International Counsel Discuss Corporate Compliance
Thousands of attorneys, both outside and in-house counsel, descended upon Chicago for the International Bar Association 2006 Annual Conference. Attorneys from nations ranging from Albania to Zimbabwe were in attendance for the event, which lasted from Sept. 17 to Sept. 22. One of the centerpieces of the conference was a...
September 22, 2006 at 11:07 AM
17 minute read
The original version of this story was published on Law.com
Thousands of attorneys, both outside and in-house counsel, descended upon Chicago for the International Bar Association 2006 Annual Conference. Attorneys from nations ranging from Albania to Zimbabwe were in attendance for the event, which lasted from Sept. 17 to Sept. 22.
One of the centerpieces of the conference was a three-hour long panel session on corporate governance. Speakers included Paul Washington, senior vice president, deputy general counsel and corporate secretary of Time Warner Inc.; Jan Eijsbouts, general counsel and director of legal affairs of Akzo Nobel NV, a Dutch company that manufactures healthcare products; Beat Hess, group legal director of oil giant Royal Dutch Shell; Bruno Cova, co-chair of Paul Hastings, Janofsky & Walker's Milan office; Christopher Millard, a partner at Linklaters London office; Martin Weinstein, a partner at Wilkie Farr & Gallagher in Washington, D.C.; and Michele Corash, a partner at Morrison & Foerster in San Francisco.
Panelists addressed varying topics about corporate compliance, including horror stories, best practices and future trends.
Hess opened the seminar by discussing the conflicts that arise between in-house counsel's roles as confidant to senior management and respondent to government authorities.
“The most important advice I can give you is that if there is a crisis at hand and regulators are knocking on your door, offer full cooperation,” Hess said.
No stranger to noncompliance, Hess described Shell's own run-in with regulators during its infamous reserves scandal, wherein the SEC pursued Shell in 2004 after the company overstated the amount of its proven hydrocarbon reserves.
“From my experience I learned that if you notice a crisis arising, pack a suitcase and go see the regulators,” he said. “Talk to the government, explain the circumstances and tell them they'll have access to necessary documents.”
Eijsbouts also detailed his personal account of when government regulators from the U.S. and the E.U. pursued his company, Akzo Nobel NV, accusing the multinational of price-fixing. The potential liability in the case was between $3 and $4 billion.
“I told my company to allow me to do damage control,” Eijsbouts said. “I proposed an internal amnesty program that would last two months. This would allow our employees to come forward with any information they had pertaining to the allegations, which we could then turn over to regulators.”
Bringing human rights into the conversation, Corash tackled the Alien Tort Statute and the plaintiffs' bar's increased use of the long-dormant law. The statute, which has been around since 1789, did not gain prominence until 1996 when it was used against Unocal Corp. Plaintiffs accused the oil giant of using slave labor to build pipelines. After nine years of bouncing through the U.S. court system, Unocal finally settled. According to Corash, cases involving the Alien Tort Statute can last anywhere between four and 12 years, costing companies millions of dollars.
“There are no best practices,” she said. “It is clear that there is a sense that there is a need for reform of corporate responsibility.”
No legal conference would be complete without a speech about electronic discovery. Millard discussed the hot-button topic, which he terms “information governance.”
“One PC with a large hard drive can hold enough information that, if printed out, it would reach as high as Mt. Everest when stacked,” Millard said. “This is why e-discovery can be a nightmare, or a feast if you're the one making the request.”
Millard gave tips for establishing controls for the different phases of records management, including collection, storage and destruction. He noted that implementing best practices can be especially difficult for multinationals, which may have to establish different rules for different jurisdictions. This is a significant consideration for companies with a European and American presence because of Europe's strict information privacy laws.
“It is difficult to completely destroy information,” Millard said. “I know of one man who shot his computer with a handgun and threw the hard drive into a canal. Even after this, experts still recovered much of the stored information.”
As business continues to blur national borders, in-house counsel must talk to their colleagues, learn about the regulatory requirements in other nations and keep senior management apprised of existing and emerging compliance issues. Getting corporate executives to listen, however, is another issue altogether, one that in-house counsel, no matter what nationality, find difficult.
“Talking about these issues is like talking in a cemetery,” Hess said. “There's lots of people around, but no one is listening.”
Thousands of attorneys, both outside and in-house counsel, descended upon Chicago for the International Bar Association 2006 Annual Conference. Attorneys from nations ranging from Albania to Zimbabwe were in attendance for the event, which lasted from Sept. 17 to Sept. 22.
One of the centerpieces of the conference was a three-hour long panel session on corporate governance. Speakers included Paul Washington, senior vice president, deputy general counsel and corporate secretary of
Panelists addressed varying topics about corporate compliance, including horror stories, best practices and future trends.
Hess opened the seminar by discussing the conflicts that arise between in-house counsel's roles as confidant to senior management and respondent to government authorities.
“The most important advice I can give you is that if there is a crisis at hand and regulators are knocking on your door, offer full cooperation,” Hess said.
No stranger to noncompliance, Hess described Shell's own run-in with regulators during its infamous reserves scandal, wherein the SEC pursued Shell in 2004 after the company overstated the amount of its proven hydrocarbon reserves.
“From my experience I learned that if you notice a crisis arising, pack a suitcase and go see the regulators,” he said. “Talk to the government, explain the circumstances and tell them they'll have access to necessary documents.”
Eijsbouts also detailed his personal account of when government regulators from the U.S. and the E.U. pursued his company,
“I told my company to allow me to do damage control,” Eijsbouts said. “I proposed an internal amnesty program that would last two months. This would allow our employees to come forward with any information they had pertaining to the allegations, which we could then turn over to regulators.”
Bringing human rights into the conversation, Corash tackled the Alien Tort Statute and the plaintiffs' bar's increased use of the long-dormant law. The statute, which has been around since 1789, did not gain prominence until 1996 when it was used against Unocal Corp. Plaintiffs accused the oil giant of using slave labor to build pipelines. After nine years of bouncing through the U.S. court system, Unocal finally settled. According to Corash, cases involving the Alien Tort Statute can last anywhere between four and 12 years, costing companies millions of dollars.
“There are no best practices,” she said. “It is clear that there is a sense that there is a need for reform of corporate responsibility.”
No legal conference would be complete without a speech about electronic discovery. Millard discussed the hot-button topic, which he terms “information governance.”
“One PC with a large hard drive can hold enough information that, if printed out, it would reach as high as Mt. Everest when stacked,” Millard said. “This is why e-discovery can be a nightmare, or a feast if you're the one making the request.”
Millard gave tips for establishing controls for the different phases of records management, including collection, storage and destruction. He noted that implementing best practices can be especially difficult for multinationals, which may have to establish different rules for different jurisdictions. This is a significant consideration for companies with a European and American presence because of Europe's strict information privacy laws.
“It is difficult to completely destroy information,” Millard said. “I know of one man who shot his computer with a handgun and threw the hard drive into a canal. Even after this, experts still recovered much of the stored information.”
As business continues to blur national borders, in-house counsel must talk to their colleagues, learn about the regulatory requirements in other nations and keep senior management apprised of existing and emerging compliance issues. Getting corporate executives to listen, however, is another issue altogether, one that in-house counsel, no matter what nationality, find difficult.
“Talking about these issues is like talking in a cemetery,” Hess said. “There's lots of people around, but no one is listening.”
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