Brazilian state-owned energy company Petrobras announced Monday it has reached the end of its obligations set forth by the Department of Justice, three years after agreeing to a coordinated resolution with U.S. and Brazilian authorities for playing a role in one of the world’s largest political corruption investigations.
“With the conclusion of the obligations foreseen in the agreement, Petrobras closes an important stage in its recovery trajectory,” said the company’s Executive Director of Governance and Compliance Salvador Dahan in a press release. “We have finally turned the page, and the end of the DOJ agreement proves that we are living in new times, with our compliance system being strengthened day by day. We now have a robust control system and anti-corruption measures that go beyond those required by law.”
Petrobras’s troubles began when it was discovered some of Brazil’s largest construction and engineering companies received inflated contracts from Petrobras—excess markups that were then used to funnel kickbacks to Petrobras executives and high-ranking politicians.
In September 2018, in resolving violations of the U.S. Foreign Corrupt Practices Act, Petrobras entered into a non-prosecution agreement (NPA) with the Justice Department and agreed to pay a combined criminal penalty of $853.2 million. Under the coordinated agreement, Petrobras paid the Justice Department and the Securities and Exchange Commission 10 percent each ($85.32 million), while Brazilian authorities received the remaining 80 percent ($682.56 million).
“Since 2018, Petrobras has continued to improve the effectiveness of its internal controls and consolidate structural and governance changes by strengthening its culture of ethics, integrity, and transparency,” the company stated. “The corporate compliance program includes, among other things, an independent whistleblower channel, mechanisms to combat fraud and corruption by the companies with which Petrobras does business (due diligence), and integrity analyses of all managers, administrators, and employees who work in critical processes (integrity background check).
“In addition to these measures, the company invests in training on integrity-related topics for its employees, suppliers, and partners. As a result of its commitment to strengthening its governance and integrity practices, Petrobras successfully rejoined the Partnering Against Corruption Initiative (PACI), an initiative of the World Economic Forum (WEF) focused on anti-corruption and transparency issues.”
With all its obligations fulfilled, the company said, the agreement is now complete.
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