Tag: corruption

Companies anticipate adaptation to the Anti-Corruption Law

In force since January, but awaiting regulation by the Union, by the states and municipalities, the Anticorruption Law is already causing positive changes in companies. Organizations that have compliance practices in line with international anti-corruption laws improve their programs to also adapt them to the Brazilian standard.

The changes seek to improve documentation and monitoring of activities, as well as to encourage integrity. This is because Law 12.846 / 13 made companies responsible for the possible unlawful conduct of their employees, collaborators and even third parties. In addition, companies need to prove that they have done everything possible to prevent internal corruption in order to be entitled to lesser penalties in the event of conviction.

At the 2014 Latin America Ethics Summit, an event that counted as a sponsorship of ETCO - Brazilian Institute of Ethics in Competition, in July, in São Paulo, a Google representative informed that the company created a policy of participation in bids for its distributors that compete in public competitions . The company also developed a cross-checking system between e-mails and case files for bidding processes to monitor any irregularities.

Siemens said it provides anti-corruption training for employees and service providers. It also created reporting channels and protection mechanisms for whistleblowers that ensure anonymity and effective action for each reported irregularity. The objective is to maintain the integrity program's credibility. Another initiative was to subject third parties to the same compliance rules that are valid for employees.

The Gerdau representative said that the company created a compliance program that encourages ethical conduct inside and outside the organization. The company frequently promotes conduct training in interactions between managers and subordinates. In addition, he started to recognize positive behaviors to make it clear that he takes integrity seriously.

3M, on the other hand, said it had instituted due diligence for suppliers and created ethical performance evaluations for senior executives who count as criteria for promotions. With the initiative, the company hopes to disseminate a culture of righteousness based on the examples of the leaders. "Our program exceeds the authorities' expectations," said Latin America compliance leader Gary Zaugg.

The adjustments made by these organizations were not motivated only by the enactment of Law No. 12.846 / 13. They also stem from their interest in improving internal practices and the relationship with partners. "Compliance generates benefits in terms of reputation and lowers the cost of attracting talent and good suppliers," said Dennis Jacob, compliance officer at Becton Dickinson.

During the event, Law 12.846 / 13 was unanimously recognized by companies as an advance in the fight against corruption. However, the organizations did not fail to express their doubts regarding the functioning of the standard. “Spread competence can be a complicating factor, especially in encouraging complaints,” said Wagner Giovanini, director of compliance at Siemens.

Read also

Fight against corruption moves forward with Law 12.846 / 13
Companies will have to live with law enforcement by various agencies
CGU advances rules for leniency agreements
São Paulo centralizes application of the standard in Controllership

 

Debate on corruption

The executive president of ETCO (Brazilian Institute of Ethics in Competition), Evandro Guimarães, participated in the No Accepted Corruption seminar, in the beginning of the month, in São Paulo. The event, an initiative of the Democratic Public Ministry Movement, discussed the impact of corruption on society.

In his speech, Guimarães highlighted the importance of companies in combating this evil. For the director, organizations can prevent internal deviations through integrity commissions, which would function like the Internal Accident Prevention Commissions (Cipas). "I hope one day that the integrity commissions will be as efficient in the work of spreading the importance of fighting corruption as are the Cipas in the security issue," he said.

Yes, Compliance is already a reality!

Nowadays it is practically impossible to miss the large number of articles on combating corruption, business ethics and Compliance, among other related topics, but where does all this uproar come from? The answer to this question is the political and economic moment experienced by Brazil. The country is a signatory to the OECD Convention (Organization for Economic Cooperation and Development), ratified by the Brazilian government on June 15, 2000 and promulgated in November of the same year, which requires the criminalization of the act of corruption of foreign public officials in international transactions. .

Internally, we also have Law No. 12.846 / 13, the so-called Anti-Corruption Law, which, in line with OECD guidelines, objectively holds accountable (without the need to prove the guilt of the company's leadership, just proof of economic benefit). legal entities and their agents involved in corruption, and establishes that one of the defenses to be adopted by companies sued for corruption will be to demonstrate the previous existence of an effective Compliance program, capable of minimizing the risks of fraud.

Although there is a long way to go before the extinction of corruption in Brazil, the existence of legislation and work, which has been developed by people and organizations in order to consolidate a law that aims to prevent and curb corruption brings a great advance for your combat.

With the approval of the Anti-Corruption Law and the initiatives of entities such as the Ethos Institute, Ibrademp, ETCO, LEC Magazine, among others, we should see in the coming years the strengthening of ethics in national companies. So, we have no doubt: Compliance is a reality that is here to stay!

Daniel Sibille and Giovanni Falcetta - LEC Compliance Preparatory Course Instructors - Legal, Ethics and Compliance.

