Payments to Governments Report 2019 About Glencore
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Payments to Governments Report 2019 About Glencore We are one of the world’s largest natural resource companies. We fulfil our purpose through our strategy to be active at multiple stages of the commodity supply chain. Our diversity by geography, product and activity, maximises the value we create for our business and its diverse stakeholders. We have around 150 mining and metallurgical sites and oil production assets in 35 countries and employ 160,000 people. We recognise that our business activities make a significant contribution to the national and local economies in which we operate. We believe that our presence can deliver long-term, sustainable benefits to our host countries. Our culture We fulfil our purpose and deliver on our strategy in a manner that reflects our values of safety, integrity, responsibility, openness, simplicity and entrepreneurialism. Only by actively living and breathing these values are we able to ensure our culture is conducive to fulfilling our purpose and delivering on our strategy. Our purpose Glencore’s purpose is to source responsibly the commodities that advance everyday life. We do so through our strategy of sustainably growing total shareholder returns while maintaining a strong investment grade rating and acting as a responsible operator. Our values Our values reflect our purpose, our priorities and the beliefs by which we conduct ourselves and carry out our business activities. They define what it means to work at Glencore, regardless of location or role. They are the fundamental basis of our sustainability management system along with our Code of Conduct and our Group policies. Safety Integrity Responsibility We never compromise on safety. We have the courage to do what’s We take responsibility for our actions. We look out for one another and right, even when it’s hard. We do We talk and listen to others to stop work if it’s not safe what we say and treat each other understand what they expect from us. fairly and with respect We work to improve our commercial, social and environmental performance Openness Simplicity Entrepreneurialism We’re honest and straightforward when We work efficiently and focus on We encourage new ideas and quickly we communicate. We push ourselves what’s important. We avoid unnecessary adapt to change. We’re always looking to improve by sharing information and complexity and look for simple, for new opportunities to create value and encouraging dialogue and feedback pragmatic solutions find better and safer ways of working Contents Chief Financial Officer’s introduction 2 Our approach to tax and transparency 4 Our contribution 8 Our payments to governments 18 Extractive Industries Transparency Initiative 28 Material advances and loans repayable with product 36 About this report 37 Appendix One – Group Tax Policy 38 Appendix Two – Detailed Country Disclosures 40 Glossary 42 Important notice 43 Further information 44 Overview of payments made to governments in 2019, in line with the EU reporting directive Amounts in US$ ’000 ● Argentina $21,603 ● Australia $1,682,846 ● Bolivia $10,901 ● Cameroon $5,332 ● Canada $51,402 ● Chad $88,612 ● Chile $235,695 ● Colombia $291,740 ● Democratic Republic of Congo $614,092 ● Equatorial Guinea $65,900 ● Kazakhstan $414,248 ● Peru $417,126 ● South Africa $96,664 ● Zambia $11,671 Glencore Payments to Governments Report 2019 1 Chief Financial Officer’s introduction During 2019, our total payments to government were around $7.7 billion. governance. Increasing transparency enables civil society to hold governments to account and supports an improved understanding of our contributions to national economies. This year’s report includes our payments to governments on country-by-country and project-by- project basis, our approach to tax transparency and disclosures relating to the EITI. In this report, we have chosen to expand our disclosures to include: • A short overview of our contributions and activities in the countries where our payments to government are $100 million or higher • Details on the metal and minerals, as well as oil, purchases we made from state-owned enterprises (SOEs) in EITI countries • Continued disclosure of our large I am pleased to introduce our fifth transparency, as it encourages the custom and excise payments to Payments to Governments report that responsible management of revenues government entities and details on aligns with the reporting requirements from extractive activities. We have the material advances and loans of Chapter 10 of the EU Accounting been an active supporter of the payable Directive. Extractive Industries Transparency Initiative (EITI) since 2011. We will In 2019, we continued our Glencore is one of the world’s largest continue to promote its principles of engagement with stakeholders with a natural resource companies. We are transparency and accountability as particular interest in transparency of active at multiple stages of the well as to engage with the EITI at both payments to governments. We have commodity supply chain, with local and international levels. included in this report a section on key activities in 35 countries. Through our external engagement activities, which presence, we are able to deliver During 2019, our total payments to include meeting with our investors significant and sustainable economic government, including those relating and civil society groups. These benefits to our host governments, to our ownership interest in the interactions contributed to our employees, suppliers and Antamina, Cerrejón and Collahuasi assessment on how to improve our communities. joint ventures, were around $7.7 billion, disclosures. of which $4 billion is reported The activities of resource companies pursuant to the EU Accounting Reflecting our commitment towards and the payments we make support Directive extractive industries’ transparency, we are supporting and governments to realise value from reporting requirements. This encouraging disclosure of mining and their natural resources. Governments compares to a 2018 total of $5.7 billion exploration contracts with can use the taxes and royalties that we and $3.7 billion under the EU reporting governments. We support contract pay to fund public services and requirements. disclosure as a way to build trust and infrastructure to improve their nation’s ensure accountability. quality of life. Our reporting on our payments to governments, as well as the disclosure During the course of 2020, we have We are committed to high standards requirements placed on governments started the process to disclose our of corporate governance and by initiatives such as the EITI, leads to mining and exploration contracts with transparency and we welcome fiscal increased transparency and governments, to the extent that these 2 Glencore Payments to Governments Report 2019 are not subject to confidentiality As we publish this year’s Payments to We hope that these efforts will help restrictions. Governments Report, the world is ease the burden on our host responding to the COVID-19 communities as we work together In addition to contract disclosure, we pandemic, an unprecedented towards a common goal of intend to disclose later in the year the challenge. In response to the virus, combatting the impact of the beneficial ownership of our operating Glencore’s top priority is to protect the pandemic. joint ventures. To support access to safety and health of our people and this information, we are developing a We welcome your feedback on this the communities that host our transparency microsite linked to our report and our approach to businesses. corporate website, glencore.com. transparency. To support the efforts of our local We recognise that through our operations, we launched a $25 million presence we contribute significant, Glencore Community Support Fund. long-term socio-economic value to The Fund complements existing our operating countries. During 2019, efforts by our local teams to support we paid $5.2 billion in wages and Steve Kalmin their communities with an initial spent $90 million on initiatives directly Chief Financial Officer prioritisation of assisting health supporting local community authorities and community 30 June 2020 development, amongst others, health, organisations to respond to the education, roads and water immediate impacts of the crisis. infrastructure. Governments Tax Employees $7.7 billion 30.5% $5.2 billion in income taxes, royalties and other Adjusted Effective Tax Rate in salaries, wages, social security and payments other benefits Infrastructure Communities $9.1 million $90 million on public roads, sewage and power on initiatives supporting local networks and water processing and community development distribution Glencore Payments to Governments Report 2019 3 Our approach to tax and transparency We are committed to comply with all applicable tax laws, rules and regulations. We pay all relevant taxes, royalties and other levies in amounts determined by the legislation of relevant national, regional or local governments. We seek to maintain long-term, open, transparent and cooperative relationships with tax authorities in our host countries. Transparency Intra-group transactions Reflecting the complexity of the Group’s operations, and the We welcome fiscal transparency as it The Glencore group comprises a legitimate concern of tax encourages the responsible large number of separate legal administrations to collect the full management of revenues from our entities established in many amount due to them, our transfer activities.