Petrobas Fires Back at Its 3rd Parties
Now that the smoke has cleared and the dust is beginning to settle, the Brazilian Oil and Gas Company Petrobas, is looking to file suit against its subsidiaries to reclaim the damages lost during its investigation into bribery and corruption. The oil giant is looking to recover about $424 million against its engineering and construction firms. These firms were found to have over inflated the price of their services while skimming additional funds off the top.
Nicolas Torres of the FCPA Blog writes how Petrobas expects to ask for its first set of suits, two out of the five engineering firms. The suits total in the amount of $150.13 millions, which includes compensation for material damages and compensation for moral damages. Once these suits have cleared the next step for the company is to move forward on filing suits on the three other firms with expectations on collecting $274.35 million in total claims.
This amount of corruption and bribery has been stemming from this company since 2002 and ongoing until 2012. What this means is that there was a lack of external structure to be able to monitor their third party business partners. Most well established companies have an impeccable internal anti-corruption and anti-bribery policy, which some believe is enough, but the reality is these strong internal policies and procedures needs to reflect in their external efforts. The Brazilian Clean Companies Act has strict regulations put fourth in place in order to prevent corruption and bribery and subsidiaries of any company are subject to this new legislation. The FCPA, UK Bribery Act, and the Brazilian Companies Act, requires companies to account for their 3rd parties, which means if those third parties are doing business on your behalf you are still held accountable.
Corruption and bribery cost companies more in penalties and fines then give a company a competitive advantage. The cost of doing business outside of the legal scope of any countries legislation makes it much more costly then doing business by the rules. With so many legislations to be aware of, Source Intelligence compiled a series of guidelines that focuses on major regulatory standards that companies should be looking into. Click here to view.