Independent Monitors: What is Their Work at Odebrecht?

Since the start of the year, American Charles Duross and Brazilian Otavio Yazbek have been monitoring the commitments assumed by Odebrecht in the Leniency Agreement signed with the Brazilian Federal Prosecutor (MPF), U.S. Department of Justice, and Swiss Attorney General’s Office. The presence and work of these independent monitors at the company is demonstration of their willingness to collaborate with the judicial process and adopt ethical, upstanding, and transparent business practices.
For up to three years, the monitors will have free access to all the Group’s environments to also evaluate its financial and accounting practices. During this period, they will deliver frequent reports to the U.S. Department of Justice (DoJ) and Brazilian Federal Prosecutor (MPF) about the efficiency of the Compliance measures implemented. At the request of Odebrecht News, Duross and Yazbek answered some questions related to what this work would be like, and how it may impact members’ routine and the perspectives for the company. Learn more.

Odebrecht News – What will be your role at Odebrecht as independent external monitors? Are you starting a new investigation process?

Otavio Yazbek and Charles Duross – The independent monitors’ duties are established in the agreements signed with the North American and Brazilian authorities. Their main role is to evaluate and monitor the Odebrecht Compliance program, adopted as the base. The monitors will also work to guarantee that potentially problematic conducts can be identified, and that controls are in place to halt any future acts of corruption. The monitors’ goal is not to start a new investigation process of the events that already occurred and which led Odebrecht to establish the agreements, but rather to check compliance with these agreements and make recommendations that apply to the company. They will work to guarantee that the conditions that led to the occurrence of those events do not reappear. Precisely because of this, it is important that the monitors adequately understand the Odebrecht business model, primarily as it relates to financial, accounting, hiring, and IT activities, as well as associated with certain public and private officials. It is based on this understanding that it will be possible to appropriately assess the mechanisms being created and make pertinent recommendations.

How would you describe the monitoring activities that you are already developing and will develop in 2017?

The Monitors’ main focus for the year 2017 is to collect information that will help them better understand the compliance and control errors that allowed for the existence of resources that were not formally recorded. They will also assess whether the internal controls have been improved or implemented based on the terms of the signed agreements to ensure that said practices are not repeated. This is why the Monitors’ evaluation will be focused on the leadership and the areas of compliance, finances, controllership, and hiring at Odebrecht and its business lines. The information collection process for the monitors to assess the effectiveness of the Odebrecht anti-corruption compliance program will be supported by a series of measures, including the following: analysis of documents and relevant materials; holding of interviews and visits to some of the regional offices, construction sites, and projects; holding of meetings and interviews with directors, board members, members, business partners, and other agents and relevant individuals; analysis of public statements and corporate activities (which should adopt a new posture); and analyses, studies, and tests of the compliance program and internal controls in place at the company.

Will this work interfere with members’ work routine, regardless of duties, areas, or hierarchical positions? How can each professional at the company contribute within this context?

The monitors will work to guarantee as much as possible that this process runs efficiently and with the least amount of disturbance to the normal activities at Odebrecht, its operational companies, executives, and team members. Since they were hired, the monitors began working jointly with the company to define their work plan. Nevertheless, it is probable that the monitoring process will require significant efforts – both in terms of time and attention – by certain people, primarily those in positions of leadership and in the areas of compliance, finances, controllership, accounting and hiring at Odebrecht and its lines of business. By any means, the process of creating a Compliance program involves the entire company as part of collaborative work on several different levels. Therefore, even if daily activities are not affected by the monitoring work, the managers and other Odebrecht professionals will certainly find a new type of professional environment. This will include some changes to certain practices and routines, which correspond to the new culture of compliance and controls being adopted at all levels of the company.  After all, the success of this program, including the creation of adequate controls for preventing irregular practices and promoting the company’s sustainable development, is a commitment shared by all.

Will you have a routine at the company? And for how long?

The work will include an analysis of the documents and relevant materials, examination of Odebrecht’s activities, holding of interviews and visits, and participation in different meetings. The monitors’ activities will be determined based on the work plan, to be prepared with the support of the company. It has been submitted for approval by the responsible authorities. This work plan will be periodically revised when new needs arise and as the work progresses.

Based on this monitoring context, what is your message for members?

Odebrecht has established agreements with the Brazilian and North American governments agreeing to reveal information, cease illegal practices, and create a robust compliance system. From the company’s perspective, establishing these agreements is important for the Group to be able to resume its normal professional activities. In this sense, the monitors hope to contribute to ensure that Odebrecht is successful in meeting its obligations and creating new standards of conduct.

Your work will result in reports for the Brazilian and U.S. Justice systems. Will they be public? Can the content be disclosed to members?

The reports will be previously submitted to the company’s management before being sent to the responsible authorities. There are no plans to disclose them, due to the confidentiality requirements established in the agreements with the respective authorities.

What do you consider a positive result at the end of the three-year monitoring period of Odebrecht’s operations?

The Monitors’ goal is to ensure that, after the end of the monitoring process, Odebrecht has an effective and sustainable compliance and internal control program. That they guarantee that the conduct that led to the establishment of the agreements will not occur again and that the company is capable of adequately identifying and addressing future corruption risks. International experience demonstrates that companies that undergo such processes tend to surpass their past experiences and adopt new standard of conduct that positively impact their activities.