ABSTRACT OF THE INTEGRATED MODEL - cross.unimi.it · Eleonora Del Fabbro, Filomena De Matteis, Jole Garuti, Luigi Lusenti, Ilaria Meli, Francesco Memo, Laura Miani, ... the so called

ABSTRACT OF THE INTEGRATED MODEL

AND GUIDELINES

This research is the result of the collaboration

of the partners of the project “ICARO”.

It has been coordinated by:

Nando Dalla chiesa

Stefania Pellegrini

Research collaborators:

Stefania Balzarotti, Alessandro Brazzini,

Federica Cabras, Anna Catasta,

Eleonora Del Fabbro, Filomena De Matteis,

Jole Garuti, Luigi Lusenti, Ilaria Meli,

Francesco Memo, Laura Miani,

Vincenzo Moriello, Pierpaolo Romani,

Alberto Rotondo, Luciano Silvestri,

Angelo Urgo, Luca Tripeni Zanforlin

Final revision by:

Laura Miani

Luigi Lusenti

Stefania Balzarotti

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1. INTRODUCTION: HISTORY AND MEMORY

2. THE INTEGRATED THEORETICAL MODEL

2.1 THE COLLECTIVE ENTREPRENEUR

2.2 THE REFERENCE THEORETICAL FRAMEWORK

3. GUIDELINES AND RECOMMENDATIONS

3.1 RECOMMENDATIONS TO THE COURT

RECEIVER AND THE COURT– PREVENTIVE

ORDERS SECTION

3.1.1 Regulatory framework and scope of application

3.1.2 Recommendations for the Court Receiver and

the Judicial Authority having jurisdiction in the

first phase

3.1.2.1 Instructions for the Judicial Authority (Court in

relation to preventive measures or Examining

Judge for criminal prosecution)

3.1.2.2 Instructions for the Court Receiver

3.1.3 Common lines

3.2 GUIDELINES FOR INSTITUTIONAL ACTORS

(LOCAL AUTHORITIES, LAW ENFORCEMENT,

POLICE, FINANCIAL POLICE, FORESTRY

POLICE, AGENCY FOR CONFISCATED

PROPERTY)

3.2.1 Role of the actors in the process

3.2.2 Recommendations on the management of

relations with the other actors involved in the

process

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SUMMARY

3.2.3 Recommendations on the assessment of risk in

the activities tasked to actors

3.2.4 Recommendations on how to evaluate and seize

improvement opportunities

3.2.5 Examples of good practice

3.3 GUIDELINES FOR THE PROFESSIONAL WORK

(WORKERS, UNIONS, MANAGERS)

3.3.1 Workers

3.3.1.1 Actual and potential role of workers in the

process

3.3.1.2 Recommendations on the management of

relations with the other actors involved

3.3.1.3 Recommendations for the assessment of risk in


3.3.1.4 Recommendations on how to approach the

identified risk

3.3.1.5 Recommendations for assessing and seizing

opportunities for improvement

3.3.1.6 Examples of good practices

3.3.2 Trade unions

3.3.2.1 Actual and potential role of trade unions in the

process

3.3.2.2 Recommendations for the management of





identified risk

3.3.2.5 Recommendations on how to evaluate and seize


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3.3.3 Managers

3.3.3.1 Actual and potential role of managers in the

process






identified risk

3.3.3.5 Recommendations on how to evaluate and seize



3.4 GUIDELINES FOR THE ECONOMIC OPERATORS

(CREDIT INSTITUTIONS, BANKING

FOUNDATIONS, BUSINESS ASSOCIATIONS,

ENTREPRENEURS AND COOPERATIVES)

3.4.1 Lending institutions

3.4.1.1 Role of the actors in problem definition and

process

3.4.1.2 Recommendations to lenders in order to address

the identified issues

3.4.1.3 Tax and economic recommendations on credit

to confiscated businesses


3.4.2 Banking foundations

3.4.2.1 Role of the actor in the process


3.4.3 Professional, employers and cooperative

associations



3.5 GUIDELINES FOR THE ORGANIZED CIVIL

SOCIETY


3.5.2 Recommendations for the management of


process

3.5.2.1 Recommendation in the management of relation

with the other actors involved in the prevention

process



seizure phase

3.5.3 Recommendations on risk assessment in the

activities tasked to actors

3.5.4 Recommendations on how to approach the

identified risk

3.5.5 Recommendations on how to evaluate and seize


3.5.6 Examples of good practices

3.6 GUIDELINES FOR LEGISLATORS AND POLICY

MAKER

6. CONCLUSIONS

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1. INTRODUCTION: HISTORY AND MEMORY

It is known that Mafia has decades of existence in Italy, almost centuries, until nowadays in many countries of the world. In order to fight against mafia spread and infiltration into the legal economy affecting honest companies, workers and citizens’ lives, it is mainly needed to understand what methods are the most efficient to tackle their power and spread. In 1982, fight actions against mafia organizations became really efficient thanks to Parliamentary Pio La Torre. He was affected by Sicilian Mafia and introduced a Bill characterized by two main elements: the assumption Mafia is an unitary criminal organization and the awareness that mafia men are more afraid of losing their assets rather than jail. La Torre had realized the ongoing transformation inside Mafia and its expansion in the international arena, that is the globalization of criminal activities.

Afterwards his brutally murdered, the Italian Government sent to Palermo General Dalla Chiesa, who in the previous years was able to defeat the terrorists named Brigate rosse (Red Brigades) through efficient solutions. For this reason, he was given the task to defeat mafia as well. However, Mafia did not let him time to pursue his task. His murdered arose a spread feeling of indignation such as to induce urgently parliamentarians to transform into law the Bill elaborated by Pio La Torre. It was the Law 646/82, called Law La Torre/Rognoni, by the names of its promoter and of the Minister of Domestic Affairs, Virginio Rognoni.

By law 646/82, the article 416 bis was added in the Penal Code, marking a revolutionary breakthrough in the fighting against the mafias, considering the mafia association a crime as such. As the law

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states: “The association is a mafia type whenever its members take advantage from deploying the strength of intimidation related to mafia-type organization, subjection condition and code of silence, deriving from committing crimes, with the purpose of obtaining directly or not the management or command of economic activities, concessions, authorization, tender and public services or make profits as well as taking unfair advantages for oneself or for others”. Hence, in 1986 it was possible for judges Giovanni Falcone and Paolo Borsellino, under the guidance of Antonio Caponnetto, to prosecute 475 bosses. The judgments of the “maxi-trial” were 19 life sentences and more than two thousand six hundred years in jail. After the judgments were confirmed by the Italian Supreme Court, the reaction of Corleonesi was merciless: they killed their main enemies Giovanni Falcone and Paolo Borsellino, but also their friends Salvo Lima firstly and Ignazio Salvo secondly, as they were not able to avoid the confirmatory verdict of the Supreme Court.

During this Maxi-trial (Maxiprocesso) it was applied for the first time the so called norma sui patrimoni as required by the Rognoni-La Torre law, that is the confiscation of mafia assets. Indeed the article 416 bis states: It is always mandatory the confiscation of the convict’s assets that were used or made available for committing the crime, as well as all those things which are the price, product, profit of the crime or which constitute its use.

Such measure obviously triggered when the convict is unable to demonstrate the legitimacy of the possession of the property at issue.

After the massacres of Capaci and via D’Amelio, a rebellion movement against mafia death culture started to spread around the country. It became clear that not only magistrates and law enforcement should fight and repress the Mafia, but it is equally necessary the active participation of citizens - because the achievement of legality coincides with the fulfillment of democracy.

In 1995 it was established “Libera, associations, names and numbers

Abstract of the integrated model and guidelines 13

against mafias”: an association aimed to support the anti-mafia activities and to spread in the country a culture of legality. This was the way social anti-mafia was born. It would have reunited almost 1500 groups such as national and local associations, schools and citizens.

The first goal achieved by Libera was the collection of signatures in support of the Bill presented by the Parliamentary Giuseppe Di Lello for the social re-use of assets seized to the mafia clans: it was the perfection of La Torre’s idea.

More than a million of citizens all over Italy signed to support that idea, which became the Law 109/96 in March 1996. A new season of fighting against Mafia was opened since the confiscated assets could remain State property for judicial, public order or civil protection purposes, or they could be moved to municipalities for institutional or social purposes and/or to meet the needs of the community. The law has a great symbolic value and generates jobs for thousands of people who are employed in cooperatives working on confiscated lands or in confiscated companies.

The application of the Law 109/96 did not always have an easy path. Firstly, in 1999 the Ufficio del Commissario straordinario del Governo (Office of the Special Commissioner of the Government) was established to manage and use confiscated assets. Since 2010, ANBSC - Agenzia nazionale per l’amministrazione e la destinazione dei beni sequestrati e confiscati alla criminalità organizzata di stampo mafioso (National Agency for the administration and the destination of assets seized and confiscated from organized crime) is responsible for the management of these assets, even if it has not yet reached its full operation.

The greatest difficulty occurs when the confiscated asset is a company, since in case of company’s closure, the workers lose their job. The analysis of the problems faced by confiscated companies is the key element of the project ICARO.

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In 2010, following Law n°136, the Italian government carried out a survey on the penal, trial and administrative anti-mafia rules and regulations in order to elaborate the Anti-mafia Code, that is the administrative measures necessary to prevent mafia crimes and infiltration into the legal economy. Furthermore, the already mentioned ANBSC was established during that year. Nowadays the Italian Parliament is discussing the reform of the Agency so to make its actions more effective and more matching to necessities.

The new regulation of the Anti-mafia code (to be approved) provides the introduction of measures addressed to support the turnover of confiscated companies and to facilitate their participation to public tenders. Improving changes are foreseen about the assignment of the confiscated companies, better guarantees of their operational continuity and a more effective protection of labor. In 2016 through the Budgetary Stability Law it was established a fund to support seized and confiscated companies.

ICARO - a project co-funded by the Prevention of and Fight against Crime Programme of the European Union – is promoted by Arci Milano, Avviso Pubblico, Centro di Iniziativa Europea, CGIL Lombardia, Associazione Saveria Antiochia Osservatorio Antimafia and Università degli Studi of Milano. Such a large partnership makes understand the amount of efforts required to tackle the mafia phenomenon.

Starting from the Italian experiences of the laws on the seizure and social re-use of mafia assets, the project ICARO has deepened a fundamental topic for the successful fight against mafias: the recovery of confiscated companies and their re-introduction into the legal economy.

The project ICARO has the following aims:

• To increase the knowledge on the policies, laws and regulations adopted in Europe to contrast the mafia organizations with par-ticular reference to confiscation and re-use of criminal assets and


companies.

• To study the conditions for success and the weaknesses of the policies of confiscation / reuse of Mafia assets and companies experienced in Italy.

• To supply competences and skills able to enhance the managing and recovery of confiscated assets.

• To foster seizure and confiscation as a tool to fight organized cri-me so to create ethical behavior and social corporate responsibi-lity.

• To transfer on a European level competences, methodologies and good practices adopted in Italy on how to hit criminal richness and prevent diffusion of mafia interests into legal economy.

• To increase public awareness on the importance of asset recovery / social reuse as a tool to contrast and prevent criminal infiltration into legal economy

Within the project ICARO the following public events were held.

• International Conference, ”Mafia’s infiltration into the legal eco-nomy: mafia without borders”, April, 10th 2015, Milan;

• National Conference, “Best practices to contrast the illegal eco-nomy: the social re-use of assets confiscated from mafia”, Novem-ber, 27th 2015, Milan;

• National Conference: “Policies, methodologies and tools to mana-ge confiscated companies: from the mafia enterprise to the legal one”, April, 19th 2016, Milan.

In 2012, some of the ICARO partners together with other civil society organizations, launched the campaign “Io riattivo il lavoro” to promote a law of citizens’ initiative that fosters the recovery of companies confiscated from organized crime. Indeed, it is necessary

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being efficient in the recovering of confiscated companies, so as to eradicate the idea that fighting against mafia leads to unemployment.

Mafia can be defeated by the involvement of the law enforcement and judiciary authorities together with the involvement of the social anti-mafia. It is necessary to built the culture of legality acted by citizens, whether they are entrepreneurs or simple consumers. Social anti-mafia occurs also in doing one’s job properly, in respecting the laws and rules, in countering the corruption in any possible way.

Citizens are needed to be enable to recognize mafias and their activities starting from school. Once developed this ability and awareness about negative effects led by mafias organizations upon economic and democratic life in the country, citizens are able to seriously contrast mafias and put efforts into the fight of corruption. In Italy, there are plenty of associations, Libera before any other, that aim to contrast mafia and support the victims of its violence. Just as mafias are globalized, so too the anti-mafia institutions and the citizens must extend and globalize themselves.

The member countries of the EU can provide a great help to the other States and protect themselves by avoiding proliferation of mafia presence in their territories. Europol stated the existence of 3600 criminal organizations across the continent. Hence, it is required to elaborate an anti-mafia model usable in many countries.

Not by chance, Italy is the country where mafias were born but it is also the country of the anti-mafia.

2. THE INTEGRATED THEORETICAL MODEL

2.1 THE COLLECTIVE ENTREPRENEUR

Some relevant conclusions must now be drawn by analysing some practical cases; it should be said in this regard that sample selection was instrumental to single out a “cluster” of businesses whose structure could allow on the one side to grasp –in a fairly generalizable way– success or failure conditions (therefore more regions, industries, company types, etc.) and on the other to focus on the specific traits –if any– to be borne in mind to come to a summary assessment. The starting point is still the already mentioned Business case report: the document is still the landmark to build the reasons and origin of the following remarks on, even though some of the main pieces of information have already been offered in a very succinct way in the previous Methodological Note.

The remarks will be developed according to the so-called Integrated Theoretical Model, made up of two elements. The first is the Reference Theoretical Framework, which in a conceptual abstraction comprises the overall sense of the surveyed instances. As you will see, the framework is the place where an intricate network of empirical observations and socio-economic theories converge, more specifically focused on entrepreneurship, as well as organised crime theories specifically focused on the relation between organised crime and the environment. If some of the remarks herein were already given as a starting assumption within the research, others grew with time and reached a new level of maturity because – or thanks to – the work done by the researches. It is fair to say, then, that the Framework adds

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values to the public debate on the issue of confiscated businesses. The second element, in turn and as a consequence, has a readily operational value. It will consist of a series of Recommendations, namely guidelines suggested to the actors called upon ensuring their support to the process of introducing confiscated companies (or even seized, as we have seen) into the legal economy. The Recommendations are developed by distinct and parallel categories in relation to the differences and functional specificities of the various stakeholders, and are offered, needless to say, not in the form of prescriptions but as cultural and conduct guidelines which research shows to be particularly useful to increase the chances of success in each individual case.

As to the Reference Theoretical Diagram, in their diverse outcomes the investigated experiences suggest (one could speak of saved companies, submerged companies, and suspended companies) at least five major perspectives to reflect on, which should be better explained here.

In the first place let us consider propose a particular approach to the well-known stakeholders theory. The theory, successfully introduced by Freeman now more than thirty years ago1, defines the system of opportunities and constraints, and therefore the strategic horizon and the field of action of a company in relation to the characteristics of a wide range of stakeholders involved in various ways in its existence: from shareholders to employees, from banks to suppliers, from customers/consumers/users to trade unions. This list is much longer if considering the indications coming from the actual instances being analysed. Some businesses are virtually forced to include the press,

1 R. Edward Freeman, Strategic Management. A Stakeholders Approach, Cambridge University Press, Cambridge, 2010 (original edition 1984). Also, R. Edward Free-man, Gianfranco Rusconi, Michele Dorigatti, Teoria degli stakeholders, Franco An-geli, Milano, 2007


other local opinion leaders, even other environmental movements2, other the Government of the judiciary. Often these additions are not marginal nor purely devoid of significance, since they derive from case studies that emphasise the (sometimes unexpected) centrality of this or that element. In short, the theory has a great use also because of this: indeed, when developed creatively, it described with variable geometries a reference framework for single instances of business experience.

Well, one can reasonably argue that confiscated companies that must be converted to the legal economy must form their own peculiar and different stakeholder cluster or system given the nature of the target entities and also for their comparative importance.

