Trader Trafigura pleads guilty to a decade of oil bribery in Brazil

MEXICO CITY – Trafigura Group pleaded guilty to a decade of bribery in Brazil, in the latest in a string of cases that have exposed a widespread culture of corruption inside the world’s biggest commodity traders.

Trafigura entered a plea agreement with the US Department of Justice (DOJ) in a federal court in Miami on March 28. The company will pay a fine of US$80.4 million and forfeit US$46.5 million, in line with the US$127 million it set aside in December to resolve the case.

While its largest rivals have all admitted to paying bribes in recent years to resolve US investigations, this is the first time that Trafigura has made such an admission.

The DOJ on Thursday criticised Trafigura for its stance at the start of the investigation. “Particularly during the early phase of the department’s investigation, Trafigura failed to preserve and produce certain documents and evidence in a timely manner and, at times, took positions that were inconsistent with full cooperation,” it said.

Trafigura’s “early posture in resolution negotiations” forced the US government to spend additional resources to develop further evidence before the company “constructively reengaged,” it said. The company was also slow to exercise disciplinary measures for employees who violated company policy.

“For more than a decade, Trafigura bribed Brazilian officials to illegally obtain business and reap over US$61 million in profits,” said Nicole Argentieri, head of the DOJ’s criminal division.

The series of years-long investigations led by the US have laid bare a shockingly brazen culture of wrongdoing in an industry that had long sought to distance itself from a history of paying bribes to win business.

Commodity trading is dominated by a handful of mostly privately owned companies that operate with little regulation and oversight, yet wield huge influence in the global economy through their sprawling businesses that buy, sell and transport raw materials around the world. The industry collectively earned about US$100 billion in 2023, according to estimates from consultancy Oliver Wyman LLC.

For Trafigura – one of the largest of the group – the guilty plea for wrongdoing between 2003 and 2014 is a fresh stain on its reputation after the company has spent the past two decades working to move past an incident involving the discharge of hazardous waste in Ivory Coast in 2006, which catapulted it into the global spotlight at the time.

“These historical incidents do not reflect Trafigura’s values nor the conduct we expect from every employee. They are particularly disappointing given our sustained efforts over many years to embed a culture of responsible conduct at Trafigura,” Chief Executive Officer Jeremy Weir said in a statement.

“We are pleased the DOJ recognized the steps we have taken to invest in our compliance function: enhancing our policies, procedures, processes and controls and from 2019, prohibiting the use of third parties for business origination.”

The case is the latest that originated with the sweeping Carwash probe that began a decade ago in Brazil and uncovered massive corruption at state oil company Petrobras. Trafigura’s rivals Vitol Group and Glencore Plc have already admitted they paid bribes in Brazil to settle wider corruption investigations into them, but Trafigura has until now denied charges of wrongdoing.

When Brazilian prosecutors in 2020 sued Trafigura and several of its executives in a civil lawsuit alleging corruption in its dealings with Petrobras, Trafigura said the charges were “not supported by evidence.”

A former Petrobras trader, Rodrigo Berkowitz, pleaded guilty in the US in 2019 to charges that he took bribes from several trading companies and agreed to cooperate with investigators.

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