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The days of handing out bribes to secure commodity contracts are over, the heads of the world’s biggest trading companies said, after a series of US bribery scandals put the sector under intense scrutiny.
Speaking at the FT Commodities Global Summit in Lausanne the heads of Vitol, Trafigura and Gunvor each said they had overhauled trading and compliance processes since the 2010s and that bribery and corruption has no place in commodity trading today.
“We’ve tried very hard over the past few years to re-engineer some of those processes and policies,” said Russell Hardy, chief executive officer of Vitol, the world’s largest independent oil trader.
The firm, which agreed to pay more than $160mn to authorities in the US and Brazil in 2020 in relation to bribery charges in Brazil, Ecuador and Mexico, has sought to “influence the culture” of its employees to “embrace that compliance is a necessary part of their thinking and everything that they do,” he said.
Rotterdam-based Vitol, whose chief executive sits in London, has had “conversations with a lot of [its] stakeholders to impress upon them the efforts that we’re putting in,” he added.
Large scale trading of goods like oil and critical minerals has in the past relied on well-connected intermediaries to win business leading to corrupt deals that have drawn the scrutiny of US and European prosecutors in recent years.
A former Vitol trader was convicted in February in the US on corruption charges relating to more than $1mn in bribes he paid to officials in Ecuador and Mexico between 2015 and 2020.
Rival Trafigura in March pleaded guilty to charges by US prosecutors of bribery in Brazil between 2003 and 2014, agreeing to pay more than $120mn in fines and forfeited profits.
“I’m modest enough to say, you can never say never” said Jeremy Weir, Trafigura CEO, when asked whether similar corrupt dealings could happen again at the company. “What you need to do is put in all those checks and balances, and training and programs in place to ensure that you can address these specific problems,” he said. “And I do feel in our case, we’re doing the best we possibly can.”
Weir said the company had “evolved” its compliance program, and long stopped the use of intermediaries. “There’s some businesses we might not do. So be it,” he added.
The CEO, who has been part of the management committee since 2007, said he had no knowledge of the corrupt payments at the time.
Trafigura and its former chief operating officer Mike Wainwright also face charges in Switzerland relating to the alleged bribery of foreign officials in Angola between 2009 and 2011. Trafigura in December said Wainwright “rejects the charges against him”, and that the company would “defend itself” in court.
The three trading houses have been among the greatest beneficiaries of the huge disruption in energy markets since Russia’s invasion of Ukraine two years ago, earning a combined $46bn in profits in 2022 and 2023, according to the FT’s calculations.
Gunvor’s co-founder and chair Torbjörn Törnqvist said the company had stopped using intermediaries to win business in 2020 as it “realised that is a risk”.
In 2019, Swiss prosecutors found the company guilty of facilitating corruption in the Republic of Congo and Ivory Coast and forced it to pay fines and compensation of $95mn. At the time, Törnqvist said he never wanted to find himself in the same position again.
In March Gunvor pleaded guilty to US charges and agreed to pay more than $660mn in fines and forfeited profits over bribery to obtain oil contracts in Ecuador.
Törnqvist, who owns 84 per cent of the company, said he had no knowledge at the time of the payments made to Ecuadorean officials.
“I [would] also like to say that it was in fact our own compliance operation [that] actually stopped it before we knew we were being investigated,” he added.
“We can’t change history but you can certainly change the future,” he said. “We’re very sorry for what happened. And we have done whatever we can do to see it not happen again.”