United States: Podcast: International Risks Facing Latin America Companies

With the rise of anti-corruption enforcement activity and new laws throughout Latin America and the rise in coordinated efforts between U.S. and Latin American authorities, companies in Latin America are under heightened pressure to prevent and detect corruption in their business. In this podcast, Ropes & Gray litigation & enforcement partners Ryan Rohlfsen and Alex Rene are joined by Mike Munro, Director of Global Outreach and Board Advisor, and former Chief Compliance Officer, at Odebrecht Engineering & Construction headquartered in Brazil. They discuss key international risks facing companies in Latin America and strategies to mitigate them. This podcast covers:

  • The increase in cross-border cooperation between regulators and the example of Odebrecht's recent multi-country corruption settlements
  • The risks and value of being open and transparent about corruption within your company
  • The challenges and opportunities for companies that are subject to a monitorship
  • Strategies for bringing about cultural change when implementing new compliance programs


Ryan Rohlfsen: Hello, and welcome to our risk mitigation and management podcast series. My name is Ryan Rohlfsen and I'm a partner at Ropes & Gray in our litigation and enforcement practice. I'm here today with my D.C.-based government enforcement partner, Alex Rene, and Mike Munro, who's the Director of Global Outreach and Board Advisor at Odebrecht Engineering & Construction, and formerly the Chief Compliance Officer of Odebrecht Engineering & Construction, headquartered in Brazil. Today, we'll be looking at some of the international risk areas facing companies in Latin America and Brazil. Starting with Mike but certainly between the three of us, we have extensive experience with developing strategies and implementing best practices to mitigate risks in the region. I'd like to start off by asking both briefly to describe your experience working in Latin America. Alex, why don't we start with you?

Alex Rene: Thanks, Ryan. So I've been handling matters in Latin America and the Caribbean for about 11-12 years. The matters range from internal investigations to government-facing investigations – all sorts of due diligence for some of our clients throughout the region. I'm currently the monitor for a company based in Brazil with operations all over the world.

Ryan Rohlfsen: Thanks, Alex. Mike, can you tell us a little bit about your background?

Mike Munro: Sure. First, I really appreciate the opportunity to participate in this discussion. I've had the fortunate opportunity to work in Latin America for almost 30 years now, beginning when I started with Dow Chemical. I'm giving my age away here, but, again, I've worked in Latin America for a long time. And then the other global companies that I've worked for since then all have had pretty significant operations in Latin America. And two years ago, I was asked to join Odebrecht in São Paolo, Brazil as the Orebrecht's first Chief Compliance Officer.

Ryan Rohlfsen: So that leads, Mike, to an interesting question. So in your role as Chief Compliance Officer of Odebrecht as well as your new role, what are the main things that really are important and perhaps even keeping not only you, but other companies that are operating in Brazil and Latin America, up at night in the last few months? You know, sort of hot topics at the top of your mind?

Mike Munro: Well, I think it's similar to the challenges and risks that companies face in many other parts of the world where there has been a history of challenges and corruption challenges – and we all know that it's, unfortunately, many parts of the world where global companies face those issues. So it really is the same. What's positive, though, about Latin America in what we've seen in the past few years, and to be honest, I think a lot of it did start with Lava Jato. Lava Jato, although there was a movement in certain countries even prior to that – there really has been much more of a focus and there's been much more opportunities for companies and individuals to be open about corruption and to address corruption. The risk is still there. You'll always have the demand-side, like I said, in many parts of the world, but again, from a positive side, there's real movement. But no question that the risk of corruption is still real in many parts of Latin America like it is in many parts of the world.

Ryan Rohlfsen: And Mike, what are you seeing in terms of both the legal environment as well as sort of the enforcement environment? How has it been evolving from your perspective the last few years in Brazil and Latin America in general?

Mike Munro: And, again, I will just continue to point to where things are at globally. There clearly has been an ongoing increase in enforcement actions. There's been more and more countries that are addressing corruption. There's better and more laws. There's just really the realization that you cannot and should not do business based on corruption. The discussion that people continually have regarding cooperation between the government and prosecutors around the world, that is real. And, of course, Odebrecht is a perfect example of how real that is with the settlements that we've had – they're almost completely coordinated settlements and timing that Odebrecht had in Brazil and the United States and Switzerland. And since then, we've entered into a series of other settlements with the countries where we have admitted to bribery. So there's no question that there's increased enforcement, and what people talk about as cooperation between prosecutors are real. And people are definitely much more serious and much more focused. And now there are real examples, like Odebrecht, that people can look at.

Ryan Rohlfsen: So Mike, one of the more recent announcements out of the U.S. Department of Justice in the last month or so was Deputy Attorney General Rosenstein's statement that the DOJ would formally have a policy that it would try to avoid piling on with resolutions. In other words, that when there are multi-country investigations into one company's conduct, that the U.S. would be trying to avoid, as a matter of policy, having duplicative fines simply paid by two or three or four countries just in effect repeating the same fine over and over again. Do you have any thoughts on that?

