OVER US$75 million which should have been paid to Democratic Republic of Congo’s state mining company Gécamines, between 2013 and 2016, by mining giant Glencore, was instead diverted to a controversial Israel businessman Dan Gertler, according to a report in Global Witness.
“Glencore did not disclose in company filings that it was instead making these payments to Gertler, a known corruption risk,” the report says. “That he was the recipient of the payments comes to light only weeks after Glencore bought Gertler out of mining assets it held jointly with him in DR Congo in a billion dollar deal.”
A Global Witness investigation found that from 2013 to 2016 Toronto-listed Katanga Mining, majority-owned by Glencore, made “signature bonus” and other payments totalling over $75 million to Gertler’s Africa Horizons company, registered in the Cayman Islands.
Under the original contract these payments would have gone to Gécamines, but Global Witness wrote to Glencore after reviewing company documents and filings that raised questions over the true recipient of the payments. Glencore admitted that they were made to Gertler’s company.
“It’s outrageous that Glencore has been making payments to a friend of the Congolese President who has been accused of bribery and corruption, and then not telling its shareholders or the public that it’s done so,” said Pete Jones from the Congo team at Global Witness. “Glencore has been in business in DR Congo with Gertler for a decade and has known about the allegations that have been made against him for years.”
Gertler is a close friend of DR Congo’s President Joseph Kabila and has been a focus of major foreign bribery investigations in the US and UK.
Glencore declared the 2013 and 2014 payments it had made to Gertler’s company as payments to Gécamines, in its submissions to the Extractive Industries Transparency Initiative (EITI).
However, Glencore has now admitted, in a letter to Global Witness, that these payments actually went to Gertler from 2013 to 2016.
Global Witness previously reported in November 2016 that since 2014 Glencore had made royalty payments, originally due to go to Congo’s state mining company, Gécamines, to Gertler’s Africa Horizons company instead.
DR Congo has vast natural resource wealth, but corruption, mismanagement and the sale of mines below market value have helped keep it one of the world’s poorest countries, consistently languishing near the bottom of the UN Human Development Index.
*Global Witness is an independent, not-for-profit organisation. It exposes the hidden links between demand for natural resources, corruption, armed conflict and environmental destruction.