focus of this paper is to analyse the ethical and unethical operations of Trafigura
Pte Ltd. It is a Singaporean multinational commodity trading company. Trafigura
pte Ltd is listed as 54th place when ranked by revenue by Fortune Magazine. They have 4000 employees, a revenue
of US $ 136.4 billion but a notably low net income of US $ 0.887 billion in
2017. Their operational market targets approximately 36 countries worldwide. Their
business fields include sourcing, storing, blending and the transportation of
raw resources such as oil, refined petroleum products, and metals such as iron
ore or coal. Additionally, they trade, build, or purchase stakes in pipelines,
mines, smelters, ports and storage terminals1.It´s the world largest metal and second largest oil
trader. In 1993 Trafigura split
off from an even more controversial group, Glencore International AG, which was
run by Marc Rich. Rich was accused by the US of sanctions-busting to Iran and a
tax evasion. However, he was pardoned by the US president, Bill Clinton, in
20012 on the president’s last day in office before George Bush was
sworn in.

Notable Unethical and Irresponsible Situations Involving

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2.1 Oil for food scandal

Oil for Food programme (OFFP) was established in 1995 by the UN to allow Iraq
to countertrade oil in exchange for food, medicine or other humanitarian needs
for the Iraqi citizens. The programme was supported and introduced by U.S.
President Bill Clinton in 1995 because Iraq’s citizens where heavily affected
by the economic sanctions aimed to demilitarise the Saddam Regime.  The OFFP was terminated in 2003, although the
sanctions were affective, multiple cases of corruption were found.3
The highest benefactor was The Russian State itself with a total of 1.366.000.000
barrels. Trafigura’s exploitation landed them at 10th4
place of over 60 perpetrators listed who have exploited this situation. Patrick
Maugein, whom negotiated directly with Iraqi authorities on behalf of Trafigura
Company 5misappropriated
and benefitted from more than 25.000.000 barrels. These were defalcated by
overloading the authorized bulk under the OFFP. Trafigura denied that it was
knowingly involved in any kind of payments (kickbacks) to get access to the oil
though that is unlikely.


2.2 Waste dumping in Ivory Coast 2006

The Ivory
Coast toxic waste dump was an environmental and public health crisis which
occurred in 2006. A ship chartered by Trafigura hired a local contractor to
offload waste in Abidjan, Côte d’Ivoire
(The Ivory Coast). The reason for this was
to avoid paying a 1000€ per cubic meter surcharge imposed by Amsterdam’s Port
Services to dispose of hazardous waste in in the Netherlands6. The local
contractor, Compagnie Tommy, improperly dumped the waste in and around the city
of Abidjan in August of the year 2006. The gas caused by the release of these
chemicals is blamed by the UN and the government of the Ivory Coast for the
deaths of 17 Ivorian citizens and the injury of many more though there are
conflicting statistics. The injuries ranged from mild headaches to severe burns
of the skin and lungs. Almost 100,000 Ivorians required medical attention after
the offer of Prime Minister Charles Konan Banny for free medical care in
Abidjan’s hospitals to the city’s residents affected by the gas.7

In Trafigura´s
statement they adamantly denied that the dumped substance contained
“slops”, or waste water from washing the holding tanks of Probo
Koala, the ship which Trafigura had chartered. An investigation in the
Netherlands, in late 2006, confirmed the waste consisted of more than 500
tonnes of hazard waste which was made up of fuel, hydrogen sulphide, and sodium hydroxide, known as caustic soda.

denied any waste was transported from the Netherlands, and stated that the
substances contained only tiny amounts of hydrogen sulphide, and that they had
no knowledge of the improper disposal by the contracted company, Compagnie Tommy.
Trafigura officials, including Claude Dauphin who is one of Trafigura’s founder
as well as the company’s West Africa regional director8, travelled to Abidjan with
the intention to support in the clean-up. As soon as they arrived they were arrested
and jailed by the Ivorian government9. While the executives were
arrested, Trafigura agreed to pay US$198 million for the clean-up efforts of
the Ivorian government but without admitting any wrong doing. In return The
Ivorian government had pledged not to prosecute the company. Dauphin and
his fellow executives were released following the settlement.

In 2008 a
civil lawsuit in London was launched by almost 30,000 Ivorians against
Trafigura. In May 2009 Trafigura announced it would sue BBC for liability after
its News night program alleged the company had knowingly sought to
cover up its role in the incident. Additionally, internal Trafigura emails
which were obtained by The Guardian as well as WikiLeaks in 2009 showed that
the people responsible were absolutely aware of the danger and ramifications
involved from dumping the chemicals. In light of this, Trafigura swiftly
settled the civil suit for US$42.4 million in 2009. Finally a Dutch court found
also found Trafigura guilty of illegally exporting toxic waste from Amsterdam10.


