Odebrecht shockwave sends ripples across LatAm

The Colombian government will review PPP contracts involving the Brazilian developer to ensure they're not tainted by corruption and bribery.

Following news of a 19-year sentence for Marcelo Odebrecht, the former head of Latin America's largest construction company, the Colombian government has put Odebrecht SA's active PPPs on watch. 

The 47-year-old grandson of the Brazilian developer's founder was sentenced on charges of corruption, money laundering and racketeering after his arrest along with a handful of other managers last June

The accusations were related to the corruption scheme discovered by federal investigators as part of the 'Lava Jato' operation that has reached into virtually every aspect of the Brazilian government. Odebrecht's lawyer Nabor Bulhoes said in a statement that the conviction was a “grave judicial error”, and that there are plans to appeal. 

In a country where it has long been widely believed that the rich and powerful are above the law, the Lava Jato investigation is standing against the stereotype that corruption is “The Brazilian Way”, as one Sao Paolo-based lawyer put it to Infrastructure Investor in confidence last year. Even former President Luiz Inacio Lula da Silva, known more popularly as 'Lula', was taken into custody last Friday by investigators who have reportedly found evidence that he took illicit payments and favours from Odebrecht and others (Lula denies the charges).  

In a statement released late on the evening of 8 March, Colombia's Agencia Nacional de Infraestructura (ANI) condemned corruption for its undermining of the “morality and integrity of managing public assets”. 

In keeping with its ambition to maintain a corruption-free procurement process, the government of President Juan Manuel Santos has made changes to the Anti-Corruption Law of 2011 Act 1474 and introduced Law 1778 of 2016, which addresses transnational bribery. 

According to the ANI statement, a copy of the Odebrecht judgment was delivered to the Colombian government by its Brazilian counterpart. The national Superintendency of Companies will now review “possible penalties and disqualifications” to companies “allegedly responsible for transnational bribery, or if such actions should be undertaken by the contracting entity”. 

The agency will review the contracts between Colombian transport sector entities and the companies in which Odebrecht is the investor, according to the ANI. The agency has identified three projects up for review: Ruta del Sol Sector 2, Asociacion Publico-Privada Recuperacion Navegabilidad del Rio Magdalena, and Transversal de Boyaca Fase 2. 

ANI said that it will maintain constant monitoring of these contracts to ensure that there is no effect on “public patrimony”.  

A Brasilia-based spokesperson for Odebrecht had not responded to a request for comment at press time.