Compliance Profession: The View from the Inside

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We continue a series of posts called “Compliance Profession: The View from the Inside”. These are the interviews with known professionals in the area of corporate ethics and compliance who share interesting aspects of their work, ideas, views and useful materials.

Our today’s guest is Oleg Polishchuk. An Ironman, a big patriot of Ukraine, a lawyer, an atomic engineer, and a great compliance officer he is. Oleg was recognized in 2018 as the best Compliance Officer and currently he is Director of the Directorate for Prevention and Counteraction of Corruption, Compliance Officer, and the Advisor to the President of the “Energoatom“, the biggest Ukrainian State Enterprise Generating Aropic Energy.

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And here are the 5 questions to Oleg. I personally liked 3rd answe the most. Which one did you find most interesting?

(1) Oleg, do you believe that corporate anti-corruption programs in Ukraine change Ukrainian business to meet the society expectations of transparency and fairness of business? Or will there be another regulation demanded to bridge such gap?

In 2015, the Law of Ukraine "On Prevention of Corruption" was adopted. This law provided mandatory implementation of Anti-corruption programs in state entities, in public state-owned enterprises, and in enterprises that participate in public procurement with over 20 million UAH in value.  Thus, for the first time at the legislative level, it was decided to introduce a legally binding document which would regulate the anti-corruption policy.  Typical program was developed by the National Anti-Corruption Agency and is a fairly high quality document. 

Then, the question of enforcement and significance of this document in public authorities and in an enterprise has arisen. It surely depends on the Head of an enterprise and on the Commissioner for the Implementation of Anti-Corruption Program.  Therefore, in my opinion, other regulations are not necessary, the ones we have now are enough; the main goal is for the Anti-Corruption Program to not only exist on paper but be put to work.  In Ukraine, this process is just in the beginning.  We have long been aware of these virtuous standards and now they are beginning to show. The good news is that more and more private businesses are joining this process.  Even better news: the public business is catching up with the private business in the area of transparency and ethics. I am convinced that corporate anti-corruption programs are changing the Ukrainian business for the better.

(2) Given your vast experience in the biggest state energy producing corporation in Ukraine, can you give us some insights? What are the most challenging things in building a compliance program in Energy sector?

Our state-owned enterprises were established much earlier - right about the same time when the corrupt Ukrainian culture was establishing. This has had a significant impact on corporate environments and informal corporate processes. The main feature in the toxic corporate environments of state-owned corporations in Ukraine are their closedness, opacity of procedures, and very often lack of any logic in their nature; in many cases there is a strong sense of injustice. This applies not only to the energy sector of the economy, but in general to all public corporations. Throughout the vertical functioning of state corporations, "family clans" were formed; tenders were won only by firms which were close to the heads of the enterprise. All of his had to be changed. This became the main challenge for The Commissioner for The implementation of Anti-Corruption Program.  It is his/her function to eliminate all the above mentioned negative issues. First, it is necessary to identify problems and then undertake the steps necessary to eliminate them - i.e. to often start conflicting with very influential executives who have high status, connections and influence.  Amidst all this, the main thing is not to burn out and not to overestimate oneself; besides, one has to have their own team before all else; to have their own sympathizers in the corporation, and then loyalty and support of the corporation head.  One must believe in what they do; they need to be sure in what needs to be done, and not to be afraid. In addition, all this must be done publicly. Publicity is perhaps the only weapon that can scare corrupt officials to death. 

Unfortunately, in Ukraine, the corrupt officials do not have any fear of the law, but they do fear of publicity as much as dark powers fear light.  One must be principled and not succumb for any “proposals” - you know, the sort of “let's do things gradually”, “we need to take an evolutionary path” and so on.  The most important and difficult part in the first stage is getting one’s bridgehead of virtuous territory, and the bigger it would become, the better. It's similar to attacking and storming the opposite riverbank. The task for the landing party is to occupy and consolidate, to form a bridgehead from where attacks would come and thus occupied territory would expand.  The analogy in building up compliance “territory” is about the same. The first steps of presenting oneself in the new team and  getting one’s space in order to spread compliance are probably the most complicated in the whole process. If the Compliance Officer does not succeed during this stage, then there would hardly be any success in the future. 

