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CADE opens Administrative Proceeding on Petrobras public bid cartel investigation


21 companies and 59 individuals are being accused of participating on the collusion
published: Dec 22, 2015 11:00 PM last modified: Apr 11, 2016 05:05 PM

The General Superintendence of the Administrative Council for Economic Defense – CADE opened, on 22 December 2015, an Administrative Proceeding to investigate an alleged cartel on public bids for hiring engineering services, construction services and onshore industrial assembling held by Petrobras (Administrative Proceeding No 08700.002086/2015-14). The procedure opening is the first accusation step, within CADE, against individuals and companies that the authority has found evidence of infraction.

The companies indicated as participants of the supposed antitrust conduct are Alusa Engenharia (currently named Alumini Engenharia S.A.), Carioca Christiani Nielsen Engenharia S.A., Construções e Comércio Camargo Corrêa S.A., Construtora Andrade Gutierrez S.A., Construtora Norberto Odebrecht S.A., Construtora OAS Ltda., Construtora Queiroz Galvão S.A., Engevix Engenharia S.A., Galvão Engenharia S.A., GDK S.A., Iesa Óleo e Gás S.A., Jaraguá Equipamentos Industriais Ltda., Mendes Júnior Trading Engenharia S.A., MPE Montagens e Projetos Especiais S.A., Promon Engenharia Ltda., Schahin Engenharia S.A., Skanska Brasil Ltda., SOG Óleo e Gás S.A., Techint Engenharia e Construções S.A., Tomé Engenharia S.A. and UTC Engenharia S.A., in addition to, at least, 59 individuals, employees and former employees of these companies. 

According to the opinion, there is robust evidence that the investigated companies and individuals would have entered in an agreement to fix prices, share the market and adjust conditions, advantages or abstention in public bids of industrial assembling of Petrobras.      

The concerted action among the companies would have begun among the years 1998/1999, gaining strength especially from 2003. The alleged cartel would have been organized in a dynamic manner, adapting itself to the various changes of the market and of the institutional environment, guaranteeing that the bids conducted by Petrobras envisaged all the companies involved. 
The General Superintendence esteems that the sum of the figures of the contracts correspondent to the onshore public bids held by Petrobras that have evidence of the cartel action builds a total of, at least, BRL 35 billion. Among the constructions potentially struck by the alleged infringement are the ones of Henrique Lage Refinery - REVAP, President Getúlio Vargas Refinery – REPAR, Paulínia Refinery – REPLAN, North East Refinery – RNEST (Abreu e Lima Refinery) and Rio de Janeiro Petrochemical Complex – COMPERJ.     
Investigation – The opening of the Administrative Proceeding is founded in different evidence sources. In March 2015, CADE’s General Superintendence and the Federal Prosecutor’s Office of the state of Paraná – MPF/PR signed a leniency agreement with Setal Engenharia e Construções, SOG Óleo e Gás, and employees and former employees of companies held by the group. In August 2015, it was signed a Cease and Desist Agreement with Camargo Corrêa S/A and with two former employees of the company. Through the agreements, the signatory companies confessed their participation on the conduct and brought evidence of cartel.
The Superintendence has also worked with evidence from the criminal investigation and prosecution, as well as documents sourced on the dawn raids held by the Federal Police and by the MPF/PR on the Federal Justice of the state of Paraná, within the Operation Car Wash, which were shared with CADE. The evidence complements and supports the cartel signs. 

The evidentiary set includes emails swaps, tabs that shared the construction bids, phone registries that show the contact among competitors, meetings scheduling proofs, hand written notes, documents with the terms of the agreement, among others.
With the opening of the Administrative Proceeding, the parties will be notified to present their defenses and can pursue their rights of defense. During the procedural instruction, the parties and the General Superintendence may produce new evidence. At the end of the investigation phase, the General Superintendence will issue an opinion on the condemnation or on the filling of the case and will submit it for judgment by CADE’s Tribunal, which is responsible for the final decision.