Making Billions While The People In The Producing Countries Remain Bitterly Poor
Posted on December 4, 2012 by Anita Roddick Team
Glencore, headquartered in Switzerland, is one of the world’s leading integrated producers and marketers of commodities – it has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of metals and minerals, energy products and agricultural products. Glencore is one of the richest companies in the world and who flouts every standard of decent trading with weaker producers. The UK effectively subsidises Glencore by giving aid to Zambia where their treatment of the Zambian people who extract copper revenues is disgraceful.
We urge you to read the below article which appeared in The Guardian and also to sign 38 Degrees’ campaign calling on the Chair of Glencore to be transparent in their treatment of Zambia. You can also watch on BBC IPlayer a recent programme shown on BBC4 called Why Poverty? Stealing Africa which is about Glencore’s copper mines in Zambia.
Ivan Glasenberg’s neighbours rest uneasily with Glencore tax windfall The village of Rüschlikon got £242m when Glencore floated – but many residents have reservations about the money’s origins
Rupert Neate, 2nd December 2012
He’s so rich and pays so much tax that every one of his 3,600 neighbours in the picturesque village overlooking Lake Zurich got a 7% tax break, but not everyone in Rüschlikon likes Ivan Glasenberg.
The 55-year-old, who had been living quietly in the village for more than a decade, exploded into the public consciousness last year when his previously extremely secretive commodity trading company Glencore floated on the London Stock Exchange and turned Glasenberg into Switzerland’s sixth richest man overnight.
The float valued his stake in the company, which is worth four times as much as Marks & Spencer, at £5.7bn. Even with Switzerland’s famously low tax rates, Glasenberg paid 360m Swiss francs (£242m) in tax to Rüschlikon’s coffers because under Swiss law a large proportion of income taxes are paid to the local community rather than directly to the state.
As a result Rüschlikon, which was already known as the “richest village in Switzerland”, was left with so much spare cash that the village council proposed cutting its already low tax rate by a further 7%. The idea was overwhelmingly approved in a public vote, but some citizens argued against the windfall – suggesting it was tainted money – and are still concerned today.
The money which Rüschlikon is benefiting from comes via Glencore’s mining and trading operations in more than 40 countries around the world. “He (Glasenberg) covers a lot of territory and has access to a lot of heads of state,” said James Campbell, a former executive at mining multinational Anglo American who worked closely with Glasenberg on one of his first deals in the 1980s. “His modus operandi is active. Certainly you either like Ivan or you don’t. I’m not sure those who don’t like him can tell you why.”
Growing up, Glasenberg was a keen athlete, going on to become a champion race walker who would have competed in the 1984 Olympics if South Africa had not been banned from the competition during the apartheid period. Chris Rael, who trained with him in California in the 1980s and now works for the US athletics team, remembers Glasenberg as courteous, friendly and approachable. “He never talked about money or business, so I would never have suspected that was what he’d become.” While Glasenberg, who lives in a glass and steel chalet up a steep hill with views over the lake, is on first-name terms with presidents and prime ministers, few people in Rüschlikon had heard of him until his taxes reached the village coffers. The huge payment caused an immediate stir, with the mayor being advised to call the village’s bank to make sure it was prepared to receive such a large payment.
In Le Bistro cafe in the converted waiting room of Rüschlikon station, from where the village’s rich residents can be whisked to downtown Zurich in 15 minutes, none of the clientele whiling away the afternoon have met Glasenberg but all are happy to chat about his impact on the community.
“They are really happy with him paying a lot of taxes,” said waitress Sylvia Hauser. “But they don’t like his business, they don’t like what he is doing. It’s not very friendly and they do not agree with what he does, especially in Africa.”
“(Glencore) is cheating other people, taking things out of the ground and not paying (much in taxes in the countries in which it operates) and selling it at a lot of profit.”
Further down the quiet road winding down the hill towards the calm waters of Lake Zurich, the manager of one of the village’s opulent boutiques, who did not wish to be named, said: “A lot of people think it (Glencore) is bad for the world. We have a lot of money, we don’t need money from Mr Glasenberg. It is not right to close the eyes and take the money. I can’t say that he is a bad man – I do not know him – but I have heard about what he does.”
Rüschlikon resident Daniel Zbinden said: “We don’t want his money; it is bad money that comes from the bad things Glencore does in Africa.”
Some of the locals decided to try and use some of the windfall to redress the balance between the wealth of Glasenberg’s village and the poverty endured by many of the communities where Glencore operates. Peter Cadisch set up the Solidarity Rüschlikon campaign calling for the village to cut taxes by 5% rather than 7% and to send the rest of the money “back to where the particular workers in the commodity trade generated it”.
The proposal led to the most highly attended meeting in Rüschlikon’s history, when 424 people turned out to vote in the village hall that seats 280. The full tax cut was voted through by a big majority.
But many residents still have concerns, including the mayor, Dr Bernhard Elsener, a professor at a nearby university. “We know that Glencore is accused of not acting well in developing countries, but the business that Glencore is performing around the world is considered legal (and) we have no means to discuss about the origin of this money,” he said.
“I agree Glencore as a company is accused by NGOs (non-governmental organizations) that not everything is going as it should. They (Glencore) do not communicate very frequently, which is also a problem.”
In May 2011 an NGO in Switzerland, Berne Declaration, claimed Glencore lagged behind other mining companies on a range of ethical and environmental issues, such as corporate responsibility and CO2 emissions. Glencore denied the charge.
Elsener says the village would have been unable to reject the money even if the electorate voted to, because the localised tax system is mandated by federal Swiss law.
Elsener said he received two letters of complaint after the villagers voted to allow Glasenberg to become a naturalised Swiss citizen two years ago.
While none of the residents the Guardian spoke to had seen Glasenberg in the village in the 18 years he has been living in Rüschlikon, Elsener said he had several discussions with the businessman to “make sure he was good enough in German (the local language of the area) in order to make sure he can communicate”.
“He is a very interesting personality, but because he’s travelling a lot around the whole world maybe he’s not in Rüschlikon that often.”
Concern about Glasenberg’s millions has now spread to other parts of the canton. Yvonne Beutler, the finance director of nearby Winterthur village council, which is to receive a big proportion of the money via a complex system that diverts more of the funds to the poorest villages, told the local newspaper: “I am not really happy about this money. I can’t ignore who is actually paying the price for this and I don’t like the fact that a few commodity traders make billions while the people in the producing countries remain bitterly poor.”
In the interview with Der Landbote, Beutler said Switzerland’s MPs had a moral responsibility to question “how much longer our country shall remain an oasis for commodity trading regarding transparency and regulations”.
A Glencore spokeperson told the Guardian that the company believes “sustainability must be an integral part of everything we do”
“We have put a corporate sustainability framework in place to balance social, environmental, ethical and commercial interests at every level of our group. This framework is called Glencore Corporate Practice, or GCP. We have designed and implemented GCP to meet internationally recognised, sector-specific, good practice standards.”