Regulatory and Legislative Risks
As is known, the Acea Group operates mainly in regulated markets, and changes to the rules in these markets as well as regulations and obligations can have a significant effect on results and operating performance. Therefore, the Group has a structure that can consolidate its relations with local and national governments and regulatory bodies.
This structure monitors regulatory developments in terms of providing support in the preparation of comments in the response to the Consultation Paper, in line with the interests of Group companies, and in the consistent application of regulations in corporate procedures and within the electricity, gas and water businesses.
The nature of the business also exposes the Acea Group to the risk of non-compliance with consumer protection regulations pursuant to Italian Legislative Decree no. 206/2005, i.e. the risk mainly connected to the commission of consumer offences/unfair trade practices or misleading advertising (through activities like omission of relevant information, dissemination of untrue information/forms of undue influence, unfair terms in commercial relations with consumers, as well as risks of non-compliance with the regulations for the protection of competition, i.e. the risk associated mainly with the prohibition of companies to establish restrictive agreements and to abuse their dominant position in the market (through activities like market allocation, manipulation of tenders, restrictive agreements and other types of anti-competitive agreements, exchange of commercial/competitive information that potentially constitutes the creation of a cartel).
The rules of territorial planning and governance of the integrated water service continue to be subject to specific regulatory measures. In fact, two different bills have been drafted (AC52, first signatory Hon. F. Daga, and AC 773, first signatory Hon. F. Braga) which, taking up previously proposed topics, intend to deal with the government and public management of the integrated water cycle in different ways. The two bills, whose examination was joint and declared urgent, are currently being examined by the Appointee of the Chamber's Environmental Commission.
Regulatory risks include all non-conformities, with particular regard to the environmental impact of Acea Group (generated for example by the activities of production and / or treatment of urban waste and waste, and of health and safety). at work, mitigated through the adoption of certified management systems, respectively UNI EN ISO 14011: 2015 and BS OHSAS 18001: 2007), which may result in the application of administrative and / or criminal penalties, including those of a disqualifying nature.
In this regard, newly introduced crimes expand the catalogue of predicate offences capable of activating the responsibility of the bodies pursuant to Italian Legislative Decree no. 231/2001, thus requiring an update of the organisational models.
Italian Law 199 of 2016 in force since 4 November 2016, amended art. 603-bis of the penal code, "Illicit brokering and exploitation of labour" and has included it among the predicate offences under art. 25-d.
of Italian Legislative Decree 38 of 2017, effective from 14 April 2017, amended art. 2635 "Corruption between private individuals" of the Italian Civil Code and has introduced art. 2635 bis "Instigation to corruption among private individuals" by adding it to the catalogue of predicate offences of Italian Legislative Decree no. 231/2001 to art. 25-ter, paragraph 1, letter s-bis).
Italian Law no. 179 of 30 November 2017 in force since 29 December 2017 introduced in Italian Legislative Decree no. 231/2001 at paragraphs 2-bis, 2-ter and 2-quater of art. 6 the protection of the employee or contractor that reports illegal actions or violations related to the organisation and management model of the body that come to his or her attention while working (so-called "whistleblowing").
Further crimes introduced during 2017 include:
- Italian Law no. 161 of 17 October 2017 in force since 19 November 2017, that at art. 30, para. 4 added paragraphs 1-bis, 1-ter and 1-quater in art. 25-duodecies "Employment of foreigners without resident documentation" of Italian Legislative Decree no. 231/01;
- the European Law 2017, definitively approved on 8 November 2017 and entered into force on 12 December 2017, which, in art. 5, paragraph 2 introduces into Italian Legislative Decree no. 231/01 art. 25-terdecies "Racism and xenophobia", punishing the institution in case of commission of crimes pursuant to art. 3, paragraph 3-bis, of Italian law no. 654 of 13 October 1975;
while these were taken into consideration, they were assessed as being difficult to commit in the context of company activities.
Other regulatory risks that may potentially be of particular importance for the Acea Group include those deriving from the new Privacy Regulation (EU) 2016/679 GDPR; Acea has already started a survey of the most exposed corporate processes, aimed at creating a model of Privacy Governance and the integration of the new principles required by the law.
With Law no. 68 of 22 May, 2015 (published in No. 122 of the Italian Official Gazette of 28 May 2015) new provisions concerning environmental crimes have been approved.
In particular, Law 68/2015 introduces the new Title VI-bis -“Crimes against the environment” into the Italian Criminal Code amending art. 152/2006.
Newly introduced crimes expand the catalogue of predicate offences capable of activating the responsibility of the bodies pursuant to Italian Legislative Decree no. 231/2001, thus requiring an update of the organisational models.
The subsidiary Acea Ato5 is involved in investigations and proceedings that relate to cases falling under Italian Legislative Decree no. 231/2001 regarding the environment and corporate crimes. In particular, with regard to corporate offences, case 2031/16 relates to financial years 2015, 2016 and 2017 and alleges that the crimes of accounting fraud and filing fraudulent financial statements were committed by the Chairmen of the Company and the representatives of the supervisory body of this company. Investigations are ongoing.
It should be noted that some consolidated companies (mainly Acea Ato5, Acea Ato2 and Acea Ambiente), as more fully illustrated in the relative financial statements for the year, are subject to investigations or proceedings that relate to significant cases pursuant to Italian Legislative Decree no. 231/2001, mainly concerning safety and the environment. There is also a complaint for a corporate offence related to Acea Ato5 alone. . In particular, with regard to corporate offences, case 2031/16 relates to financial years 2015, 2016 and 2017 and alleges that the crimes of accounting fraud and filing fraudulent financial statements were committed by the Chairmen of the Company and the representatives of the supervisory body of this company. Investigations are ongoing. On the basis of the information currently available, taking into account the operational autonomy of the companies with respect to the parent company Acea, any responsibilities that may be ascertained upon the final outcome of the aforementioned proceedings are exclusively attributable to the companies themselves, without any repercussions on the Parent Company or other companies of the Group that are not involved.