Argentina Publishes Recommendations on Combating Corruption in Public Organisations

Law of 1 December 2017 No. 27.401 “Criminal Liability of Legal Persons” (Ley 27.401, Ley de Responsabilidad Penal de Personas Jurídicas Privadas, hereinafter, the Law on criminal liability of legal persons) imposes the obligation to counter corruption, in particular, by developing and implementing compliance programmes, on legal persons, including entities with state participation. The Guide was prepared by the Bureau with the aim to clarify the relevant requirements with regard to:

state-owned companies (Sociedades del Estado);
semi-public companies (Sociedades de Economía Mixta);
organisations whose activities are regulated under the General Law of 3 April 1972 No. 19.550 “On Partnerships” (Ley 19/550, Ley General De Sociedades);
private companies in which the State has a majority holding (Sociedades Anónimas Con Participación Mayoritaria) or in which the State has at least 51% of the charter capital (SAPEM);
private companies in which the State has a minority holding (Sociedades Anónimas Con Participación Estatal Minoritaria).

1.  Public officials

The Guide stresses that the first step towards the implementation of a set of anti-corruption measures in a public organisation should consist in defining the list of employees who fall under the “public officials” category and who are covered by the anti-corruption standards established by the law.

In compiling this list, it is necessary to take into consideration the type of the organisation, the format of its interaction with public authorities, the procedure for appointing the board of directors etc. It can include, in particular:

persons exercising the functions of government officials and equivalent to the persons holding public positions or civil servants under the legal norms;
persons acting on behalf of the State;
employees authorised to manage resources of the company allocated from the state budget, and employees responsible for procurement;
deputies of the directors appointed by the State and others.

It is recommended that these categories of persons abide, as a minimum, by the following standards of conduct:

take the decisions that give priority to the public rather than personal interest;
exercise the duties in a faithful and impartial manner, including conflict-of-interest prevention;
refuse any advantages for themselves or third parties offered in relation to their positions;
abide by anti-corruption restrictions and prohibitions, including those on accepting gifts, taking up other paid employment etc.;
declare assets, both their own and those of their close relatives;
abide by the principles of accountability and transparency;
manage efficiently the resources entrusted to them in the exercise of their duties;
disclose offences, including corruption, that come to their knowledge and cooperate in subsequent investigation etc.

2. Risk mapping

After the list of public officials of the organisation developing a set of anti-corruption measures is compiled, it is needed, in the first place, to define the main corruption risks inherent in its activities, potential mitigation measures, including the description of duties of specific employees and the resources necessary to implement them, and the requirements to subsequent monitoring of implementation of these measures.

All stages of corruption risk mapping, planning and implementation of mitigation measures should be documented: the presence of this “paper trail” will be particularly important in the event that the organisation is subject to criminal or other proceedings in the future.

3. Appointment of responsible personnel (units)

It is recommended that every public organisation appoint the persons (units) responsible for developing, implementing and monitoring the implementation of compliance programmes; they should also have sufficient powers, resources and autonomy and develop a mechanism for interaction of relevant persons (units) with other units (legal and human resources departments, internal audit unit etc.).

4. Compliance programme development

In the next stage, taking account of the risk mapping, needs, peculiarities and corporate culture of the organisation, its compliance programme is developed. It should include a set of activities aimed at preventing corruption and other offences, overseeing employees of the organisation and third parties, investigating offences and holding perpetrators liable, as well as strengthening corporate integrity culture.

5. Tone at the top

It is equally important to instil the commitment to fight corruption in the top executives of the organisation. This commitment can manifest itself, in particular, in:

the organisation’s joining the National Integrity Strategy (Estrategia Nacional de Integridad);
the company’s registering in the Integrity and Transparency Register for Enterprises and Entities (Registro de Integridad y Transparencia para Empresas y Entidades – RITE)*;
supporting the organisation of educational and awareness-raising events for the management;
participating in corruption risk mapping and monitoring of implementation of the compliance programme;
adopting the code of ethics etc.

Additionally, the authors of the Guide underline the need to use such an approach to the recruitment and appointment of the management that would have an anti-corruption element. In particular, they should meet qualification requirements that include no past violations, prior training on professional ethics and commitment to integrity principles. The requirement concerning training can be equally applicable in the case of movement to another position with the content of training depending on the managerial category: while a single introductory course can be sufficient for the mid-level managers, top managers and members of the board of directors should be trained regularly with particular attention to conflicts of interest.

6.  Internal anti-corruption policies

Based on the risk mapping, it is recommended that public organisations develop/modify local acts regulating the acceptance of undue advantages, acceptance/giving of gifts, hospitality, travels and entertainment expenses, revolving doors, conflicts of interest etc. The number and content of these anti-corruption standards should take account of the specific company. For example, the legal provisions concerning conflict-of-interest prevention and management must cover the employees of the public organisation who are public officials, but, where appropriate, the company can decide to extend them to other categories of workers.

7.  Code of ethics

Besides the local acts, it is recommended that organisations adopt a code of ethics or a code of conduct. This document is needed to consolidate the information about all existing corporate anti-corruption policies and procedures and link them to real life situations that can arise in a specific company. This will also facilitate employees’ understanding of how to apply relevant requirements in practice.

8.  Asset disclosure

It is recommended that public organisations define the list of persons who, under the law or due to their holding of “sensitive” positions, must submit asset declarations. The list can include, in particular, the persons:

holding senior positions;
authorised to issue permits to undertake certain activities or responsible for overseeing these activities;
members of procurement commissions or commissions on acceptance of goods, works and services, or participating in procurement decision-making;
having powers in the area of resource management, control or oversight of public revenues of any kind etc.

