General Counsel sharing some of the most difficult ... · Snamprogetti Italy (Italy) SEC USD 125 M...
Transcript of General Counsel sharing some of the most difficult ... · Snamprogetti Italy (Italy) SEC USD 125 M...
General Counsel
sharing some of the most difficult
corporate and legal issues of today
Eni’s experience
Massimo Mantovani
General Counsel
Eni S.p.A.
Kazakhstan/Iraq
Kazakistan/Iraq
Subject matter: alleged case of international corruption i)
in Kazakhastan, in connection with tender processes
managed by Agip KCO in the “Kashagan Project”, ii) in Iraq,
in connection with operations by eni Zubair
Authority: Public Prosecutor of Milan
Status of the proceedings: Still in the preliminary
investigation phase since 2009
2012
2013
2009
2011
2014
Service to eni of a subpoena calling for the production of
documents pursuant to art. 248 of the Italian Code of
Criminal Procedure
Service to eni of a notice of investigation pursuant to
Legislative Decree n. 231/2001 together with a seizure
order
Motion for interim measures (barring eni from all activities in Kazakhastan) by the Milan Public Prosecutor
Dismissal by the Court of the motion for interim measures
Dismissal by the Second Instance Court of the appeal by the Public Prosecutor through arguments that, in the merits, are favorable for eni
Filing to the Prosecutor by eni of a motion for dismissal of the case
TSKJ (1/3)
2009
2010
2011
2012
2004
2010
2012
2013
Investigation by the US Department of Justice
and Securities and Exchange Commission
July 2010 Execution by Snamprogetti
Netherlands BV of a two-year deferred
prosecution agreement with the DoJ ($240M).
Eni and Snamprogetti also entered into a
consent order with the SEC ($125M). NO
compliance monitor imposed
Snamprogetti entered into a settlement and
non prosecution agreement with the Nigerian
Authorities
August 2012 Expiration of the two-year
deferral period
March 2009: service to Eni of a subpoena calling for the
production of documents pursuant to art. 248 of the Italian
Code of Criminal Procedure
Motion for interim measures (barring eni and all subsidiaries
from carrying out business activities in Nigeria) filed by the
Milan Public Prosecutor against Saipem and Eni.
Interim Measures: Dismissal by the Court of the motion for
interim measures
Interim Measures: Dismissal by the Second Instance Court of
the appeal by the Public Prosecutor
Interim Measures: decision of the Supreme Court on the
appeal by the Public Prosecutor and referral to the First
Instance Court for new examination of the instance
Formal charges filed against 5 former employees from
Snamprogetti and Saipem (the charges do not involve eni)
Interim Measures: Withdrawal of motion for interim measure
by the Public Prosecutor as a consequence of a guarantee
payment performed by Snamprogetti Netherlands
Decision by the Milan Court on statute of limitations in favour
of the 5 individuals (former snamprogetti managers)
Saipem (as successor to snamprogetti) is sentenced by the
First Istance Court and appeals the decision
TSKJ Subject matter: international corruption case related to alleged payment of bribes to Nigerian officials in connection with the construction of the Bonny Island plant (liquefied natural gas ) in Nigeria: assumed period of the illicit conduct 1994-2004
TSKJ – consequences for members
of the TSKJ consortium - 2/3
Company USA Nigeria Other Countries
Halliburton/KBR
(USA)
SEC USD 177 M in disgorgement
20.12.2010 The company reached a settlement with the Nigerian government, agreeing to pay a USD 32,5 M penalty and USD 2,5 M in legal expenses.
England 16.02.2011 MWKL (subsidiary of KBR) entered in a civil settlement with S.F.O. for 7 M GBP. The S.F.O. recognized that MWKL took no part in the criminal activity which generated the funds, but rather was used by its parent company which participated in the JV and bribery scheme to bid for contracts on Bonny Island.
