Global natural resource company Glencore has produced its 2024 Ethics and Compliance Report. It details progress made since the ethics and compliance program was overhauled after the $1 billion+ FCPA enforcement action Glencore settled with US authorities in 2022.

In his opening statement to the report, Glencore’s board chairman Kalidas Madhavpeddi noted that the company had dedicated substantial effort
and resources to engage with the independent compliance monitors mandated by the business’s resolutions with the US Department of Justice (DOJ) and to implement the first set of DOJ recommendations. The report is the culmination of this engagement and current implementation process.

Areas of interest

Monitoring

The report begins with monitoring – saying this is how the company assesses the effectiveness of the ethics and compliance program’s implementation globally. Monitoring also identifies opportunities for improvements and ways to reinforce the program, the report notes.

“We have expanded our desktop monitoring scope to include all of our marketing commodity-specific trading platforms and an additional enterprise resource planning system at our industrial assets, leveraging data analytics to identify and mitigate compliance risks. In 2024, the Risk Assessment and Monitoring team completed eight desktop reviews (2023: ten) and eleven site reviews (2023: nine),” the report states.

The report notes how the company rolled out new compliance procedures that are particularly relevant to Glencore personnel in its offices who are engaged in market-facing activities.

This includes a newly revised Personal Account Dealing Procedure, which sets out the requirements applicable to personal trading in physical commodities or commodity derivatives, a Benchmark Trading Rationale Procedure, which sets out the rules relating to documenting the rationale related to trading decisions when active in benchmark windows, and Benchmark and Price Reporting Desk Procedures, which set out the list of trained individuals approved to communicate with price reporting agencies and defines the restrictions on such communications.

The report notes that the company is also focused on enhancing its surveillance capabilities in 2024. Key achievements include the implementation
of an enhanced communications surveillance framework and tools to improve efficiency and compliance, plus Glencore continues to expand its market surveillance program with a trade surveillance system, covering additional exchanges and types of market manipulation.

Risk assessments

Glencore’s risk assessments are managed by its central corporate compliance team, which is responsible for overseeing the whole compliance program worldwide. Within that corporate compliance team is a smaller Risk Assessment and Monitoring team devoted specifically to risk assessments and monitoring, which coordinates with regional compliance teams that focus on their local risks.

The Risk Assessment team reviews compliance risks “in a number of risk areas,” as the report says, but especially focuses on anti-corruption and bribery given the nature of Glencore’s business.

Specific changes in this space include ones made changes to its Travel, Gifts and Entertainment Standard, Benchmark Trading Rationales Procedure, Position Limit Procedures, and Uncleared Derivatives and Investment Advice Procedure. The company also adjusted its Group Policy
Governance Document Procedure to require all market conduct and anti-corruption and bribery documents to be reviewed annually.

Glencore hired external advisers last year to benchmark its assessment process against those of peer companies and said the advisers confirmed the comprehensiveness of its processes.

The Risk Assessment Team also looks inward to identify “whether existing group compliance policies, standards, procedures, guidelines and training, as well as compliance resources and skillsets, effectively address the updated or newly identified risk(s).” The report doesn’t go into any depth about how it does this, or how often, and although it notes that its compliance risk assessment methodology “is based upon a more fundamental enterprise risk assessment standard,” it does not state which one.

Third-party risk management

Glencore says it enhanced its Third-Party Due Diligence (TPDD) and Management Procedure in 2024. It introduced a new “TPDD Lite” category so it could still apply due diligence to lower-risk activities to apply a more tailored approach to them and not burden the main TPDD program with this analysis.

To assist those employees traveling the globe and interacting with prospective business partners, the company launched a new Travel, Gifts and Entertainment app which provides employees with quick access to information regarding country-specific restrictions and local limits on travel, gifts and entertainment, as well as links to other internal resources.

“The app makes it easier for our employees who are travelling for business across the globe to access this critical information and mitigate bribery and corruption risk,” it notes.

The company also trains the third parties themselves on how to communicate with public officials and has implemented new compliance clauses
into contracts with them to hold them accountable.

Training

Glencore said it took a new approach to educating its workforce on travel, gifts and entertainment, conflicts of interest, and third party due diligence topics by introducing “communities of practice” sessions. The interactive, deep-dive sessions were focused on real-life case studies and were
co-presented by business and corporate function leaders, plus members of the Anti-Corruption and Bribery team, to show leadership support for these efforts. The company trained over 4,500 employees in over 150 sessions globally, it said.

Worthy of note is the fact that the compliance team got its own special training. The training included information on the latest regulatory developments and practical case studies to help equip the compliance teams with an understanding of the changing regulatory landscape. This training was attended by around 250 compliance employees across the globe, the report notes.

Raising Concerns Program

In 2024, the company strengthened its commitment to fostering a culture of open communication and ethical behavior, by further refining its Raising Concerns and Whistleblowing Policy, enhancing its concern management and investigation procedures and providing comprehensive training to internal investigators. The business expanded its corporate Raising Concerns and Investigations team, which oversees the firm’s corporate process and provides oversight and support to its departments to ensure the efficiency and integrity of their processes.

“By monitoring and analyzing concerns raised, we can also identify trends and patterns and assess where we may need to enhance our focus or further increase controls relating to different aspects of our program,” the report says.

$1.1 billion settlement

The report and the compliance program remediation dates back to May 2022, when Glencore reached a settlement with authorities in the US, UK, and Brazil, pleading guilty to foreign bribery and market manipulation. The settlement involved a total payment of over $1.1 billion to resolve investigations into violations of the FCPA and market manipulation. Glencore agreed to a criminal fine of over $428m and criminal forfeiture and disgorgement of over $272m.

Glencore agreed to retain two independent compliance monitors for three years as part of the settlement, but the Trump Administration cut the monitorships short recently, citing the company’s marked improvements in remediating their ethics and compliance program to date.

Although the Glencore report lacks some details that explain exactly how the business is performing certain improved compliance functions, I’m not sure a document available to the public should or could be far more detailed, and it can serve as a great checklist of compliance review, benchmarking and improvement action items.

DOJ expects that companies track and incorporate into their periodic risk assessment lessons learned from their own prior issues and from other companies operating in the same industry – and often that geographical region – to improve continuously. Any compliance hacks offered up by a company that had to turn things around after a well-publicized, resource-intensive FCPA resolution, post-monitorship, should be considered.

Companies that continue to update their compliance programs to better detect misconduct early on and can point to an actively monitored and risk-adjusted set of policies and processes will be the wiser, should they ultimately be the subject of a DOJ investigation.