We share the publication of Forbes Chile, where our partner Rodrigo Albagli refers to the role of compliance in companies.
The case of the Brazilian construction company Odebrecht is perhaps the most representative and well-known when talking about corruption in Latin America. It is a millionaire distribution network that involved businessmen, politicians and officials from twelve countries through bribes to obtain benefits in public contracts. And it was precisely this case that set off the alarm bells in the region’s corporate compliance.
“The Odebrecht case is one of the triggering reasons why compliance has deepened, it has gone from being a paper compliance to be progressively more effective, because it is one thing to talk about it and another to practice it from the boards and decision makers to the rest of the company“, says Rodrigo Albagli, Chilean lawyer and representative of the firm Albagli Zaliasnink (AZ).
Albagli realized the strength and the need for large companies, above all, to resolve and keep up with compliance with anti-corruption laws, ESG criteria, environmental governance and sustainability, but not only with a local vision. So in March 2022 it created the Compliance Latam platform, which it defines as “the first continental platform oriented to the compliance ecosystem“.
“When a scandal explodes in this area, whether international or local – here in Chile we have had the case of pharmacies, collusion in the sale of chicken – regulations emerge and standards are raised. These are the cases in which the models are put to the test. And in these cases, as in the Odebrecht case, there was no real commitment on the part of senior management and they talked more about marketing responsibility or image washing through environmental or sustainability issues, where many times they talk more about what they do“, inferred Albagli.
Compliance Latam is made up of law firms from different countries in the region: Albagli Zaliasnik (Chile), Basham, Ringe y Correa (Mexico), Beccar Varela (Argentina), BLP (Central America), Bustamante Fabara (Ecuador), CPB (Peru), Ferrere (Uruguay, Paraguay and Bolivia), Miller & Chevalier (United States) and Posse Herrera Ruiz (Colombia).
“It is presented as a meeting place where the different actors in the legal field can find relevant information to face the challenge imposed by the current regulatory frameworks, actively promoting best compliance practices in both the private and public world”, Albagli tells Forbes.
NEW LAW TIGHTENS SCREWS ON DIRECTORIES
On August 17, 2023, the Law on Economic and Environmental Crimes came into force in Chile, which expands the criminal liability of legal entities. It is summarized in four important keys:
- Fewer cases in which sentences may be served in freedom.
- New crimes are created and money laundering is updated.
- Those convicted will not be able to hold public management positions or have contracts with the State.
- Establishes crimes of water and soil contamination or damage to national parks and wetlands.
Days later, the increase in consultancies, training and regulations was “incredibly exponential”, says the lawyer.
“In Chile, this Law is going to change everything, because we are in another scenario, with other sanctions, aggravating factors, less mitigating factors and zero possibilities of serving the sentences in freedom; so the directors are really worried and scared. Changes in culture are often brought about by fear and not always by conviction” says the legal expert.
