​New Petrobras compliance chief pushes for more effective, less expensive compliance program

28 June 2018 11:14am
Brazil on Map

26 June 2018. By Ana Paula Candil.

A month after assuming control of Petrobras' compliance department, Rafael Mendes Gomes spoke with MLex about his intention to enhance the state-controlled enterprise's compliance program and the company's ability to monitor its interactions with both the public and private sectors.

Gomes said he will evaluate whether changes are necessary to create a more effective and less costly program, but he said he won’t implement a plan until he fully understands how Petrobras works.

Gomes plans to evaluate the measures the company has taken to prevent corruption. “We are studying if they could be more effective, could be working with less resources, could be less expensive or how we could make them better," Gomes said.

Gomes said Petrobras didn't have the opportunity to build a compliance program in a normal business environment, but instead had to respond to the “trauma” of having been found by federal police and prosecutors to have engaged in a massive corruption scheme involving bribes paid by private companies to win contracts for work at the oil giant. The investigation, known as Lava Jato, or 'Operation Car Wash,' prompted Petrobras to create a compliance department in 2015.

Gomes said he wants to strengthen Petrobras’ program and “close any gaps identified” in the company’s compliance rules. "What I'm trying to do here is have a better understanding of what actually happens, why it happens and what has been identified as opportunities for improvement,” Gomes said. “It’s been over three years since the start of this project and I've been very impressed with how much progress Petrobras has already made so far.”

Gomes became chief governance and compliance officer at Petrobras in May. He holds a law degree from Universidade de São Paulo and has 20 years of experience with international compliance. He worked on compliance, anti-bribery and Foreign Corrupt Practices Act matters, and was general counsel, legal vice president and chief ethics and compliance officer for Wal-Mart Brasil from 2007 through 2012. He worked as head of the legal departments of US-based companies in jurisdictions in Latin America and was based in California for more than two years as worldwide legal manager at Sun Microsystems.

Private and public

Gomes said that it is a hard task to manage compliance at Petrobras because the company’s structure is complex. The company is controlled by the government and its employees are public officials, but it is listed on the stock exchanges in São Paulo and New York and functions as a private enterprise.

“The complexity comes from there, because we are a little bit of both [private and public]. And that’s what makes it so challenging,” Gomes said. “Petrobras today is not necessarily an arm of the government.”

Gomes said that the legal framework is different for companies such as Petrobras because they are exposed to many different rules, such as the US FCPA, other foreign bribery statutes and Brazilian anticorruption law, which includes transparency statutes and an ethics code for public officials.

“All these different statutes require much more from us in terms of making sure that we are taking all that into account in our compliance program, in our governance and in the decisions that we make on a day-to-day basis,” Gomes said.

He cited the Securities and Exchange Commission of Brazil, and the US Securities and Exchange Commission as key regulators.

“We have a very particular, peculiar and complex environment and having the federal government as the controller [of the company] also requires a lot of additional layers of care and governance, and makes it especially challenging for the company to be in compliance with all of this,” Gomes said.

Compliance agenda

Gomes said that there is a push from the market and regulators to advance the compliance agenda.

“Petrobras has been one of the key players of this movement. We are talking about a company responsible for 10 percent of Brazilian GDP,” Gomes said.

Gomes also said that the 2014 Brazilian anticorruption law is recent, but it has been extensively used not only in the Lava Jato probe but in other important investigations in Brazil, including a tax evasion scandal known as 'Operation Zealots' and a bribery case involving food-sanitation inspectors known as 'Operation Weak Flesh.'

He said the push for compliance at Petrobras is positive for the country as a whole. "There is the cascade facet of that. If I push for integrity in my supply chain, then I indirectly push for integrity in other related sectors."

	Eliot Gao