Wood to pay $177M to settle US, UK, Brazilian bribery charges
Energy services company John Wood Group has resolved bribery and corruption investigations into the past use of third parties in the legacy Amec Foster Wheeler business.
Wood said on Tuesday that it reached agreements with the Serious Fraud Office (SFO) in the UK, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in the US, and the Ministério Público Federal (MPF), the Comptroller General’s Office (CGU) and the Solicitor General (AGU) in Brazil.
Under the terms of the agreements, the Company will pay compensation, disgorgement and prejudgment interest, fines and penalties totalling $177 million.
This will be phased over the next three years with approximately $62 million payable in the second half of 2021, and the balance to be paid in instalments in 2022, 2023, and 2024.
The resolutions relate to historical conduct which occurred before Amec acquired Foster Wheeler AG in November 2014 and before the combined firm’s acquisition by Wood in October 2017.
To clarify, Amec Foster Wheeler bribed officials at Brazilian state-owned oil company Petrobras to win a $190-million contract to design a gas-to-chemicals complex in Brazil.
In the UK, a three-year deferred prosecution agreement relating to the use of third-party agents for bribery and corruption in five countries by Foster Wheeler has been agreed with the SFO and was the subject of a preliminary Crown Court hearing today. Wood and the SFO will seek final judicial approval from the Court on 1 July 2021.
Wood has also entered into a three-year deferred prosecution agreement with the DOJ, a cease-and-desist order with the SEC, and leniency agreements with a term of 18 months with the CGU, AGU, and MPF – all about the historical use of third-party agents for bribery and corruption in connection with winning a project in Brazil.
Assuming that final judicial approval is received in the UK, it will officially conclude these investigations into the legacy Amec Foster Wheeler business.
“Wood continually reviews and enhances its compliance programme to mitigate the risk of recurrence of similar conduct, and now prohibits the use of sales agents or similar unless required by law. Considering remediation actions conducted to date and compliance improvements, none of the resolutions require the appointment of an independent compliance monitor but does include certain ongoing compliance obligations to the SFO, DOJ, and Brazilian authorities for the duration of the relevant agreements”, the company stated.
Robin Watson, chief executive of Wood, said: “The investigations brought to light unacceptable, albeit historical, behaviour that I condemn in the strongest terms. Although we inherited these issues through acquisition, we took full responsibility in addressing them, as any responsible business would.
“Since our acquisition of Amec Foster Wheeler, we have cooperated fully with the authorities and have taken steps to further improve our ethics and compliance programme from an already strong foundation. I’m pleased that, subject to final court approval in the UK, we have been able to resolve these issues and can now look to the future”.
Roy Franklin, chairman of Wood, added: “The historical conduct that led to these investigations does not reflect the values of Wood that unite us as a global team.
“The resolutions underline why we attach such importance to upholding the highest standards of ethics and compliance in all parts of the world where we operate, and why we continue to invest in strengthening our governance in this area”.