1. finance
2. accounting and auditing

2nd Annual Anti-Corruption
in Oil & Gas for the
Americas
Andreina Ostos
Business Conduct Compliance Officer
BCCO Office
Houston, USA
March 23rd, 2015
Tenaris
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13.45 – 14.15
An Argentinian Perspective: Is Your Compliance Program Effective?
Measuring a bad thing that’s not there – metrics and key performance
indicators
Ethics and anti-corruption – how can ethics be implemented and enforced
in business code of conduct?
Fighting internal corruption within your organization
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Who we are
Serving the world's energy industry and other industrial applications
Annual manufacturing capacity of 6.3 million tons of steel pipes
3.7 million tons of seamless pipes
2.6 million tons of welded pipes
Manufacturing facilities in 16 countries
R&D centers in 5 countries
Service and distribution network in more than 30 countries
27,243 employees (2015)
Annual net sales: US$ 10.3 billion (2014)
Stock exchange listings: New York, Buenos Aires, Italy and
Mexico
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Worldwide
Operations
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Market Segments
Leading global manufacturer and supplier of tubular products and services
used in:
Drilling, completion and production of oil and gas
Transportation of oil and gas
Process and power plants
Specialized industrial and automotive applications
OCTG
Premium
Connections
BCCO Office
Offshore Line
Pipe
Onshore Line
Pipe
Hidrocarbon
Processing
Power
Generation
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Industrial &
Automotive
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Compliance Program
Core Activities
Normative
Risk-Assessment
Benchmarking
Discipline &
Remediation
Third Parties
Corruptio
n and
Bribery
Risk
TranspaRencia
Monitoring &
Audit
Advising &
Guidance
Communications
Training
Certifications
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Compliance Program
Normative
Companies Normative Framework should include internal procedures designed,
issued and steadily reviewed to ensure that employees understand
requirements of applicable regulations prohibiting corruption and bribery.
Anti-bribery policies, procedures and standards should develop principles
provided in the respective company Code of Conduct, which are recommended
to be:
In local language;
Easy to understand;
Accessible to all employees;
Acknowledged by employees and representatives;
Divulgate; and
Train.
Norms cannot remain just in paper or a check in the box burden
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Compliance Program
Risk Assessment
A regular Risk Assessment is essential to identify, evaluate and prioritize
compliance and ethics activities such as: where/what to train, where/what to
audit, where to deep background checks, where/what to monitor and what
messages to emphasize, to rise concerns or awareness.
The Risk Assessment should consider the following factors:
Country corruption perception risks;
Business opportunities;
Potential or existing business partners (third parties and/or intermediaries
such as agents, distributors, traders, resellers);
Extent of interaction with government officials;
Licensing activities;
Exposure to customs and other authorities;
Size and risk of transactions; and
Management awareness of anti-corruption rules, past events.
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Compliance Program
Third Parties
When hiring representatives and certain contractors, a Due Diligence procedure is also
fundamental to qualify credentials, prestige and ethical standards of a candidate.
Internal procedures and guidelines should regulate the steps and controls to be followed
during a the pre-engagement phase, written agreements and supervision should be also
contemplated.
In general the process involves the following:
Letter of
Acknowledgement
of Policies and
Codes
Evaluate
Information
Complete
Questionnaire
Obtain
High Level
Approvals
BCCO Office
In Person
Interview
and On
Site Visit
Formalize
Written
Agreements
Check
Business
References
Searching in
an
Screening
Tool
BB & RR Provision
Training to
Audit Rights
Third Parties
Comprehensive
Termination
Clause
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Check
Financial
Information
Periodic
Review
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Compliance Program
Communications
Is recommended to ensure that relevant policies and procedures are
communicated and divulgated throughout the whole organization.
