The officials at the Norwegian Pension Fund Global recently announced that Norges Bank has decided to revoke the observation of Petroleo Brasileiro SA. That was based on a a determination of the Council on Ethics for the Government Pension Fund Global (GPFG) of 13 November 2019 that Petrobras be removed from the list of companies it has under observation.
The announcement noted:
Petrobras has been under observation since 2016. The Council on Ethics recommended that Petrobras be placed under observation in 2015 after revelations that senior executives at the company and its most important suppliers had for a decade operated a system in which the payment of bribes was a prerequisite for winning contracts with Petrobras. Investigations into some of these cases remains ongoing. Despite the risk inherent in the fact that the Brazilian government, as the controlling shareholder, appoints a majority of Petrobras’s board members, the Council considers that the risk of corruption in the company has decreased. This assessment rests partly on the legal settlement entered into with the US Department of Justice which confirms that Petrobras has implemented wide-ranging improvement measures since the investigations commenced in 2014, and that it has undertaken to report on the further implementation of its compliance programme and internal control measures each year until 2021. The Council would also like to point out that Brazil’s federal prosecution service and supreme court have officially defined Petrobras as a victim in the Lava Jato investigation, and that the company is therefore assisting the prosecuting authorities in many ongoing criminal proceedings.
Access the Council’s recommendation HERE and below. Access the Norges Banks’s press release HERE and below.