For example, it is clear that the very nature of the procedures applicable to them, or the significant decisions about their future, give a primary role to figures and entities unrelated to the more traditional definitions of stakeholders. Just think of such profiles as the Prefect or President of the Court in case of preventive measures. But also to the deputy presiding Judge or the Official Receiver. All the above are actors who hold powers to intervene in the life of the company and who can change the course thereof – acting according to their own experience and institutional culture and their own reference context (also made of affiliations and personal affinities). The web of public decisions and evaluations thus feeds into the system, with primary importance, some variables whose behaviour is strongly correlated with the public system, in its governmental and judicial options, but

2 One of the most recent cases is undoubtedly that of Ilva in Taranto: Angelo Bonel-li, Good Morning Diossina, Fondazione Verdi Europei, Youcanprint Self-Publishing 2015. Also see, rgarding difficult relations with the stakeholders, a beautiful summary of international crisis communication offered by Sara Ambri, La comunicazione di crisi: il disaster management, Università degli Studi di Milano, Facoltà di Scienze Politiche, 2012, Dissertation

also in its administrative and legislative options3.

At the same time an important role will be played by a particular type of associations, specifically those contrasting organised crime, or mafia. Its absence or presence, and also the quality thereof, will turn out to be important for the cultural environment in which conversion to the legal economy will take place. Indifference or support by public actors, resignation to any bureaucratic idleness or public criticism thereof, the neutrality of the higher political levels or their commitment to support the journey of the company4. It was observed, though, that active, dynamic and determined associations can also be critical to help the social and economic players come to the surface to take over a business, especially if it arises in sectors characterized by low barriers to entry. One could go on with examples, even by by describing differently all items that normally form the array of stakeholders (just think how the notion of “public opinion” can be differently outlined or the diversity of the ingredients that produce the notion of “community”).

But above all it should be noted that in this system operates a subject that in entirely stranger to the normal theoretical predictions, namely organised crime (mafia), in different versions of the boss, the clan or of the power network. It is an element that cannot be traced back to the general notion of “competitors”. Competition, as described in literature, is constituted by a more or less wide range of subjects competing on the market and that is why they are interested in the conduct of the company and contribute, with their own conduct, to

3 For the sake of an empirical model see, Carlo Barbieri, Le mani in pasta, Editrice Consumatori, Bologna, 2005. For a summary description of the conditions and ex-ternal actors provided in the regulatory frameowrk, see Lorenzo Frigerio and Davide Pati (by), L’uso sociale dei beni confiscati. Book formativo 2007/08, Ministero dell’In-terno - Pon Sicurezza, Libera. Associazioni, nomi e numeri contro le mafie, Roma, 2007

4 In this regard, see Nando dalla Chiesa, La scelta Libera. Giovani nel movimento an-timafia, Edizioni Gruppo Abele, Torino, 2014 (published with the support of Ludovica Ioppolo, Martina Mazzeo and Martina Panzarasa), Chapter V

influencing it. Organised crime subjects, instead, are characterized by perceiving a right of ownership on the company itself and the ensuing sense of offence that comes from being stripped of this right, with all the consequent attitudes towards the future of the company: from existential hostility to a desire to once again being in the possession of it. And there’s more: mobsters affected by the intervention of the law were, up to that point, at the centre of a real cluster of stakeholders5. And this is the bearer of relations that act in the current system and that are capable, to a certain and variable extent, of mobilising. This is certainly true on the private side, from suppliers to customers, from banks to employees and practitioners. But it is also on the public side, from municipal administrations to political parties. It therefore develops its competition pattern not so much on market criteria, for that would be impossible, but on the level of a social, economic and cultural block or, put in political terms, system. And with the ability and willingness to resort to competitive weapons (for one, physical intimidation) normally not allowed in normal “competition”.

This must therefore be made perfectly clear when defining the quality of the reference context of the confiscated company starting its voyage in the legal economy. And this leads to yet another framework element, namely the necessarily assisted nature of confiscated companies6. The size, or even the mere idea of assistance naturally evokes profit and parasitism scenarios that are not compatible with the market culture, which should receive and convert the company at hand. But success stories show that the same business needs a systematic support in overcoming the problems arising from the initial situation and the environmental context of hostility. How to

5 Umberto Santino and Giovanni La Furia, L’impresa mafiosa. Dall’Italia agli Stati Uni-ti, Franco Angeli, Milano, 1990; Rocco Sciarrone, Mafie vecchie, mafie nuove, Don-zelli, Roma, 2009, cap. II; Nando dalla Chiesa, L’impresa mafiosa. Tra capitalismo violento e controllo sociale, Cavallotti University Press, Milano, 2012

6 On this point, see the discussion in Nando dalla Chiesa, L’impresa mafiosa, cit., Chapter V (“L’impresa antimafiosa”)

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persuade a bank to not be more demanding against it more than it was when the company was in the hands of the mob? How to convince suppliers not to educe their payment terms? How to include its products in mass distribution, which can be affected locally by organised crime interests? These are all questions that lead back to the physiological needs of “friendly” authorities that work alongside the business, and they do so with intelligence and conviction. Not to mention all the constraints and bureaucratic loopholes that can be resorted to to hinder the action – which by the way are already quite customarily used in corrupt environments – to discourage new businesses that can disrupt the status quo. Therefore supporting taking a share of the problems that the company is likely to face not so much due to its inability or ineptitude, but because of its “ontological” specificity. It is therefore important to grasp the social value of the products the business eventually puts on the market, be it a product or a service. Because the product, be it concrete, medical care or food, will be the bearer not only of the value of exchange but also a special concentration of institutional, social and ethical values: the punishment of criminal wealth accumulation, discrediting the criminal ideology (Mafia seen as an employer), the ability of the state and civil society to defeat criminal powers7. The same public opinion should be educated and oriented to understanding of the game played by seized or confiscated businesses. So it’d know how to correctly interpret the meaning of supporting by public and private social actors, and not to confuse the defence of public interest with the unjust preference for a single private operator.

Thus remains the centrality of the relationship between the undertaking in question and its social environment, whose characteristics exert a fundamental importance on its likelihood to succeed. In this regard it is useful to draw from some remarks made by Arthur H. Cole, one of the greatest of entrepreneurship scholars, who after World War II at the Harvard Research Centre of Entrepreneurial History led a group

7 Idem


of economists, historians and sociologists in a systematic study of the entrepreneurial phenomenon8.

This author pointed out – in an important essay published in 19499 – that several factors can affect the ability of a business to succeed in its actions:

1. security;

2. political relations;

3. available capital;

4. technical, legal or financial knowledge;

5. information/communication;

6. political and social circumstances in the form of both institutions and practices;

7. the category of social phenomena, including the quality of the “bearers of entrepreneurial roles”.

It is precisely these factors that should be taken into account when analysing the overall framework in which those to whom the confiscated business is entrusted operate. More specifically these factors can be reprocessed creatively to both tackle the operational challenges the undertaking in question is facing and address the questions this challenge poses to the socio-institutional context; safety, first of all. Cole obviously envisages the alternative scenario based on peace and war. He thinks about the protection of people and property during conflicts and revolutions. But in this case the issue of security

8 Cole’s work is historically and theoretically described in Angelo Pagani, Nuovi svilup-pi dell’analisi imprenditoriale, in Angelo Pagani (by), Il nuovo imprenditore, Franco Angeli, Milano, 1967

9 Arture H. Cole, Entrepreneurship and Entrepreneurial History: The Institutional Set-ting, in “Change and the Entrepreneur”, Harvard University Press, Cambridge, 1949, pp. 85-107

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can be otherwise regarded in relation to the historical specificities of a context being highly influenced by criminal intimidation10. To what extent is this ability to intimidate antagonised in order to enable businesses to be confident they are operating in a peaceful system physically protecting their assets? Therefore this is quite inevitably the first term of the aforementioned Reference Framework.

In second place among the relevant factors Cole puts political relations. He considers widely differing forms of relationships, from royal favours (“His/Her Majesty” suppliers) to the exclusive concessions, from preferences in war contracts to corruption. In our case, however, political relations play a different role. They do not express privilege or corruption but, on the contrary, civil sensitivity and the spirit of legality. The relatively young history of confiscated property and businesses confiscated is marked by more or less moral involvement of political institutions in the challenge that business “re-use” stands for. The attitude of political parties, the adamant participation in the challenge by a competent minister, the awareness of a parliamentary committee, but also of a municipal authority, are all elements of the framework that can push the likelihood of a business to succeed in opposed directions.

The availability of capital plays a key role, too. The author is clearly influenced by Schumpeter’s position, which sees in bank capital a key condition of innovation and development11. Empirical cases observed indicate how is the availability of cash a necessary condition to enable that very special form of innovation consisting of the conversion of a criminal company into a legal one, to manage the transition phase and save the company in the most crucial phases, and how the

10 The literature on criminal intimidation is boundless. Still, going back to the origins is always useful: Leopoldo Franchetti, Condizioni politiche e amministrative della Sicilia, Ed. Barbera, Firenze, 1877 (now Donzelli, Roma, 1993, with a preface by Paolo Pezzino)

11 Paolo Sylos Labini, Introduzione all’edizione italiana, in Joseph Schumpeter, Teoria dello sviluppo economico, Sansoni, Firenze, 1971 (pp. VII-XXVI)


attitude of the banking system, either hostile/restrictive (or even un-empathically bureaucratic) or open/collaborative, can decisively influence the outcome of the challenge.

Of course, the availability of technical, legal and financial knowledge also arises as a discriminating factor for success. In a first phase businesses can generally follow the creative instinct. But in difficult times, when they need to move all the different variables (technical, organizational, market, relational) into a unitary function, they require a wealth of specific – and quite sophisticated – knowledge. This remark opens up the debate about what are, for the particular type of business analysed here, the elements of knowledge that should be prioritised; if, for the sake of simplicity, the knowledge of an Official Receiver is more useful than that of an entrepreneur. This has been a hot topic of debate for several years in Italian academic, professional and entrepreneurial circles. Some of the cases analysed by the research team (just think of the Hotel Gianicolo case in Rome) indicate that different types of knowledge can also be integrated into a single designated Receiver with an entrepreneurial spirit, and that in any case the enterprise cannot do without any of the mentioned experience deriving from entrepreneurial know-how. Hence the absolute need for business to the trusted for management on the basis of a strict observance of merit criteria and individual skills.

The issue of information and communication leads instead to assessing all its importance the reliability of information as a requirement. Cole thinks about information on markets, prices, and terms of trade. But here we must rather think about the need for the company to operate in a sure legislative context, to act on the basis of reliable and comprehensive information about the system of opportunities and constraints in which it operates, about the signs, and even the regulations, which its various stakeholders must abide by, namely the need to operate in a context that is not hazy nor overly dependent on the intentions and the culture of the systemic actors. These considerations lead directly to the political and social circumstances

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that Cole sharply analysed according to the double perspective of the institutions and practices. Beyond the law, what are the dominant social practices with which a confiscated business has to deal? What are the procedural timing, institutional priorities and the collective willingness to participate in the challenge? Again, what are the elements of support and hindrance? The situation of companies we defined “submerged”, “saved” or “suspended” is precisely defined both by the institutions and by social practices. The latter, after all, can cause (as in the case of “Wall Street” in Lecco) a pizzeria to open again – still as a pizzeria, by the way – after as many as twenty years. Finally, there is the broader category of social phenomena, concerning which Cole gives a primary role to the holders of entrepreneurial roles. As for confiscated companies, the focal question is the issue of knowledge and cultural attitudes required of new profiles assigned to management roles. In part, as it will be soon explained, the question is also the ability of the community per se to express their own and wider entrepreneurial role.

We have reached the last leg of the Reference Theoretical Framework drawn from the analysis of specific cases. Meaning that it would now be theoretically proper at this point to draw a correct relationship between the extent of social approval and the size of deviance, which for the purposes of this passage we’d like to call heresy. Specialised literature has indeed known two important scholarly approaches on the relationship between entrepreneurship and the social context. These approaches have produced as many interpretative models on the historical development of entrepreneurial attitudes. The first maybe traced back to such authors as David S. Landes12 and John E. Sawyer13, who emphasise the importance of social approval in the production of guidelines and the conduct of businesses. More

12 David S. Landes, French Business and the Businessman: A Social and Cultural Analysis, in “Modern France”, 1951, pp.334-353

13 John E. Sawyer, The Entrepreneur and the Social Order: France and the United States, in “Men in Business”, 1952, pp. 7-22


specifically, Sawyer compares the historical experience of France and that of the United States, and highlights the role played in the United States by the absence of feudal heritage in favour of the free expression of entrepreneurial spirits. Such a heritage has weighed on the French experience, where for centuries a definition of prestige founded on land, arms and religion discouraged and diminished the talent of businessmen to a lesser category. Hence the United States as the cradle of the social mobility, self-made-man and market freedom myths.

The second approach dates back to other authors under the names of Alexander Gerschenkron14 and Bert F. Hoselitz15, who from their analyses and researches drew a theory whereby entrepreneurship may well be born in the presence of social disapproval or even be stimulated by it (as deviance from the dominant normative structures) within ethnic and religious minorities. The explanation of this phenomenon can be summarised as follows. Minorities are by definition farther away from the heart of power and from the conventions that it processes, and upon which it rests. As such they can more easily express deviant attitudes, since the price they bear are much less relevant socially. The same fortunes of the Jewish families in business and trade were favoured by this condition of being a minority. Gerschenkron also refers to the fortunes of emancipated slaves in XIX century Russia. In this perspective, entrepreneurship is described like a heresy. Both approaches are based on historical facts and sound conceptual systems.

Hence the apparent dilemma research is faced with: is Entrepreneurship

14 Alexander Gerschenkron, Atteggiamenti sociali, imprenditorialità e sviluppo econo-mico, in Angelo Pagani (by), cit, pp. 263-284 (orginal edition 1953). See also Alexan-der Gerschenkron, Il problema storico dell’arretratezza economica, Einaudi, Torino, 1975

15 Bert F. Hoselitz, Main Concepts in the Analysis of the Social Implications of Technical Change, in Bert F. Hoselitz e Wilbert E. Moore (edd), Industrialization and Society, UNESCO Mount, 1963, pp. 11-31

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represented as the product social approval or as the expression of cultural marginality? As the dominant mode or as heresy? In fact, the two approaches are not contradictory. In fact it can be argued that where social approval is widespread and culturally rooted entrepreneurship also tends to be a rather widespread phenomenon. Instead where business elites are seen with suspicion or disillusionment entrepreneurship tends to flourish in the most distant places from institutions and power.

Now, how can one apply this important discussion in the field of our research, that is, to the theme of businesses confiscated from criminal (mafia) organizations? Research shows without a doubt that these companies take advantage decisively of a high level of social approval. Their chances of success in the legal market in fact rise considerably when their project experience is immersed in the direct and open cooperation of a rich and diverse variety of actors, each committed to fulfilling their own specific function. And it is especially so when the legal system, the political system, economic institutions, the surrounding community, from the press to associations, look to the project of these companies as an opportunity for collective redemption and economic and social promotion. However, collective action exerted to support businesses always features some defections, or better said, it normally displays incompleteness in the intents and actors called upon getting involved. Often, in fact, such action must come to terms with the stickiness and the legacies of the mafia power, which is willing and strategically prepared to play its cards to prevent the “subversive” project from succeeding. To use a sport expression, this collective action is as though it was playing an “away game”. The challenging nature of the project, its being heresy (total, partial) compared to a system of values, to a historical legacy, to a whole range of cultural and nuanced conventions becomes much clearer in this context.

In short, social approval manifests itself in an incomplete and minority form and must choose the path of heresy. And in doing so


it transforms its bearers (echoing Cole’s bearers of entrepreneurial roles) in a collective subject: an all-round entrepreneurial subject, still respecting the different functions in which the general entrepreneurial function is divided; a Collective entreprepreneur16. From this fundamental theoretical acquisition derive the meaning and value of the recommendations contained in the following pages and the latter, by complementing the theoretical frame of reference, constitute what we have called the Integrated Theoretical Model, which should be construed as the mix of conceptual results and operational indications of research. 2.2 THE REFERENCE THEORETICAL FRAMEWORK

16 Nando dalla Chiesa, L’impresa mafiosa, cit, Chapter V. On the concepts of “Collecti-ve business” and “Collective entrepreneurship” see also Nando dalla Chiesa, Profili sociali della comunicazione di impresa, Franco Angeli, Milano, 2012, pp. 45-47

A SUMMARY OF COMPOSITIONAL ELEMENTS

1. FREEMAN’S STAKEHOLDERS THEORY

2. THE RELATION BETWEEN BUSINESS AND THE ENVIRONMENT

3. THE RELATION BETWEEN ORGANISED CRIME AND THE ENVIRONMENT

4. CONFISCATED BUSINESSES AS ASSISTED BUSINESSES (THE CHALLENGE ELEMENT)

5. COLE’S THEORY OF ENVIRONMENTAL ELEMENTS

6. THE RELATION BETWEEN SOCIAL APPROVAL AND DEVIANCE/HERESY

7. THE THEORY OF COLLECTIVE ENTREPRENEURSHIP

3. GUIDELINES AND RECOMMENDATIONS

3.1 RECOMMENDATIONS TO THE COURT RECEIVER AND THE COURT – PREVENTIVE ORDERS SECTION

3.1.1 Regulatory framework and scope of application

Legislative Decree no. 159 of 6 September 2011 in Book I organically regulates the prevention process that provides for the adoption of a single set of rules, such as to rule on all the stages involved, from forced confiscation of the asset to its destination.

