Glencore attacked by UN and others for seeing business opportunity in a crisis
Date: 23 Aug 2012
Commodities trading company Glencore has been the target of widespread criticism after it was accused of celebrating its ability to use the current global food crisis as a good business opportunity. Chris Mahoney, the company’s director of agriculture trading had said: “The environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness ... We will be able to provide the world with solutions ... and that should also be good for Glencore.”
The senior economist of the UN’s Food and Agriculture Organisation Concepcion Calpe was quoted by the Independent newspaper as saying that he expected Glencore to pay no heed to ethics in how it reacted to a world situation that could be exploited to achieve enormous profits. She called for changes in regulation to reform how companies such as Glencore, alongside others such as ADM and Monsanto, are able to operate.
It seems unlikely that Mahoney, whose words were part of the company’s interim results presentation, was celebrating a prospective bonanza rather than reassuring investors in the face of an earnings decline that the company was positioned not to suffer major problems in the face of commodities disruption.
But reactions, for instance Oxfam used the phrase “profiting from the misery and suffering of poor people” have been an indication of how standard business logic can run into challenges when applied to situations of major social impact.
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In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.
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