Compliance and Investigations Newsletter No 15 – March 2023

The Compliance and Investigations Newsletter aims to provide information on the main media news, trends, cases and legislation concerning compliance matters, in Brazil and abroad. This material is for informational purposes and should not be used for decision making. Specific legal advice can be provided by our lawyers.

Companies must now adopt measures to prevent and combat sexual harassment and other forms of violence in the workplace

On September 21, 2022, Law No.  14,457/2022 introduced Programa + Mulheres (a program for the protection of women and to foster gender equality) and established that companies with Internal Commission of Accident Prevention (“CIPA”) have to adopt the following measures to prevent and combat sexual harassment and other forms of violence in the workplace:

(i) inclusion and dissemination of rules of conduct concerning sexual harassment and other forms of violence within the company’s internal policies;

(ii) introduction of proceedings for receiving and handling of reports, internal investigations and application of disciplinary measures for conduct that constitutes sexual harassment and violence, and the anonymity of the reporting party is ensured;

(iii) inclusion of discussions regarding sexual harassment and violence in the activities and practices within CIPA; and

(iv) to conduct, every 12 months (at least), training, guidance and awareness activities for all company employees concerning violence, harassment, equality and diversity in the workplace.

Law No.  14,457/2022 established a 180-day term for companies to adopt the abovementioned measures, which expired on March 20, 2023. Therefore, companies that are not compliant with the provisions mentioned above can now be subject to inspections and labor claims.

Within this context, the Brazilian Office of the Comptroller-General (“CGU”) released, on March 08, 2023 (International Women’s Day), a guide to assist in the detection, reporting and accountability of sexual and moral harassment cases within the Brazilian Federal Government (Guia Lilás, in English “Lilac Guide”). The Lilac Guide provides guidance for the proper use of hotline channels and a specific protocol for victims about how to proceed in cases of sexual and moral harassment or discrimination.

The Lilac Guide is designed for the Executive Federal Branch, but can also be used as a reference by private companies that seek to implement the directives of Law No. 14,457/2022.

Click here to access the entire Law No. 14,457/2022 and here for the CGU’s Lilac Guide.

Supreme-Court justice repeals excerpt of the State-Owned Companies Law

On March 16, 2023, Brazilian Supreme-Court (“STF”) Justice, Ricardo Lewandowski (“Lewandowski”), repealed, as a preliminary injunction relief, excerpts of the State-Owned Companies Law (Law No.  13,303/16), which established a term limit for the appointment of political officers to the executive board of state-owned companies.

Mr. Lewandowski, however, sustained the prohibition of the appointment of individuals that still hold decision-making positions in political parties or that are employed in jobs connected to political campaigns or parties.

Mr. Lewandowski’s ruling came as a response to the preliminary injunction on the direct action for the declaration of unconstitutionality (“ADI”) filed by the Communist Party of Brazil (“PC do B”). Mr. Lewandowski’s preliminary injunction relief will remain valid until a decision is reached by the STF sitting en banc.

For more information, access Mr. Lewandowski’s decision here.

Superior Court of Justice orders the continuation of proceeding to review J&F’s leniency agreement, but payment installments remain suspended

The Superior Court of Justice (“STJ”) ruled, on March 15, 2023, for the continuation of the lawsuit that aims to review the leniency agreement entered into between J&F Investimentos S.A. (“J&F”) and the Federal Prosecution Office (“MPF”). However, despite the decision, the payment of upcoming installments is still on hold, awaiting a final provision.

The leniency agreement was signed in 2017, but, in 2021, J&F filed a lawsuit to review the amounts that had been established in the agreement, claiming there were illegal elements in the procedure to calculate the fines. As of now, J&F has paid about BRL 580 million, which represents 5.6% of the BRL 10.3 billion set forth in the leniency agreement.

Through such lawsuit, J&F requests a fine reduction, in the best-case scenario, to BRL 1.8 billion and to BRL 7.3 billion, in the worst case. In its petition, J&F claimed that the parameters for fine calculation were excessive (they should be 4% of J&F’s revenue, instead of 5.8%, the amount that was actually billed). In addition to that, J&F claims it did not hold 100% of the equity of the other companies under its leniency agreement, but such fact was not taken into consideration in the calculation process.

For more information, see the news from March 16 and March 18, 2023.

Brazilian Senate’s Law Enforcement Commission approves the bill that aims to prioritize administrative improbity actions and lawsuits of crimes against the Government

On March 21, 2023, the Brazilian Senate’s Law Enforcement Commission approved Draft Bill 1431/2021, which is currently under analysis by the Brazilian Senate’s Constitution, Justice and Citizenship Commission (“CCJ”).

Bill 1431/2021 aims to amend the Criminal Procedure Code and the Administrative Improbity Law in order to prioritize – in all levels of the Judiciary Branch – the prosecution of lawsuits concerning administrative improbity and crimes against the Government. Currently, only heinous crimes are prioritized.

For more information, access here to check the progress of Bill 1431/2021 on the Brazilian Senate website.[/vc_column_text][vc_empty_space height=”50px”][/vc_column][/vc_row]