November 14, 2018 / 5:19 PM / in a month

Brazil prosecutors near decision on BRF corruption charges

SAO PAULO, Nov 14 (Reuters) - A sprawling Brazilian probe into alleged cheating on food safety checks by BRF SA and other firms is entering its final weeks, according to authorities and court documents, with more criminal charges potentially on their way before year-end.

Prosecutors are slated to decide whether to charge BRF’s former chairman Abílio Diniz and more than 40 others once a Nov. 20 deadline passes for police to gather evidence about what they say are pervasive violations of food safety protocols dating back to at least 2015.

The probe, which kicked off in March 2017 and expanded a year later, has examined the relationship between food processors, Agricultural Ministry health inspectors and laboratories with a mandate to certify the safety of meat sold domestically and in markets like China, Japan, the Middle East and Europe.

The investigation initially found that firms had bribed inspectors to keep processing plants running and allow the sale of substandard products in violation of food safety norms. Those charges disrupted production and triggered temporary trade bans that jeopardized Brazil’s $15 billion annual meat export trade. So far, 10 people have been convicted on corruption charges, including a former BRF employee and three health inspectors.

The charges that prosecutors will consider in December could pertain to the bribery scheme as well as later allegations that the company, government officials and laboratories falsified and suppressed certain incriminating data.

BRF, 12 of whose poultry plants remain banned by the European Union after Brussels found “deficiencies” in Brazil’s control systems, ultimately agreed to cooperate with prosecutors in exchange for more lenient corporate fines.

‘A FIRM REPLY’

Police said contamination issues with BRF chicken were first flagged in 2015 by Chinese authorities, who discovered that some of the company’s shipments contained the highly poisonous chemical dioxin above tolerated levels.

While BRF launched an internal investigation, it also tried to persuade authorities to use its own technical data in responding to China and lobbied officials to limit public disclosures related to the case, according to a 400-page police report released last month.

Diniz, who was sailing near the Italian island of Capri when the dioxin problems became public, discussed the incident with BRF’s then-Chief Executive Pedro Faria via WhatsApp text messages, according to the police report.

“It’s been many days since we spoke. I’m worried about the China issue because there’s been no news ... is everything all right?” Diniz said in a message in September 2015.

Faria, who also may be charged, responded that company officials were making good progress “to rein in the information leak and keep it under control.”

He added that BRF had presented a strong technical defense to the government, paving the way for Brazil’s foreign office and Agriculture Ministry to send “a firm reply to the Chinese.” After briefly suspending the export license of Rio Verde, the plant where the contaminated exports originated, the government restored it a week later, the evidence shows.

Both Diniz and Faria deny any wrongdoing.

The dioxin episode is only one instance in which police accuse BRF of failing to observe safety protocols.

For example, they say, BRF authorized the slaughter in June 2016 of 26,000 birds infected with the harmful pathogen Salmonella Typhimurium. BRF then sold the meat in 10 Brazilian states, and provided false information to authorities to hide that decision, according to the police.

The investigation found evidence of dioxin contamination at BRF’s Mineiros plant producing feather meal, an animal feed ingredient, as late as October 2017.

In addition, BRF allegedly misreported use of certain antibiotics as recently as March 2018, police said.

SOUL SEARCHING

The food safety probe has led to soul searching at Brazil’s Agriculture Ministry, where 19 people were suspended from office in 2017 in connection with the first phase of the investigation.

Brazil’s Deputy Agriculture Minister Eumar Novacki recently told Reuters that the same inspector often works at the same processing plant for decades, creating conflicts of interest. The ministry is considering introducing a rotation scheme to avoid this, he said.

Beyond rooting out individuals who may have broken the law, “a change in culture” is needed to affect real change - both at the companies and in the government, Novacki said. (Reporting by Ana Mano and additional reporting by Jake Spring in Brasília; Editing by Christian Plumb and Susan Thomas)

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