On May 24, 2022, Swiss-based commodities firm Glencore pleaded guilty to bribery, corruption, and market manipulation, paying $1.1 billion in fines and forfeitures to the U.S. government to settle the charges. Glencore is one of the world’s largest traders of oil, metals, and minerals, including cobalt, an essential mineral used in emerging green technologies. Cobalt mined from Glencore’s operations supply several U.S. companies, including General Motors, Tesla, Apple, Google, Dell, and Microsoft. The government’s investigation and subsequent charges reveal a decades-long scheme of bribery and corruption in seven countries across South America and Africa, where Glencore paid millions in bribes to influence contracts, avoid government audits, and bribe judges. However, what these charges are silent on is the long record of human rights abuses that have accompanied Glencore’s corrupt practices.
$700 million of the $1.1 billion in fines and forfeitures Glencore paid were related to charges under the Foreign Corrupt Practices Act (FCPA). Enacted to halt bribery and restore investor confidence in the U.S. business system, the FCPA prohibits U.S. companies and companies trading on U.S. exchanges from paying bribes to foreign officials to assist in obtaining or retaining business. The FCPA creates broad jurisdiction to combat corruption, applying to prohibited conduct that occurs anywhere in the world and extending liability over publicly traded companies and their officers, directors, employees, stockholders, and agents. Corruption and bribery prosecutions against corporations under the FCPA are numerous, but what remains unseen in U.S. law is the prosecution of these corporations for human rights abuses that occur throughout their operations and supply chains. Corrupt business practices and human rights abuses tend to take place in parallel, with one exacerbating the other. In particular, the UN has highlighted the extractive sector, where Glencore operates, as having especially significant amounts of corruption, leading to wide ranging human rights impacts. The recent FCPA settlement against Glencore highlights the need for a human rights version of the FCPA.
Despite that Glencore is reported to have the worst human rights record amongst companies working in green metals extraction, Glencore is only successfully being held accountable for their corrupt business dealings. Glencore is linked to the highest number of human rights allegations in Africa and the third-highest number of allegations in South America. In several countries where they operate, there are reports of wide-ranging human rights abuses linked to Glencore, including complicity in child labor, forced relocations, environmental pollution, hazardous working conditions, and attacks on human rights defenders.
As part of their FCPA charges, Glencore pleaded guilty to paying millions in bribes to government officials to avoid tax audits and dismiss lawsuits in the Democratic Republic of the Congo (DRC). A recent case from the U.S. District Court for the District of Columbia against tech giants Apple, Google, Dell, Microsoft and Tesla, John Doe I, et al. v. Apple Inc., et al., details allegations of child abuse at Glencore-owned cobalt mines in the DRC and Glencore sourcing raw materials traced to artisanal mining that uses child labor. Although not a named defendant, this case describes tragic injuries and deaths of several children working at Glencore’s mines and estimates that thousands of children mining cobalt in the DRC, including at Glencore-owned mines, are forced to work under hazardous conditions. Glencore has formally denied any use of child labor in its mines and any connection to artisanal mining, but researchers on the case found that Glencore had made deals with artisanal miners who use child labor and made agreements with the Congolese military to secure one of the mines where many of the alleged injuries took place.
Even with these credible allegations of child labor, Glencore and the U.S. companies it supplies have not been held accountable because the current law is insufficient to address these abuses. The above case against the tech giants was ultimately dismissed for lack of standing because the Court found the plaintiffs’ injuries of child labor were not fairly traceable to the named defendants (i.e., Tesla, Apple, Google, Dell, and Microsoft). Additionally, the court noted that it is not obvious that the Trafficking Victims Protection Reauthorization Act’s civil remedy portion, which this case was brought under, even applies to conduct that occurred outside of the U.S. Due to these technicalities, companies which are alleged to have used child labor in their supply chains evade accountability for their complicity in this abuse.
Glencore also has serious human rights abuse allegations in several other countries across Africa and South America. In Peru, where Glencore operates a copper mine, there have been reports of police brutality against community leaders who oppose the mine’s operations. In Chad, Glencore is facing a U.K. OECD complaint for the collapse of a wastewater basin that contaminated a local river, killing livestock and causing severe crude oil burns and sickness to at least 50 people. In Colombia, a Glencore subsidiary has been accused of financing paramilitary groups to gain control of the carbon industry. Additionally, the Cerrejón coal mine in Colombia, which is partially operated by Glencore, has been at the center of OECD complaints in Australia, Ireland, Switzerland, and the U.K. for forced expropriations and evictions of indigenous communities and significant hazardous metal pollution of a nearby river.
However, the OECD complaints brought against Glencore for its abuses in Chad and Colombia provide limited means for accountability. The current complaint in the UK for abuses in Chad is still under examination, and the other complaints about abuses in Colombia have only just been accepted by the various national contact points. The OECD complaints are a last resort to hold Glencore accountable for these egregious abuses, but even though these complaints have been accepted, the success of these complaints depends largely on governments enforcing the non-binding OECD guidelines.
To get accountability for these human rights abuses, there needs to be a law in the U.S. that holds companies accountable for the human rights abuses that occur within their supply chains. In the case of Glencore, the FCPA provided the framework and the authority for a large-scale investigation and ultimate multi-million dollar settlement for their multinational corruption and bribery scheme. However, no similar framework exists to hold corporations accountable for human rights abuses down their supply chains. If corruption and bribery can be prosecuted with such success, then the human rights abuses of the same corporations should be prosecuted similarly under U.S. law. Outside the U.S., the EU has proposed a corporate sustainability and due diligence directive which would mandate human rights due diligence in company supply chains. Although a positive step, the proposal has been criticized by corporate accountability and human rights activists for excluding short-term or informal relationships from a company’s due diligence obligations and allowing measures known to be ineffective at preventing and mitigating abuse to be used to satisfy due diligence obligations. While similar mandatory human rights due diligence laws are being socialized globally, lack of accountability for abuses within corporate supply chains continues.
During the press conference announcing Glencore’s settlement, U.S. Attorney General Merrick Garland stated that “the rule of law requires that there not be one rule for the powerful and another for the powerless; one rule for the rich and another for the poor.” If that is truly to be the case, the U.S. needs a human rights accountability law that is on par with the FCPA so that those most vulnerable to corporate exploitation are protected and have access to justice.
Written by Caroline Dumoulin, Legal & Policy Intern