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Category: Anti-Corruption / FCPA
Petrobras Scandal Deepens: Will President Rousseff Go?
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By Alejandra Kubitschek Bujones, Program Director- International Trade & Anti-Corruption at American Conference Institute
Nine months ago President Rousseff was re-elected in one of the most fiercely contested elections in Brazilian history. Despite the beginning of investigations into Petrobras and allegations of high level corruption in Dilma’s Worker’s Party, she was able to successfully secure the necessary votes of many who were largely fearful that political changes might lead to the reversal of social and economic gains achieved during the years of commodity boom. And while many investors and companies were concerned about political risk at the time of the election, now it seems that the political stakes are even higher.
A deepening corruption scandal in the state-oil giant Petrobras has led to the arrest of senior executives and has implicated politicians, top-aides and even former president Lula. In addition, economic woes (including high inflation, low growth and a rise in unemployment) have eroded the purchasing power of the working class, traditionally President Rousseff’s electoral base. As a result, in latest opinion polls President Dilma’s approval rating has dipped to single digits, leading to calls for her resignation from an emboldened opposition. While the likelihood that she will leave office before her mandate in 2018 expires remains unlikely, with a hostile Congress and an unhappy electorate, there is still a remote possibility of impeachment. Investors, analysts, media and politicians recognize that her position as president remains precarious.
An exit could potentially cause significant political disruption. Economically, companies are watching what these developments might mean for their risk exposure as well as the business environment and Brazil’s long-term economic potential. They are well aware that higher political risk in a lagging economic environment presents no gains for business. Every day new headlines about the Petrobras investigations remind investors of the impact of the scandal, which has touched many sectors of the economy from energy to construction. And as the US and Brazilian authorities continue their investigations, it’s not clear who might be affected next.
How will companies doing business in Brazil need to evaluate their compliance functions and controls in light of increased scrutiny? Will this turmoil impact Brazil’s nearest neighbors including Argentina, Colombia, Peru and Chile? What is its economic impact on the BRICS? A panel of experts will discuss the risks and economic implications for businesses in Brazil beyond the Petrobras headlines at ACI’s 6th Global Forum on Anti-Corruption Compliance in High Risk Markets.
Now in its 6th successful year, ACI’s annual Anti-Corruption in High Risk Markets summit will provide practical country-specific insights for companies and their advisers to fine-tune their anti-corruption compliance program and tailor it to address the local challenges in high risk markets.
Unparalleled networking and benchmarking opportunities with a roster of 30+ multinationals, progressive insights from an international faculty of senior-level executives, and an advanced agenda packed with information you can’t get anywhere else make this the must-attend One-Stop-Shop event of the year! Join senior decision-makers from government, industry, finance and law as they discuss the future of compliance and risk management in: