Communication

Releases

The Odebrecht Group, for respecting for its Clients, Partners, Investors, Financial Institutions, Suppliers, Users of its Services, Friends and Team Members, hereby expresses its indignation at the arrest of five of its executives and the search and seizure warrants served last Friday (June 19) at some of our subsidiaries as part of the 14th stage of Operation Lava Jato (“Car Wash”; a Brazilian corruption scandal involving alleged payoffs and the state-owned oil giant Petrobras).

The court order approving the arrest of our executives and the search and seizure warrants demonstrates that, since the beginning of Lava Jato over a year ago, the Federal Police have not presented, as alleged in the court order, any new evidence that justifies the forceful measures taken, which were completely unnecessary and for that very reason, illegal. 

In fact, the only new evidence presented now reflects a clear misinterpretation of the facts:

- The “deposit” allegedly made by Odebrecht to the account of the company Canyon View Assets S/A, given as one of the main justifications for issuing the arrest warrants, and extensively publicized in the press in the last few days as irrefutable proof of corruption, was not a deposit. Rather, it was an investment made by one of the Lava Jato defendants in bonds issued by an Odebrecht Group subsidiary and freely traded in the international market, which investment must be made using financial institutions without any control or involvement by Odebrecht.

- As for the email dated March 21, 2011, between our executives, which has also been widely publicized in the press as proof of illegal activity, we clarify as follows:

     * The sequence of messages that preceded said email, included in the Police Report, but omitted from the court order, makes it clear that it involved a technical discussion between these executives regarding the preparation for a proposal for a contract to operate drill ships, which is a contract between private parties that was in no way illegal. The isolated use of just one of these email messages eliminated the true context from this communication. 

     * The term “surcharge” used in this e-mail has nothing to do with overbilling, overcharging or any irregularity. It merely represents the contractual remuneration that Odebrecht Oil & Gas as an operator of drill ships, proposed to Sete Brasil, and that involves the reimbursement of the cost of the operation and maintenance of the drill ships, which is added to the fixed remuneration. In other words, it was a translation of the well-known market term “cost plus fee.”

- As for the alleged link between Odebrecht and the companies of Mr. João Antônio Bernardi Filho and Mrs. Christina Maria da Silva Jorge, we clarify that Mr. Bernardi Filho has not been a member of any Odebrecht Group company for over a decade, and that Mrs. da Silva Jorge has never been a member of any Group subsidiary. Odebrecht does not have and has never had any relationship with the companies of these individuals.

The use of imprisonment to prevent repeat offences because the competent authorities had not barred Construtora Norberto Odebrecht from entering into contracts with the Government, particularly regarding the most recent package of concessions that currently is just an announced statement of intent, is an affront to the most basic principles of the rule of law. So much so that the Brazilian Comptroller General, the Brazilian Attorney General and the Brazilian Minister of Justice have publicly affirmed that companies can only be barred from government contracts after they have been tried and convicted in compliance with due process of law.

Another affront to the rule of law is the presumption that knowledge of allegedly illegal facts by the companies’ senior management is enough to justify their imprisonment.

Furthermore, the statement in the court order that Odebrecht Group companies did not conduct an internal investigation of the alleged irregularities is completely untrue. All of our companies have and apply a Code of Conduct and a Compliance System that are effective and widely publicized, completely aligned with Brazilian and international anti-corruption legislation. An example of this practice was Braskem´ publication of a Material Fact notice on April 2, 2015.

Regarding payments allegedly made by Constructora Internacional del Sur, Odebrecht reiterates that none of its subsidiaries have or have ever had any ties with or made any payment to that company.

Odebrecht denies having participated in any cartel. There are no cartels in the contracting process, which is controlled entirely by the client, as is the case with Petrobras, which has always set its own budgets and standards for technical-financial assessment and performance.

In addition, the Odebrecht Group never hindered the investigations in any way. To the contrary, its executives have always made themselves available to authorities to provide any clarifications. In fact, four of the five arrested executives had traveled to the headquarters of the Federal Police in Brasília and provided testimony in the course of the Lava Jato investigations conducted by the Superior Court of Justice and the Federal Supreme Court. They have also furnished all requested documents and formally offered to testify before the Federal Court in the State of Paraná – testimony that they were never invited to provide, but which certainly would have clarified all of the points raised.

Although we are deeply perplexed and indignant regarding what has occurred, we will not stop fighting. Our business model, based on principles of delegation and decentralization, ensures that our 15 business areas and over 100 subsidiaries, are fully and independently led by our executives and their teams, and will continue to operate normally to fulfill our obligations, as we have always done in a manner as has been recognized during our more than 70-year history, half of which includes international operations.

This is our commitment to our Clients, Partners, Investors, Financial Institutions, Suppliers, the Users of our Services and the Communities in the 21 countries where we operate. We maintain our strong conviction that our more than 160,000 Members will remain even more united by our corporate culture and by the bonds of trust that unite us, maintaining their pride to be part of the Odebrecht Group.

Finally, at this time, we express our unrestricted solidarity and support for the families of our executives who unjustly have lost their constitutional right to freedom. We will continue to work together in defense of our Team Members, and will continue to be even more available to the authorities, cooperating fully so that all of these issues are clarified quickly, convinced that the truth will come out and that justice will prevail, because we believe that the recent events resulted from misinformation and misinterpretation.