Seeking to strengthen its institutions, Brazil has consolidated its bodies for the prevention and fight against corruption.
With this, we have seen the
institutionalisation of control and inspection bodies, such as the
Court (TCU) and the Federal Controller's Office (CGU).
Likewise, in 2004 the Federal Government Transparency Portal was
implemented, which allows us to visualise where the public
resources are applied. Initiatives such as these have the aim of
increasing the transparency of public management, allowing citizens
to monitor and follow up the way public money is being used.
Recently, in October, we took another step in this direction. The State of Rio de Janeiro sanctioned State Law No. 7,753/2017, which obliges companies contracted by the government to formulate an Integrity Program against corruption. The program will be mandatory in new hirings (including bids) with values above R$ 1.5m for engineering works and services; and above R$650,000 for purchases and services with a six-month or longer-term contract.
The new law applies to any type of corporation, whether it be
entrepreneur or simple, foundations and associations, entities,
persons or foreign companies that have representation in the
national territory. It means that those not on the Integrity
Program simply cannot be contracted.
To comply with the requirements of the law, the Integrity Program must be structured, applied and updated in accordance with the current characteristics and risks of the activities of each legal entity. And it must monitor the constant improvement and adaptation of the program, ensuring its effectiveness.
According to article 4 of the law, the Integrity Program will be evaluated according to the following parameters:
- Commitment from the senior management
- Standards of conduct applied to all employees and managers
- Standards of conduct applied to all suppliers and service providers
- Training and analysis of periodic risks
- Independence of the body responsible for implementing the Integrity Program
- Channels to denounce irregularity (open, disclosed and with non-retaliation policies of whistle-blowers).
When we observe similar
programs carried out abroad, we see that they are successful
instruments for creating an effective risk matrix (Risk
Assessment), a continuous training program and the enforcement of
enforcement mechanisms, such as the complaint channels.
The advantages exist, but there are also challenges. The law does not bring a closed definition of what should be encompassed by the program, hence the need for external support so that companies can implement it as planned.
Talk to us
TMF Brazil offers a complete package of services provided by law, which give full support to companies participating in public contracting in the State of Rio de Janeiro.
Need more information? Get in touch with us today.
Learn how to successfully navigate foreign rules and regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.