In December 2016, Odebrecht signed a collaboration agreement with the authorities in the U.S., Brazil and Switzerland – having admitted the payment of $3.5 billion in bribes to public officials in several countries.

This agreement included an independent external compliance monitoring of its operations (with global scope) by the U.S. Department of Justice (DoJ), which began to be applied in February 2017.

The monitoring process ended in November 2020. Previously, the company carried out its financial restructuring, as in 2019 it had filed for bankruptcy in Brazil and the U.S.

As part of the agreement reached, the company implemented corrective measures. It terminated several employees, suspended others – for up to a year and a half -, applied financial penalties and reduced the hierarchy of several employees. In addition, it committed to improving compliance with anti-corruption policies and training staff in business ethics.

This agreement required Odebrecht to carry out daily monitoring measures, ensuring that the monitor had full access and power to evaluate the firm’s business activities and the commitment of those responsible for compliance policy decisions and activities.

The scheduled monitoring lasted three years. The certification granted by the DoJ monitor has allowed Odebrecht to obtain a clear recognition as a “new company”, which is not a momentary thing, but must be sustainable over time. It also allows to mark a before and after regarding its reputation.

In November 2020, Odebrecht noted that the monitor team had interviewed “more than 900 [company officials and employees], including board members, business leaders and project managers.”

According to the monitor report, “more than 1,300 [employees] were surveyed to assess the perception and effectiveness of the integrity program and the company’s commitment to maintaining a robust enough program.” The team also reviewed “approximately 30,000 documents related to the company’s operating program and the integrity program and tested more than 5,000 transactions.”

The monitor work and reporting has been an important resource for Brazilian companies facing the complexities of FCPA compliance. In addition, the Union’s Office of the Attorney General (CGU, acronym in Brazilian language), a federal government body in Brazil, has published anti-corruption guidelines to help companies build or improve their compliance programs. The CGU guidelines have several similarities to the best practices formulated by the FCPA and the UK Bribery Act, so oversight over Odebrecht also served to guide the UGC’s guidelines.

At the end of 2016 and following the agreement reached, Odebrecht lost future contracts for construction projects with the governments of Peru, Colombia and Panama. These losses, among others, led the U.S. DoJ to reduce the U.S. part of Odebrecht’s penalty from $260 million to $93 million, following a decrease in the holding company’s financial capacity to deal with the payment of those penalties.

Having suffered an economic as well as reputational damage, it is not surprising that Odebrecht recently announced a name change. The “new” company is named “Novonor”. This reflects a change in Odebrecht’s strategy and effort to reconvert and overcome the scandal derived from the investigation known as “LavaJato”.

From G5Integritas we can assist you in the design and implementation of a compliance program in order to strengthen ethical aspects that allow your business to take off, support in the search for strategic partners and new markets as well as allow you to avoid irreparable damage to your entity’s reputation.

 [email protected] 

 www.g5integritaslatam.com

Equipo G5 Integritas Latam

Equipo G5 Integritas Latam

Equipo G5 Integritas Latam

G5 Integritas is a consulting and strategic advisory firm for corporate clients, financial institutions, law firms, entrepreneurs and investors, specialized in: RISK AND COMPLIANCE DUE DILIGENCE AND BACKGROUND CHECK INVESTIGATIONS AND BUSINESS INTELLIGENCE SECURITY CONSULTING FORENSIC INFORMATION AND DATA RECOVERY

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