(3)  Tell our readers an intriguing story related to you and compliance.

In 2014, we began to resolve conflicts of interest at the state-owned enterprise Energoatom, in connection with nepotism and direct submission to relatives. At Ukrainian nuclear power plants, this practice is very common, and in most places such subordination began to create toxic environment.  For instance, a relative covered another relative, and the team had a feeling of injustice: i.e. the amount of wages was unfairly set, unfair distribution of work load; a relative could give a bonus and even allowed certain employee(s) not to show up for work, but still provided pay for them for that day. All of this family subordination had to be broken. There are four nuclear power plants in Ukraine. The CEOs of three nuclear power plants have fully agreed to my proposal for finishing with family clans, and for breaking their direct subordination, but the director of the fourth was not delighted at this idea at all, and his lawyers tried to bring the law to absurdity.  The lawyer wrote that subordination of relatives at work does not create a conflict of interest, since there is no private interest involved; they also claimed that this law was misunderstood  by The Energoatom DP Compliance Service… because if understood the way it is nowwritten, then we have “a conflict of interest throughout the entire country”.   According to the Law of Ukraine “On Prevention of Corruption”, private interest is any property-related or non-property-related interest of a person, including ties caused by personal, family, friendly or other non-official relations with individuals or legal entities, including those arising from membership or activity in public, political, religious, or other organizations.   And here, the lawyers wrote, “in Ukraine, the vast majority of people are Orthodox believers, so there is also a private interest involved”…  It was both ridiculous and tragic, because the lawyers who claimed all this are actually very smart people, their profession does not allow them to be doubtful, and so there were distorting the law, specifically with the purpose to please someone.  We could easily guess to whom it would be pleasing. This is the most important task of compliance – to prevent the distortion of law; to always insist on principles - no matter whom  or how high the authority we face, and no matter what would be pleasing to these authorities.

Of course, the lawyers’ conclusions did not find continuation in that case, and at this fourth energy station, although with pains, we were able to resolve issues related to nepotism and the conflict of interest connected with subordination of relatives.

(4) What is your favorite and the least favorite part of chief compliance officer job?

Most of all, in my work, I enjoy communicating with people in work teams, conducting trainings, anti-corruption seminars, doing outreach work, and helping our employees to avoid offenses in order to prevent negative consequences for them personally. From my position, I like to "light" people up, to see their shining eyes, so that we could build a virtuous corporate environment together.  Unfortunately, due to many factors, not all employees, especially officials, are ready.  That is why we not only teach and explain, but also conduct our investigations, send reports to law enforcement agencies, and initiate prosecution. Reprimands and terminations of employment do take place, of course - and they do affect people’s fate. This side of my work is also necessary, but I cannot say that I really enjoy it. 

(5) As the 24 August (Ukrainian Independence Day) is approaching what would you want to wish to all Ukrainian anti-corruption program commissioners and ethics and compliance officers?

I would like to wish to all Ukrainian Commissioners for the Implementation of Anti-Corruption Program to be aware of the importance of his/her case; to have an understanding of how important his/her own mission and responsibility are; to have self-assurance and courage; to make creative decisions, and to see development and building up of virtuous business network.  Only a virtuous business with strong compliance can be our future.

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I hope you took something for yourself from Oleg’s experience as I did. If you would like to be our next guest, please reach out through the form on our website or via Facebook and we will get in touch. Or feel free to suggest a question bothering you, and we will ask our next guest to share his or her view on this.

Until next time, and preserve ethics in your actions and decisions.

Interviewed by Pavlo Bespalov

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Oleg is the Director of the Directorate for Prevention and Counteraction of Corruption , Compliance Officer, and the Advisor to the President of the Biggest State Enterprise Generating Atomic Energy.

He obtained his master degrees in law, public administration, and atomic engineering. In 2017, he received his MBA degree from the MIM Business School.

Oleg is an attorney at law. and has been recognized in 2018 as the best Compliance Officer by one of the most reputable legal publisher (Yuridicheskaya practica).