DoJ USD 402 M criminal penalty
11.02.2009 Plea agreement + independent compliance monitor for 3 years
Technip (France)
SEC USD 98 M in disgorgement
17.12.2010 Technip entered into an agreement with the Nigerian government fully resolving all potential claims by the Nigerian Governmentor any public or private corporation owned or controlled by itrelating to Technip’s participation in the TSKJ JV. Technip agreed to pay a fine and costs totaling USD 32.5M.
France An investigation in France commenced in 2004 and was concluded in 2010 with no prosecution of Technip.
DoJ USD 240 M criminal penalty
28.06.2010 Deferred Prosecution Agreement + independent compliance monitor for two years.
JGC (Japan)
SEC No SEC action 31.01.2011 The company reached a settlement agreement with the Nigerian government, agreeing to pay a USD 28.2 M penalty
DoJ USD 218.8 M Criminal penalty
6.04.2011 Deferred Prosecution Agreement + independent compliance monitor for 2 years
TSKJ (3/3)
Company USA Nigeria Other Countries
Snamprogetti (Italy)
SEC USD 125 M in disgorgement of profits and prejudgment interest
20.12.2010 Snamprogetti entered into a settlement agreement and non prosecution agreement with the Nigerian government to resolve the investigation. Snamprogetti agreed to pay a criminal penalty of USD 30 M, along with USD 2,5 M for legal costs and expenses incurred by the Nigerian Authorities.
Italy The TSKJ matter has been investigated by the Milan Public Prosecutor’s office against unidentified persons since 2004. On July 31, 2009, a decree issued by the Judge for Preliminary Investigation at the Court of Milan was served on Saipem spa (as the legal entity incorporating Snamprogetti spa). The decree set for a hearing in camera on September 22, 2009 in relation to proceedings pursuant to Legislative Decree No. 231 of June 8, 2001 on corporate liability, under which the Milan Public Prosecutor was investigating Saipem spa and eni spa as a consequence of alleged international corruption purportedly carried out by two former managers of Snamprogetti spa. The Milan Public Prosecutor requested as an interim measure that Saipem and eni, pending the investigation, be debarred from activities involving any agreement with the Nigerian National Petroleum Corp and its subsidiaries. On February 18, 2011, following payment by Snamprogetti Netherlands BV of a deposit of 24,530,580 Euro (also on behalf of Saipem spa), the Milan Public Prosecutor’s office withdrew its request for interim measures vs both eni spa and Saipem spa. On July 11, 2013 The Court of Milan issued the ruling in relation to the investigation on the alleged offences in Nigeria by Snamprogetti Netherlands BV and ordered the Company to pay 600.000 Euro and the confiscation of the deposit of 24,530,580 Euro paid by Snamprogetti Netherlands BV to the Milan Prosecutor in February 2011. Saipem appealed the decision. Appeal ongoing.
DoJ USD 240 M criminal penalty
07.07.2010 2-year Deferred Prosecution Agreement. At the conclusion of the two-year deferral period, on 19.09.2012 all charges against the company in the U.S. were dismissed.
Algeria
2011
2010
Eni Anti-Corruption Compliance
Program
Massimo Mantovani
General Counsel
Eni S.p.A.
Anti-Corruption Compliance Program • In 1994 eni adopted the Code of Conduct (subsequently named Code of Ethics) which clearly states the
prohibition and repudiation of any form of corruption: bribes, illegitimate favors, collusion. Offering, giving,
requesting, accepting personal benefits for oneself or others, either directly or through third parties, are
prohibited without any exception.
• To guarantee the highest respect of the Code of Ethics, in November 2009 eni extended its compliance
program by focusing on corruption risks and adopting the Anti-Corruption Guidelines and the related Anti-
Corruption Ancillary Procedures, setting out principles, rules and controls on activities considered at-risk.
• The compliance program has been defined in compliance with the applicable anti-corruption laws, the US
FCPA and the Italian Legislative Decree 231/01, and the International Conventions (the UNCAC and the
OECD Convention on Combating Bribery of foreign officials in international business transactions).
• On December 15th, 2011, eni BoD approved the Anti-Corruption MSG, which updates the anti-corruption
compliance program in order to render it complaint with the UK Bribery Act.
