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As a lawyer, consultant and researcher in criminal compliance, risk analysis and anti-corruption strategies, his presentation focused on these areas and how mining companies can best manage these challenges.
Below, Eduardo shares his presentation on these challenges facing mining companies in Latin America.
There is a general feeling of anxiety on the part of companies regarding the risks they face in relation to the issue of corruption and its legal implications. Specifically, in big companies a lack of transparency still prevails, a problem which no-one wants to deal with.
It is fraught with risk, and I believe that these companies do not know with any certainty what they are exposed to, who are the agencies involved and what action to take to alleviate the problem.
I take the view that each company is a separate world. The corporate actions of each have their own character, as an example Apple and Samsung are not the same, they are completely different companies and should be managed in different ways.
What is lacking is an accurate risk mapping analysis, this is where they should start. There is also a problem of professional orientation. For example, one can’t contract somebody who deals with financial matters or internal controlling to tackle a legal or criminal matter, just as one would not contract an attorney-at-law to deal with financial matters. What is needed is somebody with experience in the field because, when it comes to corruption, the criminal justice system will be the body assessing the ways and means of mitigating the problem.
I believe the main problem is that companies have not learned to map and identify risk. If you don’t do that correctly, it will be difficult to combat or mitigate against.
In the specific case of mining companies, I see major risks in relation to corruption, dealings with suppliers and conflict of interest. Regarding this final point, it may for example be the case that a person working in mining also has parallel business dealings whereby he ends up selling to the same company. This is a problematic practice but it has become commonplace and is frequently tolerated by the industry. In these cases, for example, there are clear legal repercussions.
Speaking of the issue of corruption in public-private relations, anybody who is in a position to bribe a public employee in order to obtain or retain a permit or license in the name of the company, and does so using company funds, will almost automatically generate liability for that company.
Often unwittingly, the company will end up being a medium or vehicle for the crime.
That is the great problem currently facing companies.
I have always thought that compliance ought to function as an individually tailored practice. A major failing at a global level is that it has been transformed into a procedure which looks fine on paper and therefore generates an excessive degree of confidence. That is where the error lies.
Firstly, for me it is fundamentally important to identify the actual risks which the company faces, and to work from there towards a specific set of objectives mainly identifying weaknesses and vulnerabilities. Secondly, work hard on the applied philosophy, that people should have a clear idea of what conduct the company expects of them.
Eduardo emphasised the importance of putting in place a new, integrated, multidisciplinary mode of compliance which addresses not only the legal issue but also psychological factors, regulatory matters, and intelligence factors that surround this topic.