Mike Munro: Sure. First of all, I think it's very positive that the Department of Justice, and I believe other government prosecutors as well, see the real need to address that issue. What's been good about the Odebrecht situation is that countries have really been trying to address this issue of corruption in many countries for the first time. But because of that, the issue of duplicative penalties has been real, and it's been, of course, negative for Odebrecht as it tries to do the right thing and be transparent and address these issues. So I think that's very positive, and I think it's really going to help what I would call the "global anti-corruption agenda" in encouraging companies to come forth and address these issues in an open and transparent way.

Ryan Rohlfsen: Alex, leading off that point of cross-border cooperation, what do you see in your practice in terms of cross-border cooperation not only between the U.S. and Brazil and other Latin American countries, but even within Latin American countries directly?

Alex Rene: Yes, you know, Ryan, I think what we've been hearing for many, many years is this idea of cross-border cooperation between various jurisdictions. And to be honest, we sort of never really knew what was truly happening. But I do think that since Lava Jato and post-Lava Jato, you've just seen tremendous amount of cooperation, specifically in Brazil between the Brazilian prosecutors and the U.S. prosecutors, but also between Latin American countries. You know, one prosecutor in one Latin American country working with others in the same region because it works – "the proof is in the pudding" as they like to say. And the results have borne this era, now, of cross-border cooperation that may have really started with the U.S. taking the lead working with Brazil or with Mexico, but now has really spread throughout the region. So we are seeing a number of instances where the tactics used by prosecutors in these various jurisdictions mirror what the U.S. authorities have been doing for years as it relates to cooperation and "flipping of witnesses," as we like to say, in working your way up a tree to get to the highest accountable person. So I think the answer now is this cross-border cooperation is a real thing in Latin America.

Ryan Rohlfsen: You know, Alex and Mike, one thing that obviously the cooperation may lead to is a resolution. One of the prominent features of anti-corruption related resolutions the last two years has been a lot of monitorships have been imposed on companies around the world, but also, in particular, Latin America. Mike, as you noted, your company is currently subject to a monitor. Mike, what are the most significant challenges you have faced in terms of being under a monitorship for a company before, and what are the opportunities you've also seen?

Mike Munro: So the first clarification, which is important, is I work for Odebrecht Engineering & Construction. We actually have two monitors: we have a U.S.-appointed and a Brazilian-appointed monitor, which I believe is unique. And what has been very positive about that is both monitors have worked very closely together in insuring that we're complying with our settlement obligations and implementing the right type of compliance program, so that's a bit unique. In addition, the Odebrecht family of companies we have another subsidiary that has a separate monitor. So Odebrecht, as a whole, actually has three different monitors: two from the U.S and one from Brazil, just as a clarification. There are so many good things about monitorships, and, of course, challenges, and a lot of work that needs to be done internally to ensure that the monitors are getting the information they need to getting the input that is helpful to the company going forward. But I don't see and I don't with us on the line, we've worked with monitors in many parts of the world for a number of years – to me, it's been the same. It's always the give and take. It's always working in a respectful way, or both ways, and making sure that the company's open and that the monitor's open and we work together because our goal is the same. And the company's goal and the monitor's, all we want is to ensure that the company is never again involved in corruption as well as the company ultimately becomes an example, a model, and helps other companies get to where they need to be. So that's been my experience with the monitors at Odebrecht, and then, again, it's similar to other monitorships I've seen.

Ryan Rohlfsen: Does having a monitor, in your Chief Compliance Officer role or your Strategic Advisor role, can that ever help internally in terms of trying to change tone, mindset, processes, procedures – those sort of things? Or do you find that really it's more of an audit function or more of a checking function to make sure those things are in place?

Mike Munro: I think it can be very helpful and it's just similar to the concept of companies who have not had corruption issues or problems in the past. It's sometimes difficult to get the leadership of those companies, in particular a board of directors, focused on a particular issue. When you have a monitor, it's easy, it's very clear. The company has committed from the board level on down to comply with settlement agreements, to listen to the monitors, to, again, have appropriate back and forth. And so it can be very, very positive with having a third party involved – it's like having an independent auditor involved, things like that. There's just the ability for the company to get good information, to get support, and to move forward in the right way.

Ryan Rohlfsen: As a practical matter, as you've gone through this process, I'm curious if you have any tips or any anecdotes or anything you can share as to how you would help change culture or respond to questions? I can see a scenario where a company, after having had a number of set practices and procedures over a long period of time or maybe not having a lot of practices or procedures over a long period of time, then introducing those to its entire organization. It may receive a lot of questions or pushback, or "why am I doing this," or "we're going to lose business." How do you address those sort of things?

Mike Munro: It just takes a lot of time, of course, and focus. And there's no question, I think everyone would agree – really the best way to have those types of discussions, to address those issues, unfortunately from a travel schedule and time, it takes time, but it really is in person. So all of these types of discussions, webcasts are helpful and positive, and good information can be disseminated. What is really required, and that's what I did the first year and a half at Odebrecht, spent virtually the entire time on the road, visiting our projects, building the right team and spending time with people. As you said, people need to understand what's happening – they also need to understand why it's happening and they need to see the benefits. The good news is compliance programs and these type of cases have been around now about 15-20 years and so there's so many examples that we can give to people as to successes that other companies have, and that really helps a lot. But doing that in person, looking people in the eye, responding to their questions is really the way to go.

