Ecopetrol Is Under Investigation for Its Role in Alleged Price Fixing of Building Materials

Colombia’s business regulator is investigating state-controlled oil giant Ecopetrol and 16 suppliers of construction stone materials for alleged violations of fair competition. According to the Superintendency of Industry and Commerce, Ecopetrol encouraged anti-competitive practices by entering into agreements with building materials providers that colluded on prices and delivery quotas. The potentially illicit agreements in question were arranged through supplier association ASOMGUACA with contractors in the areas of Acacías, Castilla la Nueva, and Guamal, says the regulator.

In addition to the involved organizations, the Superintendency is investigating 25 officials or former officials from the companies — including 13 from Ecopetrol — who “allegedly tolerated, executed, facilitated and collaborated with the alleged anti-competitive conduct.” The agency said that six companies have admitted their role in the price-fixing and provided evidence following an original complaint filed in June 2014 by one of the Ecopetrol’s contractors.

If violations are proven, the Superintendency could levy fines as high as $23.7 million USD (68,945,400,000 pesos) against each of the involved companies and $474,000 USD (1,378,908,000 pesos) against each individual.

Ecopetrol issued a statement asserting that, last year, it reported being a “victim of conduct contrary to free competition as a consumer of some regional goods and services, including the acquisition of stone material.”

It also noted that the probe relates to events that occurred between 2008 and 2014 and that the company has collaborated with the Superintendency on the matter since April 2015. “Ecopetrol reiterates that these illegal practices affect the finances and operations of the company,” said the company in a statement.

In addition to Ecopetrol, the Superintendency is looking into the following companies and organizations: ASOMGUACA (Asociación de Mineros de Guamal, Acacías y Castilla La Nueva); Aluviones la Fortuna; Suministros Mineros del Llano; Servipetróleos; Gravipetrol; Triturados Mina la Isla; Triturados y Triturados; Piñeros Barrera y Cía; DCM Asociados; Mintracol; Gravicon; RP Mineros Constructores; Inpecoll; Néstor Cifuentes; José Héctor Murillo; María del Pilar Noa.

Photo Credit: Ecopetrol