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Trafigura

Trafigura
Company type	Privately held company
Industry	Raw materials / Merchant
Founded	1993
Headquarters	Lucerne, Switzerland
Revenue	US $73 billion (2008)
Net income	US$440 million
Total assets	53,801,000,000 United States dollar (2018)
Number of employees	1900
Website	www.trafigura.com

Trafigura is a Swiss-based multinational company founded in 1993 trading in base metals and energy, including oil. As of 2008 it had equity of more than US$2bn and a turnover of US$73bn that generated US$440 million of profit. It operates out of over 55 offices in 36 countries in Europe and North, Central, and South America, as well as in the Middle and Far East. It is the world's third largest private oil and metals trader after Vitol and Glencore.

Trafigura was set up by Claude Dauphin and Eric de Turkheim, who had worked as oil traders at Glencore. It split off from a group of companies managed by Marc Rich in 1993. Trafigura has been named or involved in several scandals, especially in Africa, since its creation.

Oil-for-food scandal

The company was named in the Iraq Oil-for-Food Scandal in connection with the Essex, a Liberian registered "turbine-tanker" that had UN approval to load Iraqi crude at Iraq’s main export terminal at Mina al-Bakr. The tanker was chartered by Trafigura Beheer BV and according to its captain, Theofanis Chiladakis, the Essex was at least twice 'topped off' with an extra 272,000 barrels of crude after UN monitors had signed off the cargo. This was on May 13 and August 27, 2001. Elf-Aquitaine employees had first talked about this scheme in February 1998.

A Trafigura subsidiary called Roundhead, Inc. had bought the oil from a subsidiary of the French oil trader, Ibex Energy and claimed it paid Ibex a "premium" of 40 cents per barrel over the official United Nations selling price. In early October 2001, U.S. warships intercepted the Essex off the coast of Curacao before it could offload its illegal cargo. This resulted in more than US$5 million in additional shipping costs for Trafigura, and led them to sue Ibex in a London court for having misled them. But Ibex managing director Jean-Paul Cayre claimed in an affidavit that Trafigura had cooked up the scheme to "make up for an earlier loss on an Iraqi oil deal that fell through in 1999."

Waste dumping in Côte d'Ivoire

On July 2, 2006, the Probo Koala, a ship leased by the company, entered a port in Amsterdam to unload a hundred tons of waste, or "slops". Amsterdam Port Services BV, the company that had been contracted to take the waste, raised their price to process the waste 20-fold soon after delivery, after determining the waste was more toxic than previously understood. In response, Trafigura decided to have the ship take back the waste and have it processed en route to a different processing site in Abidjan, Côte d'Ivoire, one of Africa's largest seaports. In Abidjan, the waste was handed over to a local processing company, Compagnie Tommy, which illegally dumped the waste instead of processing it. Many people there became sick due to exposure to the waste, and investigations were begun to determine whether it was intentionally dumped by Trafigura. Trafigura stated in a press statement that their tests showed the waste not to be as toxic as had been claimed, and that they were unsure why so many people had become ill from exposure to it.

The New York Times reported on October 3, 2006 that the dumping of the waste by Compagnie Tommy was indeed illegal.

On February 13, 2007, in response to the deaths of 10 people and the various illnesses of over 100,000 people attributed to the waste, Trafigura paid €152 million to Côte d'Ivoire in compensation. The payment also exonerated Trafigura from further legal proceedings in Côte d'Ivoire.

On February 19, 2007, Côte d'Ivoire attributed the deaths of 5 more people to the waste dump, raising the total to 15.

In May 2007, the Dutch newspaper Volkskrant reported that the press officer of Trafigura, operating under the username Press Office T NL, attempted to alter the Dutch Misplaced Pages article "Probo Koala" on three separate occasions, with intent to clear the company's name. The article was then temporarily locked by Misplaced Pages administrators so that it could not be modified.

2009

In May 2009, the British newspaper The Guardian reported that it had obtained conclusive proof that the company had released toxic waste in Côte d'Ivoire. The BBC News program, Newsnight also reported in May that the dumping of waste in Côte d'Ivoire had lead to deaths and serious health consequences. Trafigura denied this and attempted to sue the programme for libel.

In August 2009, the Dutch newspaper Volkskrant reported that Trafigura Beheer and its lawyers sued the Dutch government in order to keep a document of the Dutch National Forensics Institute (NFI) secret. This document had been given to the lawyers of the victims of Ivory Coast toxic waste. Trafigura wants this decision to be reverted on the basis that the victims are not a party to the Dutch case under Dutch law. Publishing it would lead to irreparable damages to the image of Trafigura and would convict it before the Dutch criminal court case had started. The contents of the document are, according to the newspaper, not challenged by Trafigura. The newspaper stated that the NFI determined that the contents of the tanker had been 528,000 litres of extremely alkaline waste constituting 6.8% sulfur, for 3.5% alkyl-thiols and 0.5% hydrogen sulfide.

