Engineering Firm Wood to Pay $177M to Settle Amec Foster Wheeler’s Brazil Bribery Case

UK-based engineering firm John Wood Group, also known as Wood, on Monday said it had reached agreements with authorities in the UK, Brazil, and the U.S. to resolve their respective bribery and corruption investigations into the past use of third parties in the legacy Amec Foster Wheeler business.

The U.S. Department of Justice last week that Amec Foster Wheeler, a subsidiary of John Wood Group plc (Wood), had admitted to paying bribes to officials in Brazil in exchange for an approximately $190 million contract to design a gas-to-chemicals complex.

According to the company’s admissions, as cited by DoJ, between 2011 and 2014, Amec Foster Wheeler conspired with others, including an Italian sales agent affiliated with a Monaco-based intermediary company, to pay bribes to decision-makers at Petrobras in order to win an approximately $190 million contract from Petrobras to design a gas-to-chemicals complex in Brazil called Complexo Gás-Químico UFN-IV. 

The company, through certain of its employees and agents, took acts in furtherance of the scheme while located in New York and Texas, and earned at least $12.9 million in profits from the corruptly obtained business, the DoJ said.

$177 million

Under the terms of the settlement agreements announced by Wood on Monday, Wood agreed to pay compensation, disgorgement and prejudgment interest, fines, and penalties totaling $177 million. 

The payment will be phased over the next three years with approximately $62 million to be paid in the second half of 2021, and the remaining amount will be paid in installments in 2022, 2023, and 2024.  

“The resolutions relate to historical conduct which occurred before Amec plc acquired Foster Wheeler AG in November 2014 and prior to the combined firm’s acquisition by Wood in October 2017.  Wood cooperated fully with all authorities in their investigations, which is reflected in the cooperation credit that Wood received from the authorities in their respective resolutions,” Wood said.

In relation to the UK, a three-year deferred prosecution agreement (‘DPA’) relating to the use of third-party agents for bribery and corruption in five countries by Foster Wheeler has been agreed with the SFO and was the subject of a preliminary Crown Court hearing Monday.  Wood and the SFO will seek final judicial approval of the DPA from the Court on 1st July 2021.

Wood has also entered into a three-year DPA with the U.S. Department of Justice DOJ, a cease & desist order with the SEC, and leniency agreements with a term of 18 months with the Brazilian authorities, all in relation to the historical use of third-party agents for bribery and corruption in connection with winning a project in Brazil.

“Assuming that final judicial approval is received in the UK, it will officially conclude these investigations into the legacy Amec Foster Wheeler business,” Wood said.

Robin Watson, Chief Executive, Wood, said: “The investigations brought to light unacceptable, albeit historical, behavior that I condemn in the strongest terms.  Although we inherited these issues through acquisition, we took full responsibility in addressing them, as any responsible business would. 

“Since our acquisition of Amec Foster Wheeler, we have cooperated fully with the authorities and have taken steps to further improve our ethics and compliance program from an already strong foundation.  I’m pleased that, subject to final court approval in the UK, we have been able to resolve these issues and can now look to the future.”

Roy Franklin, Chair, Wood, said: “The historical conduct that led to these investigations does not reflect the values of Wood that unite us as a global team.  The resolutions underline why we attach such importance to upholding the highest standards of ethics and compliance in all parts of the world where we operate, and why we continue to invest in strengthening our governance in this area.”

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