Source: Merchant Monitor

Fight against corruption moves forward with Law 12.846 / 13

For CGU, the rule eliminates gaps in other legislation and avoids the recession of resources with the adoption of the administrative process

The chief minister of the Federal Comptroller General (CGU), Jorge Hage, said last month, at the 2014 Latin America Ethics Summit, in São Paulo, that Law 12.846 / 13 will boost the fight against corruption. For Hage, the rule brings innovations, such as the clear typification of the offender, who now reaches legal entities, strict financial punishments and the administrative process to speed up convictions.

“Before, the agent of illicit conduct was not standardized,” said Hage, referring to the diffuse typification in milestones such as the General Procurement Law, Improbity Law, Liability Crimes Law and others. “In the Bidding Law, it only affected the legal entity. It did not reach the company's equity. The fines were insignificant and [the norm] provided, at most, for suspension of activities. ”

For the chief minister of CGU, the Anti-Corruption Law corrected this deficiency by clearly establishing that companies and non-profit organizations can be punished if they violate public administration. The punishment, of up to 20% of the billing or, in the limit, of R $ 60 million when it is not possible to measure it, is applied even if the offense was committed by an employee regardless of the management's knowledge or consent.

This was one of the points criticized in the rule, which, in the opinion of some jurists, would render the text unconstitutional. In a clear response to these criticisms, Hage said that “strict liability” is not new in Brazil (when the organization becomes responsible for the illicit acts practiced by its employees, collaborators and even service providers).

In the same way, Hage understands the instrument of the administrative process to be "not new". He reinforced the position that the mechanism was chosen to speed up the convictions. "We understand that we should force the administrative route to the limit of the Constitution, since the procedural law provides for many resources and needs to be changed," he said.

The minister trusts that the Anti-Corruption Law will have a deterrent effect on companies that consider illegal practices to do business with the State. He also hopes that the standard will encourage the adoption of compliance programs to prevent, detect and react to acts of corruption within companies.

 

CGU advances rules for leniency agreements

Minister Hage also gives new details on the criteria for assessing the effectiveness of integrity programs

In a lecture at the 2014 Latin America Ethics Summit, in July, the Chief Minister of the Comptroller General of the Union (CGU), Jorge Hage, spoke for the first time about the rules for leniency agreements provided for in the Anticorruption Law (12.846 / 13) . The criteria will still be detailed in federal regulations, to be published by the Casa Civil. The text was written by the CGU and endorsed by the Ministry of Justice.

Hage said that companies that admit participation in the infringement will be entitled to leniency agreements; stop the illegal practice immediately; collaborate with investigations and the administrative process; assist in identifying stakeholders and provide evidence. Plaintiffs must also not have breached such agreements in the past three years.

With Law 12.846 / 13, the leniency instrument, previously only available in competition law, becomes a tool for intervention in investigations of corruption cases. The instrument offers lesser penalties to companies that voluntarily report internal crimes. The State, in turn, can bring to justice crimes that are very difficult to investigate.

The CGU holder also gave new details on how the agency will analyze the effectiveness of integrity programs (compliance) in future processes. Law 12.846 / 13 says that convicted companies may have milder penalties if they prove that they prevent corruption through these programs. This efficiency analysis will also be detailed in the regulations in the Civil House.

According to Hage, the assessment should consider senior management's commitment to preventing corruption; standards of conduct and code of ethics; conducting frequent training; the existence of widely publicized reporting channels, internal controls and disciplinary measures, and transparency in donations to candidates and parties.

The performance of companies in the face of deviations will also be analyzed. It is expected that they will promptly report the harmful act to the government and that the employees involved will be removed before notification to the authorities. Companies must also prove that management has not participated in or tolerated corruption by subordinates.

"What is more difficult to prove will be analyzed by the result [produced by the integrity measures]," said Hage, when asked how companies would eventually be analyzed while the regulation is not in force.

Controllership will also take into account the number of employees and subsidiaries; the complexity of the hierarchy; the use of consultants, commercial representatives and intermediaries, and the degree of interaction with the public sector. "Small and medium-sized companies [therefore] will not be evaluated in the same way as large corporations from the point of view of compliance," said the minister

Companies will have to live with law enforcement by various agencies

Widespread competence to institute lawsuits is inherent to the federal state, says CGU; organ studies mechanisms to mitigate conflicts

The Chief Minister of the Comptroller General of the Union (CGU), Jorge Hage, said in July that companies will have to get used to the system of application of the Anti-Corruption Law (12.846 / 13), which gives competence to organs of all public administration to institute proceedings. The speech was addressed to lawyers from large corporations gathered at the 2014 Latin America Ethics Summit, in São Paulo.

