Meat giant JBS’s cyber woes lay bare a dangerous reality
Large Australian Footprint
Australia’s meat industry is experiencing a consolidation similar to that of the United States, JBS has launched a wave of acquisitions over the past 15 years to become the country’s largest player with an extensive network of production facilities and feedlots and brands, including the ham and small products group Primo Foods, Tasman Group and Rockdale Beef. Other critical acquisitions included Australian Meat Holdings.
More recently, it was introduced as an interested party in the sale of Australia’s largest pork and pork processor, Riverlea Australia, which is owned by QAF of Singapore. The asking price is supposed to be around $ 200 million, which is a big sum for the JBS empire, which generates over $ 50 billion in revenue per year.
The rise of JBS in Australia can be attributed to the appointment of powerful lobbyists and the approval of the Foreign Investment Review Board (FIRB), which is responsible for reviewing international takeovers to ensure they are in the national interest.
Unfortunately for Australia, the FIRB’s record has been disappointing over the past decade. For example, in 2017-18, the FIRB made decisions on more than 11,000 proposals worth $ 163 billion, with manufacturing, power and gas assets of $ 16.6 billion. Of all the submissions, only five were rejected.
The most publicized was the sale of the country’s largest dairy company to a Chinese trading operator who was recently exposed for allegations of animal welfare abuse and serious regulatory violations due to overstocking of livestock that has caused the failure of effluent systems causing damage to nearby waterways.
Others include Alinta Energy, sold to Hong Kong conglomerate Chow Tai Fook in 2017, which was later embroiled in one of Australia’s biggest privacy scandals and questioned about some questionable behavior towards vulnerable customers.
The government tried to fix this problem last year, but much more needs to be done.
Brazilian parent under the microscope
To date, JBS has managed to escape media scrutiny and go under the radar, unlike its Brazilian parent company and its founders the Batista brothers, who have been at the center of a series of serious scandals.
The most recent was last year when the Brazilian company agreed to pay fines to the US Department of Justice and the Securities and Exchange Commission (SEC) to settle charges in court that it violated laws federal anti-corruption.
A press release issued by the SEC last October states that “Brazilian nationals Joesley Batista and Wesley Batista and their companies J&F Investimentos SA and JBS SA, a global meat and protein producer, have agreed to pay nearly $ 27 million. dollars to resolve charges stemming from a vast program of corruption that spanned several years.
He indicates that the Batistas have engaged in a bribery scheme “in part to facilitate the acquisition by JBS in 2009 of the American issuer Pilgrim’s Pride Corporation … from a former Brazilian finance minister using in part funds from intercompany transfers, dividend payments and other means obtained from JBS’s operating accounts containing Pilgrim’s funds. “
On the same day, the US Department of Justice issued a press release stating that the Brazilian company had agreed to pay a criminal fine of $ 256 million to “resolve the department’s investigation into violations of the law on human practices. of corruption abroad ”.
In addition to being caught bribing government officials, JBS in the United States was cited for workplace, worker safety, and environmental violations in the 10 years leading up to 2019.
Some of the weak spots include reports in 2017 that in Rio de Janeiro “federal agents raided some operations after accusations their employees oversaw a program that included bribing inspectors to allow rotten meals to be served in public schools and that meat contaminated with salmonella be served. exported to Europe.
While things appear to be much calmer in Australia, there has been a lot of activity in recent months over a court case started a year ago involving the ATO, PwC and JBS over the Office of the United Nations’ efforts. taxes to fight against tax minimization and repatriation of profits. by multinational companies.
It seems the calm waters are deep.