Research was The Russian State itself with

Research Paper


Trafigura Pte Ltd.



Business Ethics

Dr Adriana



Marco Loew Gil 3827




Kraków 2018











The focus of this paper is to analyse the ethical and unethical
operations of Trafigura Pte Ltd. is a Singaporean multinational commodity
trading company. Trafigua 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. Trafigura split off in 1993 from an even more controversial
group WHICH GROUP 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.

Notable Unethical and Irresponsible Situations Involving

2.1 Oil for food scandal

The 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 effected 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

Ivory Coast toxic waste dump was a health crisis in 2006. In which a ship chartered
by Trafigura hired a local contractor to offload waste in Abidjan. The reason
for this where their refuse to pay a 1000€ per cubic meter surcharge imposed by
Rotterdam’s Port Services to dispose waste of hazardous nature in the
Netherlands6. The
local contractor, 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 and the injury of over 30,000 Ivorians. The injuries ranged from
mild headaches to severe burns of 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

Trafigura´s statement they kept denying that the dumped substance contained
“slops”, or waste water from washing the tanks of Probo
Koala’s. An investigation in the Netherlands, in late 2006, confirmed the waste
to consist more than 500 tonnes of a mix of fuel, hydrogen
sulphide, and sodium hydroxide, known as caustic soda.

denied any waste was transported from the Netherlands, and kept saying that the
substances contained only tiny amounts of hydrogen sulphide, and that they did
not know anything about the improper disposal of the contracted company, Tommy.
Trafigura officials, including Claude Dauphin one of the founders and the West
Africa regional director, travelled to Abidjan with the intention to support in
the clean-up. As soon as they arrived they got arrested and imprisoned by the
Ivorian government8.
While the executives were arrested, the Trafigura agreed to pay US$198 million
for the clean-up efforts of the Ivorian government but without admitting any wrongdoing.
In return The Ivorian government had pledged not to prosecute the company. Dauphin
and his fellow executives were released following the settlement.

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 libel after
its News night program alleged the company had knowingly sought to
cover up its role in the incident.
In September 2009 The Guardian obtained
and published internal Trafigura emails showing that the traders responsible
knew how dangerous the chemicals were. Shortly afterwards Trafigura agreed to a
settlement of £30 million (US$42.4 million) to settle the suit.46 In 2010 a Dutch court found Trafigura
guilty of illegally exporting toxic waste from Amsterdam.47 On 16 June 2016, law firm Leigh Day,
which represented the Ivorian claimants, was found guilty of negligence after
£6 million of the 2009 settlement funds were embezzled.48


2.3 Allegations of Bribes in

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 $425,000 have brought
their motivations and intentions into question as the company was seeking to do
business with the government of Jamaica at the time. 

Analysis of Information and Conclusion

What 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. Though the specific reasons for this
are numerous, they are all 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. People start to use terms like “just make it happen” or “we need to
make this work”.


























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