Hello!
This week, a US judge ordered Swiss mining and commodity trading giant Glencore to pay US$700 million in connection with a long-running corruption probe.
Last year, Glencore pleaded guilty to channelling at least US$100 million in bribes between 2007 and 2018 to public officials across the world – from Brazil to the Democratic Republic of Congo (DRC), and Nigeria to Venezuela. The company reached a deal with authorities in Brazil, the UK and the US to pay up to US$1.1 billion. This week’s sentence confirms the US portion of the coordinated settlement.
In a welcome move, the judge also instructed the company to pay almost US$30 million in restitution to the founders of a healthcare firm recognised as a victim of Glencore’s conduct in the DRC. But this doesn’t address the full scope. There are likely more populations, entities and individuals who suffered harm from Glencore’s scheme. There must be a more comprehensive effort to identify and adequately compensate all those affected – particularly the most vulnerable.
This is not a new issue, and our Exporting Corruption 2022 report highlights that even when large-scale foreign bribery schemes are successfully investigated and companies are hit with fines and penalties, victims usually don’t receive compensation. Instead, large penalties and fines paid by bribe-paying companies are typically allocated to the treasuries of their home countries. Settlements rarely consider compensating harm to the countries adversely affected by the bribery.
Rightfully so, affected countries are starting to take issue with this.
For example, Indonesia is now requesting guarantees from the UK that it will receive a portion of any future financial settlement resulting from a corruption inquiry into aircraft manufacturer Bombardier. This comes after Jakarta was excluded from an agreement made with aerospace leader Airbus three years ago – even though it reportedly assisted with the investigation.
In the case of Airbus, which incidentally owns a majority stake in Bombardier, the company was implicated in bribing foreign officials between at least 2008 and 2015 to win business abroad. The company signed a plea deal in January 2020 and agreed to pay record penalties of US$3.9 billion to France, the UK and the US, all of which investigated the scheme.
Notably absent from the Airbus agreements were any plans to compensate the countries and people where the company paid bribes, including Colombia, Ghana, Indonesia and Sri Lanka – something we didn’t think was right.
In Sri Lanka alone, experts estimated a minimum of US$98 million in losses for the public due to the scheme. This did not sit well with our chapter in Sri Lanka, which expressed concern to UK authorities about inadequate compensation for victims. Disappointingly, they received a response justifying the lack of compensation on the grounds that the loss from the criminal conduct was hard to measure and there was no evidence that any of the products or services sold by Airbus to customers were defective or unwanted.
Similarly in France, Airbus paid approximately US$2.29 billion – but no victims were identified with whom to share compensation.
Fortunately, there have been signs of legislative progress. France’s landmark 2021 law on the restitution of ill-gotten gains in international corruption cases – whether proceeds of bribery or embezzled public funds – establishes a new model that makes an explicit link to foreign victims.
Foreign bribery has been treated as a victimless crime for far too long. Countries must develop transparent and accountable mechanisms to ensure justice for those who directly suffer from such corruption.