Brazil’s Ministry of Planning has decreed that all participants in federal public bids must file a certificate confirming that they have not engaged in bid rigging, following a recommendation by the country’s Secretariat of Economic Law (SDE).
The ministry regulates federal tenders and operates ComprasNet, the Brazilian government’s e-procurement system.
The Certificates of Independent Bid Determination (CIBDs) require bidders to sign a statement that they have not agreed with competitors about bids, disclosed bid prices to any competitors or attempted to convince others to rig bids.
Ana Paula Martinez, director of the SDE’s antitrust division, says: “From now on, CIBDs will be implemented in all federal procurement, which is a major accomplishment. This could be seen as the turning point in the fight against bid rigging in Brazil. To achieve this goal, we had the invaluable support and assistance of the OECD, through the Latin American bid rigging programme.”
Some of Brazil's antitrust community support the initiative - Bruno Werneck at Thompson & Knight LLP in Rio de Janeiro, for example, notes the measure is an example of the antitrust authorities' "serious efforts" to strengthen competition. "I think it is a great initiative to reinforce the core values of antitrust at a time when national champions are being formed," he says.
Similarly, Jose del Chiaro at his own firm in São Paulo says the certificate is a "very good initiative" because if it is later proved false, it will constitute a crime of fraudulent misrepresentation besides the evidence of collusive behaviour. "Therefore, we will have collusive behaviour being punished before the antitrust authority and as a criminal offence."
However, some have raised concerns about the idea. José Ignacio Gonzago Franchescini at Franceschini e Miranda - Advogados in São Paulo says that the certificates are an awareness exercise for government bodies issuing tenders as well as the companies, as public sector clients may not be fully aware of the competition laws and their impact on public bids. “This is evidence that the authorities are becoming more aggressive in their approach,” he says. “The SDE’s objective would be better served if they approached public authorities in a more conciliatory fashion – it just shows that they do not trust the marketplace.”
“The certificates may also be considered unconstitutional in court – as there is a provision in the constitution that says no one has to sign anything that incriminates them,” he continues.
Tito Amaral de Andrade at Machado, Meyer, Sendacz e Opice Advogados in São Paulo agrees that as evidence of the upturn in advocacy work the initiative is positive. However, “in relation to the mandatory certificate itself I have doubts whether it will be an efficient deterrent to reduce collusion or bid rigging in Brazil. In my opinion only a prompt and severe prosecution of cartels that have really engaged in such conduct can accomplish this goal.”
Indeed, Francisco Todorov at Baker & McKenzie LLP in Brasilia worries that the initiative might discourage leniency applications in bid rigging cases, as criminal immunity currently offered by the leniency programme to individuals is limited to cartel offences. “According to this new development, in addition to the cartel violation, individuals could face prosecution for presenting a false statement, and that violation is not covered by the leniency statute.”
“Therefore, would-be applicants could be discouraged from submitting a leniency application if they feel that they would be exposing indviduals to criminal prosecution under a non-cartel statute,” Todorov continues. “I am not sure whether the competition authorities have realised this side effect of this requirement for a certificate or, if they have, whether they have an idea of how to neutralise the problem, under the current legal framework for leniency.”
(Latin Lawyer 28.09.2009)
(Notícia na Íntegra)