WOW Moments in Compliance (Part 2)

21 February 2020
Knowledge Base

by Geert Vermeulen

Often ethics & compliance officers only end up in the news when things have gone wrong. Many people don’t realise that ethics & compliance officers also prevent numerous crimes and unethical practices, sometimes at the risk of being fired or by risking our health or even our lives. Usually you don’t hear about these cases. Therefore, I decided to share a couple WOW moments in compliance.The first part of the article that has been published last week discussed the case study of due diligence in the aviation industry. Now, in this second part, another example will be discussed, which is that of due diligence in the energy industry.

Due diligence in the energy industry

One day I, while I was working in the office, I was all of sudden called into a teleconference. Our business people were about to provide services on an island, commonly known as a loosely regulated tax-haven, to a state oil company from an African country. However, the financial supervisor on the island had indicated to our business people that, if we really wanted pursue this business, we would have to take another good look at our Know Your Client procedure. So, the business turned to me. What did the supervisor mean?

My first response was very brief: the remarks of the supervisor were in itself a sufficient reason to advise not to chase this opportunity. However, the business people demanded a better explanation. After all, with relatively little effort, we could make a substantial profit. I was given 24 hours to explain exactly why we should not do this.

The rest of the day I studied the transaction and also later at home, deep into the night. I studied the (horrific) history of the African country, the political landscape, the local legislation in both countries, the annual reports of the company in question, etc. etc. The dictator in this country was so determined to stay in power, that he had arrested hundreds of his (alleged) opponents, chopped their heads off and put these heads on sticks standing along the only highway in the country, for everyone to see.

Around 5 a.m., I saw the light of day, both literally and as a matter of speaking. I understood what the deal was all about and how which people would personally benefit from it. This was my WOW moment. After 2,5 hours of sleep I went back to the office, where I explained the business people in 15 minutes the real rationale behind this deal. It became quiet. No one ever raised this business opportunity again.

The author, Geert Vermeulen, is a teacher, trainer, consultant and interim ethics & compliance officer. His goal is to help organisations conduct business in an ethical and compliant way. He also writes and speaks on ethics and compliance.

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