Mar 13 Nov 2012 11:17
Glencore corporate governance report is kept under wraps Re
The EIB has been considering whether to lift a moratorium on loans to Glencore and its subsidiaries, imposed last year pending an investigation over ‘governance concerns’.
While no decision has yet been taken on the ban, the Mail can reveal that the EIB will not disclose the full details of its probe into Glencore’s environmental and tax record. The Bank is due to publish its findings this month after freezing loans to Glencore in June last year.
Governance worries have re-emerged at a sensitive time for Glencore (down 3.2p at 336.25p), with directors at prospective merger partner Xstrata facing accusations of being ‘rapacious’.
And sources within the EIB said that ‘wider governance concerns … have not been resolved’.
It is unclear what is behind lingering anxiety at the EIB, which lent £40m to Zambian subsidiary Mopani Copper Mines in 2005.
The Bank is looking into Mopani’s dismal environmental record as well as allegations, fiercely rejected by the firm, that it aggressively avoided tax in Zambia.
The EIB’s tax findings are the most likely part of the report to be redacted, under a policy that says only ‘overriding public interest’ should outweigh commercial confidentiality’.
But Michael Cashman MEP, who wrote the law governing transparency in European institutions, said: ‘I fully expect the public interest test to be met, not least the use of public money and the environmental concerns.’
Joe Stead of Christian Aid said it was ‘astonished’ the EIB would keep any part of the report secret. He added: ‘The accusations against Mopani are extremely serious. The Bank’s report will help to reveal what really happened – and whether one of Europe’s biggest companies paid its fair share in Zambia, one of the poorest countries in the world.’
Savior Mwambwa, of Zambian campaign group CTPD, said: ‘Unless Zambians are given the chance to read this report, we can only conclude there is something in there Glencore or the EIB does not want us to see.’
It comes as Glencore’s prospective merger partner Xstrata faces its own governance fight, in the face of claims from a key shareholder. Standard Life’s head of equities David Cumming lambasted Xstrata directors for clinging on to incentive payments they hope to get as part of the merger.
He said the merger is likely to go through but said that Standard Life will use the complex voting structure to vote against the incentive payments while still backing the tie-up.