Although coronavírus pandemic, Brazil reached an average of 2,94 million barrels of oil per day (Mb/d) in 2020, representing an increase of 5,5% up from 2019. With this production, the country surpassed OPEP’s third-largest oil producer, the United Arab Emirates, with 2,77 Mb/d.
Petrobras, the world leader in oil exploration technology in ultra-deep waters, only in 2020, performed R$ 100 bi in transactions through the Petronect procurement website. 160 thousand bids were ran (source: petronect.com.br).
Through Petronect, the state company selects the suppliers through the vendors’ list registration process which contains financial requirements, legal, technical, HS&E, and integrity (anti-corruption) requirements.
We have previously discussed the Degree of Integrity Risk (GRI), its nebulous form of evaluation, which prevents several companies from participating in the bids.
This requirement has recently become a nightmare for some suppliers, as surprisingly, at any time during the bid process, the bidding committee may announce that the supplier is disqualified, due to a high score (red flag) in the GRI section, without any justification, even after having already been declared the winner.
Petrobras claims that the Integrity Due Diligence (DDI) department is independent and that its analysis are carried out neutrally, without any influence from other company departments. Therefore, even if a procurement division wished to hire a supplier, if this supplier has been rated as “high risk” (red flag), the hiring can not occur.
The strange thing is the fact that sometimes the supplier who receives a high score has a contract in progress with Petrobras, showing that no actual event or conduct (by supplier), at least at present, can lead to any sanction or penalty.
In addition, the parameters for evaluating the Integrity requirements are increasingly complex and diversified, requiring greater attention from suppliers to avoid surprises during the bidding process.
This is a procedure performed by filling out a due diligence questionnaire (audit), conducting searches to open sources, and, finally, evaluating the Integrity Risk Degree – GRI. The risk factors are evaluated according to the following points: company profile; relationship with the government; history and reputation and mechanisms for the prevention, detection, and correction of irregularities and acts of corruption.
The above requirements are provided by art. 42 of Decree 8420/15, CGU Ordinance 909/15, Interministerial Ordinance 2.279/15, CGU’s “Integrity Program: Guidelines for Private Companies” and other national and international guidelines.
Petrobras demands, with the same strictness, that its contractors and its suppliers have the commitment of their high management, including the boards, evidenced by the visible and unequivocal support for the integrity program as provided in the referred decree.
Furthermore, according to the art. 42 of Decree 8420/15, the company must have standards of conduct, code of ethics, integrity (anti-corruption) policies and procedures, applicable to all employees and managers, regardless of position or function held as well as extended, when necessary, to third parties, such as suppliers, service providers, intermediary agents, and associates, in addition to reporting channels of irregularities, opened and widely disclosed to employees and third parties, and mechanisms for the protection of whistleblowers in good faith, among other requirements provided under the legislation.
Nonetheless, even though the suppliers comply with these requirements, little is known about the effective value of these items resulting in the score of the integrity grade at the end. An event that occurred 10 years ago, for instance, can give rise to a red note, even if nothing is at present discrediting against the company. One might question, also, how the commitment of high management may be evidenced? The high degree of subjectivity brings legal uncertainty to the bidders.
The Integrity requirements are supported by the State Companies Law (#13.303/2016), which provides that the integrity policy must be observed in transactions with interested parties (art. 32, item V). Nonetheless, although few decisions on the matter, some courts have spoken against the attribution of a high degree of integrity risk without justification, due to the restriction of the full defense and the adversary proceedings. The bidder must be aware of the motivation behind its disqualification and granted the minimum right, still at the administrative sphere, to the opportunity of contradicting Petrobras’ decision.
In this respect, the Federal Accounting Court (TCU) has also been opposing unjustified disqualifications, based only on the high degree of GRI, indicating a need to expose the factors that based the scores awarded stem from the criteria used to the analysis undertaken.
Petrobras has the prerogative of denying access to bids to suppliers that present problems related to deviations, fraud, irregularities, and illegal acts and ensuring the selection of the most advantageous proposal for the company. However, the company agents must respect the constitution principles, according to art. 37, item XXI of the Brazilian Federal Constitution, which establishes that only qualification requirements essential to guarantee the fulfillment of the contract scope are allowed in public bids, and art. 5, item. LV, which assures the right to full defense and the adversary proceedings, as a fundamental guarantee consistent with a democratic society.
About the writers: Júlia Mota is Founding Partner of Mota Advogados e Ana Clara Chicrala is an Associated Lawyer of Mota Advogados.