Such phases may be generally described in the following terms:

I. INTERIM CONFISCATION OF THE ASSET (SEIZURE) with temporary management by a judicial receiver appointed by the Court, Preventive orders section;

II. FINAL CONFISCATION OF THE ASSET (FINAL CONFISCATION, that no longer subject to appeal) the asset moves under the competence of of the National Agency for the administration and allocation of assets seized and confiscated from organized crime;

III. DESTINATION OF ASSET by the National Agency for the administration and allocation of assets seized and confiscated from organized crime in accordance with the criteria laid down by Article 48 of the Law against Organised Crime.

Before the Law against Organised Crime, the whole discipline on the management of assets subject to precautionary measures was comprised merely by two articles in the Code of Criminal Procedure implementing provisions (Articles 104 and 104 bis), which simply

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referred to the executive rules for confiscation under the civil law, save for any specific information contained in the appointing decision (e.g. obligation of the receiver/custodian to report periodically, indicating the value limit of the deeds to be considered of extraordinary administration, etc.).

The Organised Crime Law is, therefore, a complete and complex instrument that – for the first time in Italian law – precisely tracks the coordinates of the powers and duties vested on the competent judicial authority and in the Court Receiver appointed by it.

In the light of what emerged during the ICARO research, we hereby propose some recommendations with particular reference to profiles of the Court Receiver and the Judge, meant as part of the Court, section for the application of preventive measures.

The role of such actors – Receiver and Judicial Organ – shifts and changes depending on the stage of intervention, and entails interrelations of skills and the need for coordination.

The innovative scope of the Code, in this regard, assumes a meaningful value when you consider that it not only applies to the prevention process but, by express provision of law, also to certain criminal proceedings concerning seizures arranged during criminal proceedings. Article 1, Paragraph 190, of Law no. 228 of 24 December 2012 has, in fact, added Paragraph 4a to Article 12 sexies of Legislative Decree no. 306/92, converted with Law no. 356/92, according to which the rules laid down by Legislative Decree no. 159 of 6 September 2011 apply also in cases of seizure and confiscation provided for in paragraphs 1 to 4 of this Article, as well as in other cases of seizure and confiscation of property adopted in proceedings related to crimes referred to under Article 51, Paragraph 3 bis of the Code of Criminal Procedure.

The alignment of the rules on management and receivership allows to apply the Organised Crime Law both with reference to management


and receivership in the strict sense (Title III), both with reference to the protection of third parties (Title IV), as recently recognized by the Court of Criminal Cassation, Sec. I, Judgement no. 12362 of 23 March 2016.

This is to make the following recommendations available and suitable not only to Court Receivers appointed pursuant to the regulations set forth by the Organised Crime Law, but also by the receiver appointed under criminal precautionary measures in the proceedings mentioned above.

3.1.2 Recommendations for the Court Receiver and the Judicial Authority having jurisdiction in the first phase

In the first phase, the one that goes from the issue of seizure order to finality of the confiscation order, the two actors (Court Receiver and judicial authority) apply in full their mutual powers, duties and responsibilities for the integrated management of assets undergoing a preventive measure.

3.1.2.1 Instructions for the Judicial Authority (Court in relation to preventive measures or Examining Judge for criminal prosecution)

The obligations of the Judicial Authority (Court section of preventive measures and Presiding Judge, the Public Prosecutor or the magistrate office in criminal proceedings) are derived from the provisions governing the conditions to apply of the measures and partly from information on the management activity in the strictest sense.

The reference regulatory framework sometimes leaves unresolved or inadequately treated some issues of practical nature. The gap was bridged by practices designed by the Judicial Offices and personally by

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particularly enlightened Section Presidents, which are outlined below:

- On the assessment of the objective and subjective conditions for the application of the capital measure: please refer to the best case-law for the evaluation of the disproportion, direct and indirect availability criteria; a growing trend should be reported in terms of the implementation of the equity measure against subjects potentially causing serial danger for crimes related to tax evasion. Among them, the guidelines of the latest and recent judgments of the Court of Cassation (Sec. 1, Sentence no. 31209 of 2015 - Sec. U, Judgment no. 4880 of 26/06/2014);

- On measures applicable to real estate: pay special attention to checks on the land registry. There often are misstated references, with the possible involvement of parties unrelated to the proceedings and the ensuing grounds to challenge the verdicts. Transcription errors, generally, stem from the investigation, it is therefore appropriate to carry out a technical check to properly define and identify the assets being involved in the measure;

- On measures concerning corporations: verify that the seizure of all its shares goes together with the seizure of the assets and the company, as measures which only affect shares are not uncommon and, pending the appointment of the substitute receiver prior to the confiscation, assets related to the company equity should be seized not upon a superficial survey. Otherwise, the seizure of all company assets allows to also include assets that were not specifically listed and eventually recovered when placed into possession;

- On measures concerning corporations: request the Court Receiver to look into convening the Board for the revocation of the receiver, when already from the investigation there should emerge factors such as to assume the continuity with respect to the proposed action;


- On the indication of the appointed Presiding Judge (in the case of Court preventive section): expressly entrust to the same also the role as Judge, so that the same subject be trusted with all information on the proceedings from its inception down to individual management measures authorised based on the needs of extraordinary receivership;

- On the organisation of the Clerk office: liaise the Clerk office of the Presiding Judge with the Court Receiver, providing the former with references also from the management pool (Legal Assistants of the Court Receiver), so that the instances related to the going concern of the enterprise are given priority;

- On monitoring the possessing decree: in order to allow the approval of possession to the Court Receiver since the enforcement of the seizure, including through the presence of the Legal Assistants in the different sites, in order to enable the timely inspection, the photographic survey and the identification records to detect the actual entities operating in the companies at the time of the seizure;

- On the selection of the Court Receiver: with the decision ordering the seizure of the assets as attributed, the Court shall appoint the Court Receiver selected from the national register under Article 35, Paragraph 2, of the Organised Crime Law. The Register of Receivers is governed by the following sources:a) Legislative Decree no. 14 of of 4 February 2010

Institution of the Order of Court Receivers pursuant to Article 2, Paragraph 13 of Law no. 94 of 15 July 2009, (published in Official Journal 38 of 16 February 2010)

b) Entry into force of the measure: 3 March 2010

c) Ministry Decree no. 160 of 19 September 2013

Registration in the Court Receivers Register pursuant to

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Legislative Decree no. 14/2010 and criteria for suspension and cancellation from said Register and exercise of regulatory power by the Ministry (published in the Official Journal no. 19 of 24 January 2014). Since May 30, 2016, the lawyers and accountants concerned, in order to enrol as Court Receivers, must apply on-line by accessing the Justice Department eServices portal https//pst.giustizia.it

The Register formally introduced with Legislative Decree no. 14/2010 (Official Journal 16.2.2010) consists of two sections: an ordinary section concerning professionals enabled to be assigned as receivers of assets (assets, real estate, receivables, etc.) other than companies/enterprises; and a section of experts in business management, to whom the Court should turn in case the seizure should relate to companies (art. 41, c. 1).

In practice, in case of qualitatively and/or quantitatively complex proceedings (e.g. in the presence of one or more companies/enterprises), the Court should normally appoint several Court Receivers with different skills and even professional profiles and assign pursuant to Article 40, Paragraph 1 the management guidelines prescribed by the ANBSC pursuant to Article 112, Paragraph 4, Letter a) of the Organised Crime Law.

Among the criteria reported in the above rules, there seems to be a clear precedence to the following selection criteria applied to professional profiles:

a) Unique skills, derived from past experience and from the possession of specialized educational qualifications in the management of corporate crises and in particular the receivership of portfolios subject to criminal or preventive measures (the static liquidation approach within the bankruptcy receivership should be replaced by


a dynamic management approach, which must already be a distinctive trait of the professional in charge);

b) Proximity to the asset (with the option of legal assistance in case of procedures involving local offices found in different locations);

c) Training: the profiles are to be preferred to be specifically trained on the nature of the assets subject to the measure, the prevention proceedings and the social or institutional purpose of reuse;

d) On the rotation of responsibilities, take into account not only the number of proceedings but – more specifically – the commitment that they actually require, in order to mitigate the deployment of resources and appointments with the opportunity for practitioners to specialise on this matter, in order to practice it almost exclusively and be reliable and effective partners of the Judicial Authority.

- On the appointment of legal assistants: Article 35, Paragraph 4, provides that Presiding Judge may authorise the Court Receiver to seek the assistance, under his or her responsibility, of technicians or other qualified parties. Courts, then, should set up White lists of legal assistants specifying the profiles generally more involved in the management: labour consultants, accountants, industry consultants (agronomists, managers, management engineers) not only with proven expertise in reference to the proceedings at hand, but also specifically trained in the field of asset and prevention measures proceedings.

3.1.2.2 Instructions for the Court Receiver

- On the execution of the confiscation: generally, given the

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relationship of trust between the Court Receiver and the Judicial Authority, the executive phase of the seizure is pre-arranged with the same practitioner, especially in the case of quantitatively significant seizures concerning different types of assets (movable goods, real estate, receivables, companies, company shares, etc.), often located in different territories. Indeed in these cases it is necessary to ensure as much as possible the presence of the Court Receiver in the implementation phase, including by means of specifically appointed Legal Assistant. In the event of seizure of properties and companies, this is to underline the opportunity to draw, during the enforcement phase, special reports indicating the status of the sites, movable goods and the available documents, natural persons present, etc. These reports provide a sort of “snapshot” of the company’s assets subject to the measure at the time of the seizure, and will be useful for the purposes of the reports (initial and final) which the Receiver is required to provide, as well as in case of any disputes which may arise in the future relating to the management put in place in the course of the Receivership.

- On the appointment of Legal Assistants: Article 35, Paragraph 4, provides that Presiding Judge may authorise the Court Receiver to seek the assistance, under his or her responsibility, of technicians or other qualified parties.

- On the specific powers of the Court Receiver: please refer to the legal provisions under Article 35, which states that “The Court Receiver holds the office of public official and should diligently fulfil the duties of his office. He has the task of providing for the custody, preservation and administration of property seized in the course of the proceeding, in order to increase, if possible, the profitability of the assets.” However these forecasts take particular importance, both for the powers vested in the Court Receiver by these rules, and in relation to the ensuing responsibilities. The terms “custody”, “preservation” and “management” imply a


growing expertise in functional terms:

a) “To guard” means to hold under one’s own responsibility, though normally without any need for particular deeds

b) “To preserve” is a form of so-called “active” custody, i.e. marked by occasional interventions aimed at preventing the assets from scattering (e.g.: preservation of a property, for which one must sometimes carry out routine maintenance and emergency repairs)

c) “To manage” is a dynamic activity involving active management in order to attain profits and raise the value of the asset. With reference to the “business” management, profitability is an inherent objective of the operations; for other assets, mainly real property, it is necessary to achieve a profitability return, given the possibility of requesting the employment allowance to the person concerned or lease the assets.

- On the activities of the persons concerned in the confiscation and their family: in the past the activities of the persons concerned in the confiscation and their family was tolerated, especially in the case of seizures related to small businesses revolving around the person affected by the measure. The Organised Crime Law severs this connection by providing with Article 35 that “it is forbidden to name anyone against whom the measure was introduced, their spouses, relatives, in-laws and the people living with them, nor the people sentenced to a punishment that involves disqualification, even temporary, from public offices or those who have been on the receiving end of a preventive measure. Moreover the same people may not hold auxiliary or collaborative functions for the Court Receiver”. This provision is certainly in line with the legislation on prevention and if interpreted to strictly, however, can cause serious problems in relation to business going concern, especially early in the seizure of companies – usually small to medium size – which as mentioned is mainly linked to the activity

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of the mentioned subject. In these cases, always aligning itself to a restrictive interpretation of Article. 35, Paragraph 3, might constitute the following alternatives for the Judicial Authority:

a) Single out appropriate practitioners to promptly replace the above mentioned top management of the company;

b) Opt for leasing the company or a business unit thereof to minority entrepreneurs;

c) Report to the Court, pursuant to Article 36, Paragraph 1, Letter e), with reference to the impossibility of continuing the business activity.

The solution in point b) must contemplate flexible contractual paradigms or at least adaptable to the outcomes of the procedure. For example by introducing a 6-month return clause for the property in case of revocation of the confiscation in order to prevent the tenants from being forced to maintain relations with the persons concerned in the confiscation.

- On the use of the assets by the persons concerned in the confiscation and/or their family: based on the provisions set out in the bankruptcy laws for the benefit of the bankrupt, Article. 40, Paragraph. 2 provides that the Presiding Judge may adopt, in respect of the persons concerned in the proceedings and their families, the measures described in Article 47 of Royal Decree no. 26738 of 03/16/1942, when the conditions specified therein should be met.

Ultimately the Presiding Judge may grant:

- A subsidy in the form of alimony offered to the persons concerned in the Proceeding and their family;

- The use of the confiscated property, if used by the persons concerned in the confiscation and/or their family, with the provision in this case that “the beneficiary see at its own to


the expenses and charges related to the property”, excluding “any recourse action”.

- In addition to the purposes listed above and, in particular, with reference to the right to use the property in favour of the persons concerned in the confiscation or their family members, it is important that the Court Receiver, in conjunction with the Judicial Police appointed for the execution of the seizure pursuant to Article 21, immediately inform the Presiding Judge on the status of the property or properties confiscated from the persons concerned in the confiscation (though possibly made out to third parties, considered as front for the same persons concerned in the confiscation), as it may happen – this situation was found several times – that in the event of seizure of multiple properties, instead of maintaining the use of a particularly prestigious property by the persons concerned in the confiscation and/or their family members, the latter be granted the use of a property of smaller size and value, but still suitable to cater to the family needs.

- On the occupation of real properties in general: with reference to real properties, it should be noted that the management of the same is strongly influenced by the presence or absence of people occupying in the property at the time of the seizure. The presence needs to be resolved gradually and legally to enable a regular reallocation process:

- If the property is occupied on the basis of a title authorising the continued detention, as in the case of holders of personal rights of enjoyment as of a proven date prior to the seizure, these individuals may continue to enjoy their rights, paying the rent Court Receiver. With the finality of the confiscation, the beneficial rights expire and the contracts relating to the personal rights of enjoyment will cease with the priority payment to the leaseholders of a fair compensation.

- In the event that the property should be occupied by the

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persons concerned in the confiscation, Article 21 of Legislative Decree no. 159/11 literally provides for the eviction, because the law considers such persons as legally dispossessed of the seizure constraint and, therefore, “lacking any entitlements”. The Presiding Judge may take against the persons subject to the proceedings and their family the measures provided for by Article 47 of Bankruptcy Law «when the conditions laid down therein should be met». This provision sets out the possibility of granting “home ownership” in addition to a subsidy should the persons concerned in the confiscation should lack all the means of sustenance. However, the beneficiary of the award decree shall provide for expenses and charges related to the real estate unit, with the exclusion of any recourse.

- In case of a formal holder, whose actually purpose was to prevent the asset from being confiscated, much like the person concerned it has no entitlements and should be evicted.

- In the instance in which the property should be occupied by a third party unrelated to the criminal activity, but without any entitlement, the eviction must be executed, unless a lease agreement should be entered into with the permission of the Presiding Judge to the payment of rent to the Court Receiver.

- Finally, in the light of the above checks the property should not be occupied or should be vacated during the course of the receivership, it must be duly leased on order to increase the profitability of the assets.