• Main changes in respect to the 2009 Anti-Corruption Guidelines:
• expansion of the prohibited conduct (“bribery of a private person”);
• express prohibition of facilitation payments;
• specific provisions related to gifts and other benefits offered to and/or received by eni’s personnel, and
creation of a “gift register”.
• The Anti-Corruption Legal Support Unit (“ACSLU”) was established at the end of 2009 within the Legal
Department of eni. ACLSU is in charge of providing expert assistance in the field of anti-corruption in relation
to operational activities managed by eni spa and its unlisted subsidiaries in Italy and abroad, and represents a
focal point on the subject both inside and outside eni.
Anticorruption Regulations
• Joint Venture agreements
• Intermediary agreements
• Covered business partners
• Gifts
• Entertainment expenses
• Whistleblowing reports (including
the anonymous ones)
• No-profit initiatives
• Sponsorship agreements
• Sales and acquisitions
• Appointment of external lawyers
• Procurement of consulting and
professional services
• Selection of personnel
• Travel expenses
• Accounting regulations
Adoption and Implementation
The adoption and implementation of the Anti-
Corruption compliance program it is compulsory for
eni spa and for all its Controlled companies in Italy
and abroad.
Moreover, eni uses its influence, to the extent
reasonable under the circumstances, to cause the
companies and entities in which has a non-
controlling interest to meet the above mentioned
standards.
Internal regulations:
•Eni Code of Ethics
•Anti-Corruption MSG, approved by Eni’s Board of Directors on December, 15 2011. The MSG replaced the Anti-Corruption Guidelines dated 12
November 2009 and identifies the areas of activities at risk of corruption establishing the relevant principles for their management.
•Specific regulations: they discipline in detail the system of rules and behaviors to follow in the management of areas at risk of corruption.
Top Level Commitment:
Top Management commitment in
the fight against corruption.
Anti-Corruption Legal Support Unit:
•Constitutes focal point on the subject both inside and outside eni;
• Monitors the adoption of the Anti-Corruption regulations by eni subsidiaries
•Identifies and evaluates the risks of commission of corruption crimes;
• Elaborates, monitors and updates the design of the anti-corruption compliance program (clear and accessible politics and procedures);
• Oversees the training of eni Personnel;
• Makes periodic reports on the activities carried out to the control bodies (Statutory Audit Board, Internal Control and Risk Committee, Watch Structure, CFO).
eni anti-corruption
Compliance program Constitutes a system of rules and
controls for the prevention of crimes
of corruption and aimed to strengthen the
implementation of the “zero tolerance”
principle already
contained in the eni
Code of Ethics.
Managing Red Flags
i.e. Internal audit outputs,
whistleblowing and initiation of
court inquiries.
Communication and
Training
• Circulation of the adopted
regulations;
• Training of eni Personnel (e-
learning; workshop).
Due diligence:
due diligence activities on third
parties
Disciplinary actions and contractual
remedies
Application of disciplinary measures against employees
or actions and remedies against business partners in the
event of violations.
Due Diligence and standard contractual
provisions
Preliminary phase: due diligence
• It is necessary to prevent any possible risk of corruption, carrying out a preliminary anti-corruption due diligence with the aim of evaluating the integrity, professional reliability, the present and past reputation of all third parties with which eni may have contractual relationship in at risk areas.
• “due diligence”:
– Manager’s responsibility
– It has to be promptly carried out and in any event it has to be concluded before the signing of the agreement
– It is carried out through the following tools
• Questionnaire and required documents and certifications;
• Anti-corruption letter;
• Searches on open sources;
• Check of “Red Flags”.
