presentation to nbcc - july 15, 2015 leticia andrade · presentation to nbcc - july 15, 2015...
TRANSCRIPT
Ethics & Anticorruption Compliance Presentation to NBCC - July 15, 2015 Leticia Andrade
What would YOU
do?
What is a “high risk” country?
Brazilian Company Clean Act
2013-11
UNDERSTAND THE REGULATION
Law nº 12.846/2013 entered into force in January, 2014; regulated by Federal Decree nº 8.420/2015
• Focus on Legal Entities Agent
• Extraterritorial effect • Forreign public administration • Legal Entities controlled by a foreign country
Common Traits with FCPA and UK Bribery
Act
• Strict • Joint and several – as to fines and damages • Affiliates • Consortium Partners
Liability
Brazilian Company Clean Act
2013-11
Main 05 points (CGU Normative Instructions and Ordinances)
UNDERSTAND THE REGULATION
ADMINISTRATIVE LIABILITY
FINES HOW TO CALCULATE
LENIENCY AGREEMENT
COMPLIANCE PROGRAM
NACIONAL REGISTER
Infograph CGU webiste
UNDERSTAND THE REGULATION
2013-1
Brazilian Company Clean Act
1 ADMINISTRATIVE LIABILITY
COMPANY ACQUITTED
or
COMPANY PUNISHED
DEADLINE IN 180 DAYS
RENEWABLE
FEDERAL PUBLIC ADMINISTRATION INICIATES THE PROCEDURE IN CASE OF IRREGULARITIES
LEGAL BASIS BRAZILIAN COMPANY CLEAN ACT AND BIDDING LAW OTHER SIMILAR PUNISHMENTS
FINES, PUBLICATION OF THE DECISION AND PROHIBITION
OF HIRING
Infograph CGU webiste
(Ordinance n° 910/2015)
Brazilian Company Clean Act
2 FINES HOW TO CALCULATE
1% to 2,5%
1% to 2,5%
1% to 4%
1%
5%
1% to 5%
1%
1,5%
1% to 5%
2%
1%
to 4%
FINE Base and Cap
Continuity in time Tolerance in the company’s management Interruption of work or public services Positive economic situation of the company Recurrence Total amount of the existing and up-held contracts
Non materialization of the infringement Compensation of damages The Company’s level of cooperation Spontaneous communication Existence of a Compliance Program
SUM OF AGGRAVATING FACTORS
SUM OF MITIGATING FACTORS
From 0.1% to 20% of the gross revenues of the company, or from BRL 6,000 to BRL 60,000,000 when not possible to calculate the revenues.
Infograph CGU webiste
(Normative Instruction n° 1/2015)
Brazilian Company Clean Act 3 LENIENCY AGREEMENT
REQUIREMENTS POSSIBLE BENEFITS
To stop the practice of the investigated irregularity To admit the participation in the infringement To cooperate with the investigations To provide information that prove the infringement
Exemption from the requirement to publish the punishment Exemption from the prohibition to receive incentives, loans and subsidies from the Federal Government Reduction of the fine by up to 2/3 Exemption or attenuation from the possibility of contracting with the Public Administration
DEADLINE FOR CELEBRATION 180 days, renewable
COMPETENCE Exclusive to the General Comptroller’s Office in the Federal Executive branch
REPAIRING The company has a duty to full compensation for the damage
COMPLIANCE The company should take, apply or improve a compliance program
Infograph CGU webiste
(Ordinance n° 910/2015)
Brazilian Company Clean Act 4 NACIONAL REGISTER
REGISTRATION DATA
IDENTIFICATION Name or corporate name of the individual or legal person, CPF or CNPJ.
PUNISHMENT Punishment; legal basis; number of case; date of the beginning of punishment or date of punishment application; date of final punishment, when appropriate; organ and sanctioning fine, when fit.
Temporary suspension of participation in bids.
Prevention of bidding and
contracting with Federal, State, Federal District or Municipalities.
Declaration of unfitness to bid or
contract with the public administration.
Sanctions imposed on the grounds of the Brazilian Company Clean Act. Contains information related to breach of leniency agreement.
CEIS Cadastro Nacional de Empresas Inidôneas Suspenas
National Register of Suspended Disreputable Companies
CNEP Cadastro Nacional de Empresas Punidas
National Register of Punished Companies
Infograph CGU webiste
(Normative Instruction n° 2/2015)
Brazilian Company Clean Act
5 COMPLIANCE PROGRAM
KEY ELEMENTS
INTERNAL AUDIT SYSTEM
HELPLINE
Employee’s training on the Code of Conduct
RELIABLE AND EFFECTIVE Coercive force in case of infringement
APPLICABLE TO ALL EMPLOYEES
Including top management
MICRO AND SMALL COMPANIES
Special treatment with the reduction of formalities and evaluation parameters
Infograph CGU webiste
(Ordinance n° 909/2015)
11
Top Level Commitment
Due Diligence
Monitoring & Review
Policies & Procedures
Culture
Risk Assessment
Knowledge Communication
Action
Compliance Program Adequate Procedures
Implementation of the Six Key Principles
Top-Level Commitment Top-level” management must be committed to preventing bribery and must foster a culture in which bribery is never acceptable.
Proportionate Procedures Proportionate to bribery risks, nature, scale and complexity of a company’s activities; clear, practical, accessible and effectively implemented and enforced.
Risk Assessment Assess nature and extent of exposure to external and internal risks; should be “informed”, “documented” and conducted “periodically.”
Due Diligence Apply a proportionate and risk based approach to due diligence.
Communication Policies & Procedures must be “embedded and understood throughout the organization.”; achieved by internal and external communication, including training, that is proportionate to the risks.
Monitoring and Review Periodic review of policies and procedures by internal or external experts.
What are Internal Controls?
Polices and Procedures To ensure that transactions are properly recorded and that corruption can be detected.
Ethics Code of Conduct 3.1
Does the left hand know what the right hand is doing?
What is Integrity Due Diligence (IDD)?
Gathering Information On counterparties (and sub-suppliers) to ensure they are a suitable partner for the company:
− corruption − Sanctions − Human Rights − labor practices
Legal/Compliance Officer to be kept informed.
Recommendations must be followed.
Ethics Code of Conduct 5.3 / WR 2988
Who are we doing business with?
Third Parties are the Greatest Risk
Approximately 90% of US Enforcement Actions involved the use of third parties.
Your corporate structure may not protect you
No contract required.
The universe is expanding.
The standards expected of you are higher than ever.
How to manage Third Party Risks
Before During
IDD Who are they? What do they do? Where are they doing it? What is their ABC program? How is it implemented?
Risk assess the relationship/activity Devise a management plan
What are they doing? Who are they using? What are they paying for? Receipts? Project Structure? Communications? Knowledge Management (Red Flags)?
After
Documentation. Archives. Rationally organized & accessible. Tie off loose ends.
Mitigating Actions Develop alignment between Business, Staffs, Country Office and Compliance.
Monitor contracts.
Develop contract language specific to high risk countries / high risk activities.
Continuous training o, third parties and local staff vendors on compliance and relevant persons (esp. Procurement & F&C) on how to spot irregularities.
Ensure proper resources.
Tone at the Top – be clear that delays are preferable to corruption risk. Meet with government agencies to better understand regulatory framework, timeframes and costs. Set the tone. Schedule the projects to account for delays. Do not put undue or predictable pressure on your contractors. Be present.
Communication is fundamental!
Ethics and Anticorruption Compliance July 15, 2015
Leticia Andrade [email protected] www.statoil.com
THANK YOU