2.3 Allegations of Bribes in Jamaica

It has been found that Trafigura made an illegal donation to at the time
president Simpson Miller of the People’s National Party (PNP) as well as four
other party members in 2006. The sizable donation of over $640,000 to continue
an existing oil contract11
have brought their motivations and intentions into question. Trafigura was
investigated by both Jamaican Regulators as well as Dutch. The Dutch court is
the same that fined Trafigura for dumping toxic waste in the Ivory Coast as
mentioned in 2.1. One notable difference in the handling of this case is that it
is a criminal investigation which could lead to criminal charges against the
specific perpetrators who made this happen which differs from other situations
like in the Ivory Coast where it was handled as a civil case. Complete
information on this case is unavailable as Trafigura is still denying
wrongdoing and is still in litigation a full twelve years after the situation.

Analysis of Information and Conclusion

we can take away from this research is that Trafigura seems to regularly find
themselves in a position with compromised ethics. Though I found many
situations pointing to bad ethics standards, I’ve only listed three. To sum up,
they have been either accused of or found guilty of bribery, illegal dumping of
hazardous materials resulting in what was described as a catastrophe, and
exploitation of a poverty-stricken country for their natural resources. One
thing that stands out in each situation is Trafigura systematically and adamantly
denies any wrong doing though on multiple occasions they have chosen to settle
with regulators for a civil fine under the condition they do not have to
acknowledge guilt nor criminal wrongdoing. Additionally, it seems they have a
very busy public relations department handling damage control because some
situations, bribing officials in Jamaica in particular, have much less
international publicity than I would have expected. Also, I could not find a
notable Facebook or Instagram page speaking out against Trafigura though other
firms such as BP have Facebook pages urging to boycott the firm with over
667,000 followers in English and an additional 2,800 on a Polish page. In the
case of Jamaica, Jamaica Observer12 is
the main publisher of news in relation to the situation in Jamaica. It hasn’t
gotten much attention from international media. In my subjective opinion the
reasons for Trafigura’s lack of values are numerous; they are all likely
related to one thing. Profit. My opinion is that both shareholder primacy and
corporate governance are the leading factors. As senior management is under
pressure to continually produce value for shareholders they in turn put more
pressure on middle managers and the demands, though sometimes unrealistic
continue to go down the management pyramid effecting the whole company.
Employees start to use terms like “just make it happen” or “we need to make
this work”. Many times the employee knows they face being replaced if they are
unable to create the vision of the upper management. Additionally because Trafigura
is an exceptionally large MNC the personal responsibility or liability of
employees can be diluted. By being able to say, “it’s not my problem” or “it’s
not my job” because of having specific corporate roles, employees may turn a
blind eye to what they know is wrong. They think it isn’t directly their fault
and it accomplishes the upper management’s expectations of production or savings.
It seems that these two things, production and savings are always what
Trafigura is trying to accomplish.

in an obviously volatile place like Iraq during the oil for food scandal I
might assume that the company knew exactly what it was getting itself into.
It’s common knowledge in economics that during countertrade situations such as
this, one party is likely going to get a bad deal and be forced to sell their
good below market value and suffer an initial loss there. This is exactly what
happened to Iraq but then Trafigura overfilled the tankers and was actually
stealing oil in addition to being able to trade for oil below the world market

situation in Jamaica was somewhat different though it has the same motivation.
They bribed an active politician to continue a profitable contract. If I had to
guess, there should have been an investigation on how the first contract came
to be as it may have involved bribery or illegal business activities as well.
It’s hard to believe that this situation is the first time that Trafigura has
bribed an official and it is very likely the first contract was

catastrophe in the Ivory Coast is somewhat different physically, though very in
line with the other situations of greed and profit. In the ivory coast what
stands out is the commodity is toxic waste, not oil. Iraq shows greed for
inputs of production as well as Jamaica. In Ivory Coast we can see that they
are trying to save money to the bottom line regardless of laws or damage to the
environment. I don’t think it’s any coincidence that Trafigura happened to dump
toxic waste in a country that at the time had a GDP per capita of less than
USD$1000 as it is obviously much more difficult for people in poverty to defend
themselves from a multibillion dollar firm and the army of lawyers they can

closing, as long as the ultra-rich MNCs of the world can simply calculate risk
and reward scenarios based on profit and civil charges, they have no reason to
change. We need regulators like the WTO and Transparency International to be
able to help formulate criminal charges directly to managers that knowingly
create these unethical, dangerous, and despicable situations. Most importantly,
we need these criminal charges to be enforceable.



1 https://www.banktrack.org/company/trafigura/pdf

2 https://www.theguardian.com/world/2009/sep/16/inside-trafigura-pollution-conservatives

3 https://www.theguardian.com/business/2007/feb/14/iraq.oilandpetrol

4 https://www.cfr.org/backgrounder/iraq-oil-food-scandal

5 http://news.bbc.co.uk/2/hi/americas/4383474.stm

6 https://www.amnesty.org/en/documents/afr31/002/2012/en/

7 https://www.voanews.com/a/a-13-2006-11-23-voa22/319097.html

8 https://www.ft.com/content/c48c84c6-6d0f-11e5-aca9-d87542bf8673

9 https://www.reuters.com/article/us-ivorycoast-toxic-release-idUSL1461558720070214


10 http://www.bbc.com/news/world-africa-10735255

11 https://www.namibian.com.na/index.php?id=75623=archive-read

12 http://www.jamaicaobserver.com/


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