09 05 12 Global Witness – Glencore ‘should explain potentially corrupt deals in Congo’

Global Witness is today calling on Glencore to explain potentially
corrupt deals in the Democratic Republic of Congo, and is calling on the
company to provide more details about its relationship with an Israeli
businessman who is key to its substantial mining investments in the
country. The concerns, detailed in a briefing for Glencore’s
shareholders, are being published on the day of the company’s first AGM
as a publicly listed company.

Since 2010 a number of offshore companies associated with Dan Gertler
– a businessman and friend of Congolese President Joseph Kabila – have
secretly bought stakes in several mines from the state, paying only a
small fraction of their commercially estimated values. The mines were
sold without public tenders and limited details were only released long
after the assets were sold off.

After buying the assets, at least two of the offshore companies made
huge profits by selling on shares in them soon afterwards. Others are
positioned to profit by collecting the mining revenues.

Some of the proceeds of mining sales in 2011 were used by the
Congolese government to cover costs related to the 2011 election, which
returned incumbent president Joseph Kabila to power. The polls were
condemned as flawed by international diplomats and election observers
and were marred by killings committed by government security forces.

Mr Gertler and Glencore have challenged Global Witness’s facts as
laid out in the briefing, and their views are reflected in the note. A
spokesman for Mr Gertler has questioned the commercial valuations for
some of the mines concerned, while both Glencore and Mr Gertler’s
representatives categorically deny any involvement in corruption in
Congo.

“Glencore’s business in Congo is intimately tied up with a
controversial friend of the president,” said Daniel Balint Kurti,
Campaign Leader for the Democratic Republic of Congo at Global Witness.
“In a country endowed with vast mineral wealth and yet ranked by the UN
as the least developed nation in the world, the company owes its
shareholders and, more importantly, the people of Congo, an explanation
of exactly who now owns their natural resources.”

Mr Gertler is a key intermediary through whom Glencore has acquired
stakes in Congolese mining assets. He is also a partner in all three
mining ventures in Congo in which Glencore has acquired stakes that have
been collectively valued at an estimated $4.6 billion. Two of those
ventures, the Kansuki and Mutanda mines, together are expected to add at
least 40% to the world’s cobalt output and increase Congo’s copper
production by about 40% (compared to 2011 production figures) once they
are fully developed.

Global Witness is asking Glencore and Mr Gertler to release the full
list of shareholders of all the offshore companies involved –
information which is currently secret. Global Witness believes there is a
risk that the shareholders could include corrupt Congolese government
officials or their proxies.

“Congo’s natural resource wealth should benefit the country as a
whole,” said Balint-Kurti. “Yet hugely profitable deals are being struck
in Congo by secretive offshore companies and multinationals; the
Congolese state is getting peanuts and we are extremely concerned that
the Congolese people are being deprived of billions of dollars.”

As the world’s largest commodity-trading firm, Glencore’s behaviour
helps set the standard for how commodities companies operate across the
world. It boasts that it “will not assist any third party in
violating the law in any country, nor pay or receive bribes, nor
participate in any other criminal, fraudulent or corrupt practice”.

“It is now incumbent upon Glencore to show that it is living
up to its rhetoric and that it is ready to make public the details of
its previously secret business deals,” concluded Balint-Kurti.

/Ends

Notes for editors:

Contact:

Daniel Balint-Kurti, +44 (0) 207 492 5872 and +44 (0) 7912 517 146, dbalint-kurti@globalwitness.org