- On the authorisation for extraordinary activities: as part of their duties, the Court Receiver, appointed pursuant to Article 35 of the Organised Crime Law, may engage in all acts of ordinary administration being functional to the management of the specific asset (business and otherwise), while, as concerns extraordinary management, it requires the specific authorization of the former Presiding Judge under Article 40, Paragraph 3. The following


Article 41, Paragraph 2 provides for a similar discipline even in the case of seizure of enterprises. These norms have the clear purpose of allowing a profitable and streamlined management by the Court Receivers, and, secondly, to ensure the same can carry out extraordinary activities, without the prior examination by the Presiding Judge. In this context it is necessary to establish a relationship based on continuous exchange of information between the Receiver and the Presiding Judge, because the distinction between ordinary and extraordinary administration is not always clear-cut. The aforementioned Article 41, Paragraph 3 confirms, however, the lack of an objective criterion to distinguish ordinary from extraordinary administration, given that the same rule provides for different criteria depending on the type of company, its activity, etc. It is clear that buying a piece of machinery can be an ordinary activity into an enterprise with many important contracts, with a turnover of tens of millions of Euro and in which the same purchase is presented with a certain recurrence; on the contrary, it would be an extraordinary action in a small construction company, with a low turnover, etc. Therefore it is important to look at the context in which the company operates, where it is the same Presiding Judge that in view of the mentioned factors (company, operation etc.), “may” indicate a value limit to draw the line between ordinary and extraordinary actions. On the other hand, however, it is necessary not to abuse the use of the authorizations granted by the Presiding Judge taking into account that, in the presence of recurrent operations, the Judge would then be overwhelmed by excessive (and perhaps unnecessary) requests.

- On the proceedings log and the company books: one of the first requirements that must be in place by the Court Receiver appointed pursuant to Article 35, is acquiring and duly certify the so-called proceedings log already prescribed in the previous legislation (Article 1, Decree no. 293 of 02/01/1991) and now regulated by the Organised Crime Law in Article 37. In this regard

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– though that to date the ministry decree that should regulate the specific provisions for keeping of the log has not been issued yet – it should be pointed out that in practice this log was similar, in terms of form and content, to the log provided under Royal Decree no. 267 of 03/16/1942 for insolvency liquidator. Therefore according to specific practices, in the absence of implementing provisions concerning the procedures for keeping the proceedings log, the Court Receiver must acquire and submit to the Court for the purposes of the endorsement by the Presiding Judge, a record of the procedure noting down the main transactions carried out and distinguishing those annotations for each person concerned and seized business. The log is a useful tool to evaluate the activity carried out by the Court Receiver by the Judicial Authority. In a nutshell, the proceedings log should be a sort of diachronic record of the Receiver’s doing, with the dual purpose of allowing the subsequent statements of account by the same Receiver (periodic reports and final account) and allow to obtain suitable opinions on the part of the Judicial Authority (including for the quantification of compensation).

- On the obligation to report further assets: according to Art. 35, Paragraph 6, the Court Receiver must report to the Presiding Judge the existence of other assets which may be the subject of seizure and which have come to their attention during the receivership. This function generally takes place in the initial stages of the approval of possession, or can be integrated in the course of the receivership. The practice requires not to wait for the periodic reports to indicate the presence of further assets, but rather to make timely reporting in a specific document, to be sent in a copy also to the original Public Prosecutor and in which the urgency of the subject should be reported.

- On the reports under Articles 36 and 41: the report on the seized assets is a major formal requirement to be fulfilled by the Receiver/Legal Custodian, in that such document on the one hand allows


the Judicial Authority (Court, Presiding Judge and the Public Prosecutor, but also to Judicial Police) to prepare and understand the assets actually involved in the specific proceedings in view of those indicated in the seizure order and, on the other hand it is, if drafted in a comprehensive manner, a sort of quick-reference “manual” for the Court Receiver – but also for other stakeholders (Court, Presiding Judge, Public Prosecutor, Judicial Police, ANBSC and others) – in the course of receivership. Article 36 stipulates that the Judicial Authority, within thirty days of the appointment (a term that may be extended by the Presiding Judge for no more than 90 days), must submit a detailed report having at least the following content:

a) Indication, state and consistency of the confiscated assets or of individual companies;

b) The estimated market value of the assets, according to an estimate of the Receiver himself;

c) The entitlements, if any, of third parties on the seized assets;

d) In the case of seizure of enterprises, an indication of the documents found and any discrepancies between the inventory items and the accounts;

e) An indication of the most appropriate and profitable forms of management of the assets, specifying that “in the event of seizure of assets organized in a business or equity investments that ensure the majority provided for under Article 2359 of the Civil Code, the report contains a detailed analysis of the existence of real opportunities for continuation or resumption of activities, taking into account the level of characterisation of the same with the persons concerned in the confiscation and their family, the nature of the activity carried out, the mode and the environment in which it is performed, the labour force employed, production capacity and the target

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market”.

The second paragraph specifies then that the report should also disclose any differences between the subject of the measure and what has actually been seized and the existence of other assets that could be seized, of which the judicial administrator becomes aware.

The practice clarifies that the reports are easy and effective to refer to provided that:

a) They are introduced by a table of contents;

b) They are divided by assets per single person concerned;

c) Within the wider subdivision, the assets are further categorized by type (real estate, registered assets, company shares/stocks, bank accounts and similar accounts, other assets);

d) Final remarks and summary of operational proposals to continue the activities;

e) Material prognosis as to the continuation of the activities.

The initial report, as all previous/subsequent documents, notes and reports filed by the Court Receiver, must be submitted to the Public Prosecutor’s office and also to the ANBSC, in order to enable it to always be informed in monitoring the activities of the Court Receiver.

According to Article 36, Paragraph 3, second part, the Court Receiver shall draw up a regular report “as frequently as determined by the judge”.


3.1.3 Common lines

For all the actors of this first phase, there is a specific and desirable need to establish memoranda of understanding between institutional organizations and social actors involved in the management phase and which can be involved in the process of reallocation, in order to anticipate the outcome of the destination from the confiscation stage. The protocols are designed to formally and systematically access the initiatives of the Court, the Court Receiver and the social actors that, in various capacities, are involved in the preventive procedure. These Protocols (already available in Rome, Milan, Palermo) are the instruments through which the objectives in the Organised Crime Law are structured, thus anticipating the objectives of the Italian legislation on reallocation for social purposes, which is one of a kind in the world.

3.2 GUIDELINES FOR INSTITUTIONAL ACTORS (LOCAL AUTHORITIES, LAW ENFORCEMENT, POLICE, FINANCIAL POLICE, FORESTRY POLICE, AGENCY FOR CONFISCATED PROPERTY)


The legislation in force in the field of management of company assets confiscated from organised crime under Article 48, Paragraph 8 of Legislative Decree 138/2011 and subsequent amendments and supplements does not confer any specific role to local authorities in the context of the proceedings both in the judicial phase – being under the jurisdiction of the Judicial Authority – and after the seizure, specifically regarding the allocation in view of the fact that company assets, once finally confiscated, are acquired and remain as unavailable state assets.

More specifically, as concerns the latter, company assets can be allocated, by order of the ANBSC:

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a) for rent where there should be well founded prospects of continuation or recovery of the production targeted at making a profit, to companies and to public or private organisations or free of charge, at no cost to the State, to worker cooperatives employees of the confiscated business;

b) the sale or liquidation where there should be a greater benefit to the public interest or if the sale thereof is intended to compensate the victims of Organised Crime, at a price not less than that determined by appraisal, to anyone whom should so request.

However we believe that local authorities, as part of the preventive procedures of equity nature provided by Organised Crime Law relating to assets held in the company, may take on a key role with a view to an overall improvement in the effectiveness of the preventive instruments relating to corporate assets.

In fact, given the social relevance and the particular complexity of the activities, even in view of the nature of the assets in use, it would be helpful if local authorities with particular experience and specialisation in the local governance, as a liaison with the central Government, may establish closely cooperative relations with institutions to which the law attributes specific skills in the process (Judicial Authorities, Court Receivers, ANBSC, prefectures), to assist them in the management and help them operate more incisively.

The tool that should be used in order to define and implement joint actions and empower local authorities with specific support tasks, technical assistance and provision of various services in order to support the subjects supposed to manage businesses subject to organised crime prevention measures, takes the form of institutional arrangements between public administration under Law 241/90.


3.2.2 Recommendations on the management of relations with the other actors involved in the process

Local authorities can effectively initiate different types of actions in support of the various stakeholders within the seizure-confiscation process. In particular:

a) as subjects constitutionally responsible to pursue the objectives for a more effective protection of the territory and its safety, to create favourable environmental conditions for a healthy local economic development and the smooth operation of economic activities, they may provide timely and effective collaboration to such institutional players, in order to ensure maximum transparency and legality in the management of corporate assets. Such collaboration is meant to ensure, in general, the prevention of possible phenomena of deviance and breach of transparency, freedom of enterprise and fair competition principles in the conduct of the business, including those relating to the award of works and supplies, and the repression of illegal interference by organized crime. Local governments, in their role as “privileged” observers of the area, can promote the exchange of information through the involvement of peripheral State organisations through the establishment of joint working tables. Through these partnerships it might be possible to establish a picture of organised crime presence and influence in the territory, thus providing a useful tool for Court Receivers and Presiding Judges to perform acts and take decisions about the seized/confiscated company.

In addition, local authorities may provide for temporary interventions on local taxation in support of these companies, while maintaining a sustainable balance between the need to provide a support that mitigate the distortions suffered by the seized/confiscated business and the principles of fair competition.

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b) They can provide assistance and information to stimulate integrated actions of conscious and self-determined development at the local level through the transparent and efficient management of company assets confiscated from organized crime, taking into account the specificities of the area, in order to trigger a virtuous economic cycle that can also positively affect other economic operators found in the area and thereby constitute a driving force for development to create clean wealth and produce a strong local effect.

Governments can signal the presence in the area of seized/confiscated companies through dedicated spaces within institutional websites, in order to give evidence to citizens and increase their visibility in the eye of those who are most sensitive to these issues.

c) From a social standpoint, they can facilitate the pursuit of employment objectives and social integration by preventing and remedying conditions of unrest and marginalization, through the involvement of disadvantaged and economically vulnerable people in the management of corporate assets.

d) Promote, always in support of the activities on seized company assets and in partnership with schools and local associations, cultural, educational and promotional initiatives aimed at promoting and spreading a culture of legality by disseminating and letting people know the benefits that can be produced in a community by managing the assets confiscated from organised crime.

Local governments can support forms of association that promote the culture of legality, in order to be able to increase the social awareness concerning this issue. In this respect, the funding of training courses for students is only one of the possible ways to stimulate civil society.


3.2.3 Recommendations on the assessment of risk in the activities tasked to actorsLocal authorities, such entities constitutionally responsible to pursue the objectives of better and more effectively protecting the safety of the territory, can collaborate with various institutions in order to provide the Chief Receiver and the Presiding Judge with all the information concerning the potential presence of illegal interference by organized crime, such as to significantly affect the recovery process of the company. Therefore, local authorities can share all relevant information in their possession to outline the territorial framework and highlight possible weaknesses.

3.2.4 Recommendations on how to evaluate and seize improvement opportunities

Local authorities could assign staff suitably trained on fund-raising to activities deployed in support of confiscated business asset redevelopment and management projects such to, however, not to interfere with the principles of fair competition in the activities held.

3.2.5 Examples of good practice

Consorzio sviluppo e legalità

Consorzio Sviluppo e Legalità was established in 2000 by the municipalities of Altofonte, Camporeale, Corleone, Monreale, Piana degli Albanesi, Camporeale, San Cipirello and San Giuseppe Jato. The consortium is an pilot experiment of social reallocation focusing on assets confiscated from organised crime that, for fourteen years, has been operating in Sicily, Province of Palermo. Given its accomplishments it stands out in the whole nation as a management model associated with public assets stolen organized crime.

Today, in those places that have been for so long the symbol of the

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injustice and illegality, thanks to a conscious governance policy, conducted by public authorities and associations, centred on a management model free from bureaucratic logic, and carried out in accordance with such principles as careful programming, transparency, efficiency and economy, this experience has created new conditions for development and a new entrepreneurial culture among young people in the whole community.

About seven hundred hectares of agricultural land confiscated from organised crime, as well as state-of-the-art agricultural facilities were recovered and placed back into production and, thanks to the financial contributions of the Department of Public Safety of the Ministry of Interior – the entity in charge of National Operational Plan (PON) on Security co-financed by the European Union – they were turned into holiday farms, equestrian centres, wineries, social centres.

Today in those assets that were once owned by the powerful and feared members of cosa nostra, work the members of the assignee cooperatives and the whole business that has been generated locally, namely about a hundred people who produce pasta, wine, tomatoes, melons, honey, preserves, chickpeas, lentils and other top quality organic produce. These products are marketed and distributed on a national scale, both in large supermarkets as well as in small local grocery stores, spreading about the land the symbolic message that creating clean wealth from land freed from organised crime is indeed possible.

Tuscany

In July 2014, the Regional Government of Tuscany has set up a coordination committee between the Region and its municipalities, prefectures and associations in order to accelerate the process of social reallocation of assets confiscated from organised crime.

With this Table the Regional Government of Tuscany has decided to take charge of collecting the proposals of local authorities and


associations on the use of the assets and to provide over time for a steady and regular collaboration with the National Agency for the administration and allocation of assets seized and confiscated from organized crime. The aim is to facilitate procedures for the allocation of assets and also to present the Government with proposals for improvement on the current legislation. The work of the Table is supported by a database freely available with geo-referenced access on the website of the Tuscan Regional Government, which contains detailed information and images of the 69 properties and assets confiscated in Tuscany to this date. The website also features some statistical information and other information documents on this matter.

Puglia

“Libera il Bene” is an initiative of the Puglia Regional Government targeted at promoting the culture of legality and social reallocation of assets confiscated from organized crime for social, economic and environmental protection. Libera il Bene is a project in collaboration between the Regional Youth Politics Desk and Libera - Associazioni, nomi e numeri contro le mafie, which fits into the actions held by the umbrella initiative Bollenti Spiriti.The initiative consists of 4 actions:

– Information: the www.liberailbene.regione.puglia.it platform published and constantly updated a map of the assets confiscated from organised crime and made it available to the local authorities throughout Puglia, along with news and updates on the fight against organised crime and good examples of social reallocation of confiscated property;

– Participatory mapping: with the support and supervision of Libera, active citizenship organizations involved in the field collect the latest information on the status of the assets and all necessary material to start reallocation projects with social and cultural purposes;

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– Tutoring: the Regional Government of Puglia offers technical and design assistance to Local Authorities that receive confiscated properties as well as to associations and social enterprises that manage or want to manage confiscated properties, providing them with mentorship, skills transfer and networking opportunities;

– Financing of reallocation projects: by resorting to the resources of the 2007-2013 European Fund for Regional Development, the Regional Government of Puglia has funded 14 projects for the recovery, conversion and reuse of assets confiscated from organised crime.

3.3 GUIDELINES FOR THE PROFESSIONAL WORK (WORKERS, UNIONS, MANAGERS)

3.3.1 Workers

3.3.1.1 Actual and potential role of workers in the process

The seizure of a company is a traumatic event for the workers, in that it jeopardises the guarantee of steady income and a job. At this stage the relationship established with the Court Receiver (AG) and with trade unions is quite crucial. Workers are an essential source of information. They know the business situation, the status of the company; they know suppliers and customers and, last but not least, the relatives and close friends of the mobsters involved. They possess valuable technical and professional knowledge. All other actors involved in the recovery of the company should tap into this potential source.

In this stage employees are called upon making a choice: they may take a purely defensive stance aimed at the continued payment of wages and the recovery of their receivables accrued from their work or be an active part in the continued success of the business. They should feel part of a process where all are called upon taking part in the team and carry a share of the responsibility.


The relationship with the Court Receiver is initially marked by mistrust. Employees see this new legal figure as a stranger, and they do not know the actual and potential role thereof. They also weigh in the negative experiences of previous confiscations.

Workers turn to trade unions to inquire about how their situation and how to deal with it. They demand to be protected with respect to continuity of income and employment. The relationship with trade union helps workers build the suitable conditions to retrieve a relationship of trust with the Court Receiver.

Companies often employ people who are related or in some way affiliated with the persons concerned in the confiscation. If workers are part and actively involved in criminal activities, they will be a hindrance not only for the Court Receiver and the trade unions but also for the company’s recovery, and therefore should be removed. If employees are not aware of the criminal activities under way, they have potentially play a pivotal role in the steady and continued success of the business and as such they are called upon an ethical choice.

