Internal reporting mechanisms – like confidential hotlines – offer employees an anonymous way to report potential anti-corruption violations. Such mechanisms have become standard components of FCPA compliance programs. However, companies implementing such mechanisms need to consider a number of implementation issues, ranging from what technology should be used, how to educate employees on internal reporting, and how to handle reports when they come in.
Companies should also be sure to consider culture when implementing internal reporting mechanisms. In order to make them effective, reporting mechanisms need to be sensitive to local cultures. The following are five ways that companies are adapting their internal reporting programs to Latin American audiences.
1. Use the Local Language. To make hotlines and other reporting mechanisms credible, companies should present them in local languages with local idioms. Training materials should clearly be prepared in the main local language: i.e., Spanish, Portuguese, or French for most of Latin America. Depending on your business, it might also make sense to prepare materials in Quechua or other local dialects. Companies should also take into account that languages differ across geographies. For the same reason a compliance campaign using the phrase “Mind the Gap” would be strange for a Detroit-based company, you should not hire a Portuguese company to draft your Brazilian hotline materials.
2. Clearly Explain the Hotline’s Purpose. When educating your workforce on internal reporting mechanisms, take extra care to explain the specific purpose of the hotline. Practitioners in the region report that once workers begin to report potential anti-corruption violations, they sometimes also feel compelled to disclose a host of other issues, (e.g., the boss who leaves work early, the colleagues who chat by the printer, the promotion they did not receive). This kind of reporting can overwhelm hotlines with reports that have nothing to do with bribery. As one compliance officer said “La denuncia se vuelve un drama de telenovela” (the tip turns into a soap opera). To keep this from happening, compliance officers should work on the front end to clearly communicate the focused purpose of the hotline.
3. Clearly Explain the Hotline’s Process. It is just as important for employees to have accurate expectations about how the hotline will be used. They should be informed that the hotline is intended to help the company protect itself, not necessarily to help them. They should not expect to receive a final report with findings. At the same time, when an employee has a credible tip, it is important for the company to keep the person apprised of progress in the internal review. This demonstrates that the company is responding and reduces the potential that the employee will take the same information to law enforcement.
4. Stress Anti-Retaliation Protections. In many Latin American countries, employees might have a sincere and reasonable reluctance to come forward. In some countries, like Venezuela or Mexico, it might be due to a genuine fear for personal safety or a lack of faith in the courts to protect them. In other countries, such reluctance might be due to the reality that if an employee loses his or her job, it may be hard to find another one. To overcome such reluctance, companies should make exceptional efforts to stress that hotlines are anonymous, and that the company maintains a zero tolerance policy towards any form of retaliation. Companies should also give employees the option of submitting tips by email or other methods, since some employees might fear that hotlines tips could be recorded and traced.
5. Ensure Qualified Hotline Managers. The people who manage hotlines and other reporting mechanisms, including those who listen and respond to reports, should be well-trained and familiar with local cultural nuances. They should be prepared to be good listeners, to ask open-ended questions, and to respond to complaints in ways that avoid creating unnecessary legal exposure for the company – a particularly difficult issue given the strong labor protections in Latin America. They should also be able to engage with callers according to local customs and norms, and should be independent from the business operations of the company.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
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@2013 Matteson Ellis Law, PLLC
Post authored by Matt Ellis, FCPAméricas Founder & Editor