QUEENSLAND Nationals Senator Barry O’Sullivan says Australian authorities must be alert to potential local fallout from a corruption scandal that's engulfed global beef giant JBS.
Reuters is reporting that the controlling shareholder of JBS - J&F Investimentos - has agreed to pay the 10.3 billion reais fine ($5.4 billion) linked to a political corruption and bribery scandal in Brazil, following a series of offers and counter offers between authorities.
In a statement reported in media last week, prosecutors said the fine payments are due to start in December this year and J&F would have 25 years to finalise.
Senator O’Sullivan said given the employment and beef manufacturing power of JBS in Australia, the government would need to ensure local impacts were avoided, due to the corruption fine.
“The Australian arm is a wholly owned subsidiary of JBS Swift internationally and we all know that the beef supply chain continues to face its own challenges as it makes its way forward and we want to be certain the events in Brazil don’t have a negative impact on the chain here in Australia,” he said.
“There’s never been any evidence or suggestion of corruption on the part of JBS Swift in Australia.”
But what I’m talking about is an international corporation that now faces the challenge of paying a $5.4b fine and that takes some doing so what I don’t to see is it impact on any of the investment plans for JBS Swift in Australia where in turn it might have unintended consequences of impacting on our manufacturing base which will then result in difficulties.
“We’re trade exposed in beef so what we don’t need is some lack or slow-down in investment in the Australian arm that might impact on our industry and ability to meet and develop new markets around the world.”
But Senator O’Sullivan said the scale of political corruption exposed in Brazil was “simply not possible” in Australia.
“There’s a whole different cultural atmosphere here,” he said.
“We’ve got some of the toughest rules and regulations about disclosure and corporate governance around interaction between big industry and our nation’s politician.
“I’m satisfied nothing that would even remotely resemble what happened in Brazil would be present here.”
According to reports, J&F's owners, Joesley and Wesley Batista, last week resigned from their board positions and claim to have bribed about 1900 politicians in recent years.
The corruption investigation has been named Operation Car Wash and has run for more than three years, and also been linked to Brazil’s President.
JBS Australia has meat processing facilities and feedlots in South Australia, Victoria, Tasmania, Queensland and NSW for beef and other products including sheep and pigs, with its northern division processing up to 1.4 million head of cattle annually.
JBS Australia said the issues were Brazillian specific and related to the family owned JF company with no implication for JBS Australia.
In a statement on the leniency agreement reached with the Brazilian Federal Prosecutor’s Office, JF said the financial penalty would have no impact on the operations of the JBS group.
“The entire payment will be made by J&F, which is controlled by Joesley and Wesley Batista, to protect minority shareholders and ensure that the group's business continues to focus on providing quality products and services to its customers, works closely with its suppliers, and preserves jobs,” it said.
“The Company also reiterates its commitment to continuing to work with the Federal Public Prosecutor's Office in the fight against corruption in Brazil.”