3.3.1.2 Recommendations on the management of relations with the other actors involved

A team approach is fundamental here. The key issue is the creation of a relationship based on trust, based on transparency with the Court Receiver and the collaboration with the Presiding Judge. Employees must immediately activate the relationship with trade unions in order to break the initial condition of isolation. Employees must engage, together with trade unions, in a relationship with local institutions (municipal, provincial, regional), which are often absent unless involved by those who have an interest. Creating a team will help workers set themselves free from the condition of difficulty and isolation to which confiscated companies are subject.

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3.3.1.3 Recommendations for the assessment of risk in the activities tasked to actors

There are risks associated with the phase of the seizure and risks related to the next phase, namely final confiscation. These risks include the following:

– Loss of job. It is inevitable when business winding up cannot be avoided since the enterprise is inherently interconnected with organised crime (counterfeiting, money laundering, unfair imposition of the product, etc.), and therefore cannot survive in a legal context;

– The presence of the persons concerned in the confiscation, their family and relevant affiliates;

– Temporary suspension of the business resulting in the cessation of pay;

– Loss of claims from outstanding salary. In many cases, the criminal-entrepreneur issues fictitious claims from outstanding salary;

– Non applicability of social safety nets for the specific characteristics of the business;

– Winding up of the company and inability to establish a workers cooperative;

– Unfair competition, customers and suppliers distancing themselves from the company. If previously the suppliers and the customers were loyal and steady, with the seizure those economic interests that were previously favourable for both parties come to an end;

– Debts and loans drawn up by the confiscated company borne by the workers cooperative on an asset that is property of the State. This results in high economic turmoil that, in some cases, leads the company to winding up.


3.3.1.4 Recommendations on how to approach the identified risk

– Removal of the persons concerned in the confiscation, their family members and relevant affiliates;

– Involvement of trade unions in order to safeguard contractual rights and to resort to social welfare and all other forms of protection of workers rights;

– Provision of all the information to the Court Receiver and trade unions about claims from outstanding salary that formally appear to have been made but were never actually paid (post-employment benefits, family allowances, rates of variable pay, etc.);

– Enforcement of all national and regional laws that provide any and all forms of support, including economic support to confiscated companies;

– Communication to the Presiding Judge, also through the Court Receiver and trade unions of all relevant information on the possible bad faith of creditors and banks.

3.3.1.5 Recommendations for assessing and seizing opportunities for improvement

It is quite necessary to promote a dialogue with all the other actors, feel a real part of the company and contribute to economic recovery plans and actual recovery actions as well as production launch, using all the knowledge and skills acquired. A long-term vision and a far-reaching perspective of the company are paramount in order to arrange for the right conditions to create of a cooperative of workers in the event of final confiscation.

With the support of trade unions it is also possible to foster cultural growth within the company and understand the importance of the

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law and the company’s resources to all business components, first and foremost fellow workers.


– Promote agreements with trade unions in view of the company reorganisation and seek a balance between fair and right trade union demands and the objective of going concern;

– Create a cooperative of workers for the continuation and revitalization of the productive activity;

– Foster dialogue based on trust and cooperation with all the actors that are openly and sincerely committed to supporting the future production of the company and the ensuing job creation.

3.3.2 Trade unions

3.3.2.1 Actual and potential role of trade unions in the process

In companies subject to preventive measures, trade unions are hardly present to represent workers. They are often made aware of the confiscation measure by the workers, who are worried about their future, or by the media, once the confiscation has become final.

The first questions that usually trade unionists ask employers is: “How many are you? What happened?” The attempt is to obtain news from the press and to know what rumours are circulating. A meeting is convened with the workers concerned, and and an attempt is made to understand how to best protect their jobs and income. Again, an attempt is made to understand how to bring the employment relations back under the “umbrella of the law”. Trade unions and the workers work together to figure out the problem and define the best conditions to achieve these goals.


The union is first and foremost called upon dealing with issues relating to workers income protection in case of temporary closure of the company. Next, trade unions are supposed to compare possible and/or necessary reorganisation processes that may require a reduction of employment levels.

In case of suspended production, it is necessary to activate social safety nets in order to support the income of workers. On the use of so-called social safety nets for the continuation of the working relation one must take into account the current legislative framework, which provides that, with effect from 1 January 2016, in order to prevent the use of the redundancy fund (CIGS) for unrecoverable business situations, “extraordinary pay integration will no longer be allowed for cases of corporate crisis, in case of termination of production, [...] so if at the time of submission of the application it is already clear that the company has no chance to recover production and employment”. However, an exemption from these provisions is applicable, with the provision that, “as a result of an agreement signed with the ministry, a further extraordinary intervention of wage subsidies may be approved for companies that ceased production but have tangible prospects of a rapid sale, thus resulting in employment reinstatement”.

In case of dismissal trade unions provide support to ensure the claims for outstanding salary and the activation of any forms of income support. The procedures can be made more complicated by different situations and irregularities. The workers in illegal enterprises either accept certain conditions imposed by the employer, or have to interrupt the employment relationship. It can so happen that workers were forced to declare in writing to have been paid the severance pay (TFR), without this being the case, or to have received family allowances, which are paid by the employer, and registered in the payroll, but never paid to workers.

According to a story told by a CGIL trade union leader who followed the case of Gruppo Piazza in Palermo, workers resulted to have been given the whole settlement (TFR) due to them, although it was not

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so: the Court Receiver stated: “our papers say that the workers were given the money owed them, therefore from this point of view, we owe nothing. We can begin to reserve the Severance Pay from the time when the company has been confiscated, but not before”. “How were we able to give workers the full severance pay they were owed? In this case, too, we had to be creative... through our legal counsels we found some old verdicts that we have cited in the negotiating table and according to which, if the worker should not have been paid the benefits it is not the task of the worker to prove it, but rather the burden of proof falls on the company. The company Piazza was confiscated in 1994, so we have safeguarded the right of all workers employed in the enterprise before 1994 to the severance pay they were owed”.

Close collaboration with the Court Receiver is paramount. More particularly to detect instances of black labour, both should check all the possibilities and options provided in both the national and regional legislation.

In the seizure phase trade unions should start:

– Dialogue with workers already a view that the company will be subject to permanent confiscation;

– In the first years, discuss about what to do, especially if the company has a good chance to move on;

– Refer the workers of the confiscated companies to the local institutions, often because they far from one another, and liaise the relations with local employers’ associations;

– Work with Courts to create a database on companies and corporate assets confiscated at regional and national level;

– Promote/join Memorandums of Understanding signed by institutional and social actors at the provincial and regional level of the territory where the assets/companies are located;


– Provide technical tables at the courts or prefectures, where present, with all information relating the monitoring of confiscated assets and companies conducted by trade unions at the provincial and regional level;

– Support and promote, where the circumstances should so require, the creation of cooperatives as provided for by Law 109/96;

– Organise information initiatives about the existence of confiscated companies within local communities, in order to help create awareness and support conditions (trade unions are mass organizations with thousands of members and affiliated or co-promoted social and assistance organisations).

Trade unions will have to show willingness to get involved right from the start of the seizure to establish a dialogue with those in charge of seized asset/company management in order to come to a common assessment of the outlook, objectives and the necessary tools, while putting all their professional skills and role at full disposal in order to ensure full contractual and regulatory protection of the workers involved:

– During the initial phase of the seizure, in case of a temporary closure of the company, promoting the use of social welfare provided by the standards of law to support the income of workers;

– Encourage the use of all the incentives available in the forms of taxes cuts and contributions in order to favour the emergence of illegal labour and to contrast unlawful intermediation and labour exploitation;

– Perform tax and income support activities for the benefit of the workers of seized and confiscated businesses;

– In the stages following the seizure, focus the necessary reorganization processes with a view to protecting employment,

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the income of workers and the economic and production value of the business.

Trade unions will also have to promote the signing of solidarity contracts with the Judicial Authority, which reduce the working hours of all employees in order to retain the employment level; promoting respect for the protection of health and safety measures in the workplace provided for in Legislative Decree no. 81/08; finally, carry out monitoring over the manager or Court Receiver to protect workers, and more generally to ascertain its correct behaviour. It is therefore essential to keep an open dialogue with the Presiding Judge.

3.3.2.2 Recommendations for the management of relations with the other actors involved

You need to involve the economic, institutional and social operators in the area to put the confiscated companies and assets at the core of a new idea of clean and legal development. Only in this way can one create a synergy between the National Agency for the administration and allocation of assets seized and confiscated from organized crime and the complex set of institutions and civil society organisations engaged in the creation of legal and responsible models.

For this reason it may be very useful:

– To define local protocols for the management of assets/companies seized and confiscated by the courts or the prefectures and also endorsed by the trade unions involved;

– To set up an office/technical table (to be provided for specifically in the Memorandum of Understanding), with the other parties involved in the management of companies seizure (Prefectures, Chambers of Commerce, Trade Associations), in order to define lines of action and periodic analyses (with ordinary analysis to be held at least once a year on the status of the problems of the


confiscated companies and assets while monitoring the operating and production development of seized and confiscated assets and companies).

The reform of the Organised Crime Law, already approved by the Chamber of Deputies and now under discussion before the Senate provides for the establishment, at the prefectures, of permanent tables on seized and confiscated companies whose primary end is to:

– Favour the continuation of the production and safeguard employment levels;

– Help the Court Receiver and the Agency in the company administration, management, and allocation phases;

– Facilitate the cooperation of the economic operators in the area targeted at venturing along a path towards legality.

An important role is also played by the local Prefectures, which must control seized and confiscated companies from a dedicated office. In this case, an important role in the chain is played by trade unions, which know the company and the workers and have connections with the institutions.


Family members of mobsters-entrepreneurs hinder the transition to legality. Relatives, affiliates and workers in some way related to the persons concerned in the confiscation seek in every way to sow the seeds distrust against the Court Receiver and trade unions and exert constant control not only over the workers, but also on production and economic processes. It may happen that the Court Receiver would be unwilling to initiate trade union relations.

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Remove the persons concerned in the confiscation, their friends and affiliates from the companies; otherwise they would threaten the sense of seizure and confiscation. If territorial protocols have been signed, use them to activate trade union relations with the Court Receiver.

3.3.2.5 Recommendations on how to evaluate and seize improvement opportunities

The establishment of a list of all the seized and confiscated companies is paramount as an in-house tool to select companies to which entrust orders, works, supplies and everything else needed to ensure a continued presence on the market (even for maintenance and renovation of seized and confiscated real estate assets). The data collected must relate to the seized and confiscated businesses and the information concerning workers, who currently lack official estimates.

It is necessary to inform, since the adoption of the seizure order by the court, to the ANBSC, the employees and the representative of trade unions.

It is necessary to provide universal access to social security benefits regardless of the company size and category, in order to ensure support and an income for workers for the time necessary to the judicial authority to reorganize a productive business.

Incentives are needed for companies recruiting former employees of seized and confiscated companies.

A legality rating should be assigned matched with rewarding schemes and tools for priority access to public contracts.

Agreements should be made with the Public Administration to approve and initiate works, management of services and supplies, and enter into arrangements with business associations for the implementation


of supply chain networks including seized or confiscated companies.

It is necessary to set up a guarantee fund to ensure credit and provide adequate guarantees to banks once the good faith of the business has been established.

A revolving fund should be established to provide the necessary resources for the company to venture on the paths towards legality transition and market repositioning, specifically if it should need to build new economic relations outside of the organised crime system. The fund should loans at special conditions to be repaid within a reasonable timeframe in order to favour the transition to legality and must be endowed with part of the cash seized from organised crime.

A tax credit scene should be instated in order to encourage the regularization of black or irregular labour relations and subsequently enter into temporary or permanent employment contracts, while adopting all the measures on safety in the workplace.

Workers and entrepreneurs willing to invest in seized or confiscated companies should be recognized a value and a particular social risk. This should be ensured in the form of incentives for workers constituting into a cooperative and willing to take over the business and for companies that should choose to invest in these companies.

Finally, it is necessary to ensure training programs open to workers on the organization of the labour market, their rights, and the development opportunities available to confiscated assets and companies. This is why a collaborative approach must occur between institutions and inter-professional funds.


Protocols signed in Rome, Palermo, Milan, Bari.

The experience of Calcestruzzi Ericina.

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3.3.3 Managers

3.3.3.1 Actual and potential role of managers in the process

Manager is construed here in its broadest sense of the word and therefore as Court Receiver or business executive supporting the Court Receiver, or Legal Assistant appointed by the National Agency after the seizure, or executive of the cooperative constituted by former employees whom is entrusted with the management of the asset on a free lease pursuant to the Organised Crime Law.

After the seizure managers are called upon ensuring the safekeeping, preservation and administration of the assets and, in the case of companies, the continuity of the production cycle and employment levels, in its capacity as court receiver in close relationship with the presiding judge appointed to the seizure. It may be a management executive with specific skills, supporting the Court Receiver and may have a management supervisor tasks, such as “Legal Assistant” of the ANBSC upon the final confiscation.

It must be capable of valuing and stimulating the uncompromised staff and establish a relationship with it based on trust, enabling correct trade union relations with the most represented trade union organizations, and qualify workers through training programmes.

One of the assigned tasks is also to promote skills needed for the management of the confiscated company with a cooperative model.

The costs for the managers are borne by the company. Their presence, as an additional profile complementing the work of the Court Receiver should be assessed, specifically in small companies, in view of the actual sustainability of the relevant costs.


3.3.3.2 Recommendations for the management of relations with the other actors involved

– Implement a dialogue with the workers;

– Implement a dialogue with local institutions;

– Implement a dialogue with business associations;

– Immediately implement relationships with trade unions.


– Verify the presence of family ties, links and special relationship between some workers and the persons concerned with the confiscation;

– Acknowledge the climate of mistrust with which the workers experience the seizure and the conviction, in some cases, that the company enjoyed greater benefits in the previous criminal management than from the new management transitioning it to legality;

– Take timely measures in the presence of irregularities in the contractual, tax and insurance positions of workers and non-compliance with other legal obligations such as the protection of health and safety in the workplace;

– To address the existence of loans, mortgages and trade payables to suppliers;

– Analyse the changes in the strategies applicable in the sector (hotels, construction, services, etc.);

– Take into account the time between the seizure and the final confiscation, which sometimes is particularly long and may

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complicate subsequent allocation and destination measures on the market by the ANBSC;

– Monitor charges related to the property housing the activity.


– Inform the Presiding Judge and evaluate the suspension and/or dismissal of workers, relatives, or affiliates of the persons concerned with the confiscation in order to prevent any interference in the management of the company;

– The first contact between the Court Receiver and the company subject to seizure is particularly delicate and must be handled trying not to generate production stoppages that could affect the ability to continue the company activities;

– Choose a continuous dialogue with the workers, with the involvement of the most represented trade unions;

– Give priority to the regularization of labour relations and safety standards at work;

– Promote dialogue and the drawing up of trade union agreements;

– Ensure payment of the lease, seeing to renegotiating the terms if it was particularly onerous;

– Establish an open and constructive dialogue table with the ANBSC in order to define strategies and timelines, possible transitional financial assistance to support management decisions (such as the renovation of the rooms of a hotel).


3.3.3.5 Recommendations on how to evaluate and seize improvement opportunities

- Establishment of a periodic “table” in order to entertain an open and constructive dialogue with the ANBSC top management (Executive Council), within which to define strategies and timelines, without excluding any possible financial support to act as “bridge” in aid of the management with necessary investments aimed at increasing competitiveness: for example, in the case of a hotel, restructuring the rooms;

- Establishment of guarantee instruments targeted at obtaining bank credit, which is essential to address the seasonality of revenue flows (cash flexibility);

- Activation of labour relations with the most representative trade union organizations;

- Drawing up of trade union agreements that should not affect the inalienable rights which derive from the mandatory provisions of the law and collective agreements, based on a fair balance between the exercise of entrepreneurial activities – in view of business continuity, and the protection of workers, starting from maintaining employment levels;

- Freezing of debts until the final confiscation, in order to ensure the Court Receiver has a suitable lapse of time to safeguard working relationships and productive activities. Currently, Organised Crime Law gives priority to pay the balance to creditors in good faith and if the administrator was not in the position to pay off debts, the law provides for the initiation of bankruptcy proceedings;

- Promotion of supply chains agreements between confiscated businesses and companies in the area;

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- Drafting of a “management Due Diligence17”, with the help of a specialised provider, upon which a viable business plan may be prepared for the purpose of transitioning to a quick “allocation”).

-

17 Due Diligence is a tool targeted at an overall evaluation of company equity for the purpose of assessing and confirming the “good health” of the business not just con-cerning financial and equity criteria, but also in regard with the compliance with the law in force of those who have managed and run the company since its inception.