Negotiation phase: anti-corruption contractual provisions
• commitment to comply with the relevant anti-corruption laws and the Anti-Corruption MSG, and in case of contracts with high risk partners (i.e. Intermediaries, JV, etc.), maintain throughout the term of the contract regulations to ensure compliance;
• In case of sub-contracting:
• eni’s prior approval of any sub-contractor, in line with eni’s internal rules;
• assurance that any sub-contractor is subject to terms equivalent to those imposed on the partner;
• commitment to report any request for undue financial or other advantage of any kind, received by the partner in connection with the performance of the contract;
• eni’s right to have an audit carried out on the partner (in case of suspected violation of compliance-related provisions of the contract and/or anti-corruption laws);
• eni’s right to terminate or suspend performance of the agreement and to be indemnified in case of breach by the partner of the contractual anticorruption obligations, representations and warranties, or of the anti-corruption laws.
Contract Management – the Contract Holder
Contract management
• Contract management is assigned to a Contract Holder
• The Contract Holder is the person responsible to monitor the proper performance of the contract.
Duties of the Contract Holder
– Appropriately and continuously monitor performance by the partner, to ascertain the correct fulfillment of the contractual obligations;
– Monitor that the partner always acts in compliance with criteria of the highest diligence, honesty, transparency, integrity and in compliance with the Anti-Corruption Laws, the Code of Ethics, the Model 231, the Anti-corruption compliance program and the contractual provisions;
– Ensure the traceability of the relationship with the partner, also as evidence of the services rendered consistently with the contractual provisions;
– Point out any possible red flags in the operations carried out by the Partner and immediately alert the Anti-Corruption Legal Support Unit of any inadequacy, gap or suspected violation;
– In order to effect payment of the invoices, confirm that the performance has occurred - and that the invoiced amount is - in compliance with the contractual terms and conditions.
B20 ANTI-CORRUPTION TASK FORCE
Massimo Mantovani
General Counsel
Eni S.p.A.
B20 RUSSIA – Anti Corruption Taskforce Recommendation to G20 on creating incentives and removing disincentives for the private sector to cooperate with the authorities and to self-reporting
“We recommend that from June 2013 the representatives of the B20 Task Force and of the
G20 Anti‐Corruption Working Group should have regular meetings to identify regulatory
improvements and discuss their impact on the corporate sector. This would include identifying
consistent and effective enforcement measures that can discourage bribe payers; developing
incentives and removing disincentives for the corporate sector to take an active role in the fight
against corruption such as voluntary disclosure, self‐reporting and other means of cooperation
with law enforcement authorities.”
Focus on:
• International coordination and regulatory harmonisation
• Ne bis in idem (multiple jurisdiction issues, multiple sanctions)
• Alternative means of settlement (DPAs, NPAs)
• Leniency mechanisms
• Benefits to companies conducting internal investigations prior to self-reporting
Immediate effects of this recommendation:
• Roundtable between representatives of B20 companies and representatives of selected
G20 Governments, held in Panama at the Conference of the State Parties to the UNCAC
(November 27, 2013), organised with the support of UNODC and OECD
• The basis of discussion at the roundtable was a preliminary study on Development of a
Preliminary Study on Possible Regulatory Developments to Enhance the Private Sector
Role in the Fight against Corruption in a Global Business Context *
*by Richard Alderman, Director Serious Fraud Office 2008-2012. Copies of the study can be obtained by email to
B20 RUSSIA – Anti Corruption Taskforce Recommendation to G20 on Encouraging Collective Action and Anti-corruption globally and in each G20 country
“We recommend that the G20 governments and B20 companies should continue to support the
establishment, by the end of 2013, of a Collective Action Hub to share best practices
throughout the G20 countries and beyond.”
Focus on:
• Importance of Collective Action: only through joint efforts of business, government and civil
society the risks of corruption can be mitigated
• Setting up a Collective Action Hub as a centre of competence which provides practical
advice on the implementation of Collective Action initiatives, share information on them and
analyse their effectiveness;
• Present the analysis on a dynamic Hub’s website, accessible by business, government and
civil society for them to learn more about how Collective Action can help them combat
corruption.
Immediate effects of this recommendation:
• Selection of Collective Action Hub completed in mid-2013:
the Collective Action Hub will be developed and managed by the Basel Institute on
Governance in close partnership with the UN Global Compact.