Superintendence issues fine for $56.7 million against Odebrecht and $1.3 million against Celec for a ‘collusive agreement’

The Superintendence of Control of Market Power announced that it has issued a sanction against the construction company Odebrecht and against the Electricity Corporation of Ecuador (Celec) for having incurred a “Vertical collusive agreement in Manduriacu and Pucará contracts”.

Odebrecht’s fine amounts to $56,755,175.98 and that of the Electricity Corporation of Ecuador (Celec EP) to $1,339,085.76 for having violated article 11, numeral 21, of the Organic Law of Regulation and Control of Market Power (LORCPM) , that prohibits and sanctions vertical collusive agreements, made between economic operators, in public procurement processes, whose actions have been carried out outside the provisions of the law. The overall fine for the two companies is $58,094,261.74.

The vertical collusion agreement would have occurred between Celec EP, as buyer (contracting entity), and Odebrecht as state supplier for the construction of the Manduriacu hydroelectric plant, as well as the repair of the loading tunnel of the Pucará hydroelectric plant.

These two works that were awarded by Celec to Odebrecht increased by $130,082,056 throughout their construction, causing higher amounts to be canceled than those foreseen in the referential budgets.

The Superintendence carried out the investigation and supported it based on several elements:

• Plea agreement (Plea agreement), signed by Odebrecht’s lawyer before the United States Department of Justice;
• Award-winning collaboration agreement of José Conceição Santos, former superintendent director of Odebrecht Ecuador, before the Supreme Federal Court of Brazil;
• Final judgments issued by the Ecuadorian justice system; Y,
• The legality reports of the Manduriacu and Pucará hydroelectric projects, issued by the State Attorney General’s Office.

According to the Superintendence, the vertical collusive agreement that served to award the public contracting processes distorted competition because it eliminated uncertainty in the market; namelyCelec EP directed the contracts in favor of Odebrecht and did not allow other companies to compete based on their business merits.

The resolution of the Superintendence can be appealed. The entity clarified that, according to due process, economic operators they have legal resources both in the administrative and judicial courts, to challenge the resolution issued by the First Instance Resolution Commission (CRPI) of the SCPM.

In addition to the economic sanction, it issued the following corrective and complementary measures to the sanctioned economic operators.

Corrective measures:

Implementation of a program compliancein order to train the directors of those sanctioned with respect to vertical collusive agreements.

Complementary measures:

* The operator Odebrecht, within five (5) days after the sanctioning resolution is executed, The extract of the resolution must be published in a visible place in a newspaper with wide national circulation, three times on different days.

* The operators Odebrecht and Celec EP, within a term of five (5) days after the sanctioning resolution was executed, They must publish the sanctioning resolution on their institutional web pages. (YO)