Sophisticated bribery schemes commodity traders have developed to rip off poor countries
- Kris Vansanten
- Mar 18, 2024
- 2 min read
The LinkedIn post from Jack Farchy, author of the highly insightful book hashtag#TheWorldForSale and renowed Energy and Commodities reporter at Bloomberg, sheds new light on the sophisticated bribery schemes commodity traders have developed to rip off poor countries to the detriment of their population.
A few interesting quotes also relate to Trafigura, one of the world's largest commodity traders who acquired Nyrstar, the Brussels stock exchange quoted world's second largest zinc smelter, in 2019 under an allegedly fraudulent scheme:
It’s a world that has been known for backhanders and brown envelopes since the days of hashtag#MarcRich, the infamous godfather of the industry.
[A] former Ecuadorian official stated flatly that he had been bribed not just by Vitol, but also by Trafigura Group and Gunvor Group — together, three of the four largest independent oil traders.
A former Petroecuador official described in court how Trafigura and Gunvor began using national oil companies from China, Thailand and Uruguay as fronts to steer favorable oil contracts their way, earning hundreds of millions of dollars of profits in the process.
But the trial of Javier Aguilar showed how modern-day traders had simply updated Marc Rich’s approach for the 21st Century. By adding more intermediary layers between corrupt traders and corrupt government officials, the industry has fueled a thriving underbelly of “consultants” and “brokers” with bank accounts in opaque offshore jurisdictions.
Adrià Budry Carbó, an investigator at Swiss NGO Public Eye who has written extensively about the trading industry, points out that four of the five giant oil traders based in Switzerland have been involved in current or very recent corruption cases. “This is a very strong signal that there is something wrong with this industry,” he says.
Some might hope that the industry will have taken corrective action. However, this final quote confirms that increased vigilance and monitoring is still needed to ensure a fundamental turnaround in the DNA of the industry:
“When the first allegations arrived they all claimed they had done nothing wrong; when there was an investigation going on they said they couldn’t comment; and then when it is over they say the allegations are old and the company has changed,” says Budry Carbó. “The only thing that is changing is the level of sophistication of the schemes.”
Unfortunately, this quote has too many similarities with what we are experiencing in the Nyrstar case against Trafigura - a sad story about ruthless pursuit of money, hashtag#CuckooCapitalism and the selfish money focus of a web of enablers who enable the company to continue its allegedly criminal course.
