'It is impossible to solve problems alone in this area'

Rafael Mendes Gomes, Chief Compliance Officer at Novonor (former Odebrecht), talks about the initiatives the company implemented in the last years to transform its governance. He also discussed the compliance events Novonor is leading with other organizations

Posted mardi, mars 14 2023
'It is impossible to solve problems alone in this area'

Leaders League: What were your main achievements as Chief Compliance Officer at Novonor?

Rafael Mendes Gomes: It is hard to talk about achievements because the work has been going on since 2016. Novonor embarked on a transformative journey in early 2016, and we are now almost seven years old. It was the moment when the company decided to collaborate in a very forceful way, providing all the information it had. And it started reinforcing its governance practices; a new compliance system was created in line with the best market practices, legal requirements, and national and international compliance guidelines. We are talking about being aligned with the regulatory decree of the Brazilian Anticorruption Law, which describes an integrity program under the Anticorruption Law. We have the Cade guide (Administrative Council for Economic Defense), which we also collaborate with - resulting in the implementation of the prevention of possible violations against the economy and competition violations.

Furthermore, the US Department of Justice has been monitoring us for a long time. They accompany the work being done by the company and provide several recommendations, which are aligned with two principal documents of the Department of Justice guidelines. The FCPA Resource Guide contains a chapter describing the milestones of a compliance and anti-corruption program; and the Evaluation of Corporate Compliance Programs, which also has a series of provisions and questions the company must ask itself for a self-assessment. At the same time, the Department of Justice monitoring was accompanied by the Federal Prosecutor's Office because we made a global agreement with them and the Swiss authorities. It contributed most to creating and maintaining a compliance system that is one of the most advanced and complete in the market. And that was being evaluated, audited, attested, and certified, depending on the case, by numerous authorities. We are certified under ISO 37001, the anti-bribery seal, and the certification program for anti-bribery management systems. Several of the group's companies - Ocyan, Braskem, OEC, and Novonor - have obtained the ISO 37001 certification seal. And in the first half of this year, the companies were re-audited and had their certification renewed.

It has been seven years of daily and ongoing construction. And the starting point of this is our commitment to ethics, integrity, and transparency. These non-negotiable values are very dear to us today and are part of our culture. Promoting ethics and establishing a system for preventing, detecting, and remediating irregularities are fundamental.

We also understood more the importance of influencing the business environment in which we operate. We participate in an ecosystem that includes many other parties.

We have organized events to promote knowledge and awareness and even the training of professionals starting their careers or professionals in transition. We organized a free and open training event in partnership with Obras Sociais Irmã Dulce in Salvador, explaining the importance of ensuring that your third parties, service providers, and suppliers have good reputations, histories, and backgrounds that are free of problems that can eventually contaminate your own company. And how to conduct this survey - which we call integrity due diligence.

We understand that it is impossible to solve problems alone in this area. The more companies we can bring into this movement, the better. So, we recently held another free training event in partnership with Vigor, CCR, EcoRodovias, Qualicorp, and Hypera Pharma. And we intend to carry on doing it.

 

What is Novonor's compliance department's role in the company's judicial reorganization process?

We are not involved in the judicial reorganization process. It has some aspects, focused firstly on financial restructuring and obligations that fall very much on the financial department. On the other hand, the legal department also has obligations; because it is a judicial reorganization, a follow-up procedure must be completed. We are much more focused on the integrity of all our transactions in the compliance area. Therefore, we focus heavily on internal controls, including financial management, cash flows, and payments; all of them go through us. They must comply with our policies and guidelines, especially those related to financial transactions, all treasury issues, payables, receivables, hiring, expenditures, and even payments made within the scope of the judicial reorganization. And a few things we must demonstrate. So, we often assist the financial team in addressing specific issues, but it is not a significant focus of our work. We mainly focus on topics related to the main areas mapped in our integrity and corruption risk analysis.

 

In September, Novonor achieved the best RepTrak Strong Reputation index, surpassing the 2013 mark. Was there any specific movement focused on this reputational issue?

It was a set of different actions, not only focused on integrity. Our entire trajectory since 2016 has been collaboration, closeness, and transparency with stakeholders. In 2018, we were awarded by Transparency International in recognition of the openness of our integrity system. We shared with a broad range of stakeholders everything we did to correct our past mistakes and what we did to build a new company for the future. And how we will face the following challenges having overcome this crisis.

We made governance changes in 2016 that have ensured the presence of independent advisors on our board. We brought some people from the industry, including myself, to help the company on this journey. We took other steps. We created a compliance committee, driving the whole strategy and execution of our compliance system, coordinated by an independent board member. I report to the coordinator of the compliance committee. It also ensures the necessary independence for this role. It is the same with the audit function.

Moreover, strengthening all these activities, providing transparency in all the cooperation actions with the authorities, internal problem solving, and building this compliance system, is being shared over time. And our stakeholders are seeing this transformation happening, contributing to a better image. This reflects on our reputation and the result of the RepTrack score. But we can't say it is a specific work because the basic methodology evaluates countless aspects, so isolated actions have little effect.

 

How do you see the legacy of Operation Car Wash for both the public administration and the private sector?

 

We try to focus on the lessons learned over all these years. Not only with Car Wash but also since Brazil effectively adopted the OECD Anti-Bribery Convention. One of the most important things for this was enacting the Anti-Bribery Law in 2013. But we see the lessons companies and the Brazilian business community learned regarding the importance of improving governance, adopting integrity measures, and the damage caused by the lack of these integrity measures, both in the public and private sectors. This is one of the great lessons. We witnessed companies gradually adopting these measures because they believe in the importance of a balanced, competitive, and meritocratic market. These companies are increasingly investing in the adoption of integrity measures, and this has been a necessary learning process over all these years.

 

What can we expect from Novonor for 2023?

We will continue with our key focuses. One of the primary goals is to rebuild the pipeline and a steady stream of new projects coming in, delivering them with our quality and excellence in engineering and construction. This is already happening, but we understand that even in this challenging scenario in a year that was very complex, a post-pandemic period, we saw that in OEC alone, from July 2021 to July 2022, we generated revenues of R$ 3.4 billion, which today is very clear in Brazil, Africa, USA, Peru, and in Panama. We delivered 11 projects during this period and brought R$5.2 billion of new contracts to our project portfolio.

In Brazil today, 70% of our portfolio consists of private clients. We are experiencing significant growth in companies hiring us and in some projects we participate in. And we envision a future very focused on our origin, namely engineering and construction, and on rebuilding the business pipeline and confirming our delivery track record.

 

By: Danilo Motta