By Edmo Colnaghi Neves<\/strong><\/a><\/p>

Compliance activities are not limited to preventive measures. Responsive and investigative efforts are also part of the compliance framework. These activities aim to identify violations of the Law, internal rules, and ethical principles. After all, despite all the guidance and standardization of a compliance program, there are always those who insist on incurring violations. An organization must investigate these violations and apply disciplinary measures, as appropriate.<\/p>

Establishing reporting channels is a challenge in the Brazilian culture since whistleblowers are usually frowned upon and accused of not being team players or traitors. There is a general perception that people should keep quiet, which is a mistake since addressing violations is beneficial for everyone interested in a more fair society.<\/p>

But an organization must take some precautions when creating a reporting channel, also known as hotlines. <\/p>

First, some principles that give the reporting channel credibility should be established, such as non-retaliation and non-discrimination. Suppose someone who files a complaint is subsequently the victim of retaliation. In that case, no one else will probably want to file complaints through that reporting channel, and the channel will lose all credibility and become ineffective. The same is true about the non-discrimination principle. <\/p>

In one case, an organization even included retaliation among the most severe violations when characterizing the offenses that could be committed by its employees. Retaliation was put at the same level as illicit payments to government officials or violations committed by members of the Board. This measure is an example of the importance of preventing retaliation and discrimination against a reporting channel’s users.<\/p>

It is also essential to decide whether anonymous reporting will be allowed or not. Anonymous reporting may indeed facilitate the filing of false reports. On the other hand, it can make people more comfortable in filing complaints, thus increasing the compliance program’s effectiveness. A channel that allows anonymous reporting may be more challenging to implement, but it is recommended.<\/p>

Brazil’s legislation (Art. 42 of Decree 8,420\/2015) emphasizes the importance of protecting good-faith whistleblowers and widely communicating any reporting channels’ existence.<\/p>

Once a company was under the World Bank audit and, as a strategy to meet the audit requirements, it attached stickers containing the reporting channel contact information to the office’s landline phone so that information could be easily accessible to potential whistleblowers.<\/p>

Wide dissemination, reliability, non-discrimination, non-retaliation, and confidentiality are vital points for establishing reporting channels. Reports and complaints should be followed by investigations and possibly by the application of the appropriate disciplinary measures.<\/p>

Edmo Colnaghi Neves<\/a><\/strong> is a lawyer and a Corporate Compliance Expert, he is a partner at Colnaghi Neves Consultoria Empresarial<\/strong><\/a>, and the author of the book Doing Compliance in Brazil<\/strong>,<\/a> published by Editora B18.<\/p>

Check out our “DOING COMPLIANCE IN BRAZIL”. A unique book with all Brazil’s compliance legislation and regulations translated into English.<\/strong><\/p>