Protocols singed in Rome, Palermo, Bari.

Reinforced concrete supply chain agreement in the Province of Trapani.

Actor Actual/potential

role

Relations with

other actors

Risks

connected with

the role

Approach to

the risk

Improvement

opportunities

Good

practices

Worker Knows the

company

situation, source

of information

for the Court

Receiver and

trade unions;

Trusted by Court

Receiver and

trade unions.

Create a team;

Retain a

transparent

and trust-

based relation

with the Court

Receiver;

With trade

unions, initiate

a relation with

institutions

and local

authorities.

Loss of job;

Cessation of

retribution;

Presence of

the person

concerned

in the

confiscation;

Unfair

competition;

Winding up of

the company

and risk of

workers

cooperation

not being a

viable option;

Mortgages

and debts of

the company

charged to

the workers

cooperative

Implementation

of national

and regional

provisions in

support of the

confiscated

business;

Involvement of

trade unions

in actions to

safeguard

contractual

rights;

Removal of

the persons

concerned in

the confiscation,

their affiliates

and family

members;

Notice to the

Court Receiver

and trade unions

on the claims

on outstanding

salary formally

issued but never

paid;

Communication,

if any, of bad

faith of banking

institutions.

Promotion

of a dialogue

among all

actors;

Active

contribution

to company

recovery and

restructuring;

Vision to create

a workers

cooperative.

Work with

trade unions

to restore a

fair balance

between

salary claims

and the goal

of business

continuity;

Establish

a workers

cooperative;

Retain trust

and dialogue

with other

actors

involved in

the company

recovery and

restructuring

processes.

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Trade

unions

Initial absence of

trade unions in

the company;

Collection of

information;

Convening of a

workers meeting;

Deal with

workers

problems;

Relations

with business

associations;

Dialogue on

company

reorganisation

processes;

In case of

suspension of

production,

implementation

of social safety

nets;

In case of

dismissal,

support in the

guarantee

of claims for

outstanding

salary and the

activation of

income support

schemes;

Dialogue and

collaboration

with the Court

Receiver;

During the

seizure phase

dialogue with the

workers on the

company future;

Promotion

and support

to workers

cooperative.

Relationship

with workers

is crucial to

build trust

with the Court

Receiver;

Drawing up

of protocols

for the

management

and

development

of confiscated

businesses;

Creation of

a technical

desk/table

with the other

actors.

Presence of

the persons

concerned

in the

confiscation,

their relatives

or affiliates in

the company;

Court Receiver

sceptical as to

trade union

relations.

Removal of

people hindering

company

activities;

Help from

local protocols

providing for the

involvement of

trade unions (if

available).

Creation of

a list of all

seized and

confiscated

companies

to use as

reference (to

trust orders,

contracts,

supplies, etc.);

Information on

the seizure and

confiscation

order;

Access to social

safety nets

regardless of

business size;

Agreements

with business

association

to set up

supply chain

networks;

Attribution;

Creation of a

guarantee fund

for creditors

and a revolving

fund for

the costs of

transition to

legality;

Provide

workers

with training

courses on the

labour market;

Incentives

for workers

willing to

constitute into

a cooperative

and for those

companies

investing in the

confiscated

business.

Protocols

of Rome,

Palermo,

Milan;

Calcestruzzi

Ericina.


Manager Ensure the

continuity of the

production cycle

and the level of

employment in

the company;

Get rid of high

and useless

costs;

Manager

assigned in

assistance to the

Court Receiver;

Management

supervision as

“Legal Assistant”

of the ANBSC;

Value

uncompromised

staff and create

a relationship

based on trust;

Qualify workers

through training

programmes.

Dialogue and

agreement

with trade

unions

Arrangements

with local

institutions.

Family ties or

other bonds

between some

workers and

the persons

concerned

in the

confiscation;

Distrust and

disappointment

within the

company;

Irregular labour,

social security

and insurance

positions of

workers;

Mortgages

in place with

suppliers;

Time between

seizure and

confiscation.

Dismissal of

compromised

workers;

Creation of

a calm and

confident

environment;

Involvement and

steady dialogue

with workers;

Drawing up

of trade union

agreement.s

Creation

of a open

dialogue with

the ANBSC in

order to define

strategies and

deadlines;

Creation of

guarantee

instruments;

Supply chain

agreements

between

confiscated

businesses

and local

companies;

Activation of

trade union

relations;

Agreements

with the Public

Administration

in order to

provide for

works, manage

services and

supplies;

Agreements

for worker

mobility and

employment

continuity;

Drafting of a

“management”

Due Diligence.

Protocols of

Rome and

Palermo.

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3.4 GUIDELINES FOR THE ECONOMIC OPERATORS (CREDIT INSTITUTIONS, BANKING FOUNDATIONS, BUSINESS ASSOCIATIONS, ENTREPRENEURS AND COOPERATIVES)

3.4.1 Lending institutions

3.4.1.1 Role of the actors in problem definition and process

The banking system plays a central role in the delicate process of recovery and restructuring of seized and confiscated enterprises. The ability to maintain open lines of credit is one of the essential conditions for the survival of businesses removed from a criminal context and transitioning towards legality. This is why it would be accurate to say that the chances of maintaining the companies subject to judicial measures on the market significantly depend also on the relations in place with the banking system.

The problems identified relate to the freezing of funds on the part of the banking system. It often happens that as a result of the restrictive measures issued by the Judicial Authority, banks lose confidence in the company’s ability to honour the obligations previously taken and reduce or revoke the credit lines granted until then. The credit instruments granted to the company before the seizure are systematically believed to change – in the delicate phase of transition to legality – to adverse conditions (revocation of credit, changes in rates or other terms and conditions, demand for additional collaterals, etc.). Similarly, the advanced credit applications following a declaration of seizure often appear to be rejected.

Though considering the legitimate creditors protection requirements, the restrictions to the likelihood of credit ends up disrupting in the administration of seized and confiscated enterprises the desire of continuity of the production cycle – a necessary condition to guarantee the preservation of employment levels. Moreover, especially in particularly indebted companies, this can generate a


state of insolvency and the ensuing bankruptcy. The liquidity crisis is often an insurmountable obstacle to the objective of preserving the confiscated companies in view of their recovery, which goes together a particular symbolic value in view of attempting to disrupt the consensus enjoyed by criminal organizations.

3.4.1.2 Recommendations to lenders in order to address the identified issues

While relating to companies in receivership, it is crucial for banks not to take a liquidating attitude and evaluate in network with other subjects the recovery potential of seized and confiscated companies, also by supporting the possible investment needed in order to ensure continuity of production, the transition to legality and the development of activities.

At the time of the seizure the company – albeit with operational distortions arising from organised crime infiltration – companies are often still vital. Merely conservative management approaches are inadequate to deal with the problems of these companies; on the contrary it seems necessary to develop specific strategies for the recovery thereof, to be summarised into a real and viable business plan.

The Investment decisions in businesses under receivership must therefore rely on transition plans whose final goals are legality and corporate turnaround. This is possible if the management of the confiscated business is trusted to specialists and managers with specific expertise in business management and adequate knowledge of markets/products/target services and if the business plans are communicated and shared with the various stakeholders, starting from the banks with which the company has relations and all the way to suppliers, customers and, last but not least, workers and trade unions.

The introduction of effective mechanisms to manage of assets and

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companies subject to judicial measures can prevent the rapid depletion thereof and might influence the expectations of the banking industry in terms of the evolution of granted financing lines, interrupt the circle of mistrust that sometimes causes the crisis to escalate. Thus creditors would be guaranteed the efficient management and good operation of the company targeted to the continuation and recovery, where possible, thereof.

At the same time, however, banks should avoid taking a liquidating attitude when it comes to companies under receivership, also considering that the supervisory rules on credit risk assessment do not provide for any regulatory barriers against companies under receivership, other than those prescribed by normal and customary precautionary rules. Also during the receivership phase the general principles of fairness to the customer still apply, which in most occasions are reaffirmed also by the Banking and Financial Arbitrator on the subject of or unforeseen and arbitrary withdrawal or suspension of credit facilities as a source of liability for banks.

It is fundamental for lenders to provide for the specialisation of in-house staff dedicated to the relationship with seized and confiscated companies, in order to have – at least at the regional level – intermediaries who are capable of maintaining a direct communication channel with the Court Receiver in order to assess the real business situation and the business plans targeted ad reorganising the business and transitioning it to legality.

It is of vital importance that the banks, when the company undergoes a court order, should not base their approach thinking that the company is going through difficult times and automatically close all credit lines. Internal procedures in the field of credit management can induce banks to place relations with seized and confiscated companies under special scrutiny also where no trends pointing to particularly critical profiles should be detected. This would result in the removal of the business from the ordinary management and the assignment in the non-performing loan management category, with the effect of


greater prudence and less fluidity in the relationships. Moreover, while evaluating new applications for loans banks could take on greater prudence in the allocation of credit.

In order to reduce this risk of labelling businesses as not reliable, lenders must hire specialist to deal with the credit management of companies under receivership. These profiles should have specific expertise on the financial, fiscal, administrative and regulatory environment; it is recommended that their presence should be at least at regional level, in order to ensure that the relations with seized and confiscated companies that emerge in the ordinary activities of local agencies be taken charge of by specialised technicians. This specialisation should be based on a cross sectorial organisational in order to overcome the risk of fragmentation of responsibilities.

It is advisable that the bank, when the company in its credit portfolio should be involved in seizure or confiscation measures, should consider the possibility of applying measures in terms of reassigning the employees in charge of the position at hand or at least consider the option of having the resource be assisted by other staff who have not previously taken part in the management of the position.

Such a measure could reduce the risk of labelling the company under receivership, by adopting preventive attitudes as a result of restriction in terms of the facilities in existence and the opening of new credit lines. The assignment of the file to staff who have not previously worked or been familiar with the company would indeed allow to have a fresher view, free from all prejudices about the future prospects of the company, while minimising potential conflicts of interest and responsibility.

It is necessary for lenders to have effective evaluation measures in place in order to detect and report the potential risk of criminal infiltration in the companies with which they have credit relationships.

Banks need to adopt protocols and effective procedures for assessing

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the risk of extending credit to businesses infiltrated by organised crime. For example, they should put in place effective tools for assessing the risk of being involved in money laundering operations. The provisions on money laundering, although not prescribing full investigative charges on the recipients, require the best use of the information possessed – or that should already be possessed in view of the ordinary knowledge of customers according to standard professional care – also in view of better familiarity with the client (know your customer). Compliance of those provisions by lending institutions in the genetic phase of the business relation should take specific relevance for the purpose of assessing the good faith of the creditor, which is a necessary precondition for awarding credit pursuant to the provisions of the Organised Crime Law.

It is recommended that in the context of financial support to seized/confiscated businesses a network of entities should be set up to operate in a synergistically and cooperative way in order to share information and assessments, promote the participation of specialised subjects in supporting the diverse credit requirements and thus allow also a risk allocation.

The financial needs of confiscated businesses obviously vary depending on the type of business and the corporate turnaround plan prepared by the management. These needs may have to do with risk capital for immediate investment, the need for loans and cash flows in order to support ordinary business activities, or yet again the need to support mid-long-term “patient” capital in support of corporate strategies. It is advisable for these different needs to be taken into account not by a single actor but by a network of lenders – banks, mutual funds, institutional investors, etc. – which work together in order to share information and assessments and allow the sustainability of credit lines and a breakdown of the consequent risks.


3.4.1.3 Tax and economic recommendations on credit to confiscated businesses

As highlighted in the PIANO DI AZIONE BENI CONFISCATI E COESIONE TERRITORIALE (ACTION PLAN FOR CONFISCATED ASSETS AND TERRITORIAL COHESION) presented on 7 March 2016 by the Department for Cohesive Policies (in collaboration with the ANBSC), in order to ensure the continuity of credit to companies under receivership, the State must also take action.

These actions must have a twofold objective: on the one hand, they should be construed as measures to provide practical support to the implementation of recovery plans and transition to the legality of seized/confiscated businesses; on the other hand, offer guarantee instruments that allow banks to entertain more solid and positive relationship with said companies. These tax and economic measures are competence of public authorities, though they also challenge the attitude of banks and credit institutions in respect of the seized companies.

The model proposed in the Action Plan provides for three types of intervention:

- The establishment of a guarantee fund specifically designed for confiscated companies, facilitating a wide range of operations: leasing, medium and long-term loans, short-term loans, consolidation, etc.;

- The establishment of a facilitating tool providing grants and sunk-capital loans through the involvement of Confidi. It is important to note in this regard that, while repossessed homes have benefited in recent years of various facilitation instruments, no financial support was ever made for confiscated companies;

- The execution of agreements with ethical finance institutions and mutual funds are able to facilitate access to credit by confiscated businesses.

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It would be necessary to intervene by providing forms of sterilisation, for a limited amount of time, of the executive and precautionary actions taken by creditors against the equity of seized companies along the lines of what happens with the arrangement proceedings governed by the bankruptcy law.

Banks should be subject to specific guarantee tools that prevent them from rationing credit to the detriment of confiscated companies.

Facilitated finance instruments should also be made available. However, the hindrances to accessing credit push towards the search for solutions through the use of the Guarantee Funds, the support of Confidi and facilitated finance instruments.

A share of the National Guarantee Fund for Small and Medium Enterprises should be allocated for access to credit both for companies and other persons – such as associations and social cooperatives – managing confiscated property and needing to make investments.

The Italian Government has already implemented some of the measures proposed in the PIANO DI AZIONE BENI CONFISCATI E COESIONE TERRITORIALE (ACTION PLAN FOR CONFISCATED ASSETS AND TERRITORIAL COHESION). In particular the 2016 Stability Law establishes a fund for seized and confiscated enterprises (Article 1, Paragraphs 99-102). The Fund aims to ensure access and continuity of credit in favour of companies seized and confiscated from organised crime, with a budget of 10 million euro per year for the 2016-2018 three-year period.

The purpose of the Fund is the continuity and steady access to bank credit and access, the support for investment and the charges incurred for corporate restructuring measures, the protection of employment levels, promoting the transition from illegal labour measures, the protection of health and safety in the workplace, the support for cooperatives (communities, including youth centres, voluntary organizations, social cooperatives under Law no. 381 of


1991, therapeutic centres and rehabilitation and care centres for drug addicts, authorised environmental protection associations, or to the employees of confiscated businesses).

A special section of the Guarantee Fund for Small and Medium Enterprises will receive € 3 million per year in order to issue guarantees for financial transactions provided in favour of companies of all sizes, seized or confiscated from organised crime, or to companies that take over corporate clusters of such undertakings. In the amount of 7 million euro per year, a special section of the Fund for sustainable growth will be fuelled in order to award subsidised loans in favour of the companies at hand. Under Paragraph 101, an inter-ministerial decree determines the limits, criteria and procedures for the issue of guarantees and loans, with particular focus on businesses that have to overcome major hurdles to gain access to credit. The decree shall operate in compliance with applicable EU Rules on State aid.


Memorandums of Understanding between ABI and Public Prosecutors. These memorandums are very positive in order to inject confidence in the credit management of confiscated companies, especially the collaborative initiatives that are being launched locally in order to enable a constant and timely connection between the various actors involved. The banking system – with the participation of ABI (Italian Banking Association) – is one of the actors involved in these synergistic and cooperative initiatives. For further details, see:https://www.abi. it/Pagine/Normativa/Affari-Legali/Beni-sequestrati-e-confiscati.aspx

In 2012 the Court of Milan has promoted a “Memorandum of Understanding for the management of seized and confiscated assets” in the attempt to solve the many problems Judges were faced with in the conduct of the proceedings and throughout the process of asset administration and allocation. The protocol is part of the activities

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promoted under the Tavolo della Giustizia (Table of Justice) initiative held in the city of Milan and seeking to create different actions for the modernisation of civil and criminal justice. One of the declared aims of the Milan Protocol is “to allow the going concern of businesses constituted as companies, operating in Lombardy subject to seizure”. The signatories to the Protocol are: Milan Court of Appeal, the Public Prosecutor at the Court of Milan, the Lombardy Regional Government, the Province and the Municipality of Milan, Assolombarda, ABI, the Chambers of Commerce and the Local Lawyers’ Council. In January 2013, CGIL, CISL, UIL and Confcommercio also signed the document.

