UK gov’t finds Glencore fell short of business guidelines in Chad

The British government published on Thursday the results of a years-long probe into Glencore‘s (LSE: GLEN) business in Chad, which concludes the miner and commodity trader did not fully comply with the OECD guidelines for multinationals in addressing a 2018 toxic spill at the Badila oilfield. 

The wastewater leak, equivalent in volume to 34 Olympic-sized swimming pools, impacted an area home to about 18,000 people, triggering the intervention of three human rights groups. These organizations filed a complaint against the company in 2020, alleging that dozens of villagers – among them children – had suffered severe burns, skin lesions and sickness after contact with contaminated water.

The complaint was filed by corporate watchdog RAID, the Public Interest Law Center (PILC) in Chad, and the Association of Young Chadians of the Petroleum Zone (AJTZP).

The UK National Contact Point (NCP), part of the Department for Business and Trade, acknowledged Glencore UK’s business relationship with its subsidiary PetroChad Mangara Ltd. (PCM), which operated the Badila oilfield at the time of the spill. 

The office, however, did not hold Glencore’s UK subsidiary directly responsible for the spill, saying that the company only fell short in meeting its due diligence obligations to identify and mitigate risks to human rights and the environment.

Aristote Benainou Ngarkaya, president of AJTZP, expressed concerns about NCP’s decision. “These recommendations are insufficient. Although Glencore no longer owns PCM, residents continue to live in a polluted area and suffer from the wastewater spill’s effects,” he said in a statement.

“After six years of waiting and an excessively drawn-out UK NCP process, who will provide the remedy they deserve? Glencore UK must own up to its actions and provide full compensation to those affected,” he said.

RAID’s executive director, Anneke Van Woudenberg, said the NCP’s findings underscored the need for companies like Glencore UK to strengthen their human rights due diligence practices. She added that the lack of direct accountability for addressing the harm caused by the company has left communities in Chad without the remedies they deserve.

“Not only does the NCP’s decision contradict a UK legal precedent, which establishes that parent companies may owe a duty of care to individuals and communities harmed by their subsidiaries’ actions, it also severely fails local communities impacted by the company breaching its responsibilities,” Van Woudenberg said in a statement.

Bribery, corruption

The NCP’s decision follows years of international investigations into acts of bribery and corruption by Glencore, including its UK oil subsidiary. In May 2022, the Swiss company pled guilty to corruption charges brought against it in the U.S. for widespread bribery in countries across the globe. 

A month later, its UK subsidiary, Glencore UK admitted to seven counts of bribery for preferential oil deals in West Africa. A UK court later ordered it to pay £280 million (about $353m at today’s exchange rates). 

In August, the UK Serious Fraud Office charged Alex Beard, the billionaire former head of oil at Glencore Plc, with corruption. Four other ex-employees were also charged in this ongoing case.