SBM, Camargo Corrêa and Nova Participações were reintegrated to oil company’s base
Companies that provide services to Petrobras and that were excluded, as of 2014, from the register of suppliers for involvement in cases of corruption investigated by the anti-corruption task force Car Wash are returning to have commercial relations with the oil company, although not all of them are able to close contracts for the provision of goods and services. SBM, based in Monaco, Camargo Corrêa and Nova Participações, former Engevix, are among the companies reintegrated to the Petrobras supplier base, but they are in different situations.
SBM, for example, has a contract in place with Petrobras to deliver by 2023 a platform for the Mero field, in the Santos Basin. The contract, agreed in 2019, was SBM’s first with Petrobras after the Car-Wash allegations in which the company was accused of wrongdoings by the Federal Prosecution Service and had to sign a leniency agreement with the authorities. Leniency is a kind of plea bargaining for business entities that admit wrongdoing in government contracts.
From 2014 to 2021, Car Wash investigated irregularities committed by Petrobras’ suppliers and former employees. According to the latest available data, Petrobras had been reimbursed R$6.2 billion for the damage found in the investigations. Both the state-owned company and suppliers have undergone improvements in corporate governance policies.
SBM’s CEO, Bruno Chabas, says the episodes of corruption revealed have helped the company to reinvent itself: “It was part of our history and we have learned from it. We have become a different company, we are more transparent, and we are aware of our impact on society,” he said.
Camargo Corrêa was also reinstated, in 2020, to the list of Petrobras suppliers, but has not yet signed any contracts. Nova Participações, formerly Engevix, returned to the Petrobras supplier base, but is still considered high risk, a classification that prevents it from signing contracts with the oil company.
Part of the companies authorized for contracting by Petrobras did not close new deals as a result of the reduction of investments by the state-owned company in large infrastructure projects, say sources in the construction area. The Petrobras contracts for works involves long chains of suppliers. In 2021, the company closed R$239.85 billion in supply contracts for goods and services in Brazil and abroad with 9,751 companies, including platforms and other goods. In 2020, the state-owned company closed contracts worth R$253.3 billion with 10,335 suppliers.
Despite resuming relations with companies involved in Car-Wash, there are still 76 companies on Petrobras’ list that are suspended from bidding or on precautionary blockade.
This classification appeared in 2014 to deal with those investigated in the Car Wash task-force. Not all cases, however, are related to the corruption probe. Of the total of blockades, 62 correspond to decisions made as of 2021, the year in which the task force was closed.
Salvador Dahan — Foto: Divulgação/Vivian Fernandez
Salvador Dahan, Petrobras’ Chief Governance & Compliance Officer, told Valor that the reasons for the current suspensions are diverse and range from problems in the corporate structure to failures in the integrity programs identified by the state-owned company: “Some [companies] may not have problems [of corruption], but do not have the foundations of a compliance program,” he said.
Among the companies still blocked by Petrobras that were involved in Car-Wash are Odebrecht Ambiental and Base Engenharia, formerly Schahin. Odebrecht Ambiental had its operational assets sold to BRK in 2017 and is now a non-operational company. Novonor, formerly Odebrecht, would not have sought to remove Odebrecht Ambiental from Petrobras’ blockade list because today the company is no longer part of the group’s operational assets. Base Engenharia was declared bankrupt in 2018.
Since 2015 Petrobras assigns an integrity risk level (GRI) to all companies with which it has a business relationship. The supplier evaluation process begins with the completion of a due diligence questionnaire, known as due diligence of integrity (IDD), with questions about the suitability and internal control programs of the companies. After this internal evaluation process, Petrobras defines the risk level of each company, which can be high, medium, or low. Low- and medium-grade companies are eligible to participate in bids to sign contracts.
“We do not want to associate our name and brand with companies that are committing violations, illegalities or that do not respect the same principles that we have. The goal is to protect Petrobras and its entire value chain,” said the state-owned company’s CEO. More than 80% of the companies in Petrobras’ supplier base, says Mr. Dahan, are considered low risk, while only 2% are still high risk. He says that 40% of the companies that at some point were identified as high risk by Petrobras were able to reverse the picture and become low or medium GRI, which allow them to participate in bids.
Nova Participações is one of the companies registered with Petrobras seeking to improve its GRI. According to the Federal Prosecution Service (MPF) in the Car-Wash task-force, the company was part of a scheme to pay bribes and form a cartel. The company closed a leniency agreement in 2019, in which it committed to pay R$516 million until 2047, for the losses generated, and also needed to undergo reorganization.
Adjair dos Santos, Nova Participações’ chief compliance officer, says the company hired an external consulting firm to map integrity risks in internal processes in 2017. Since then, a compliance area was set up, responsible for measuring actions and mitigating risks. In 2019, Nova Participações’ governance management was developed into an area that monitors the processes that occur within the company, which includes hiring, payments, and contract terminations. “All of this generated a transformation of people, of processes, of risk visualization,” he said.
Despite its efforts, Nova Participações has yet to close contracts with Petrobras. Today, the company provides services to private companies in the electrical sector, in the engineering of hydroelectric and solar generation plants and transmission lines. The company recently asked Petrobras for a reassessment of its risk rating. The expectation is that the GRI will fall to low or medium, according to Mr. Santos.
The risks identified in the anti-corruption task force led Petrobras to institute, in 2014, a public list of suppliers with whom it could not close new deals, in addition to strengthening surveillance mechanisms. In 2015, the state-owned company created a governance board. To be able to sign contracts with Petrobras again, suppliers had to implement improvements in internal controls to prevent and combat fraud and corruption.
The companies involved in the investigations were taken off the list of suppliers blocked by Petrobras as they signed leniency agreements with the MPF. This type of agreement, considered a kind of “rehabilitation” for business entities, allows companies involved in illicit practices to collaborate with investigations and take actions so that irregularities do not recur, in exchange for the easing of sanctions. Leniency agreements also involve payment of fines.
After the leniency agreements, Petrobras allowed the companies to take part in the bids, but the reinstatement was different for each supplier. Today, among the criteria for a company to be among those qualified to participate in Petrobras’ bids is the guarantee that the senior management has no executives involved in scandals, in addition to the existence of an independent board of directors. The development of more robust governance areas is one of the factors that allowed the suppliers to return to Petrobras’ suppliers base.
Emilia Malacarne, a lawyer from law firm Souto Correa’s compliance area, states that the purpose of a compliance program is the prevention and detection of frauds, illicit acts and irregularities, as well as the remediation of a problem, when detected. She points out that it is important for the company to apply these policies in day-to-day activities. “Compliance is a culture change, done through mechanisms. But it is necessary that the company shows, on a day-to-day basis, that these values have a practical effect.”
*By Gabriela Ruddy — Rio de Janeiro
Source: Valor International