Speaking at the IQPC 2010 Internal and Regulatory Investigations in Oil and Gas
Conference, Dominic Sheils, Compliance Counsel for John Wood Group PLC, and
James W. Noe, Senior Vice President, General Counsel and Compliance Officer for
Hercules Offshore, Inc., discussed two different approaches to internal
investigation protocols and how these different approaches work for their
respective companies. The presentations of Sheils and Noe highlighted the
different approaches taken by many companies in the United States and abroad
when dealing with the issue of whether to have a written procedure outlining
the steps to be taken when a claim which may constitute a bribery or corruption
is reported to the company.
Compliance Counsel Dominic Sheils indicated that the John
Wood Group has a detailed written procedure for handling any such complaint or
allegation of bribery or corruption, regardless of the means through which it
is communicated. The mechanism could include the internal company hot-line,
anonymous tips, or a report directly from the business unit involved. In the
John Wood Group the decision on whether or not to investigate is made by the
internal Compliance Department, with possible consultation with the Audit
Committee of the Board of Directors. The head of the business unit in which the
claim arose is notified that such an allegation has been made and that the
Compliance Department will be handling the matter on a go-forward basis.
The John Wood Group uses this detailed written procedure
to ensure there is complete transparency on the rights and obligations of all
parties once an allegation is made. This allows the Compliance Department to
have not only the flexibility but also the responsibility to deal with such
matters. The Compliance Department believes that this mandated responsibility
gives it the role in which it can best assess and then make a decision on how
to manage the matter.
The previous approach is contrasted by that of Hercules
Offshore, Inc. General Counsel James Noe stated that Hercules has no written
protocol for the handling of investigations of allegations of corruption or
bribery. He initially noted that he, as General Counsel, makes the final
decision on whether a matter is to be investigated. He believes that it is
important for the General Counsel to maintain maximum flexibility to deal with
the issues involved around any such allegations.
Mr. Noe stated that each investigation depends on the
underlying facts presented. He is concerned that if there is a written protocol
mandating the procedure it might impinge on the flexibility of the company to
proceed. He used the phrase "Sometimes small streams can become big rivers",
indicating that when a matter is thoroughly investigated flexibility is
required. Additionally, at Hercules, there is no set person(s) or personnel who
are required to be notified when bribery and corruption allegations are put
forward. The scope of the decision on to whom and how to make the notification
can be influenced by a myriad of factors including statutorily mandated
reporting requirements of US public companies, so no one protocol can respond
to every scenario.
Both John Wood Group and Hercules Offshore, Inc. have
robust Foreign Corrupt Practices Act (FCPA) compliance and ethics programs.
Their respective compliance programs differ on the mechanism by which the
decisions on investigation protocols and notification are to be made, after an
allegation of bribery and corruption comes forward. However both these
company's have made their approaches work for them.
To see a video of their presentation, click here.
Visit the FCPA Compliance
and Ethics Blog, hosted by
Thomas Fox, for more commentary on FCPA compliance, indemnities and other forms
of risk management for a worldwide energy practice, tax issues faced by
multi-national US companies, insurance coverage issues and protection of trade
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© Thomas R. Fox, 2010