This article first appeared in Diario Financiero on June 18, 2018.
Reputational risk associated with bribery drives companies to establish this type of controls.
The steps taken by the Brazilian construction company OAS through the political operator Giorgio Martelli to get in contact with the heads of the ministries of Public Works and Energy of the first government of Michelle Bachelet, are a clear example of the way in which companies do not have to act when dealing with public officials.
In fact, the reputational risk associated with bribery is what has motivated companies to establish protocols in this regard and monitor their compliance. The first study on the subject, conducted by BH Compliance, found that 21% of the 130 business groups measured have some kind of regulation regarding the way they relate to the public sector.
“We see this as an improvement that is explained precisely by the greater commitment that companies are having by warning of the risks to which they are exposed when interacting with state entities or officials in secret and for dubious purposes,” said Susana Sierra, executive director of the consulting firm that measures the culture of the private sector.
She adds that although this is a cultural issue that is difficult to establish, there has been an evolution towards the definition of best practices which, among other things, include guidelines on how to request a meeting with a public official, regardless of his or her rank, how to record the meeting, even leaving photographic evidence of the meeting and minutes of the content of the meeting. In some cases the protocol establishes, for example, that only a company representative may never attend this type of meeting or sets specific places to hold them, trying to establish a traceability of these meetings.
The executive comments that this type of record is useful for companies to clarify any complaints or mistrust about their performance that may arise later, as happened in the case of OAS.
Among the conclusions of the research is that 47% of the companies keep their policies and controls in place from the certification process to the monitoring process. However, 15% of them have not reached the sufficiency standards, as they still do not have controls in place or they are not operational.
Sierra also mentions that 17% of the companies measured are pending evaluation, since despite having controls in place, they do not have records because they state that they have not had this type of interaction with public officials, which is doubtful since by its nature it is very difficult for a company not to have this type of contact.