What is a Conduct Adjustment Term?

In Brazil, all companies are required to follow current legislation. When this doesn't happen, whether due to environmental damage, labor violations, problems in consumer relations, or non-compliance with regulatory standards, the path doesn't necessarily have to involve a lengthy legal process. One of the most efficient solutions to resolve these cases is... Terms of Adjustment of Conduct, known by the acronym TAC.

What is a conduct adjustment term? 

The Conduct Adjustment Agreement (TAC) is a civil agreement, promoted between a control or inspection body (such as the Public Prosecutor's Office or regulatory agencies), in which an offending company or organization, which recognizes that it acted incorrectly and undertakes to adjust your conduct and repair the damage caused.

These agreements are widely used in cases involving legal violations, such as environmental damage, labor issues, consumer relations or non-compliance with specific standards. Although they promote a faster and more collaborative resolution, it is important to emphasize that the TAC does not exempt the company from its liability: in addition to correcting her conduct, she must fully repair the damage already caused.

The TAC was created to reduce bureaucracy and speed up conflict resolution, reducing the need for legal proceedings that can be costly and time-consuming. Through defined deadlines and clear commitments, the term is an extrajudicial solution, which acts to repair and correct the damage caused, when there is recognition of the offending party, avoiding the judicialization of the case and in order to bring a consensual solution to the conflict and damage generated.

How does TAC work in practice?

The process of celebrating a TAC It generally involves the following steps:

Identifying the irregularity: The competent authority identifies the infraction and notifies the responsible company or organization;

Negotiating the terms: The parties negotiate the reparation commitments — what needs to be corrected, within what timeframe, with what resources, and with what monitoring indicators;

Signature and formalization: The agreement is signed and acquires the force of an extrajudicial enforceable instrument, which means it can be legally enforced if the commitments are not met;

Execution and monitoring: The offending party fulfills the commitments undertaken, which may include payment of compensation, implementation of environmental recovery programs, creation of funds for social projects, or other forms of reparation, under the monitoring of the signatory body.

It is in this final stage — the execution and management of resources allocated to repairs — which is where one of the greatest practical challenges lies. TAC.

TAC Resource Management

Resources originating from Terms of Adjustment of Conduct are, by nature, of public interestThese measures are intended to repair damage caused to society, the environment, or specific groups affected by the irregular conduct. Ensuring that these resources reach their correct destination, efficiently and transparently, is just as important as the agreement itself..

Inadequate management can compromise the impact of the reparation, generate distrust between the parties, and even result in legal disputes over the application of the funds.. Efficient management, on the other hand, It maximizes public benefit and strengthens the credibility of all involved..

Main aspects of efficient management:

1. TransparencyClear management of funds, with detailed reports and accountability demonstrating that resources are being used precisely for the purposes stipulated in the agreement;

2. Specific purposeResources must be directed exclusively to projects and actions that meet the objectives established in the TAC (Terms of Adjustment of Conduct), without deviations from their purpose.;

3. Specialized managementPartnerships with specialized organizations ensure that resources are managed rigorously, within best governance practices and in compliance with legal requirements.;

4. Efficient administrative and financial processesCentralizing resources in a specific fund facilitates administration, monitoring, and allocation, with clear criteria for project selection and results tracking.

Specialized TAC management

THE Sitawi Finanças do Bem has more than 17 years of experience in administration of philanthropic resources, including those from terms of conduct adjustment. As a manager, Sitawi centralizes and organizes these resources, ensuring their efficient application in projects that promote real benefits for society and the environment.

THE Sitawi Finanças do Bem has more than 17 years of experience in administration of philanthropic resources, including those from Terms of Adjustment of Conduct. As a specialized management company, Sitawi It centralizes and organizes these resources, ensuring their efficient application in projects that promote real and verifiable benefits for society and the environment..

Sitawi's role goes beyond financial management: The organization offers programmatic, strategic, and operational support to enable initiatives that effectively meet the reparation objectives established in the TAC (Terms of Adjustment of Conduct).. This includes:

• Structuring dedicated funds to receive and manage resources;
• Periodic impact reports and accountability for all parties involved;
• Independent external audit;
• Legal, accounting, and tax support to ensure compliance with the agreed terms.

Benefits of efficient management

• Expanded positive impact: strategic use of resources to maximize social and environmental benefits;

• Credibility for the parties involved: transparent management strengthens confidence in the commitment of the offending party and the institutions responsible for monitoring;

• Prevention of future conflicts: good management demonstrates responsibility and avoids unnecessary legal proceedings.

Frequently asked questions about the TAC