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Compliance Across The World

Managing Risk in the Energy Industry - Advanced Contract Risk Management

Contributor: Thomas Fox
Posted: 05/13/2012
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For any in-house practitioner or lawyer in private practice who represents corporations, I believe that identification, assessment and management of risk is the key service that you can deliver. Risk comes in all shapes and sizes.

My Engineer father would say that to manage a risk, you must first measure that risk but as a lawyer I am more often called upon to help manage the risk rather than to measure it.

The Oil & Gas IQ Advance Contract Risk Management Conference, held annually in Houston to keep abreast of the latest legal developments in the field, is one of the best events for those who practice law with an energy industry focus.

It will be held in Houston on May 15 and 16, with a Pre-Conference Workshop to be held on Monday, May 14. If you are in the energy industry and there is only one conference per year that you can attend, this is the conference for you.

The focus of this annual ninth annual conference, as always, is risk management in the energy industry. While many compliance practitioners focus on compliance risks inherent through the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, there are other contracting areas which impact these types of risks.

Many of these areas will be discussed at this conference. For instance what are your obligations under the law of the jurisdiction where you are providing services? Are you required to have a local company as a business representative? Do you have to maintain a level of local content, in terms of personnel, in a project? Is this information documented in your risk assessment and properly managed in your overall risk management profile?

Often in the energy industry you may be working off a form model contract agreement. For instance these are in use in the North Sea (CRINE contracts). Generally these are focused on managing risks between owners, operators and service companies. But has your compliance group weighed in with this form of agreement’s implications under both the FCPA and Bribery Act?

Similarly, in the post-Macondo world, the areas of legal risk are more carefully scrutinized but what about the vendor or sub-vendor that you are required to use; can you manage this risk through an indemnity with the party which required your company to retain such a vendor?

Lastly, how robust is your indemnity agreement with regard to compliance? Did you consider such a clause in your agreement? If you are the Contractor, did you give an unlimited indemnity and what are the potential financial implications if a FCPA violation is alleged or an investigation ensues?

I will be heading a panel discussion with prominent local compliance officers.

Our topic will be compliance best practices and our focus will be on some of the following topics:

  1. The global state of play with government regulations
  2. Dealing with the latest developments regarding the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act and how to incorporate these pieces of legislation into your future contracts
  3. What are some of the challenges in dealing with intermediaries, agents, consultants and business partners in a manner which is compliance with both the FCPA and Bribery Act and
  4. Can a company have a best-in-class compliance program if it doesn’t include due diligence, contractual requirements and reasonable audits on partners?

If you are in the energy or compliance fields I hope that you can attend as we explore some of the above issues and many others. Anyone signing up through my site receives a discount. 

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Contributor: Thomas Fox