On September 4, 2009 the court decided that the prosecutor should not have given the documents to Leigh Day, the lawyers of the victims because there was no direct relation between the environmental crime that Trafigura was a suspect of in The Netherlands and for which the samples were taken and analyzed, and the dumping in the Ivory Coast. It might be possible that the victims could receive the documents, but for this a different procedure would need to be followed. The Dutch government was required to demand the return of the documents, and require that Leighton Day not make use of the documents in the civil case in the United Kingdom.

On September 16, 2009 a BBC Newsnight broadcast claimed to have uncovered evidence revealing that oil-trading company Trafigura knew that waste dumped in Ivory Coast in 2006 was hazardous. The Independent published a story about the dumping of the waste on September 17, but later removed the story from their website. The story in question has been archived on wikileaks.

Superinjunction

On October 12, 2009 The Guardian newspaper reported that it had been prevented by legal injunction from covering remarks made in Parliament. It complied with this injunction and neither named the questioner nor published the question. The Guido Fawkes political blog identified the blocked question as likely to be linked to the Trafigura waste dumping case. The Spectator also speculated that the gagging order involved Trafigura and noted that Trafigura became a 'trending topic' on Twitter with the story shared and distributed through numerous weblinks. The Guardian confirmed that Trafigura was the source of the gagging order, after the order was lifted the next day. The question that they were unable to report was from Paul Farrelly, MP for Newcastle-under-Lyme:

To ask the Secretary of State for Justice, what assessment he has made of the effectiveness of legislation to protect (a) whistleblowers and (b) press freedom following the injunctions obtained in the High Court by (i) Barclays and Freshfields solicitors on 19 March 2009 on the publication of internal Barclays reports documenting alleged tax avoidance schemes and (ii) Trafigura and Carter-Ruck solicitors on 11 September 2009 on the publication of the Minton report on the alleged dumping of toxic waste in the Ivory Coast, commissioned by Trafigura.

The Norwegian Broadcasting Corporation have published the report in question and a copy of the gagging order against The Guardian on their website.

Alan Rusbridger, editor of The Guardian described the injunction as "a fantastic own goal". According to a press release on the website of the lawyers acting for Trafigura, Carter-Ruck, the reason that The Guardian could not report the question asked by Paul Farrelly was because a gagging order has been in place since 11 September 2009, before the MP asked the question. They also stated that it had never been their intention to prevent the press reporting on parliament and that they had since agreed on changes with The Guardian to the gagging order so that they could report on the issue.

Chemical explosion in Norway

On May 24, 2007 an explosion occurred in Sløvåg Gulen, Sogn og Fjordane, Norway in a tank owned by Vest Tank, it had severe environmental and health consequences for people living nearby. In 2008 the Norwegian Broadcasting Corporation published the 50 min documentary "Dirty Cargo" disclosing what had happened in the small community prior to the explosion. The company Vest Tank was trying to neutralize the same kind of chemical waste that was dumped in Côte d'Ivoire when the explosion occurred. The owner of the waste was Trafigura, on whose behalf Vest Tank was working. In October 2006 Trafigura sent the Probo Emu, sister ship of the Probo Koala, to Norway with identical toxic caustic waste onboard to that which had been dumped in Côte d'Ivoire. The Probo Emu traveled from Gibraltar to Norway to deliver the waste, and on shore in Norway representatives from Trafigura and the company Minton Treharne & Davies were present to oversee the discharge.

At the end of 2005 Trafigura bought a product from Pemex, called coker gasoline or coker naphtha. The oil product had been stored in the refinery town of Cadereyta for 30 months as Pemex lacked refinery capacity to process the low quality product. The oil product was trucked across the border into the USA and pumped into shore tanks at the company Transmontaigne in Brownsville. The EPA in the US is investigating this operation.

From Brownsville it was shipped out and 6 shiploads of approx. 150 000 mt was sent to Norway for caustic cleaning. In Sløvåg the coker gasoline was pumped ashore, caustic soda and the catalyst ARI100 was added. After this process in Sløvåg, five of the six ships headed for the seaport town of Paldiski in Estonia.

In Paldiski, they discharged their cargoes at the terminal of the oil company Alexela, a company partly owned by Trafigura. Incidentally, Alexela bought up Vest Tank in Sløvåg after the explosion. In Paldiski, the cargo was unloaded, and the Estonian customs service relate that a substance designed to increase the octane level is mixed into the gasoline. The unusable residue product coker gasoline had now turned into low quality gasoline.

The Estonian customs state that the quality is so low, it renders it illegal to sell in Europe. The gasoline is reloaded on board a ship, then dispatched to West Africa. In Europe, the maximum approved sulphur level in gasoline is 50 ppm. In West Africa, 5000 ppm is the approved limit.

These were the main activities Vest Tank had established in Sløvåg. Consequently, the sweetening of coker gasoline generated a steady flow of hazardous waste, and in addition, the tank facility accepted waste for processing.

The ship Ottavia, loaded cargo in Sløvåg. When she arrived, she was nearly fully loaded with high quality gasoline purchased by Trafigura of ConocoPhillips in England. In Sløvåg, she collected 5400 tons of waste residue from the process of desulphurization of coker gasoline. Documents prove that this waste was mixed with the high quality gasoline on board. Subsequently, Ottavia sailed for West Africa.

