Trafigura and Former COO Found Guilty of Bribery by Swiss Court

Trafigura, a significant commodity trading firm, faced legal repercussions as it, along with its former chief operating officer, were convicted of bribery charges by a Swiss court. This event marked the first time a high-ranking executive at a renowned commodity trading company was found guilty of engaging in corrupt practices. Mike Wainwright, Trafigura’s ex-COO, received a 32-month jail sentence, with 20 months of it being suspended, according to the Federal Criminal Court’s ruling in Bellinzona, Switzerland.

The announcement comes amid a broader regulatory crackdown in Switzerland, a cornerstone for the commodities trading industry. The case signifies a groundbreaking moment, with Trafigura being the first Swiss company of its stature to be convicted in a trial where bribes had been facilitated. This development reveals growing efforts to address concerns about ethical standards within Switzerland’s financial and business sectors.

This case sheds light on the dark underbelly of the commodity trading industry, with several major players admitting to wrongdoing across multiple regions. The judgment follows admissions of corruption by some of the industry giants, including Glencore Plc, Vitol Group, and Trafigura themselves in nations like Brazil and South Sudan. This landmark decision against Trafigura highlights the necessity for a heightened level of transparency, accountability, and ethical conduct in the industry.

Trafigura faced charges through its Dutch holding firm and was found guilty of failing to establish adequate measures to prevent bribery. Additionally, the company was held accountable for a compensation claim of $145.6 million to the Swiss Confederation, and a fine of 3 million Swiss francs. These punitive actions show the severe consequences companies face for their involvement in corrupt practices.

The legal case was centered around allegations that Trafigura had paid over $5 million in bribes to an Angolan official in exchange for oil contracts worth $151 million. The official, Paulo Gouveia Junior, was found guilty of receiving said bribes, underlying the broad network of corruption. Another individual, Thierry Plojoux, a middleman and a former Trafigura employee, faced and was convicted of charges related to facilitating the bribe payments.

The court’s ruling emphasized Wainwright’s attempts to conceal information about the illicit payments by using a USB stick to share confidential details with a middleman. This deliberate action to hide the origin of the secretly made payments played a pivotal role in the court’s conclusion. Trafigura’s negligent oversight of its business dealings, particularly the widespread usage of middlemen, was flagged as systemic misconduct, further cementing the company’s complicity in the bribery scheme.

Trafigura, in response to the ruling, expressed disappointment and assured that they would thoroughly review the matter. The company highlighted its commitment to bolstering its compliance program in recent years by enforcing mandatory staff training, enhancing internal policies and procedures, and discontinuing the use of third-party intermediaries for business origination since 2019.

While this recent verdict is subject to appeal at higher courts, it still signals a significant step in holding corporations accountable for corruption. The legal proceedings highlight the critical importance of upholding integrity and ethical standards within the commodities industry to ensure transparency and fair business practices.