets in Democratic Republic of Congo, agreeing to pay hundreds of millions to opaque Congolese state-owned company Gécamines and sanctioned Israeli businessman Dan Gertler. These agreements raise fears that the company is willing to take significant risks and pay any price to safeguard its lucrative copper and cobalt mines in Congo...The explosive news that Glencore would bypass US sanctions by paying Gertler in euros rather than dollars made headlines across the business press last week. It is hard to see this latest move as anything but a desperate and risky attempt by...[Glencore] to extricate itself from of a mess of its own making...Both Gertler and Glencore have consistently denied any wrongdoing in their business deals in Congo...In December the US Department of Treasury sanctioned Gertler and several of his companies following “hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals” in Congo. This compelled Glencore to halt royalty payments to Gertler, who immediately sued Glencore in London and Hong Kong courts for nearly $3 billion in damages for non-payment of royalties...After a couple of months of out of court talks, Glencore decided to risk the wrath of US authorities and resume paying the royalties, but in euros rather than dollars. The settlement means that Glencore will pump millions of euros into the pockets of an individual accused by the US of bribery and of “acting as a middleman for mining assets” on behalf of Kabila...Glencore’s agreements with both Gertler and Gécamines have resolved extremely serious disputes that could have seen Glencore lose its valuable investments in Congo’s copper and cobalt sectors...But that does not give companies carte blanche to make whatever payments necessary, to whomsoever necessary, in order to safeguard their investments. Companies profiting from minerals in Congo, like Glencore, must commit to supporting clean and transparent supply chains and take responsibility for any corruption risks involved in the deals they make...Glencore cannot be allowed to get around important US anti-corruption measures and continue to pay Gertler massive royalty fees; unless the US responds by enforcing its sanctions, this sends a dangerous message that huge companies can act with impunity to protect their business interests.

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