What is the cost of corruption? How much due diligence must you perform with those entities that are your customers? Does doing business with companies that have a propensity for corruption put your company at risk even if your business not does not engage in such behavior and has a best practices compliance program in place?

I thought about all those questions and others when I read a recent piece in the Financial Times (FT) Lex column, entitled “Petrobras: rip tide.” The ongoing woes for the company, and indeed the entire country, around “Javo Lito” or Operation Car Wash are well known. Many companies have been dragged directly into the scandals or, at the very least, have been required to look more closely at their own commercial operations with Petrobras and Brazil more generally.

However, what could be the effect on your company if your customer is facing corruption charges or simply has to pull back operations because of corruption issues? One major drilling rig company in Houston—ENSCO—had a contract with Petrobras unilaterally cancelled for simply allegations of corruption around an ENSCO third party agent. ENSCO denied that any of the allegations were true.

However, what if a large part of your company is exposed to the financial risk of a corrupt company slowing down its business? If you are in the energy or energy services industry, have you considered how much of your business is at risk through your relationship with Petrobras? The Lex column noted that Petrobras has pulled back its own investment plans by a full one-third through the end of this decade. The article reported that the Netherlands based SBM Offshore has “nearly half its [offshore production] fleet contracted” to Petrobras. In the financial world, that is called a lot of exposure.

Most Foreign Corrupt Practices Act (FCPA) risk analysis considers corruption risks involving third parties in the sales arena or vendors that come in through the Supply Chain, now, based upon the Petrobras imbroglio, you may want to consider taking a closer look at your customer’s anti-corruption program as well.