Although South Africa was not implicated in Glencore’s bribery scandal, parliament’s portfolio committee on mineral resources and energy has recommended that the company’s activities in the country be investigated as there “might be a potential for criminal activities”.
The multinational mining and commodity company has pleaded guilty to charges of bribery, corruption and market manipulation elsewhere in the world.
“I do recommend that the South African government, through the relevant institutions such as the NPA [National Prosecuting Authority] and SIU [Special Investigating Unit] investigate all Glecore operations in South Africa,” Sivuyile Maboda, the content adviser for the department of mineral resources and energy, said at a portfolio committee briefing on Tuesday.
Glencore pleaded guilty before a United States court in late May and a British court in June to bribery involving over $100-million in the Democratic Republic of Congo, Cameroon, Côte d’Ivoire, Equatorial Guinea, Nigeria and South Sudan. It also pleaded guilty to market manipulation in the US and additional bribery offences in Brazil and Venezuela.
The company buys and sells commodities and it is one of the world’s biggest marketers of crude oil. It runs 12 mines and three coal energy plants in South Africa.
Maboda said what had happened in the US signalled a warning for South Africa, noting areas that could be of interest should any corruption accusations arise. Eskom is the main state-owned company with which Glencore has done business in South Africa. The power utility has previously said there were no investigations with regards to Glencore’s work at Eskom and that it would not hesitate to act if there was credible evidence of wrongdoing by the latter.
Maboda also noted that the Zondo commission into state capture had made no adverse findings on Glencore, particularly on the issue of corruption. It had heard claims of President Cyril Ramaphosa trying to influence the terms of coal supply deals that Glencore had with Eskom, Maboda said, but Glencore dismissed and explained those.
Former Eskom chief executive Brian Molefe has accused the Zondo commission of being “very sympathetic” towards Glencore over its relationship with Ramaphosa. Molefe and another former Eskom chief executive, Matshela Koko, told the commission that Ramaphosa had been used by Glencore in its attempts to fleece the power utility out of millions of rands by supplying substandard coal to the Hendrina power station.
Glencore issued a statement in June that stated that “Mr Ramaphosa had no direct involvement in the day-to-day operations of Optimum Coal Holdings or Optimum Coal Mine. Mr Ramaphosa diverted his entire interest in Optimum Coal Holdings on 22 May 2014, prior to him taking office as the deputy president and prior to his involvement with the Eskom war room.”
The so-called war room was created to look into Eskom’s short- and long-term energy challenges and consisted of the minister of public enterprises and the minister of energy, with the deputy president asked to provide oversight.
Maboda, however, said Glencore’s guilty pleas elsewhere should be a warning to South Africa.
“Based on the history of the company, it is possible that South Africa is a victim of what happened in the US,” he said.
Andile Tetyana, the spokesperson for parliament’s legal services, said while there was no evidence that Glencore’s network of corruption found expression in South Africa, the committee should, as part of its oversight function over the minister, schedule a meeting to consider a review of all Glencore mining licences and contracts awarded by the department of mineral resources and energy.
The committee could also recommend to the minister that such a review should be conducted with the assistance of an independent body or entity possessing forensic capacity to make sure that due process was followed, he added.
Democratic Alliance MP James Lorimer said the review of Glencore’s operations should not only be limited to mining rights and the conditions under which they were granted, but also the details of inspections and levels of compliance with the conditions attached to those rights.
“There should also be a list of complaints received by the department against any operations of Glencore and a report back from the department as to what they have done about each of those complaints … that needs to be part of the investigation,” Lorimer said.
Economic Freedom Fighters legislator Phiwaba Madokwe added her voice to calls for an investigation on Glencore, arguing that “where there’s smoke there is fire”.
“Whether South Africa was spared from the corruption and the bribery does not take away from the fact that Glencore has admitted on an international platform and has been found guilty on an international platform to be a company that has involved itself in wrongdoing,” Madokwe said.
“It is a company that is corrupt, and perhaps as South Africa we need to interrogate whether, as a country, we would want to associate ourselves with such a company and want to allow such a company to operate on our shores considering that as a country we have taken a strong stance against corruption.”
The committee resolved to call a meeting with Mineral Resources and Energy Minister Gwede Mantashe to consider a review of all Glencore mining licences and contracts in South Africa. The meeting was scheduled for 20 September.
Anathi Madubela is an Adamela Trust business reporter at the Mail & Guardian.
