Attorney general requests more time to renegotiate Lava Jato fines

The Brazilian attorney general's office (AGU) requested more time to hold talks with major construction firms that were fined in the wake of the Lava Jato anti-graft probe.  

AGU asked the supreme court for 60 more days to renegotiate certain terms of the penalties imposed on the companies, the office said in a statement.

The comptroller general’s office (CGU) also began talks with representatives of the firms OAS, Andrade Gutierrez, Odebrecht, Nova Participações (Engevix), Camargo Corrêa, Braskem, UTC and Coesa earlier this year.

The negotiations between AGU, CGU and the companies were ordered by the supreme court after it agreed to a request filed last year by political parties PSOL, PCdoB and Solidariedade calling on the court to suspend the payment obligations under the leniency deals the companies signed with prosecutors to settle the charges against them.

The Lava Jato investigation, which started by looking into irregular contracts at federal oil firm Petrobras, ultimately unearthed a network of corruption involving executives at a string of companies and even implicating former presidents and high-ranking government officials in various Latin American countries.

In their request, the parties claimed that the fines were excessive and criticized the prosecutors and judges involved in the investigation.

The Lava Jato probe started in 2014 and led to a number of convictions of executives at groups such as OEC (formerly Odebrecht) and Braskem – a petrochemical firm controlled by OEC holding company Novonor and Petrobras – as well as OAS, Andrade Gutierrez, Camargo Corrêa and UTC, which were fined and also barred from being awarded public contracts in some countries.

In Brazil, the companies reached deals with authorities, agreeing to pay a combined 11bn reais (currently US$2.2bn) in fines.

"From a legal point of view, this initiative by the authorities in negotiating the fines imposed on companies is a good sign, as it shows that there is no risk of an increase in the fines for companies," João Cortez, a partner at infrastructure consultancy Vallya, told BNamericas.

"However, from an operational point of view, practice shows that even though large construction companies are already recovering part of their market, they are still far from recovering the room they lost during the Lava Jato probe."