Dutch company SBM to sign new leniency agreement with Brazilian authorities

The Ministry of Transparency and the Federal Comptroller General’s Office (AGU) and the Federal Public Ministry have concluded a new leniency agreement with the Dutch company SBM Offshore, an oil exploration platform operator that admitted having paid millions of dollars in bribes to get Petrobras contracts.

 

The company closed the first agreement with the Ministry of Transparency in July last year, promising to provide information on irregularities and to pay U$ 340 million (equivalent to about R $ 1 billion) to be able to do again business with Petrobras, one of its main clients.

 

But a review chamber of the Public Prosecutor’s Office blocked the settlement in September, pointing out flaws in the clauses negotiated by the government and the Rio de Janeiro prosecutors who accompanied the negotiations. The authorities then returned to the negotiating table with SBM and in recent months revised several clauses, maintaining the values ​​agreed with the company.

 

In order for the agreement to be signed, there is no endorsement by the ministers of the TCU (Court of Audit of the Union), an external control body linked to the Congress. TCU’s auditors who examined it have issued a ruling opposing the agreement, which will be discussed in a reserved session of court ministers on Tuesday (12).

 

Other law enforcement agencies and companies investigated by Lava Jato have pointed to the TCU as the main obstacle to the viability of leniency agreements, a mechanism created in 2013 by the Anti-Corruption Law to accelerate investigations and offer benefits to companies that cooperate with the Justice.

 

At the center of the controversy is the need to repair the damages caused by corruption. The law obliges the TCU to collect full compensation for the damages suffered by the public coffers, but there is no consensus as to how best to calculate them, and the controversies over the subject usually end up in court.

 

The first version of the agreement with SBM assured the company of the full settlement of damages, regardless of the analysis that the TCU did later in examining its contracts with Petrobras.

 

The new version of the agreement corrects this clause to make it clear that the final value of the repair will depend on the TCU.

 

The numbers defined by the new agreement include payments that SBM must make to Petrobras and discounts on the amounts it has to receive in contracts signed with the company before Lava Jato. If one day the TCU concludes that the damage is greater than U$ 340 million, the SBM can discuss the collection with the agency or appeal to Justice.

 

The company made a U$ 240 million settlement with the Dutch authorities two years ago, and two weeks ago it paid more than U$ 238 million to the United States Department of Justice to get rid of criminal actions. In addition to Brazil, SBM admits having paid bribes in Angola, Kazakhstan, Equatorial Guinea and Iraq.

 

CONTRACTORS

The three largest contractors affected by Lava Jato – Odebrecht, Andrade Gutierrez and Camargo Corrêa – also negotiated leniency with the Transparency Ministry, which in July signed a U$ 574 million agreement with UTC, another one that admits to having paid bribes at Petrobras.

 

 

Dozens of executives of these companies have entered into plea bargaining agreements with Lava Jato in exchange for reducing their criminal penalties. The three largest have already been cooperating with prosecutors, but now also need to negotiate with the federal government to re-engage in public bids and regain access to official credit.

 

In a lawsuit that examines frauds in the construction of the Angra 3 nuclear power plant, the TCU threatens to declare these companies not eligible, which may prevent them from re-contracting with the public sector. The companies are trying to open negotiations with the court, which will not review the case until next year.