In October 2024, the Office of the Comptroller General (CGU) published volume II of the guide “Integrity Program: Guidelines for Private Companies“. The new guide complemented the CGU’s guidelines for the implementation, application, and improvement of Integrity Programs by private companies, published by the CGU in 2015.

Volume I of the guide “Integrity Program: Guidelines for Private Companies“, released in November 2015, is considered a reference for Brazilian companies to implement and improve Integrity Programs, as well as for public agencies and entities to evaluate Integrity Programs based on the Anti-Corruption Law (Law No. 12,846/2013). Volume I of the Guide, published in 2015, had as its main focus the prevention, detection and remediation of misconducts against the public administration, such as corruption, frauds in the context of public bids and execution of administrative contracts, and other illicit conducts under interactions with the public sector.

However, after the publication of Volume I, the national and global compliance landscape underwent significant transformations. In particular, the need for the implementation of environmental, social, and governance (ESG) good practices by private companies has been consolidated by the market, scholars, and society in general, expanding the scope of Integrity Programs beyond the prevention of corruption and other illicit acts under interactions with the public administration.

In response to such changes, Decree No. 11,129 of 2022, which established a new regulation for the Anti-Corruption Law and revoked the prior regulatory decree (Decree No. 8,420/2015), added a new objective for the Integrity Program: “to foster and maintain a culture of integrity in the organizational environment“.  In the CGU’s understanding, the objective of fostering a culture of integrity in the organizational environment brought a broader approach to the Integrity Program, so that companies are recommended to adopt, in addition to anti-corruption and anti-fraud measures, ESG practices to promote ethics, good governance, and sustainability in the organizational environment.

In this sense, the new CGU guidelines now recommend that private companies adopt measures aimed at promoting human and social rights and preserving the environment, as well as measures to combat harassment, discrimination, and child and slave labor, among other good governance and sustainability practices.

For example, CGU recommends that companies adopt, within the scope of their Integrity Programs, the following practices related to ESG matters, under a risk-based approach:

  • Implementation of Codes of Conduct and compliance policies that expressly demonstrate the company’s commitment to respect human rights, and environment preservation, as well as that prohibit all forms of harassment and discrimination and the use of slave and child labor;
  • Verification, during third-party due diligence procedures, of potential involvement of third parties hired by the company in human rights violations, environmental damages, and the use of slave and child labor;
  • Inclusion, in contracts entered into with third parties, of contractual clauses that establish the obligation for the third party to respect human, labor and social rights, as well as the environmental legislation;
  • Verification, during due diligence procedures in mergers and acquisitions, of potential involvement of the target company and its partners and key executives in human rights violations, environmental damages, and use of slave and child labor;
  • Implementation of communication measures that encourage respect for human rights, diversity, and protection of the environment;
  • Verification, during the selection process of employees for senior management positions, of the candidate’s potential involvement in cases of harassment, human rights violations, and environmental damages;
  • Implementation of reporting channels that allow the receipt of complaints related to harassment and human rights violations;
  • Mapping of environmental risks in the company’s activities.

How are private companies impacted? To comply with the new CGU guidelines, private companies must implement, in addition to anti-corruption and anti-fraud measures, ESG practices to prevent, detect, and remedy violations of human and social rights, environmental violations, and practices of harassment and discrimination.  Thus, it is recommended that private companies that already have an Integrity Program in place review their compliance policies, procedures, and controls  to ascertain whether the Integrity Program already complies with the new CGU guidelines related to ESG practices or whether changes or adjustments to the Integrity Program are warranted.  Private companies should pay special attention to policies and procedures related to supply chain, considering the heightened risk of their suppliers and other third parties being involved in human rights violations, environmental violations, and practices of harassment and discrimination, which can pose legal and reputational risks to the contracting party.

Multinational companies should also consider the new CGU guidelines. Multinationals with Compliance Programs implemented based on guidelines provided by foreign anti-corruption authorities will not necessarily comply with the new CGU guidelines for the implementation of Integrity Programs, considering the expansion of the scope of the CGU guidelines to ESG matters related to the protection of human rights, environmental preservation, combating slave and child labor, and prevention of harassment and discrimination. Therefore, multinational companies are also recommended to review their Integrity Programs to, if necessary, adapt their compliance policies, procedures, and controls  to the new CGU guidelines, in a tropicalization exercise.

For more information on the implementation of the new CGU guidelines, please contact Saud Advogados.