Brazilian Competition Authority (CADE) Issues Draft Compliance Guidelines
A Draft of Guidelines for Competition Compliance Programs, That Also Apply to All Compliance Programs
The CADE, the Brazilian competition authority, has issued its draft of guidelines on compliance programs. In the draft guidelines, it mentions that "companies are becoming increasingly aware of the need to implement practices that do not infringe the Competition Law and that demonstrate a proactive attitude of the part of private entities. Due to these factors, the implementation of compliance programs has been multiplying".
The purpose of this draft guideline is to "address this reality and to establish non-binding directives for companies regarding compliance programs, such as what they consist of, how they can be implemented and what the benefits of their adoption are."
From our perspective reading through this draft document, a few points pop out and are worth noting. As quoted from the guideline document.
Of Compliance Programs:
"Employees aware of the “rules of the game” are in a better position to do business without the fear of infringing the law... well-developed compliance programs enable employees to make decisions with more confidence. The fear of infringing the law - especially when there is the risk of criminal prosecution - may intimidate the employees and eventually discourage tougher and perfectly legitimate competition." (page 13)
"A company’s genuine commitment is the basis for a successful [compliance] program. Without seriousness and effective intention to conduct business in an ethical manner, the program is doomed. In practice, commitment is substantiated through the following: tone from the top, adequate resources, and autonomy/independence for the Compliance Leader (CL)." (page 17)
"A well-renowned mechanism, mainly in big corporations, is the creation of a hotline, which allows any collaborator to have direct and anonymous contact with the compliance leader. Those hotlines bring two sorts of benefits: (i) first, since they grant anonymity, they also ensure security to employees, who consequently participate more actively in the program, for they can report misconduct not to their superior, but to a team or a collaborator specialized in that task, (ii) second, compliance with the rules is incentivized, because collaborators are aware that any given employee is a potential whistleblower." (page 23)
"Communication channels between the company and its employees, as well as between the company and third parties involved in its business, also play an important role in monitoring compliance. It is indispensable to provide and disseminate the existence of such a channel [hotline]." (page 25)
And of course, it's extremely important that companies have the ability to process all their employee complaints, or reports, and provide answers to employees, even if those answers are negative.
Unaddressed complaints have two effects - loss of confidence from employees, which results in disuse of the communications channel, and negative effect for the company in case of investigations. After all, if the channel exists, employees do report to the company and it does not provide adequate answers to those reports, the impression is that the company neglects the compliance program.
"A compliance program will have positive results when it manages to raise awareness in a company’s employees on the importance to do the right thing!"
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