This case is about corruption at Petrobras, a state-run oil firm which had earlier won the reputation of being the most ethical oil and gas company in the world. The former corporate role model, Petrobras, was under intense scrutiny by the regulators and investigating agencies since 2014 in what was dubbed as the biggest corruption case in Brazil’s history. The scandal started with the payment of bribes by an alleged cartel of contractors to Petrobras in return for massive infrastructure contracts. The Operation Car Wash anti-corruption investigation unveiled a giant conspiracy carried out over a decade to defraud Petrobras. The investigation led to accusations being leveled against dozens of senior politicians and businessman, of colluding with Petrobras directors to receive illicit payments and bribes. The extensive effects of the scandal rocked the country socially, economically, and politically. However, many Brazilians were optimistic about the positive outcome of the investigation which would help the country to confront endemic corruption. But questions were also asked on how Petrobras could come out of this crisis and whether the investigations would help eradicate corruption in the country.
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The case is structured to achieve the following teaching objectives:
Understand the issues and challenges of operating in an emerging market where corruption is endemic.
Study the magnitude, causes, and consequences of political corruption at the state-run oil firm.
Understand the ethical failure at Petrobras.
Discuss and debate whether the Brazilian government should have limited control over Petrobras to maintain greater transparency and accountability.
Identify the challenges before Petrobras going forward and the ways in which it can overcome this crisis.