presentation to nbcc - july 15, 2015 leticia andrade · presentation to nbcc - july 15, 2015...

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


2013-11

Main 05 points (CGU Normative Instructions and Ordinances)


ADMINISTRATIVE LIABILITY

FINES HOW TO CALCULATE

LENIENCY AGREEMENT

COMPLIANCE PROGRAM

NACIONAL REGISTER

Infograph CGU webiste


2013-1


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


(Ordinance n° 910/2015)


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.


(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



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


(Normative Instruction n° 2/2015)


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



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

presentation to nbcc - july 15, 2015 leticia andrade · presentation to nbcc - july 15, 2015...

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