Lifting the lid on Trafigura

From the outside Trafigura may look like a powerful, aggressive oil firm. But court documents that Trafigura tried to suppress suggest that inside the firm suffers ill-discipline, sloppiness, weak management and boardroom conflicts.

Trafigura is the world's third-largest independent oil trading company and the biggest trader in non-ferrous metals.

It has a massive $47 billion turnover and it has a reputation for throwing its considerable weight around.

Most infamously, it threw its weight - and its oil waste "slops" - around the Ivory Coast, when it found no other country would accept a shipful of waste fuel, caustic soda and hydrogen sulphide.

The waste was splashed all over the African nation by dodgy subcontractors. Trafigura would not accept that the pollution damaged health, but it paid the Ivory Coast government £120m in compensation and in London settled for £30m a joint damages action made by 31,000 Ivorians.

This was not the first time Trafigura's ships sailed into a scandal.

The UN's Paul Volcker said that Trafigura had bribed UN inspectors in oil deals with Saddam's Iraq, as part of the "oil for food" scandal.

Trafigura denies the charge. One of Trafigura's chartered ships was actually stopped by US warships in 2001 because of the disputed oil.

A tankful of Trafigura's oil waste - the kind that was dumped over the Ivory Coast - exploded in Norway in 2007.

Trafigura's aggressive legal responses to criticism make the firm seem like a tough operator.

However, it seems Trafigura's management may also have been worried about the way it operates.

Trafigura hired management consultant Kieran Looney in 2008 to coach its top staff for three years at a cost of £9m. Looney got the job because he already worked with one of the world's largest oil firms.

Trafigura was only founded in 1993, so this suggests it wants to become more like the older energy firms.

However, if Looney's claims are correct, Trafigura tried to change - but couldn't. It looks as if the company hired him to change its style but couldn't help reverting to type.

Trafigura terminated Looney after a year. He is suing because he claims Trafigura sacked him but kept his materials and techniques without permission.

His court statement, which I got hold of by visiting the High Court, quotes an email from Trafigura oil trading boss Frank Runge to other board members that says: "I am worried about the lack of management capacity within departments ... Management finds out too late about problems or delays."

Looney quotes from a meeting attended by top Trafigura execs including Runge, Pierre Lorinet and Michael Wainwright.

Looney states that meeting attendees said: "We need to fundamentally change the culture or we will grind to a halt," and argued: "We have not been able to grow the structure. In summary we are suffering from lack of accountability and discipline across the board.

"Too much silo mentality and nor or limited escalation/highlighting of potential risks to senior management before they materialise and become an issue."

Looney also refers to an email he sent to Trafigura's chief operating officer describing "internal inefficiency," "lack of disciplines being consistently adhered to," "lack of defined measures," "too much individual latitude/sloppy language/lack of firm agreements/lack of timely interventions."

Wainwright responded that this was a "useful summary."

Trafigura went to court to prevent publication of these paragraphs but failed.

Trafigura denies Looney's claim that it improperly ended his contract. Trafigura also denies his claim that it took his management improvement materials without permission and stuck them in its own, considerably cheaper, computerised training and performance system known as "Trafitalent."

The firm does not accept his characterisation of its meetings and says: "In common with many other companies, Trafigura recognised (and continues to recognise) that its internal systems, controls performance and training could always be improved."

As part of its defence Trafigura has launched a counter-claim of breach of confidentiality.