By Antonella Involto Luzuriaga, Business Compliance Specialist at OLX Group.
During the last years, Latin America has considerably increased the need to implement Compliance plans, especially due to the fact that in several countries, criminal liability of legal persons has been introduced, being a mitigating factor in terms of sanctions, the established compliance programs in companies.
However, in Latin America there are different challenges that make it difficult to apply Compliance in an adequate and faster way in all the countries that comprise it.
Among these challenges we mainly find corruption. According to the latest analysis presented by Transparency International on the Corruption Perception Index during 2020, in Latin America only 3 of the 19 countries analyzed had an acceptable score. For years the subcontinent has been affected by different cases of corruption that have led to a loss of social credibility towards the control systems of the different countries that make it up and, due to the current world situation with Covid-19, this virus called corruption, has increased its levels.
Another challenge that can be considered as a problem with Compliance programs implementation in Latin America is the current economic crisis that Covid-19 has left in the vast majority of countries, which increases the already existing informality of its economy, being this sector defined by the ILO as unregulated, made up of micro-enterprises, self-employed workers, whose productivity fails to cover formalization expenses.
As a third challenge there are the low levels of development of small and medium-sized companies, especially with the strong transformation of production and consumption that the technological revolution has generated. These companies have a tendency to be less productive than similar sized businesses in developed countries.
As we have seen, the situation we are experiencing is bringing changes both at a social and corporate level. Therefore, in order to increase the pace of implementation of compliance plans in Latin America, taking into account the current difficulties that Covid-19 has brought with it, the high levels of corruption must first be reduced urgently through legal reforms that allow better control of corporate crime, government crime and organized crime. New measures and incentives should also be created that allow informal companies to achieve sufficient productivity to meet the established costs of formalization. All this in the midst of an extremely complex economic, political and social crisis.