In March 2014 the Court of Rome, too, promoted the signing of a protocol with business associations, the Italian Banking Association, the Chamber of Commerce of Rome and local authorities for the joint management of assets confiscated from organised crime. The signing of the Protocol is the result of a careful assessment made in the light of a more comprehensive reflection ABI and the banking sector are called upon performing with regard to the issue of financing seized and confiscated enterprises. In this context, the signing of the Protocol of the Court of Rome confirms the desire of the Association and the banks to take a proactive stance vis-à-vis the financial viability of seized/confiscated enterprises.

In 2015 ABI ratified a Memorandum of Understanding for the management of companies seized and confiscated from organized crime with the courts of Palermo, Caltanissetta and Trapani. The protocol is specifically focused on the relationship between seized and confiscated businesses and the banking sector and establishes a series of commitments applicable for both parties. The Courts are committed to encouraging a dynamic management of seized companies through a managerial approach and to ensure a timely and direct communication to any third party holders of credit rights, raising awareness among the Court Receivers in carrying out their managerial duties. In turn, ABI undertakes to encourage the banks so that:


- Banks don’t automatically revoke the credit lines in place merely because a seizure order has been issued against the financed business, but instead they should renegotiate such lines with the Court Receiver;

- Banks, subject to the principle of credit worthiness, disburse new loans after the approval of the company’s continuation program by the Court;

- Banks centralise in a dedicated facility the management of files and transactions concerning seized and/or confiscated assets.

Other courts are working to promote similar cooperation protocols. Even many prefectures have promoted the signing of memorandums of understanding on the destination and reallocation for social purposes of assets confiscated from organised crime, signed with the Courts, local authorities, the dioceses and the main local economic and social partnership players. To mention a few of the involved entities, the participants included the Prefectures of Rome (2005), Brindisi (2007), Caserta, Catania and Siracusa (2009), Crotone (2010) and Trapani (2012).

CFI Cooperazione finanza impresa. Worth mentioning in the cooperative sector is the sponsorship and support role played for businesses by the CFI Cooperazione Finanza Impresa, a cooperative joint stock company held by the Ministry of Economic Development and promoted by the main associations in the cooperative universe (AGCI, CONFCOOPERATIVE, LEGACOOP). CFI participates as an institutional investor in the share capital of companies and provides financing aimed at investment plans with the aim of creating value, thus safeguarding and increasing employment. CFI promotes the creation, development and repositioning of enterprises engaged in innovative and socially relevant projects related to a sustainable economic and financial profile. CFI also supports working members with their strategic decisions and operational choices. The support to workers cooperatives that manage confiscated assets and companies

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is one of the lines of action that CFI has recognised as a priority, which still fits more generally in the support activities to the Workers buyout. www.cfi.it

3.4.2 Banking foundations

3.4.2.1 The role of actors in the process

Banking foundations are non-profit organizations, both private and independent, which exclusively pursue socially beneficial goals and the promotion of economic development. In Italy banking foundations are 88; they feature different origin, size and scope of operations. Their role is to promote the development of the areas in which they operate and are rooted through two levels of action: as philanthropic entities granting resources to non-profit organisations and local authorities, and as institutional investors. From the profit generated by the good management of these investments derive the resources to support the collective interest activities, particularly in the sectors of scientific research, education, art, health, culture, preservation and promotion of environmental and landscape heritage, assistance to vulnerable social groups and in all sectors, among those provided by the law, which any Foundation should considers to include in the articles of association.

Banking foundations stand as an important actor for the welfare and socio-economic development of local communities, especially– not only but certainly to a significant extent – in the southern regions, where their role is very important in support of activities having collective interest. The social investment activities held of banking institutions include projects for the promotion of rule of law, in particular to provide support for enterprises restored to legality from the hands of organised crime.

Until now the focus of banking institutions has been directed almost


exclusively to the support of social reallocation projects focused on real estate properties confiscated from organised crime (see below). It is quite evident that the challenges in terms of transition to legality and the restructuring and revitalisation of the confiscated companies poses a number of problems, not to mention the considerable complexity. However it is necessary that Foundations should do their part on this issue, given its remarkable and absolutely direct impact at local level, both on the level of social visibility and consensus to actions aimed of rehabilitation by the State and employment and socio-economic development.

It is recommended that banking foundations should devote calls for procurement and tenders to projects for the virtuous management of confiscated assets and businesses relevant for their respective area of operation. In many contexts the support of Foundations is an essential resource to allow local communities to take charge of the companies that were set free from the grasp of organised crime.

The calls for procurement and tenders may break down into different objectives and be aimed at the different actors involved in various capacities in the virtuous management of confiscated companies, such as:

- Institutional actors: municipalities and group of municipalities;

- Third sector operators: associations, cooperatives;

- Actors from professional associations, businesses and cooperatives: trade associations and representative bodies, professional orders;

- New social economy business clusters focused on taking over businesses confiscated from organised crime: new cooperatives, start-ups founded by young entrepreneurs.

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“La Fondazione con il Sud” is a private non-profit organisation founded in 2006 by the alliance between banking foundations, the third sector and the voluntary sector; its final aim is to promote new social infrastructure in the South of Italy.

One of the model projects was a call for procurement (repeated for several years starting in 2010) for the development and self-sustainability of the assets confiscated from organised crime in four southern regions (Puglia, Campania, Calabria and Sicily), which after the selection process awarded third sector organizations real properties totalling € 3.5 million. The fundamental aim was to integrate the economic network with the social network (health, education, legality, integration of migrants and promotion of common heritage), experimenting with new networks and innovative solutions in the fight against organised crime. 9 projects were funded while the partnership organizations involved in the design were approximately 66.

In June 2013, the Foundation published a new call for procurement to support social projects with the reallocation of confiscated assets, allocating a total of € 4.5 million.

Project LaRES @ Rete di economia sociale, supported by the Fondazione con il Sud experimented, on a complex area as large as the province of Caserta, an integrated local development model based on a social economy infrastructure one of whose products is the productivity of real estate assets confiscated from organised crime, in pursuance of the general interest of the community to human promotion and social integration of citizens while increasing the share capital within legality.h t t p : // w w w. fo n d a z i o n e co n i l s u d . i t / ba n d i - e - i n i z i at i ve /leggi/2013-06-12/bando-beni-confiscati-2013/


3.4.3 Professional, employers and cooperative associations


Associations, professional bodies and representatives of entrepreneurs and cooperatives are civil society organizations that can play a very important role in the processes of collective take-over of the companies removed from the influence of organised crime. These organisations are an important reservoir of skills, social capital and collective mobilisation potential that must be activated in the reorganisation and revitalisation process of seized and confiscated enterprises. After all this challenge has been recognised and taken up by the same employers, professional and cooperative associations, which in recent years have promoted projects and actions in favour of the rule of law and the recovery of confiscated companies.

It is recommended that the actions of the associations representing the business community should address the following objectives:

- Support the recovery of seized/confiscated businesses and encourage the establishment of new companies to manage seized/confiscated assets and companies through mentoring, guidance and provision of services;

- Favour the acquisition of knowledge and skills in terms of management of confiscated companies by promoting training courses and seminars open to managers, entrepreneurs, practitioners, the exchange of good practices and networking of involved actors;

- Provide those involved in the direct management of seized/confiscated businesses with tools to assess the company situation, the potential and critical issues in place and guarantee arrangements in order to share the risks inherent in the company’s reorganisation and recovery plans;

- Promote the adoption of methods and tools targeted at preventing

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and monitoring organised crime infiltration risks;

- Collect and openly provide statistical data and indicators available to better familiarise with the phenomenon of criminal infiltration in the economic and social fabric of the concerned community;

- Raise awareness that the criminal enterprises that operate illegally hinder and jeopardise the market relations and the very principles of free competition;

- Spread and support among its members a culture of legality, for example through the adoption of codes of ethics requiring the removal from the association of those members who commit crimes or otherwise operate illegally.


The transition to legality of companies seized from organised crime can be supported in different ways by professional, entrepreneurial and cooperative associations. Here are some particularly significant and innovative experiences.

Business networks: the PIANO DI AZIONE BENI CONFISCATI E COESIONE TERRITORIALE (ACTION PLAN FOR CONFISCATED ASSETS AND TERRITORIAL COHESION) presented on 7 MARCH 2016 by the Department for Cohesive Policies (in collaboration with the ANBSC), aims at supporting the creation of formal or informal networks involving confiscated undertakings and healthy enterprises (all under the Made in Italy umbrella) for economic activities, productive supply chains and the provision of services in which there is a greater presence of organised crime and of companies affiliated thereto. The objectives are:

- Support the integration and the participation of the confiscated companies within systems and business networks that operate in the market and within the law;


- Increase the competitiveness of confiscated companies through production and market integration with other Made in Italy companies.

In order to lay the foundations for the establishment and growth of a partnership between enterprises of national relevance and companies transitioning towards legality, either operating in the same sector or in related sectors, specific facilitation instruments can be defined and activated with the name – for instance – “Investment Contracts for Legality” which provide, in particular support measures for those companies that participate in tutoring initiatives for seized and confiscated companies.

As part of a specific contract, integrated benefit packages may be provided. The application for the aid packages will be open to seized and confiscated companies entrusted to a Court Receiver or confiscated companies acquired by new corporate entities – including those established by the workers – or also healthy companies that decide to join the Agreement. Packages may also be awarded also by social enterprises or cooperatives with a focus on productive activities that manage confiscated real properties and land.

These initiatives may also trigger the creation of networks and partnerships between confiscated businesses, other business entities, young and new entrepreneurs, third sector organizations, educational and research bodies and institutions. These contracts may be defined and enabled for all areas eligible for ERDF the ESF and the EAFRD funding on the basis of existing EU legislation on aid to businesses.

Project: “Prevenzione delle infiltrazioni criminali nelle aziende e valorizzazione dei beni confiscati in Lombardia: una opportunità per lo sviluppo territoriale” (Prevention of criminal infiltration in companies and enhancement of assets seized in Lombardy: an opportunity for territorial development). Since 2011 Assolombarda, Aldai and Fondirigenti, with the scientific support of ISTUD, Fondazione Politecnico, SDA Bocconi, Università Cattolica and Luiss Business

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School have been committed to providing institutions with the necessary support for the effective management and allocation of assets: relationships, skills, knowledge, innovative methods and trials under way. The project took place in coordination with a parallel project organised by the Regional Government of Lombardy on the same subjects. The projects, followed and developed by a group of managers included in a qualified and certified white list, involved several entities: municipalities, social cooperatives, non-profit and third sector organisations and local institutions.http://www.assolombarda.it/assolombarda-per-la-legalita

Association Manager WhiteList (MWL): the Association Manager WhiteList stemmed from a project carried out in 2012 thanks to an agreement between ANBSC (National Agency for the administration and allocation of assets seized and confiscated from organized crime), Aldai (Lombard Industrial Managers Association), Assolombarda and Fondirigenti: “La valorizzazione delle competenze dei Dirigenti Industriali di Milano nella gestione delle imprese sequestrate e confiscate alla criminalità” (Skill enhancement among the executives of Milan Industrial enterprises in the management businesses seized and confiscated from organised crime). After a careful selection process, which involved the assessment by ANBSC of individual profiles until the third generation, 60 corporate executives were selected. Since June 2015 the Association has been included in the list of professions not being regulated into Orders and Colleges (Law 4/2013) issued by the Ministry of Economic Development. As such it is the first association of managers qualified in the management of assets seized and confiscated from organised crime. It is currently involved in some seizures involving hundreds of companies and cooperatives in order to support the Court Receivers in managing companies, evaluating the business and proposing corporate solutions. It implements many good managerial practices that allow in the short term to identify the critical success factors for possible sustainable development processes in the seized companies and as many good practices for creating and supporting social enterprises.


http://www.managerwhitelist.org/

Legacoop: Memorandum of Understanding for the management of seized and confiscated assets. In December of 2015 a Memorandum of Understanding was executed between the National Association of Cooperatives and Mutual Organisations (Legacoop) and the Court of Rome. Legacoop is committed to providing services and other interventions for the institution and development of business initiatives in the form of cooperatives to manage businesses and assets confiscated from the crime, supporting the consolidation and business development of seized/confiscated cooperatives and cooperatives that handle assets and companies through mentoring and known-how. More specifically, Legacoop is committed to providing:

- Advisory services, technical assistance and preliminary assistance to start-ups;

- Pre-feasibility analysis, selection and evaluation of business plans;

- Assistance in sourcing financial, credit and insurance instruments;

- Selection of Temporary Managers to assist the work of the Court Receiver.

3.5 GUIDELINES FOR THE ORGANIZED CIVIL SOCIETY


Organised civil society is part of the healing process of a company run by organised crime, specifically in three particular moments: prior to the start of the confiscation process, in the period from the seizure and to final confiscation and in the post confiscation phase if the workers should decide to personally take charge of company management (in the various possible forms provided for by the law).

Organised civil society plays the roles of co-actor in the prevention

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of organised crime and facilitator in the whole process of company management and requalification.

Because of the complexities and variables in the business confiscation process, what may define a success case is the ability of different stakeholders to create synergies, precisely in view of the collective entrepreneur. The roles played by organized civil society are crucial in activating and supporting these synergies, which are essential to build a legality network capable of opposing, at a local, social and entrepreneurial level, the circles supporting organised crime and its operators.

The first task of organized civil society is therefore to educate and inform by creating fertile ground for the development of a law-abiding culture and networks that encourage citizens to isolate mobsters thus hindering their power networks. In particular, the action is targeted at all those economic actors (suppliers, distributors, banks, associated companies, etc.) that have direct contact with the company and can identify any critical signals. The educational and informative role is also a defence tool for economic and market operators that come into contact with the criminal enterprise when the same is not yet recognised as such. Performing these actions in a unified and consistent perspective, not sporadically in response to a full-fledged emergency, helps prevent organised crime from rearing its ugly head, while shedding light on their existence and fostering requalification processes.

The second task of organized civil society it is to promote and support positive actions that various stakeholders implement for the benefit of the company. In particular, in the first months of seizure of a company suspected to be run by organised crime, when the risk of failure is very high, organized civil society must ensure that Court Receivers be aided by support and information networks at local level instead of being hindered or isolated by a hostile environment resulting from the support that organised crime enjoyed with local communities through personal and economic ties. Organised civil society must


therefore promote the exchange of information and mutual trust between local actors (citizens, associations, institutions, public safety, trade union, chamber of commerce, courts, banks) and the Court Receiver. The exchange is beneficial when correct information is fed to the community on the status of specific companies and the effects of its poor management on the territory, and when Court Receivers receive, through the collaboration of local actors, useful information to overcome obstacles during the new management. In particular, in the preliminary phase the actions that should implemented are the following:

- Creation of territorial tables between the various associations of organised civil society and other stakeholders. The tables are meant to educate, inform, disseminate the culture of legality in a coordinated manner, with the help of one another but with a critical eye over the characteristics of the reference context. The territorial tables must engage in a dialogue with the actors who were or are currently involved in similar experiences at national level;

- Definition of an agenda on the issue of legality, the fight against corruption and the management of confiscated companies. The agenda is a useful tool for regional coordination offices to identify the times and forms of their action. In the agenda each situation (corruption, racketeering, usury, education to legality, confiscated assets and companies) should be treated in close connection but with also individually in dedicated moments in order to better understand the specific characteristics of each one of them.

In the seizure phase the actions that should be implemented are the following:

- Informative meetings with citizens on the criminal characteristics that the seized company had come to express, notwithstanding the presumption of innocence. A pivotal element is that clear

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and correct information must be urgently passed on to citizens for the purposes of defeating prejudice and misinformation and tearing down the social network and local support of organised crime. The communication in place must stand out for sheer, uncompromising transparency. By developing material provided by other stakeholders, organised civil society must keep the public up to speed on how the company has produced a negative influence on the territory, the economy and society through, for instance, false competition, black labour, intimidation and money laundering. The role of organized civil society is to raise awareness among citizens, especially all those economic and non-economic entities likely to come into contact with a criminal company (suppliers, distributors, banks, associated companies, etc.), to give them tools to protect themselves and report crimes to the authorities;

- Activation of regional coordination in response and support of the specific case. Organized civil society organizations, which are a precious watch on of any criticalities taking place at local level, may provide information that will facilitate screening initiatives focused on seized companies by the Court Receiver with the help and participation of the other stakeholders in the process;

- Guidance to professional training for employees of seized companies, by means of an open dialogue with industry experts, in particular with trade unions and entrepreneurial and trade organizations. Professional training aims at increasing skills, both industry-specific and entrepreneurial, in order to help workers of a seized company, to keep playing a pivotal role in the enterprise. In case of closure of the company or excess of labour, workers may possibly be reassigned to other companies. Catering to the professional needs of workers creates a positive atmosphere that brings the same to having a more cooperative attitude with the Court Receiver. At the same time this action helps defeat the dangerous thought whereby “organised crime creates jobs while


the State cuts them”. Moreover, the chance of coordinating the training of workers of various related companies optimises the resources deployed, while giving the possibility of developing dialogue and labour support networks and synergies also useful in case of difficulties of one of the companies;

- Promotion of a corporate code of ethics, which will facilitate the adoption of legal conducts and behaviours within the company.

