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Siemens Lectures MF on Compliance | Man Bites Dog

Source: Estado de S. Paulo

Siemens will lecture federal prosecutors on ethics

President of the German multinational Siemens, Paulo Stark, has been invited by the federal prosecutor to give a lecture on its system of compliance.

By: Fausto Macedo

Translations: C. Brayton

Siemens will give prosecutors a lesson in business ethics and compliance — a system of practices which seek to adapt corporate practices to the laws and regulations of foreign hosts.

The audience is a group of federal prosecutors and civil servants of the Ministério Público Federal (MPF), the federal prosecutor’s office.

At the invitiation of two divisions of the MPF, the president and CEO of  Siemens Ltda.  Paulo Ricardo Stark, will deliver a lecture on the fifth floor of the Procuradoria-Geral da República (PGR), in Brasília on September 6.

The initiative has perplexed and angered prosecutors who contest the fact that the company chosen for the event is the very same company in the center of the subway and commuter rail case under investigation by the MPF, the federal police, and the state MP do of São Paulo.

Siemensis a participant in a compliance education program managed by the federal CGU — roughly, the GAO of the Union — called Pró-Ética, a partnership with Instituto Ethos and Empresa Limpa.  Other signatories:

  • 3M do Brasil
  • AES Eletropaulo
  • AES Sul
  • AES Tietê
  • Caixa Econômica Federal
  • CPFL Energia
  • EDP Energias do Brasil
  • Johnson Controls Building Efficiency
  • Santander
  • Siemens

Senior prosecutors consider the Siemens invitation “inappropriate,” even though its current president is not suspected of illicit practices. Stark gave a statement to the PF, last week, in the condidition of a witness.

In May, Siemens sought out antitrust authority CADE  to negotiate a peal deal in which six executives in strategica areas of the business described how the fraudulent scheme worked in billion-dollar auctions between 1998 to 2008.

Stark, an electrical engineer, took over the top post at Siemens in Brazil in 2011, replacing Adilson Antônio Primo, was fired for “inaction and insurbordination”.

The invitation to Siemens originated  from two Chambers of Coordination and Revision of the MPF. These divisions coordenate, integrate and review the exercise of functions by magistrates and other members of the institution. These are organized by theme or topic. The Third Chamber deals with consumer law and economic order. The Fifth deals with public and social assets.

In an internal memo regarding the lecture, the Third Chamber, at the invitation of the German group, mentions “the recent example that Siemens has provided in terms of  its corporate ethics and compliance.”

The memo to prosecutors stresses an argument by the coordinator of the Third Chamber assistant federal prosecutor Antonio Carlos Fonseca da Silva. “It is possible to dream of a society in which trust and confidence are restored as contractual dogma, in relations with consumers, marking the ties that link the company and its customers — consumer society — among the rivals that compete for quality products and services at conpetitive prices.

Fonseca joined the MPF in 1984, as a procurator. He currently officiates over cases in the state high court. He was a CADE councillor from 1996 to 1998.

Free market. According to the memo distributed to all the procurators, the coordinator of the Third Chamber believes that the major corporations “have internalized the concept of sustainability of their business models and an effective commitment to behaving in an upright manner,  from the point of view of compliance with laws and regulations.  ”

Fonseca says he believes that there “exists a growing consciousness that paying the fine is not worth the effort, which is good for the public image of the company and for society in general.”

“Bribery is illegal and diverts money from scarce resources that could better be used in development of the growing needs of the population; it deprives society of the fruits to be expected from a free market economy,” ssaid the subprocurator-general, in the memo circulated to civil servants.

Siemens had no comment about the invitation of its president to visit Brazil.