Glencore South Africa needs to be investigated and here is why

By: Sipho Singiswa*

When the US judgment against Glencore broke in the news on 24 May 2022, President Cyril Ramaphosa may have sighed inwardly in relief, only too grateful that South Africa was not one of the countries included in the investigation.

Ramaphosa’s relief was short lived however, when a week later, United Democratic Movement (UDM) leader Bantu Holomisa, requested in writing that the Public Protector, Busisiwe Mkhwebane, approaches the United States government for evidence against mining giant Glencore. In the application Holomisa stated that: “the chances that Glencore bribed officials and engaged in corrupt activities in South Africa were high even though South Africa was not specifically cited in the US’ indictment against the multinational.”

According to the US judgement roughly between “2007 and 2018, Glencore and its subsidiaries caused approximately $79.6 million in payments to be made to intermediary companies in order to secure improper advantages to obtain and retain business with state-owned and state-controlled entities in Africa, Brazil and Venezuela.” Glencore agreed to pay fines of more than $1.1 billion over to the US Department of Justice (USDOJ).

A statement from Glencore reads: “Under the terms of the US resolutions, Glencore will pay penalties of $700,706,965 to resolve bribery investigations and $485,638,885 to resolve market manipulation investigations by the Department of Justice (“DOJ”) and the Commodity Futures Trading Commission (“CFTC”). Of this amount, up to $165,930,959 will be credited against other, parallel matters, including in the UK, so that the net amount payable to the US authorities is expected to be $1,020,414,891. Glencore has further agreed to pay $39,598,367 under a resolution signed with the Brazilian Federal Prosecutor’s Office (“MPF”) in connection with its bribery investigation into the Group.”

On 03 June, at the same time as the #Farmgate Phala Phala farm robbery was exposed (read here), Public Protector Busisiwe Mkhwebane issued a statement from her office announcing her intention to investigate Glencore South Africa. The official notice also stated that her office was looking into Glencore’s ties with Eskom from an ongoing case started in June 2020 and that she will merge the two complaints if they establish that there is anything worth pursuing with the current case.

Five days later Mkhwebane launched a probe into Ramaphosa’s Phala Phala Farm theft for Alleged Breach of Ethics Code. In a statement from her office, Mkhwebane made it clear that the Public Protector is the only institution in the country that is empowered to enforce the Executive Code of Ethics.

Her statement reads: “On receipt of such a complaint, the Public Protector must investigate and must submit a report on the alleged breach of the Executive Code of Ethics within 30 days of the complaint to the President if the complaint was against a member of Cabinet, a Premier or Deputy Minister.”

But in a shocking turn of events, within 24 hours of this proclamation Ramaphosa announced his own decision to suspend the Public Protector. It cannot be overlooked that Mkhwebane’s suspension was announced the day after she gave notice that she was probing Ramaphosa for allegedly breaching the executive code of ethics relating to criminal activities at his farm – as well as only 6 days after her announcement on a Glencore investigation. This certainly smacks of foul play and indicates that Ramaphosa is not immune from using the systemic power available to him to shut Mkhwebane’s investigations down.

We are left asking exactly what and how much the ruthless Ramaphosa is hiding from the citizens he presides over? To unpack this moral and political conundrum we have to look at Ramaphosa’s history with Glencore and it’s alleged links to corporate corruption in South Africa.

Looking back.

After Ramaphosa’s failure to become Mandela’s deputy in 1994 he joined the corporate world and the sphere of ongoing apartheid monopoly capital. He was soon to become the Black Economic Empowerment (BEE) director of the Shanduka Group, a diversified industrial company with major interests in coal mining operations. He was at the same time in a BEE-partnership with, and the chairperson of Glencore. Despite the conflicts of interest Ramaphosa also presided over the Eskom War room established to execute a turnaround of this state power utility.

It has been alleged by some that the extraction industry bosses connived with Ramaphosa to use this opportunity as a cover to loot Eskom’s coal supplies and to defraud the South African government. Some allege that Glencore made Ramaphosa its BEE partner with a view of leveraging Mr. Ramaphosa’s influence to achieve amendments to the Coal Supply Agreement (CSA)”.

Many are of the opinion that the Gupta’s own dubious business dealings and close relationship with President Zuma and other government officials provided the ideal cover for Glencore’s own, perhaps even more dubious, corporate wrongdoings. Without going into the entire history of Ramaphosa’s links to Glencore’s questionable corporate practice, much of this is included in what unfolded in the Raymond Zondo Commission of Inquiry into State Capture, commonly known as ‘The Zondo Commission.’

The Zondo Commission and the US Judgment against Glencore.

At the Zondo Commission, Former Eskom boss Brian Molefe, and Former Eskom chief executive, Matshela Koko, vehemently argued that Ramaphosa and Glencore had connived to defraud Eskom and the State. They further gave testimony that Glencore and Ramaphosa had deliberately pursued an adversarial relationship with Eskom in which Ramaphosa was accused of abuse of power and facilitating deals for Glencore through underhanded means and at the expense of both Eskom and the already cash-strapped South African taxpayer.

Molefe had consistently pointed out at the commission that when he was appointed CEO of Eskom, he found that Ramaphosa had facilitated deals that allowed Glencore, through its subsidiary Optimum Coal Holding, to supply sub-standard coal at over-inflated prices to Eskom.

Molefe testified that when he became the CEO of Eskom, he discovered to his disbelief and shock that Optimum Coal Holdings was on the brink of concluding an agreement with Eskom to increase its supply price from R150 per tonne to R530 a tonne, which he had put a stop to.

During the period when Glencore did business with Eskom, Ramaphosa was both Glencore’s chairperson and the Head of Government Business and thus responsible for overseeing the business operations of all State-Owned Enterprises (SOE), one of those being Eskom.

