IDB debars Odebrecht subsidiary for 6 years

On September 4, 2019, the Office of Institutional Integrity of the Inter-American Development Bank (IDB) announced that it had reached a Negotiated Resolution Agreement with Odebrecht S.A., resolving an investigation that uncovered bribes paid in connection with IDB-financed projects in Venezuela and Brazil.  The settlement debars CNO S.A. (CNO), a subsidiary of Odebrecht, and 19 CNO subsidiaries, from participating in IDB-financed projects for six years, followed by four years of conditional non-debarment.  When conditionally non-debarred, a company remains eligible to participate in projects financed by IDB but only if it fully meets the conditions of the settlement. If any condition is not met, the company will be debarred.

As part of the settlement, Odebrecht agreed not to contest evidence that CNO made corrupt payments to public officials in order to “facilitate either the award, contract execution payments and/or contract amendments” in the two projects. The settlement requires Odebrecht to contribute $50 million (beginning in 2024) to non-governmental organizations and charities managing social projects in vulnerable communities in the IDB’s developing member countries. The settlement also includes the conditional non-debarment of another Odebrecht subsidiary, Odebrecht Engenharia e Construção S.A. (OEC), and 41 of OEC’s subsidiaries for ten years.

According to the IDB, the settlement “allows for a reduced period of debarment” due to Odebrecht’s continued cooperation in the investigation.  As part of the settlement, Odebrecht committed to reporting on its compliance program through an independent monitor. 

IDB press release

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