Neighbours of Glencore boss Ivan Glasenberg feel uneasy about the bounty they have received.
He is so rich and pays so much tax that every one of his 3 600 neighbours in the picturesque village overlooking Lake Zurich got a 7% tax break. But not everyone in Rüschlikon, Switzerland, likes Ivan Glasenberg.
The 55-year-old, who has lived quietly in the village for more than a decade, exploded on to the public scene last year when his previously extremely secretive commodity trading company Glencore floated on the London Stock Exchange and turned Glasenberg into Switzerland's sixth-richest man overnight.
The float valued his stake in the company at £5.7-billion. Even with Switzerland's famously low tax rates, Glasenberg paid 360-million Swiss francs (R3.4-billion) in tax into Rüschlikon's coffers. That is because under Swiss law a large proportion of income taxes is paid to the local community rather than directly to the state. As a result, Rüschlikon, which was already known as the "richest village in Switzerland", was left with so much spare cash that the village council proposed cutting its already low tax rate by a further 7%. The idea was overwhelmingly approved in a public vote, but some citizens argued against the windfall – suggesting it was tainted money – and remain concerned today.
The money Rüschlikon is benefiting from comes from Glencore's mining and trading operations in more than 40 countries around the world. "He [Glasenberg] covers a lot of territory and has access to many heads of state," said James Campbell, a former executive at mining multinational company Anglo American, who worked closely with Glasenberg on one of his first deals in the 1980s. "His modus operandi is active. Certainly you either like Ivan or you don't. I'm not sure those who don't like him can tell you why."
Growing up in South Africa, Glasenberg was a keen athlete. He later became a champion race walker who would have competed in the 1984 Olympics if the country had not been banned from the competition during the apartheid period. Chris Rael, who trained with him in California in the 1980s and now works for the United States athletics team, remembers Glasenberg as courteous, friendly and approachable. "He never talked about money or business, so I would never have suspected that was what he'd become."
Although Glasenberg, who lives in a glass-and-steel chalet up a steep hill with views over the lake, is on first-name terms with presidents and prime ministers, few people in Rüschlikon had heard of him until his taxes reached the village coffers. The huge payment caused an immediate stir and the mayor was advised to call the village's bank to make sure it was prepared to receive such a large payment.
Cheating other people
In Le Bistro café in the converted waiting room of Rüschlikon Station, from where the village's rich residents can be whisked to downtown Zurich in 15 minutes, none of the clientele whiling away the afternoon had met Glasenberg but all were happy to chat about his effect on the community.
"They are really happy with him paying a lot of taxes," said waitress Sylvia Hauser. "But they don't like his business; they don't like what he is doing. It's not very friendly and they do not agree with what he does, especially in Africa.
"[Glencore] is cheating other people, taking things out of the ground and not paying [much in taxes in the countries in which it operates] and selling it at a lot of profit."
Further down the quiet road winding down the hill towards the calm waters of Lake Zurich, the manager of one of the village's opulent boutiques, who did not wish to be named, said: "A lot of people think it [Glencore] is bad for the world. We have a lot of money; we don't need money from Mr Glasenberg. It is not right to close the eyes and take the money. I can't say that he is a bad man – I do not know him – but I have heard about what he does."
Rüschlikon resident Daniel Zbinden said: "We don't want his money. It is bad money that comes from the bad things Glencore does in Africa."
Some of the locals decided to try to use some of the windfall to redress the balance between the wealth of Glasenberg's village and the poverty endured by many of the communities in which Glencore operates. Peter Cadisch set up the Solidarity Rüschlikon campaign, which calls for the village to cut taxes by 5% rather than 7% and send the rest of the money "back to where the particular workers in the commodity trade generated it".
The proposal led to the most well-attended meeting in Rüschlikon's history when 424 people turned out to vote in the village hall that seats 280. The full tax cut was voted through by a big majority. But many residents still have concerns, including the mayor, Dr Bernhard Elsener, a professor at a nearby university.
"We know that Glencore is accused of not acting well in developing countries, but the business that Glencore is performing around the world is considered legal [and] we have no means to discuss the origin of this money," he said.
"I agree Glencore as a company is accused by non-governmental organisations that not everything is going as it should. They [Glencore] do not communicate very frequently, which is also a problem."
In May 2011, an NGO in Switzerland claimed that Glencore lagged behind other mining companies on a range of ethical and environmental issues, such as corporate responsibility and CO2 emissions. Glencore denied the charge.
Elsener said the village would have been unable to reject the money even if the electorate had voted to do so, because the localised tax system was mandated by federal Swiss law. He said he had received two letters of complaint after the villagers voted to allow Glasenberg to become a naturalised Swiss citizen two years ago.
Although none of the residents this newspaper spoke to had seen Glasenberg in the village in the 18 years he has been living in Rüschlikon, Elsener said he had several discussions with the businessman to "make sure he was good enough in German [the local language of the area] in order to make sure he can communicate".
"He is a very interesting personality, but because he's travelling a lot around the whole world, maybe he's not in Rüschlikon that often."
Concern about Glasenberg's millions has now spread to other parts of the canton. Yvonne Beutler, finance director of the nearby Winterthur village council, which is to receive a big proportion of the money through a complex system that diverts more of the funds to the poorest villages, told the local newspaper: "I am not really happy about this money. I can't ignore who is actually paying the price for this and I don't like the fact that a few commodity traders make billions while the people in the producing countries remain bitterly poor."
In the interview with Der Landbote, Beutler said Switzerland's MPs had a moral responsibility to question "how much longer our country shall remain an oasis for commodity trading regarding transparency and regulations". – © Guardian News & Media 2012