Ryan Rohlfsen: Alex, at a high level, your perspective, what are monitors looking for in a company that has had issues, has resolved, has admitted to them, and is looking to improve and move forward? Are there particular items that monitors are looking for to establish that a company has changed and is prepared to do business ethically and in a way that would be appropriate from not only the monitor's perspective, but also the DOJ or the FCC or other enforcement authority's perspective?

Alex Rene: Yes, Ryan, that's a very good question. I think following up on a point that Mike mentioned, you know, having a third party, the monitor comes in and this is not an investigation. Monitors are independent third parties who really are not hired by the company and they're not representative of the DOJ – they are really put in place to really provide sort of an objective view of where the company stands at a given state in time and how it can move forward and improve. And so one of the things that I think you want to look for is something as simple as policies and procedures, right. Are there actual policies and procedures in place? Try to gauge if you can if they are properly tailored for the risks associated with the types of business that you're dealing with, and because as we all know and we hear it all the time, there is no such thing as a one-size-fits-all. So we want to make sure that there are policies and procedures in place that are adequate for the risks faced by, in particular, a business.

I think, from my perspective, one of the most important things and one of the hardest things to sort of figure out during the monitorship process is culture – I think that's where it starts and ends to a degree. It's trying to figure out what sort of culture the company has, and by culture, I mean compliance culture. And one can lay down all the rules that they want – you can have all the policies and procedures that you want in place, but if you do not have a workforce that is willing to live and breathe those policies and procedures, and it becomes much more of a genetic make up of the individuals that make up the company, then your chances for success are diminished. So as a monitor, one of the things that I try to assess is does the company get it? Not just from the top ranks, obviously – tone at the top is very important, but are the folks throughout the organization on the same page as it relates to compliance? Do they have, for example, folks in the finance function who can serve as gatekeepers and really serve as fiduciaries to the company, to the organization, to make sure that things are progressing and following a path that they should. So those are the sorts of things and sorts of areas and sort of the soft areas that one looks at to see whether or not a company is truly committed to "cultural compliance," as I like to call it.

Ryan Rohlfsen: Alex, those are all really excellent points, and I think leads to a question for Mike. When we're talking at a high-level about bringing about this cultural change, whether you call it "tone at the top," tone at the middle" or just "enterprise-wide culture," I know it's something that you've had to address in your roles at the company. How do you do it? How do you practically go about from the inside starting to assess the tone that the company, not only from the CEO's statements, but all the way down to the front lines, sales organization, and then the gatekeepers and legal and finance? And then, how do you go about practically trying to move that in a positive direction?

Mike Munro: All businesses have a culture, as we know – it's just like law firms. So people can step back and there's lots of consultant people that will assess a culture of a particular organization. And I think, in many cases, in the other things I've been involved in a number of those assessments, it happens to be very accurate. What are the priorities for that particular company? Is that company, for example, a company that has a safety culture or an environmental stewardship culture, sustainability culture? You know, does that company have a people culture or not? So the whole issue of culture, I personally believe, comes down to priorities and focus. Is compliance, in particular in the area that I've worked in most, the anti-corruption area, is that a priority and focus of the people throughout the organization from the top-down. I'll mention briefly the issue of safety and environmental stewardship. There are so many companies, great companies, that truly have safety cultures. And so what we can do, and what I've done at Odebrecht and all the other companies that I've worked at, is make the compliance culture similar to, for example, the culture of safety and sustainability that already exists in many other particularly manufacturing and chemical-type companies. So it really is just getting people at all levels to understand that this is a priority, this is a focus, there is zero tolerance – just like you cannot have a fatality, you cannot have a bribe. And so that type of focus on safety and sustainability that many companies have had over the years, that similar focus needs to be done, and, in fact, it has been done, I think, in the anti-corruption area. So it really is a matter, I believe, of focus and priority, and once people understand that at all levels of the organization, it does become a way of life and that's what it has to become.

Ryan Rohlfsen: Mike, in your experience, have you found a way to include compliance as part of determining compensation? So, in other words, incentivizing in a monetary manner compliance-related activity to help drive that cultural change in priority?

Mike Munro: Certainly, and that is part of what was done at Odebrecht from the very beginning. Odebrecht has a very strong people development, annual performance review process, and it's on a rolling three years. The very first year of our compliance program we made compliance KPIs as part of the compensation, and it continues to this day. So that is very important just like, similarly, many large companies who are focused on safety will have safety-related KPIs as part of their performance reviews, and ultimately their compensation and bonus and all of that. So it's a great example of just one way to have compliance part of your culture is to make it part of the compensation package, to make it real because it does demonstrate to the lower levels, even if the higher levels already know, that is a priority for the company and it really needs to be part of the culture.

Ryan Rohlfsen: Thank you, Mike and Alex. That's all the time we have, and thank you all for listening. Please tune in to our other podcasts on topics related to risk mitigation and management. You can find them on our website at www.ropesgray.com. And, of course, if we can help you to navigate any of these challenges, please don't hesitate to ask. Thank you again.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions