As we move into 2017, a news story from late 2016 is still dominating the headlines here in Peru – the Odebrecht corruption scandal. In December the company admitted to bribing Peruvian government officials to the sum of $29 million in order to win lucrative contracts from 2005 to 2014.
The Brazilian company, which is an international heavyweight in construction has a long history in Peru, dating back to 1979. However, in the last ten years alone it project’s contracts in the country have a combine worth of $10bn.
Since the revelation of corruption, the Peruvian government have been quick to denounce the company, barring it from bidding for new contracts. Further to this the Brazilian firm has been ordered to pay $8.9m compensation, which Peruvian officials suggest is just an initial figure and that the fee should be expected to rise. The investigation is expected to review contracts negotiated through the Toledo and Garcia administrations, and is expected to be one of the biggest political stories of the year.
There have been calls for the government to go further and completely close Odebrecht’s operations in Peru, however President Kuczynski has refused to do so, saying that not all work done by the firm in the country is corrupt.
President Kuczynski who was Prime Minister and Finance Minister in 2005 himself has denied any involvement in the scandal, and reiterated that he and his government are “totally against corruption”.
The Peruvian government have passed legislation through Congress, which (according to Prime Minister Zavala) will prevent Odebrecht-like scandals from happening in the country again.
Odebrecht’s scandals are not unique to Peru as the company has admitted similar wrongdoings in other South American countries, including Ecuador, Panama, and its home country Brazil.
Odebrecht announced it will sell its share in the Gasoducto Sur Peruano (GSP) project would be sold to Canadian outfit Brookfield.