Braskem compliance program the first in Brazil to be certified under leniency deal

02 Apr 2020 12:36 pm by Caio Rinaldi

Petrochemical giant Braskem, a Petrobras-Odebrecht joint-venture, is the first company under a leniency deal in Brazil to have its compliance program certificated by independent auditors.

The deal, forged with federal prosecutors after the "Operation Carwash" investigation in 2016, was still pending as Braskem worked to implement the full extent of the agreed upon compliance program.

In early February, after nearly two years of reviews, independent auditors from US company Orrick certified to Brazilian federal prosecutors that Braskem’s compliance program met its obligations, Braskem’s chief compliance officer, Everson Bassinello, told MLex. “Through a series of recommendations, interviews and tests, they verified we had in fact implemented in the best possible way what we had committed ourselves to do,” he said.

“Every recommendation made by independent auditors, to structure and implement the compliance program, were met by the company,” federal prosecutors confirmed in a statement.

It took a while for Braskem’s compliance program to be granted the certification. There were three separate reports, in April and September 2018 and another in July 2019, Bassinello said. “It is a constant pursuit,” he said. With its compliance program certified, Braskem's external monitoring is now completed.

As part of the deal to get a more lenient punishment from the government, Braskem agreed to provide authorities with information and documents related to illicit acts, to completely cease involvement with such acts, and to return more than 2.3 billion reais to Brazilian public accounts. “We have a payment plan due [through] December 2023,” Bassinello said.

The company’s board and upper management had their commitment to the compliance program evaluated in the process. The program also introduced specific controls “designed to comply with anti-corruption legislation and provisions regarding internal accounting controls and financial reporting, as well as compliance policies and procedures,” according to the prosecutors’ statement.

The audit was paid for by Braskem and supervised by federal prosecutors. “We cannot disclose the cost of the program, which is high, but if we compare it to the cost of non-compliance, we have no doubt it is a very important investment,” Bassinello declared. “When we think of reputation, improvement in the decision process, profit margins, it is clear it is an investment. Our goal is to have an ethical conducting of our business.”

Now, with a certified compliance program, Braskem hopes it has positioned itself as a positive force in the Brazilian business environment. “We now have this commitment to improve not only Braskem’s environment, but the whole value chain. It’s something that goes beyond our company, we’re contributing to a better business environment," Braskem’s CCO said.

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