9.  Anti-corruption training and awareness-raising

Anti-corruption training and awareness-raising constitute an important element of the system of anti-corruption measures and promotion of the culture of integrity. In this regard, it is advisable that every public organisation implement relevant measures, defining their content, target audience, modalities, frequency, form of documentation etc. in view of the corruption risks identifies and the resources the company has.

It is also recommended that organisations be guided by the following principles:

give priority to the persons holding senior positions;
where appropriate, seek support of the public bodies regulating integrity policies, in particular, of the Bureau, Access to Public Information Agency, Prosecutor General’s Office, and implement joint initiatives with other organisations;
use the educational and information resources of the RITE Platform;
encourage training of contractors;
consider training and awareness-raising as an obligation of employees.

10.  Efficient resource management

In developing a set of corruption prevention measures, public companies should, among other things, ensure due and efficient management of the public resources entrusted to them and be guided by the public interest. To this end, organisations can:

develop and adopt documents regulating the procedure for conducting procurement and concluding contracts and ensuring compliance with the principles of integrity and transparency in these activities;
ensure that contracts are concluded with the suppliers that can provide goods, services and works of the best quality at the best price and are in compliance with all technical and ethical requirements (for instance, they are registered in the RITE);
seek contribution of different stakeholders to the development of the specifications of the goods, works and services procured etc.

11.  Due diligence

Compliance programmes of public organisations should also incorporate due diligence procedures, including the assessment of integrity of suppliers, distributors, intermediaries and other third parties, before starting cooperating with them.

This assessment implies the analysis of potential negative consequences for the organisation of certain actions of contractors, definition of associated risks and decision on subsequent actions (from refusal to cooperate with the contractor to simple notification of the anti-corruption division about the risks detected). The relevant analysis defining when, by whom and which information about contractors will be gathered and analysed should be enshrined in the local corporate acts.

Additionally, it would be appropriate to create a preliminary ranking of contractors depending on the risk level: the more risks are associated with the cooperation with a third party, the more strict requirements to its adherence to the principles of integrity and transparency the company should impose on it and the more detailed due diligence should be applicable to it before the contract is concluded. This ranking will allow the company to optimize its resources.

12.  Reporting channels

The establishment of reporting channels for employees to be able to disclose, also anonymously, the violations that come to their knowledge or alleged infringements, and implementation of a set of measures for protecting these persons from potential retaliation in relation to the disclosures, constitute an equally important area of the prevention of and the fight against corruption in organisations. To this end, it is needed, in particular, to develop and adopt local acts establishing the procedure for making disclosures, including the list of violations that can be disclosed and appointment of persons responsible for receiving and processing tips, the procedure for processing reports and adopting corrective action, informing whistleblowers about the course of investigation and the measures adopted, transferring information about violations to the competent authorities etc.

13.  Investigation and liability

In order to ensure that the corporate anti-corruption policies and procedures function properly, it is necessary to develop an effective system for holding the perpetrators liable that would provide for the procedure for conducting investigations and sanctioning.

This can present considerable difficulties to public organisations due to the fact that here, unlike in the private sector, there are fewer possibilities for adopting strategic decisions on whether the detected violations should be reported to the court or other oversight bodies, and, if so, when and how. As a consequence, it is recommended that public organisations define the procedure for processing reports that would allow them to conduct, where appropriate, an efficient investigation with respect of the rights and safeguards of the persons subject to it, which should conclude with effective sanctioning.

In this context, the employees who are public officials are covered by the procedure for holding the perpetrators liable defined by the Regulation on Administrative Investigations (Reglamento de Investigaciones Administrativas); as for the other categories of employees, the procedure is defined by corporate local acts.

14.  Policies on transparency and participation of society

In addition to the internal regulations, it is recommended that public organisations enhance transparency of their activities and political decision-making.

To this end, companies can adopt the rules for public disclosure of information about its activities that would include the list of data disclosed and information that, under the law, cannot be disclosed (for example, economic indicators), the procedure for gathering them and preparing for publication (for instance, development of relevant data bases), the procedure for processing and protecting personal data etc.

Additionally, organisations can use different methods for enhancing the participation of society in the development of public policies, for example, by conducting public hearings, consultations, engaging public observers etc.

15.  Monitoring

Finally, it is recommended that public organisations conduct periodic monitoring of effectiveness of their compliance programme. It can include internal audit or other forms of control; the employees who conduct it should be able to have timely access to all necessary information, and its results should be brought to the attention of the top executives so that the decision to amend the existing anti-corruption policies and procedures is taken, where appropriate.

* The RITE Platform was established by the Bureau in line with the Law on criminal liability of legal persons as a tool for promoting the principles of integrity and transparency in organisations of the public and private sectors. The future register of organisations interested in the development and implementation of compliance programmes will be based on it.

The Platform contains:

the link to the register and the page for registering in it;
different instruments for providing assistance in the development and implementation of compliance programmes, including videos, training materials, model forms for assessing corporate compliance programmes that are under implementation etc., as well as agreements with the universities that organisations can contact for conducting training; and
news.

Both the organisations that are only planning to implement a compliance programme and the companies that have already implemented one can register. The latter can post reports on the implementation of their compliance programmes by filing in respective evaluation forms. The assessment of compliance programmes will conclude with attaching one of the following elaboration statuses to them: “satisfactory”, “intermediate”, “advanced”. In filling in the evaluation forms, organisations will also be able to detect the flaws in their compliance programmes based on the good practices and existing integrity standards that are present in them.

Although as of now it is possible to register on a voluntary basis, it is expected that the inclusion in the register can become a mandatory requirement for the organisations of specific sectors or for the companies that seek to obtain certain benefits (incentives, subsidies etc.).