"We share your concerns," said Hage, acknowledging the possibility that some of the thousands of agencies in the federal, state and municipal administrations could misuse the standard. “But [the dispersed competence] is a consequence of living in a federal state. We have to live with this multiplicity of agents. It would be impossible to centralize law enforcement at the federal level. ”

The fears of the private sector in relation to widespread competence range from the possibility of agencies using the law to extort money from companies under the threat of initiating lawsuits, to the overlapping of competences between agencies in the application of the standard. An example of this would be the investigation of bribery directed at a municipal agent, responsible for works financed with federal resources. In theory, the administrative proceeding could be initiated by the Union and the municipality.

Hage said the CGU is looking at mechanisms to mitigate this type of conflict. The agency also studies channels of dialogue between what the minister called “different punitive regimes”, such as the Federal Audit Court, the Securities Commission and Cade. In addition, CGU analyzes ways of harmonizing legal frameworks, such as the General Law on Tenders and Improbity, at points of possible conflict with Law 12.846 / 13.

The minister again said that the norm is an advance in the fight against corruption, by covering gaps in other laws and by providing unprecedented punishment in the patrimony of companies that commit illicit acts in Brazil and abroad (another novelty in the text). He also said that the instruments of administrative process and strict liability are not new in Brazil and were chosen because they are the most effective means against impunity.

São Paulo centralizes application of the standard in Controllership

With measure, City Hall seeks to ensure legal security and transparency in the application of the Anti-Corruption Law

When regulating the Anticorruption Law, the city of São Paulo attributed only to the Comptroller General of the Municipality (CGM) the competence to apply the rule, leaving out the other municipal bodies. According to the head of CGM, Mario Vinícius Spinelli, the measure aims to guarantee legal certainty in the application of the law and to restore an environment of trust between companies and the municipal administration.

"I have read that Law 12.846 / 13 can generate even more corruption," said Spinelli in a lecture at the 2014 Latin America Ethics Summit, in reference to the possible misuse of the standard by public agencies. “In São Paulo, we decided to centralize the competence in Controllership to convey confidence. The regulations we created show that the procedures to be done by the City are serious, and companies will have an opportunity to show what they have done to prevent corruption. ”

Spinelli acknowledged that there is a crisis of confidence in the role of the State in guiding the interests of society. For him, restoring that trust is the responsibility of public managers and companies. The controller-general believes that strong public institutions committed to eliminating corruption, supported by robust legal frameworks, are part of the solution. But he stressed that the success of the Anti-Corruption Law depends on the good faith of the public authorities and the private sector.

As for the City Hall, Spinelli said that the creation of the CGM to identify internal deviations and the agency's initiative to make public the scheme of fees charged by City Hall inspectors (known as the ISS Mafia), in 2013, are demonstrations of commitment current municipal administration with transparency and an end to corruption.

On the part of companies, the controller-general understands that their role is not to tolerate corruption both internally and externally. Internally, this attitude of non-tolerance must reflect the efficiency of compliance programs in combating and preventing illicit conduct. At the external level, it should reflect the non-compactness with harassment of State agents, if it occurs.

Spinelli recalled that companies have reporting channels available, which are still underused. According to him, only 115 of the more than 35 thousand complaints already forwarded to the Federal Internal Affairs Department since its creation were made by companies. The controller-general also regretted that, of the 500 organizations investigated by the Public Prosecutor in the case of the ISS Mafia, only one approached CGM to collaborate with information. "This reflects the distrust of companies in the state, but it is something that needs to be changed."

Controllership investigates alleged cartel formation

The Municipal Comptroller General is investigating the existence of a supposed fraud in the electronic auction carried out for the contracting of cleaning and conservation services for schools and Unified Educational Centers (CEUs) in the municipality. The investigation request was made by the Municipal Department of Education, responsible for contracting the services.

According to a report published last Tuesday (5) by the newspaper “O Estado de S. Paulo”, the names of the winning companies in the bid were informed to the newspaper on July 25, by telephone and e-mail, a hour and thirty minutes before the start of trading.

Based on a preliminary analysis by the Comptroller General of the Municipality, which showed low competitiveness among the companies that competed in the electronic auction, the City of São Paulo revoked the bid. Mayor Fernando Haddad argued that the person who made the complaint to the newspaper report to the Comptroller to contribute to the investigations.

The Controllership appointed a team to analyze the bidding process. According to the general controller of the municipality, Mário Vinícius Spinelli, the entire procedural rite will be mapped in search of evidence of cartelization. He also highlighted the importance of effective participation by society, denouncing any irregularities, so that crimes against the administration are curbed.

If the practice of cartel is proven, an accountability administrative process will be initiated by the Comptroller. Companies whose participation in the fraud is proven will be subject to the application of Law No. 12.846. Regulated in May by the Municipality of São Paulo, the so-called Anti-Corruption Law provides for the application of fines of up to 20% of gross revenue to companies that benefit from unlawful acts committed against the public administration.

The Controllership will also forward the information obtained in the investigations to the Public Ministry of the State of São Paulo and to the Administrative Council for Economic Defense (CADE).

Source: Portal of São Paulo City Hall