Odebrecht, the Brazilian construction giant that entered into a $3.5 billion global bribery resolution in December 2016 with authorities in the United States, Brazil, and Switzerland, announced last month the completion of independent external compliance monitoring.
As part of Odebrecht’s plea agreement with the U.S. Justice Department, the company undertook extensive remedial measures. It terminated the employment of 51 individuals, suspended 26 individuals for up to a year and a half, and imposed significant financial penalties and demotions on various employees. And it committed to enhancing anti-corruption compliance and business ethics training.
The plea agreement also required Odebrecht to maintain heightened oversight and day-to-day supervision, including ensuring that the independent compliance monitor had full access and authority to evaluate the business activities and ongoing compliance of individuals responsible for compliance-related decisions and activity.
The monitorship had a duration of three years, with primary responsibility to assess and monitor the company’s compliance program.
Odebrecht said in November the monitor’s team interviewed “in person and by videoconference, more than 900 [company officers and employees], including members of boards of directors, business leaders and project managers.”
The monitor’s team surveyed more than 1,300 [employees] to assess the perception and effectiveness of the compliance program and the company’s commitment to keep a robust compliance program.”
The team also reviewed “approximately 30,000 documents related to the company’s operations and compliance program and tested more than 5,000 transactions.”
The monitor’s work and reports have been an important resource for Brazil companies that are faced with the complexities of FCPA compliance. Also, the Brazil Comptroller General of the Union (CGU) has published guidelines to help companies build or improve anti-corruption compliance programs. The CGU guidelines have several similarities with the best practices of the FCPA and the UK Bribery Act, so the Odebrecht monitorship also served as indirect guidance for the GCU guidelines.
Following Odebrecht’s global settlement in late 2016, the company lost big contracts for construction projects with the governments of Peru, Colombia, and Panama. Those losses, among others, led the U.S. DOJ to reduce the U.S. portion of Odebrecht’s criminal fine from $260 million down to $93 million, based on impairment of Odebrecht’s ability to pay the criminal penalties.
After having suffered so much economic and reputational damage, perhaps it isn’t surprising that Odebrecht has also announced that is rebranding, with the new name “Novonor.”
The new name reflects a shift in strategy and an effort by Odebrecht move past the scandal that grew out of the investigation known as Operation Car Wash.