The topicality of Compliance continues unbroken. Host Rechtsanwalt Prof. Dr. Thomas Klindt welcomed more than 130 participants from Germany, Austria, Switzerland, the Czech Republic and Luxembourg to this year’s Noerr LLP Compliance Day, now an established tradition, in Munich’s Kempinski Airport Hotel at the end of June. Managers, in-house counsel, compliance officers from the most varied industries, but also investor relationship managers and financial managers were brought up-to-date on the newest trends and issues in Compliance and availed of the opportunity for an intensive exchange of experiences provided by the event.

Strategy needed: amnesty programmes

That an internal company amnesty programme can be quite an effective instrument in the investigation of cases of corruption, was illustrated by the Munich Noerr labour law expert Dr. habil. Georg Annuß. "Liability aspects of amnesty programmes can easily be overlooked in the heat of battle. Waiving a claim of the company against a cooperating employee can be expensive if precise care is not exercised", so Annuß.

Procurement law: the self-cleansing solution

"Mistakes in designing and implementing such amnesty programmes could be a reason for a company being excluded from public tenders even years after a corruption scandal", is how Uwe-Carsten Völlink, procurement law expert at Noerr, described the long-term expensive consequences of non-compliance. "Tender officers are entitled to grant contracts only to compliant companies. In some federal states, there is a corruption register, in others, the administration employs coordinated blocks compiled by the municipalities within a state", according to Völlink. However, even after a corruption scandal, all is not lost forever. A company which can prove to the administration that it has conducted a successful self-cleansing process has quite a good chance of participating again in tenders.

Foundation: company values

Such a self-cleansing process can also be the occasion for redefining and introducing a company value system. "Most employees are anxious to behave correctly", said Dr. Petra Sonne-Neubacher, managing director of PSN Wirtschaftsberatung, Frankfurt am Main, guest speaker at the Compliance Day. Sonne-Neubacher, who previously held leading positions in the chemical industry for over ten years, offered the participants a refreshing and thought-provoking perspective on the subject of "Company values as the basis for compliance". "Effective communication of values functions in companies only through consensus – and the forces for postponement are often strong. Stamina is required to even achieve a change in values", as Sonne-Neubacher described the challenges which a company faces.

Compliance implementation

The various steps in implementing a Compliance system were explained by the Noerr corporate lawyer, Dr. Torsten Fett. "Especially in the analysis phase, one should be able to deal with the frequently encountered competitive behaviour between employees, i.e. contribute experience of how a culture of discussion free of conflict can be created – otherwise the exposure of compliance risks remains a matter of chance", emphasised Fett.

Internal Investigations

Auditor and tax advisor Andreas Brückner of Noerr's Dresden office, who advises any affected company to undertake internal investigations, explains how to proceed if an existing preventative compliance system fails. "Internal investigations are always only a reaction to indications, suspicions or already exposed irregularities", said Brückner, "Damage limitation is the priority. A professionally conducted internal investigation usually enables the company to remain in command of the process, continue its business and recover the - at least - damaged trust of customers suppliers and employees". Usually, external advisors work with suitable employees of the company so that the tension between distance from the events and expertise/insider knowledge is appropriate in the course of the investigations, according to Brückner.

Practice: compliance in the group

On the subject of "Compliance in the group", Daniel Patnaik, head of corporate legal advice and Audi participation, AUDI AG, and the Düsseldorf Noerr corporate lawyer Dr. Ingo Theusinger, again made it clear that there is no blueprint for the correct compliance architecture in a group. "The possibility of implementing compliance within a group is determined by the possibilities of the parent company to exercise its influence", said Theusinger. Daniel Patnaik reported from practice that "the supply of information to the decision-making bodies is crucial". Efforts to direct the flow of information so that the necessary compliance measures are implemented promptly and effectively into daily business must be continuous.

Practice: compliance at Merck KGaA

The changes to the risk management and the company strategy of the Darmstadt pharmaceutical and chemical group Merck brought about by compliance were reported by its Corporate Compliance Officer, Rechtsanwalt Michael Volz. At the beginning of 2000, the company, which is active worldwide in 61 countries, was in the headlines and in the sights of the cartel authorities because of a breach of international cartel laws and has since made compliance a matter for the highest management level. "Compliance is not static but an evolutionary process. We must continuously adopt our company-wide uniform compliance programme to the ever-increasing German and international requirements. US regulations, in particular, play a role. In addition, in the case of acquisitions or even the selection of suppliers, an integrity check is increasingly an integral element in the Due Diligence", said Volz.

Trend: Carbon Compliance

That compliance is not confined to the subjects of corruption and cartels was shown by the Noerr environmental law expert, Uwe Erling, LL.M.: "In the USA, since 2007, institutional investors insist on transparency with regard to possible climate risks and base their investment decisions on ‘Carbon Compliance’ (CC)", said Erling. In addition, the Stock Exchange Commission issues annual guidance on the disclosure of climate risks. "Here in Germany, too, institutional investors increasingly make decisions according to CC considerations", said Erling, who also advises clients on emissions trading. "Climate litigation, already tried several times in the USA, will not be successful in its present form in Germany due to the narrower German legal liability framework", said Erling, "but it is no longer a purely US phenomenon: only recently, the state of Micronesia, a group of islands in the west Pacific, claimed against the Czech Republic, in connection with an environmental impact review of the extension and renewal of the Ponerov coal power station, that the CO2 emissions from the power station endangered the island group. This not only caused a government crisis there but endangered the approval of the power station for months. The case shows vividly the internationalisation of climate litigation which must be considered now particularly by internationally active companies", according to Erling.

Background

This was the sixth Noerr Compliance Day. Noerr and Rechtsanwalt Prof. Dr. Thomas Klindt are among the pioneers in "Compliance" in Germany. Klindt is co-publisher of the Zeitschrift für Corporate Compliance (CCZ). In 2008 he was named "Legal Innovator of the Year" by the Financial Times Innovative Lawyers Awards of the British FT because he "contributed to changing the attitude to compliance in Germany".