Structure

Some of Trafigura's major international units include:

• Trafigura Beheer BV, based in the Netherlands
• Trafigura AG, is the main office, based in Lucerne, Switzerland, also deals with business in the United States.
• Trafigura Pte Ltd runs the Group’s petroleum trading in the Far East.
• Puma Group of Companies which operate the Group’s world-wide oil storage and distribution assets and investments.
• Galena Asset Management, based in London and FSA registered, is the subsidiary through which Trafigura has established and manages a fund management business. Lord Strathclyde, the leader of the Conservative Party in the House of Lords, is a non-executive director on the board, although he has stated his intent to stand down from this post .

References

1. Trafigura Corporate Brochure
2. ^ Leigh, David (16 September 2009). "Inside Trafigura: Accusations, sour deals and friends in high places". The Guardian. Retrieved 2009-09-17.
3. Trafigura Corporate Brochure
4. Timmerman, Kenneth (2004-03-16). The French Betrayal of America (html). Crown Forum (New York). Retrieved 2007-05-18.
5. Hoyos, Carola (2005-10-28). "Big oil groups implicated in oil-for-food scandal" (html). Financial Times. Retrieved 2007-05-18.
6. Timmerman, Kenneth (2004-03-16). The French Betrayal of America (html). Crown Forum (New York). Retrieved 2007-05-18.
7. Polgreen, Lydia (2006-10-01). "Global Sludge Ends in Tragedy for Ivory Coast" (html). New York Times. Retrieved 2006-03-06. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
8. "Trafigura Tests Contradict Media Speculation" (html). Trafigura. 2006-09-24. Retrieved 2007-03-06.
9. "Death toll from ICoast pollution rises to 15" (html). Reuters. 2007-02-19. Retrieved 2007-03-06.
10. "Tot drie keer toe is het lemma over het gifschip Probo Koala veranderd. Tevergeefs" (html). ANP. 2007-05-18. Retrieved 2007-05-18.
11. "Papers prove Trafigura ship dumped toxic waste in Ivory Coast" (html). The Guardian. 2009-05-19.
12. Leigh, David (16 May 2009). "Newsnight sued over toxic waste claims". The Guardian. Retrieved 2009-10-13.
13. "Trafigura: OM moet rapport geheimhouden" (html). Volkskrant. 2009-08-24.
14. "Text of the ruling in case Trafigura Beheer B.V. vs the Netherlands (LJN: BJ6977, Rechtbank 's-Gravenhage , 341048 / KG ZA 09-830)" (html). Rechtspraak.nl. 2009-00-05. {{cite news}}: Check date values in: |date= (help)
15. "Trafigura knew of waste dangers" (html). BBC. 2009-09-16.
16. "The Independent: Toxic Shame: Thousands injured in African city, 17 Sep 2009". Wikileaks (The Independent). Retrieved 2009-10-15.
17. "Guardian gagged from reporting Parliament" (html). The Guardian. 2009-10-12.
18. "Guardian gagged from reporting Parliament" (html). Order Order. 2009-10-12.
19. Massie, Alex (13th October 2009). "British Press Banned from Reporting Parliament. Seriously". The Spectator. Retrieved 2009-10-13. {{cite news}}: Check date values in: |date= (help)
20. "Twitter Can't Be Gagged". Guardian Online. Retrieved Oct 13. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
21. "Gag on Guardian reporting MP's Trafigura question lifted". The Guardian. 2009-10-13.
22. David Leigh "Gag on Guardian reporting MP's Trafigura question lifted", The Guardian, 13 October 2009
23. Minton Report dated September 2006 detailing the composition of the dumped slops
24. High Court ruling against The Guardian dated 11 September 2009
25. "Alan Rusbridger: As a way of handling PR it was a fantastic own goal". The Guardian. 2009-10-13.
26. "Press Release by Carter-Ruck on behalf of Trafigura Limited and Trafigura Beheer BV" (PDF). 13 October 2009. Retrieved 2009-10-13.
27. "Vest Tank sweetened coker gasoline" (htmllink title). NRK. 2008-06-24. Retrieved 2008-09-05. {{cite news}}: External link in |format= (help)
28. "A small pawn in the game" (html). NRK. 2008-06-24. Retrieved 2008-09-05.
29. "Coker gasoline – low quality" (html). NRK. 2008-06-24. Retrieved 2008-09-05.
30. David Leigh and Rob Evans, "Lord Strathclyde severs links with oil trader Trafigura after waste scandal", The Guardian, 17 September 2009.

External links

• Trafigura website
• Trafigura press releases regarding the Côte d'Ivoire waste dumping incident
• NRK Brennpunkt Trafigura and the Minton report
• Leigh, David. "The Trafigura files and how to read them". The Guardian, 16 September 2009. This introduces: Internal Trafigura emails and letters regarding the Côte d'Ivoire waste dumping incident (PDF file, 7.9 MiB). The Guardian.

• Oil companies of the Netherlands
• Companies of the United Kingdom
• Oil traders
• Companies established in 1993