Profile: Glencore in Zambia

Glencore is the world's biggest commodities brokerage firm. Reuters called it "the biggest company you have never heard of" after it went to public offering at the London Stock exchange in 2011. It controls more than half the international tradable market in zinc and copper and about a third of the world's seaborne coal, according to Foreign Policy. The African Confidential says Glencore is an "empire stretching from Sahara to South Africa." Apart from its impressive size, Glencore has also a history of fraud and tax evasion since it founding in Switzerland in 1974.

Before the giant's public offering, Glencore already had a record of tax evasion. In 1983, the founder of Glencore, Marc Rich, was indicted on a series of charges related to tax evasion, fraud and illegal dealings with Iran. "It was considered the largest tax evasion case in U.S. history at that time," reported the website Flathead Beacon. Rich became a fugitive but was pardoned in 2001 by president Clinton. During his time as a fugitive in Switzerland, Rich sold his stake, and the company name changed to Glencore International.

The giant commodity company remained controversial even after Marc Rich left in 1994. The Daily Mail called Glencore "morally dubious" in an article titled "Greed Inc: A special investigation into pollution dubious tax practices and exploration of African workers at Glencore". Zambia accused the powerful company for trying to manipulate the financial accounts to reduce the taxes and "deliberately depriving that poverty-stricken nation of much-needed income." The article also pointed out that the company sold to African dictators, Cuban communists and South Africa during the apartheid. The controversy that Rich had brought to the company trailed on after he had left Glencore.

Moreover, the pressure group that campaigns for greater transparency, Publish What You Pay, published a report called "Piping Profits" that investigated if the developing countries where lucrative companies settle and extract their natural resources get opportunities to escape poverty. They stated "Glencore International AG is the most opaque mining company in the Piping Profits survey with 46 percent of its 46 subsidiaries incorporated in Secrecy Jurisdictions."

Publish What You Pay reported Glencore uses opaque subsidiaries to make financial flows easier "to which the developing world loses US$1 trillion a year."

The British newspaper The Telegraph reported on the Publish What You Pay report. It revealed Glencore had subsidiaries with accounts and ownership details that were unobtainable for the public. If the information is not public and the subsidiaries are in secret jurisdictions, any company could keep tax affairs hidden from the country that has the natural resources. This makes it incredibly difficult for countries with natural resources to find out exactly how much money was made from their resources and whether they are getting a fair deal. It is the way companies such Glencore can keep tax affairs from public scrutiny, The Telegraph pointed out in its report "Piping Profits."

"You don't know how much is being used, you don't know how much is being left, you don't know how much was there to start with. That is almost the exact definition of darkness," said the journalist Nick Mathaison who worked on the report.

Glencore also faced scrutiny in 2012 when the company was accused of exploiting the mines of the Democratic Republic of Congo. The company was investigated and accused to profit from child labor in a mine in Congo. A footage showed children working and miners climbing without safety or breathing equipment, BBC reported. Sales documents also show that the company was paying suspected associates of rebels in Colombia. The company's chief executive, Ivan Glasenberg, denied all the charges.

In a more recent case, an Italian financial police found that the Anglo-Swiss commodities giant was evading more than 120 million euros worth of tax money through the activities of a metals producer in the Mediterranean island of Sardinia, The Independent reported. Glencore had arranged a transfer of pricing by letting the Italian company Portovesme buy raw materials at an inflated price from the Swiss commodity company.

The commodity company giant has had a record of breaking the law since it was founded. Except for the initial prosecution of the founder Marc Rich, who was later pardoned, Glencore has not been formally prosecuted for the accusations in Congo or Zambia. It is a $60 billion worth company, according to Foreign Policy, and owns 73.1 percent of the Mopani copper mines in Zambia.

By Maria Jose Valero.