The scandal has implicated Bolivia's state-owned oil company, YPFB. The Vice Ministry of Transparency has filed two criminal complaints alleging financial losses exceeding 870 million bolivianos (approximately US$75 million) related to Biodiesel Plant I, located in Santa Cruz. According to authorities, the scheme was orchestrated in 2024 through the expedited modification of YPFB Refinación's guarantee regulations to benefit a supplier of crude soybean oil.
The facts came to light this Wednesday at a press conference given by Vice Minister Yamil García, who explained that the investigation focuses on two contracts signed with the company Agroindustrial del Este – Indueste SRL for a combined value of 1.057 billion bolivianos. Of that amount, advance payments equivalent to 75% of the total were disbursed, but the company failed to meet its obligations, and the usual guarantees for recovering the money were not required.
A multi-million dollar hole in the biodiesel plant
The deputy minister explained that, according to regulations, these types of contracts should require at least two guarantees: one for contract performance, equivalent to 7% of the value, and another to cover the advance payment. However, in this case, neither was required , allowing the company to receive the funds without any collateral. The scheme, according to the complaint, was orchestrated at a YPFB Refinación board meeting held on April 2, 2024, where an amendment to the guarantee regulations was approved to include exceptions for crude soybean oil suppliers.
The modification eliminated the requirement for a guarantee of proper investment of the advance payment and, for contracts exceeding one million bolivianos, replaced the performance guarantee with a simple retention. Three days later, on April 5, the contract was awarded to Indueste; it was signed on April 8, and disbursements began the following day. “In less than a week, YPFB set up this scheme to deliver more than 870 million bolivianos without a single guarantee,” García denounced.
Irregularities in contracting
The case is not limited to the lack of guarantees. Authorities have also indicated that the Biodiesel Plant I suffered from a construction cost overrun of approximately $10 million, and that initial operations left a considerable financial shortfall. According to the report, the company Indueste only fulfilled about 20% of its committed production, and when attempts were made to enforce the guarantees, it was discovered that the two properties offered as collateral were small agricultural holdings, which are constitutionally protected from seizure.
In response to the breach of contract, it was agreed to terminate one of the contracts and return 336,4 million bolivianos, but the money never arrived. The vice minister emphasized that “from beginning to end, a series of systematic actions were carried out to benefit a company with more than 870 million bolivianos that have never been returned to YPFB's assets.” Furthermore, it has been discovered that the previous board of directors of YPFB Refinación accepted these properties as collateral, despite regulations requiring bonds or insurance policies.
Complaints and consequences
The Vice Ministry of Transparency has filed two complaints with the Public Prosecutor's Office for alleged crimes of corruption, contracts detrimental to the State, breach of contract, and uneconomical conduct. The complaints name 14 individuals, including the legal representative of Indueste, several of the company's partners, and current and former officials of YPFB Refinación, including the managers of the commercial, legal, and applicant departments. Two of those implicated are already in pretrial detention, while three others have been released on alternative measures.
The investigation, which began about 20 days ago, has received nearly 60 complaints related to the hydrocarbons sector, 60% of which pertain to YPFB and 40% to the National Hydrocarbons Agency. The government has set up a WhatsApp hotline for citizens to report further cases of corruption. Meanwhile, Vice Minister García has assured that the government will seek financial restitution for the state through real precautionary measures.
This new scandal adds to the existing criticism of the management of the biodiesel plant, which was promoted by former president Luis Arce and, according to the complainants, has not been operating at full capacity. The lack of transparency in the contracting process and the speed with which payments were made have generated deep discontent among the Bolivian public, who see how resources allocated to biofuel production end up in the hands of private companies without oversight.
The situation has put the YPFB Refinación management under scrutiny during the Arce administration, and the Prosecutor's Office is expected to expand its investigation to include other officials involved in drafting technical and legal reports. Meanwhile, the 870 million boliviano economic damage remains unrecovered, and the Bolivian state faces yet another corruption case that tarnishes the image of the country's biofuels industry.
In short, the complaint filed by the Vice Ministry of Transparency has uncovered a corruption scheme at the YPFB biodiesel plant that has cost the state more than 870 million bolivianos. The irregular modification of the guarantee regulations, the lack of oversight in disbursements, and the subsequent inability to enforce the guarantees have left a gaping hole that will be difficult to fill. With 14 people charged and two arrested, the Bolivian justice system will have to determine responsibility, while the public demands the recovery of the money and that those responsible be held accountable.