Trafigura is the third-largest commodity trader in the world after Vitol and Glencore Xstrata and Vitol. Like Vitol, it is registered in the Netherlands but operates from Switzerland (as does Glencore) because of the extremely advantageous local tax regime. Vitol (2012 revenue: $303 bn), Glencore Xstrata ($214 bn) and Trafigura ($120 bn) are the universal middlemen in every critical commodity: oil, gas, minerals, steel, sugar, cotton, wheat, soya — you name it, they probably sell it.
Trafigura is, in the corporate sense, the step-son of Marc Rich & co AG, the Swiss-based mega-trader founded by Belgian-born Marc Rich —real name: David Marcell Reich— who was credited for creating the spot market for oil, so giving him the nickname of “the king of oil.”
Rich was ousted as CEO in 2002 by South African-born Ivan Glasenberg, who renamed the company as Glencore and went on to form the world’s largest mining company after merging with Xstrata to form Glencore Xstrata last year.
Rich cut his business teeth dealing in commodities from poor countries for Philippe Brothers before setting out to build his own empire - as impressive as it was controversial. These included building a secret gas pipeline between Egypt and Israel in the 1970s and dealing in Iranian oil during the 444-day Teheran hostage crisis of 1979-1981.
For this, he was charged with tax evasion and trading with the enemy by the US Department of justice and fled to Switzerland. In 2002, President Bill Clinton controversially gave Rich a presidential pardon as one of his last acts of office. Rich died in 2013, of natural causes.
In 1993, two of Rich’s top traders, Erich von Turckheim and Claude Dauphin, broke away to set up their own business as Trafigura, which soon acquired a reputation as a feisty underdog — and one of the most controversial and litigious multinationals in the world.
Trafigura was named in the 2004 Iraqi Oil-for-Food scandal, a kickback scheme that benefited both British conservatives and Saddam Hussein’s inner circles. In 2006, Trafigura became embroiled in one of the worst environmental pollution cases in Africa when a subcontractor, Compagnie Tommy, dumped 500 tons of toxic waste in Abdijan. Ten people died and a 100,000 became ill as result. Cote d’Ivoire released Trafigura’s local officials only after they paid a $208 million fine in return for all charges dropped against them locally.
In 2007, a tanker carrying toxic waste on behalf of Trafigura exploded off Gulen in Norway, with severe environmental and health consequences for the area and its people.
Between 2009 and 2010, The Guardian and BBC were repeatedly slapped with legal injunctions, including a so-called super-injunction to prevent the Guardian from reporting questions asked in the British Parliament of Trafigura’s alleged tax-avoidance practices and their role in the Abidjan debacle.
Trafigura has denied all charges against them, but in 2012 agreed to a settlement with the Dutch government of a €1 million fine, paying damages of €300,000 and an additional fine of €67,000 to have all charges against chairman Claude Dauphin dropped.
In February 2013, Trafigura Maritime Ventures and French oil firm Total were banned from a Malta public tender process over allegations of kickbacks. The matter is still under investigation.