In order to keep employees aware of bribery risks and importance of this issue
to the company and the direction, Companies may also divulgate standards,
points of attention or key messages by different means in the intranet, for
instance: leaflets, memorabilia, booklets, newsletters, etc.. on
Expert opinions;
News;
Experts Presentations;
Comments on business corruption cases;
Regulatory agencies announcements;
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Ethical episodes;
Q&A’s;
FAQ’s;
Case studies; and
Comments on specialized
doctrine
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Compliance Program
Training
Is crucial to regularly train employees and third parties to assure
understanding and familiarity with anti-bribery provisions and company
expectations by:
On-Line Activities (i.e. e-learning); and
In Person/On Site Training Sessions general & focused on most critical
topics.
Training sessions might:
Be between 2 and 4 hours;
Brief legal and internal normative regulations;
Encourage participation with cases studies, business cases and
exercises;
Summarize key points of Compliance Program; remarking liabilities and
responsibility with customers, suppliers and legal system;
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Incorporate
Do’s and Don’ts; snd
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Compliance Program
Certifications
Certifications of compliance and training and acknowledgements of policies help
to make more conscious the employees about their obligations to comply and
the consequences of not.
Acknowledgement and certifications shall be gathered periodically.
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Compliance Program
Advising & Guidance
Direction and Compliance should encourage management and employees to
make prompt inquiries and consultation to clarify any unusual circumstance
(Red Flag) or any doubt raised during day-to-day operations, that might imply
bribery concern or lack of supporting records, and get advice on how to
comply with policies.
Companies expect that management properly respond whenever facing a red
flag.
Is recommended that companies keep records of this activity, considering the
following fields:
Content type
Date of reply
Requester
Type of request
Status
Supervisor
Motive
Country of business
Public official/End user
Day of inquiry
Description
Third party
Region
Response
Area Manager
etc.
Functional Area
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Compliance Program
Monitoring & Audit
Auditing should be planned and coordinated with the Audit department, and
conduct by specialized auditors in bribery.
Audits shall ensure the effective applicability and implementation of the
Compliance Program and shall be based on the risk level per country, third
parties, transactions, payments and consulting services.
Compliance Line
Companies must encourage all employees to report to ‘Compliance Line’
complaints and misconduct, on a confidential basis and without fear of
retaliation, and carry out promptly, internal investigations of suspected
violations.
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Compliance Program
Discipline & Remediation
Prompt and reliable execution by the management of the necessary
remediation/mitigation measures is essential to enforce the Compliance
Program appropriately. Sanctions or corrective actions shall be consistently
applied at all levels of the organization, depending on the seriousness of the
violation up to possible employment termination.
Examples of disciplinary measures:
Verbal warning;
Formal warning in writing;
Career adjustments;
Denial or reduction of performance-based compensation and rewards;
Suspension;
Employment dismissal or termination.
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Compliance Program
Benchmarking
Continuous benchmarking activities and networking with other comparable
companies in the industry allow to learn from Best Practices in the business
environment, in order to regularly review and improve a Compliance
Program, to maintain it adequate, effective and tailored on its own specific
needs and challenges. For instance:
Stand alone Code of Conduct vs. Code of Conduct plus anti-bribery policies
and procedures;
FCPA vs. FCPA plus UKBA;
Limits and conditions for gifts, entertainment and hospitality;
Budget and organization;
Supervisor of Compliance Officers;
Expert opinions;
Resources
Experts urveys;
Due Diligence best practices;
Compliance department structure; etc..
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Compliance Program
Remarks
Be determine
Plan and execute your activities risk focused
Perform regular site visits
Learn to manage pressures
Get credibility
Coordinate message from top management
Identify cultural considerations
Know your audience or target
Credit management for supporting compliance
Taylor methods and message to the audience
Share experiences and examples
Simplify message but keep it solid
Mantain channels or bridges for regular interaction with management
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THANK
YOU
2nd Annual Anti-Corruption
in Oil & Gas for the
Americas
Andreina Ostos
Business Conduct Compliance Officer
BCCO Office
Houston, USA
March 23rd, 2015
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