Molefe told the Commission that soon after assuming office he found compelling evidence to issue summons for R2-billion in penalties against Glencore. This had set him on a warpath with both Ramaphosa and the extraction industry bosses who were backing Ramaphosa’s political campaign.

In the wake of the US judgement Molefe reiterated that although R1.4-billion of the more than R2-billion in accumulated interest had been prescribed nobody had bothered to go and recover that money. He went on to say: “And while I can’t say they bribed so and so, but it just doesn’t add up. It looks strange, and that was my evidence to the commission,”

Koko has also argued that Glencore had used its political connectivity through Ramaphosa to bully State officials to sign agreements that were detrimental to the long-term interests of the power utility and South Africa’s domestic priorities, as exemplified by the current-ongoing power-outages and interruptions to the demand and supply operations of the power utility.

However, despite Glencore being found by the USDOJ guilty of charges that mirror the practices it is consistently accused of in South Africa, Glencore was quick to deny allegations of complicity in corruption with Ramaphosa. In its carefully crafted legal statement it said:

“We acknowledge the misconduct identified in these investigations and have clearly stated that this type of behaviour has no place in the Glencore of today. We are committed going forward to operating transparently under a well-defined set of values, with openness and integrity at the forefront,”

“The suggestion that Glencore involved Mr Ramaphosa in the acquisition of Optimum Coal Holding (OCH) with a view to, or with the expectation of, leveraging Mr Ramaphosa’s influence to achieve amendments to the CSA, is false and baseless.”

“Regarding the allegations relating to Optimum Coal, Glencore cooperated fully with the Public Protector investigation and Zondo Commission into State Capture. Glencore denies any allegation of wrongdoing and the conclusion of both processes confirms this.”

“Mr Ramaphosa had no direct involvement in the day-to-day operations of Optimum Coal Holdings (OCH) or Optimum Coal Mine (OCM). Mr Ramaphosa divested his entire interest in OCH on 22 May 2014 prior to him taking office as the Deputy President and prior to his involvement with the Eskom War Room.

“Mr Ramaphosa therefore had no interest in OCH following the conclusion of the Cooperation Agreement and during the period when OCM/OCH were negotiating with Eskom regarding potential amendments to the Coal Supply Agreement (CSA) with Eskom and an extension to the CSA.

Both Molefe and Koko have said that they are not surprised by Glencore and Ramaphosa’s denials of wrongdoing and have also been calling for a further in-depth investigation into Glencore’s operations in South Africa and its relationship with Ramaphosa. They are both adamant that Glencore and Ramaphosa had connived to defraud the power utility. Molefe points out that the: “R2.2-billion penalty payable to Eskom was accrued while Ramaphosa was the chairperson of Glencore”. Of course, Ramaphosa implies that he never knew about the R2.2billion penalty Glencore owed to Eskom.

Molefe continues to be dismissive of Ramaphosa’s selective amnesia and points out that as both Head of government business and Glencore’s chairperson Ramaphosa would have, no doubt, known about “a contingent liability of R2.2-billion, otherwise he is guilty of a dereliction of duty”. He has always dismissed Ramaphosa’s denials as being disingenuous and dishonest and testified similarly at the Zondo Commission that as he was both Head of government business, therefore overall head of Eskom, as well as Glencore’s chairperson, it was impossible for Ramaphosa not to have known about Glencore’s contract manipulation, fabrication of workload and supply streams.

Deafening silence

It is repugnant that there has not been overwhelming public outrage around these alleged Glencore shenanigans, save for the voices of those who are written off as destructive RET instigators. That Glencore is being investigated by authorities in other countries, including Norway, Netherlands, Britain and Switzerland, is surely indicative that there is grounds for Mkhwebene to investigate Glencore SA. Even more shocking is the silence from many of the Chapter 9 NGOs and Foundations such as Defend Our Democracy; Council for the Advancement of the South African Constitution (CASAC); Ahmed Khathrada; Business Unity South Africa (BUSA) Banking Association SA. (BASA); Helen Suzman; De Klerk; etc, as well as the COSATU and SACP leadership.

Their deafening silence makes it clear that as beneficiaries of Ramaphosa’s toxic generosity, it is not in their interest to scrutinse this gross misconduct, regardless of the mountain of growing evidence that the president and his corporate backers’ seem to have an program to undermine and destroy the ANC’s social transformation agenda to emancipate the majority and eradicate economic and social racial inequalities. That these entities have remained mum on Ramaphosa’s alleged corruption, further prompts old questions about their legitimacy, as well as that of the Zondo Commission.

Besides acting as race-biased, and oft times, arrogant gatekeepers who are seemingly hired to police the dissenting voices of the Native African people – who exactly is their existence meant to benefit? Where is their voice of outrage around Ramaphosa’s alleged corruption? After all they are quick to denounce their ideological opponents as guilty until proven innocent. And why have they ignored the convenient timing of Ramaphosa’s suspension of Public Protector, Busisiwe Mkhwebane, who has worked tirelessly at exposing this corruption despite the brutal war waged against her by the CR administration and white owned media.

It is time for South Africans to stop having the wool pulled over their eyes by the hegemonic narrative that seeks to rob the dispossessed majority of its rightful claim to the land and resources of Mzansi. It is also time to insist that Mkhwebane is reinstated so that she is able to complete her investigations into Glencore, Farmgate and the plentiful other investigations into money laundering that have over and over again been thwarted by Ramaphosa.

Aluta Continua!

*Sipho Singiswa is an ex-Robben Island political prisoner and a well-known documentary filmmaker and political commentator. He is a founder of Media for Justice and Head of media and international programming for Robben Island Ex Political Prisoner Human Rights Programme.

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