After the confiscation phase the actions that should be implemented are the following:

- Counselling towards a possible form of business management by workers;

- Raising public awareness about business created from confiscated companies. In all those activities where the audience determines the success of an endeavour (pizzerias, restaurants, ice cream shops etc.) organized civil society can structure ad hoc campaigns and activities to raise awareness and among the citizens and involve them in increasing the level of reputation and economic success. Actions of this kind were, for example, put in place with “Le botteghe dei sapori e saperi della legalità” and a pizzeria in Rescaldina.

These actions need to bear in mind of the concept of free competition in order to protect other independent entrepreneurs who are in the market properly and also abide by the same rules.

3.5.2 Recommendations for the management of relations with the other actors involved in the process

The planned actions feature different and specific constraints that depend on the criticality of creating a dialogue between various stakeholders involved in different ways in the process.

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3.5.2.1 Recommendation in the management of relation with the other actors involved in the prevention process

The prevention phase stands out for the organisation of local tables and panels focused on legality and whose final purpose is to draft a common agenda on the viable actions and the foreseeable outcomes thereof. The weaker links in this phase are:

1) Relations between different organised civil society organisations

Organised civil society organisations must collaborate with one another in order to define roles and competences and determine the timing and methods to open the discussion tables. The various organisations must build a solid dialogue base focused on common targets and capable of overcoming different views and self-absorbed attitudes;

2) Relations between organised civil society and the public

It is necessary that organised civil society organisations define educational and training plans able to provide stakeholders and the public with elements of analysis and intervention tools in order to identify the alleged criminal essence of the company and intervene proactively. Stakeholders and the public must become aware that a criminal enterprise poses a disturbance in the market. Such elements as the excessive number of employees, black labour, unfair competition, the injection of high amounts of “dirty” money hinder fair and legal competition and put the criminal company and its criminal owner on a privileged competitive position.

3.5.2.2 Recommendations for the management of relations with the other actors involved in the seizure phase

During the term of seizure, specifically in the early months thereof, organised civil society must support the action of Court Receivers by liaising in the dialogue with the community, other institutional actors


and, where possible, workers. In this particular phase the most fragile and complex relations are those that revolve around the Court Receiver.

More specifically, organised civil society must be collaborative with Court Receivers and entertain a steady dialogue with it. In turn, Court Receivers must provide organised civil society with the specific knowledge and information concerning the company status and criticalities. Organised civil society must learn and understand the information shared by Receivers in order to define actions to implement and communication in support of its activities. The actions that organised civil society must perform in support of Court Receivers must first of all be submitted to the same Receivers in order to respect the hierarchy of roles, promote mutual trust, prevent misunderstandings and foster the pursuit of common goals.

3.5.3 Recommendations on risk assessment in the activities tasked to actors

One first risk is for organised civil society to get stuck in designing and defining a shared agenda, roles and competences, determining the timing and methods for the tables to become operational. The more organised civil society operators lack the industry-specific training to competently and professionally tackle the problems of the seized business, the higher the risk. The representatives of organised civil society organisations must be trained, for instance, on how to draft and read financial statements, on Fondo Unico di Giustizia (single fund for justice), labour market regulations, etc. A general knowledge on organised crime issues is not enough in that it does not enable to bring forth the tasks with efficiency and efficacy.

Another risk that may occur is that organised civil society should not be up to its role as facilitator given its inability to relate to the multiple actors at play. As a matter of fact it may happen that the Court Receiver or the citizens do not express any willingness to collaborate, for several reasons, in the actions deployed by organised

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civil society. The relational dynamics among these subjects become more precarious when, for instance, the conditions of the company should force toe Court Receiver to dismiss some workers. In this case the relations between the Receiver and trade unions also become tense (as trade unions are supposed to take part in organised civil society tables). One or more relational setbacks may frustrate the actions held by organised civil society.

A third risk, which may occur across the whole process, is for the action of organised civil society to be somehow hindered, threatened or damaged by other players in the area that are sill under the influence of organised crime or even the risk of infiltration of members of organised crime in the same organised civil society.

3.5.4 Recommendations on how to approach the identified risk

In order to make up for the general, unspecialised approach that may dampen the efficacy of organised civil society action, it is necessary to train the participants to tables held in support of confiscated assets. This type of training, which some organisations such as Libera already provide at national level, should be made capillary in the community using locally sourced resources (e.g. universities, education centres and single practitioners capable of providing training). Obviously all this has a cost. It is therefore important to involve local institutions, as they are the only ones that can deploy resources.

The lack of collaboration among the various actors involved may have different causes, which are difficult to be outlined and given solutions a priori. Organised civil society, though, must be adamant and strongly determined to give its contribution to any processes supporting seized companies, with a collaborative, cooperative and proactive role in respect of the hierarchies and roles.

The protection from any criminal infiltration in organised civil society tables or any forms of criminal influence or pressure, either direct or


indirect, may be tackled through a thorough knowledge of the people who operate in those tables, as well as sheer transparency in the forms of operation, debate, decision-making and relevant enforcement. No negotiation must rest on personal relations and anyone who should not abide by these simple principles should be immediately removed. The same goes for anyone being even remotely suspect of being under external pressure, be it of criminal nature or not.

3.5.5 Recommendations on how to evaluate and seize improvement opportunities

Organised civil society will have accomplished its purpose the more it will be capable of generating positive collaboration between the same organisations and the community, such as to build legality culture and networks. The action may be improved by considering:

1) The ability of leading an educational and informational action in a cohesive and jointly designed approach. Such ability allows to prevent criminal phenomena and contributes to shedding light on them, while facilitating the start of recovery and requalification processes. The criteria to measure improvement are, for instance, the availability of the counterparts, the ease of organising tables and meetings and the feedback received from the various participants. These elements depend for the most part on the ability, across all phases, to deploy organised civil society subjects trained specifically on the issue of confiscated businesses. The professionalism of the operators involved is therefore a further element to grasp improvement.

2) The participation to local tables and community meetings in terms of quality and quantity. A receptive and proactive environment, where dialogue is encouraged among competent subjects, is fertile soil to build reliable and solid legality networks. The criteria to evaluate improvement are, for instance, the number of stakeholders involved, the liveliness of the dialogue and the ability

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of the people involved to contribute initiatives and ideas.

3) Widespread awareness of the confiscated business issue and the deployment of good practices among stakeholders, business operators and citizens. If business operators and citizens who can come into contact with criminally managed business will be given the tools to recognise the problem, it will be harder for organised crime bosses to build a network of consensus and power around themselves. At the same time it will be easier to trigger positive synergy between the stakeholders and the local community. A criterion to assess improvement, for instance, is the ability to disseminate information on the issue of confiscated enterprises beyond a close circle of practitioners.

3.5.6 Examples of good practices

The experiences in the management if a confiscated company are very few and do not date back a long time. In this regard organised civil society has not managed yet to play a pivotal role. This is why we believe it’s still too early to analyse or report any good practices, positive experiences or criticalities.

3.6 GUIDELINES FOR LEGISLATORS AND POLICY MAKER

It has been said that knowledge is key, both to solve problems incurred by the presence of organised crime and the revitalisation of confiscated companies. Still it cannot be ignore that being able to read through economic data, judiciary orders, the history of criminal infiltration and the long-lived rooting of criminal families in certain territories, not to mention the economic variables that companies have to deal with on the market are not easy or simple tasks. Consequently this research is not meant for simple citizens, but rather for politicians and legislators, managers and first and foremost universities.


Legislators must know in great detail the entire corruption and organised crime regulations, the results of the implementation of other laws previously applied by the Parliament, the well documented history of the action against crime applied with varying success by the State. They must reflect on past mistakes and the lessons learnt from success cases. Since organised crime never stops evolving, legislators must be able to read its presence in an area and be ready to innovate and amend the regulatory framework in order to effectively counter illegal or criminal activities.

They must study in order to be able to prevent any requests from criminal companies. Criminal entrepreneurship demands favourable laws in terms of tax regulation, invoicing, deductibles and breaks in every industry; it means to block, hinder and upset the laws that threaten its economic power. It wants to launder money earned through criminal activities, the so-called “dirty money”, and therefore needs laws providing for uncontrolled bank deposits.

In the relation with the Public Administration and in public procurements, it requires preferential treatments for contracts, extensions and changes to urban planning.

Legislators who can anticipate such requests can neutralise them with suitable regulations safeguarding free competition and the work of honest entrepreneurs.

Policy-makers must create the right conditions for teachers and students in universities to be given suitable tools to carry out their researches and be able to provide institutions with updated and rigorous elements in terms of methodology and outcomes.

This may occur with the establishment of observatories and research centres specifically focused on studying organised crime groups, as well as expert committees that can provide decision-makers with suitable knowledge to prevent relevant contracts from being trusted to companies and practitioners previously involved in illegal activities.

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Another duty of policy-makers is to inform citizens about the characteristics of organised crime groups, their political and economic interests and connections, their methods and even some episodes that can help reveal their presence.

Everyone must be put in a position to understand that the presence of organised crime is detrimental for all members of the community and more specifically those who perform business activities that may be appetising to the mob.

Consequently, policy-makers must clearly disseminate a message whereby the effective management of confiscated companies means a victory against organised crime from an economic, civil and most importantly ethical standpoint.

Knowing the modus operandi of criminal enterprises is crucial since the very issue of calls for procurement, According to the Italian anti-corruption authority ANAC, the provisions and guidelines issued for every phase of the public procurement process must be kept under control at all time: from the negotiated procedure to the definition of the selection board, a rigorous project management and execution, the evaluation of the most suitable bid and the control over the design services. All this can allow the market to operate properly and correctly.

Moreover, steady supervision must be ensured in terms of the appointment of the Board of Directors in companies called upon issuing projects and estimates, while looking into the relationships and family ties of all the Members of such Boards. The anti-crime certificate, which in Italy is mandatory in order to perform public activities, is sometimes by-passed by using fronts, that is, “clean” people who, sometimes circumvented, sometimes without being aware of it, are placed at the head of a company.

It has been widely documented and proven that corruption is the perfect breeding ground from organised crime. As a consequence


every position, law, regulation and rule preventing corruption from occurring has high value in the fight against organised crime.

As concerns actual political activities, parties have a primary role to play in choosing the candidates to chose in their electoral rolls, both for local and national elections. They must check the origin and provenance of candidates, any changes in their income, the transparency of their past conduct and their programmes. It is not enough for candidates to merely take a vocal position against organised crime; they must prove to be adamantly and reliably committed against it.

Once elected, administrators can be trained on anti-corruption and anti-crime activities in ad hoc meetings with experts and refer to the Code of ethics and good politics published by Avviso Pubblico in collaboration with political commentators, jurists, public officials, representatives of associations and local administrators.

For legislators, as well as for policy-makers, being full aware of the boundaries of action determines new individual and collective motivational processes.

This challenge becomes all the more relevant in the policy-making processes, which play a pivotal role in contributing to a decrease in criticalities. As a matter of fact, in order to ensure the positive reallocation of confiscated companies on the market, policy-makers cannot merely focus on the legal and economic aspects of the matter, but must also contribute to foster the promotion within the community and the commitment of civil society in raising awareness and understanding that “legality pays”.

MAJOR PILLARS OF THIS RESEARCH

A. DEFINITION OF HISTORIC AND SOCIAL URGENCIES

B. POLITICAL AND LEGAL ADVANCEMENT

C. ANALYSIS OF THE ORGANISED CRIME PHENOMENON

D. EXISTENCE OF RESOURCES FOR SOCIAL MOBILISATION

4. CONCLUSIONS

It is now possible to come to the main conclusions of our research, which come at the end of a process that was consistent as much as it was multi-faceted: both in view of the cultural identity of the partners and given the scientific disciplines that have been delved into and, finally, also for the analytic perspectives selected in the project.

Before we do it, though, it is useful to remember and once again describe the main assumption, the pillars upon which rest our research. These pillars are historic, political, legal and social and give a very specific profile to the motivations of the researchers as well as to the experiences analysed and the ensuing suggestions. They are schematically reported in Chart 1.

Chart 1

There are assumptions that may be defined as a “definition of historic-social urgencies”. Indeed, the research would never have come to be without the conviction that the organised crime phenomenon is one

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of the most urgent historic and social challenges in contemporary times. Organised crime is part of a bunch of priorities a visionary and ambitions political agenda must come to terms with. Quite naturally this urgency has been particularly, sometime dramatically, experienced across the Italian history, which was and still is forced to live with its and its direct consequences, especially in some regions (and not all in the south, contrary to what one may imagine). Nevertheless this urgency is beginning to be acknowledged, or at least deserves to be acknowledged, also in other, important European contexts, as seems to have emerged for some time according to several data and trends (to this regard, see the ICARO file on risk map).

Now, it is quite remarkable that this research, the product of a group of Italian partners, focused on a rather peripheral issue, namely the issue of the confiscation and reallocation of companies previously controlled by organised crime, which plays a key role in the broader and more complex strategy in place in Italy and which also at European level has began to meet with a certain interest with the 2014 Lisbon Directive.

The research, which happens to be our second main pillar, took shape within a specific political and legal milieu. It tends to draw a distance from it in order to benefit some other stare and civil entities, though it is undoubtedly the expression of a political culture that, first and foremost by effect of some major public traumas, has realised the need to complement its laws with the offence of mafia association and to introduce the instrument of asset seizure and confiscation – basing its legitimacy by reversing the burden of proof – to later provide for the social reallocation of such seized and confiscated assets.

Without this pillar it couldn’t be possible to understand the importance given by all partners (coming from associations, culture, trade unions, administration and academia) to the research goals. In summary, on the shoulders of researchers there lies a legacy of political history and legal reasoning that could not be found in the same forms either in the Italy of fifty years ago or in the other European Union Member States


of the past few years.

The third pillar has analytic values and has to do with the social reading of the mafia or, as it has come to be called these days, the mafias.

It is quite clear that the scope of the research and the very intellectual reasons behind approaching this issue are very diverse according to the different angle taken before the organised crime phenomenon. Some consider it a matter of folklore, others say it’s a mentality issues and others think it’s simply crime, maybe limited only to some regions; the most attentive observers, though, will certainly grasp its systemic nature, its will to exercise power in order to gradually, steadily and progressively expand the reach of its power. Well, this latter position is the one that has gained the most ground in research studies as well as in the most aware political and institutional circles. Moreover, it gives strategic value both to confiscation as a tool and to the social reallocation of assets, more specifically the reconversion of seized companies into law-abiding entities and assigns higher priority to the issue that is at the origin and heart of this research.

The success of confiscation and – most importantly – social reallocation and conversion of companies into law-abiding businesses is not only based on appropriate laws and analyses. Indeed, it requires also a large number of actors to take part in the process, which research has tried to identify both in terns of their specific functional characteristics as well as their interaction patterns. A high level of social mobilisation is therefore needed to support and accompany the company along its path by effect of a self-empowerment process of institutional, political, social and economic sectors at national and regional level, for without it the chances of success of individual reassignment projects become rather slim, if not paper-thin. The confidence that “political-legal” culture is not brittle but sturdy and dynamic stems from a conviction that its roots are deep in movements animating society. This is, then, the fourth pillar upon which our research rests: the system has in itself some resources of social mobilisation that can be further implemented and can ensure on-going and efficient support to the general project,

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as highlighted in some of the case studies presented and analysed in the research.

Within the framework of these basic premises, the main outcomes of this research gain particular depth and a “higher” theoretical value, as summarised in Chart 2 [where, for the sake of argument, item d) stands as organically related to the four pillars reported above, or again item a) is highly interconnected with the first three pillars]

Chart 2

THE MAIN OUTCOMES OF RESEARCH

A. THE DYNAMIC NATURE OF ORGANISED CRIME LAW (A THEORY OF LAW)

B. TWO-SPEED INSTITUTIONS (A THEORY OF THE STATE)

C. THE FLEETING NATURE OF SOCIAL SYSTEMS (A THEORY OF LOCAL SYSTEMS)

D. THE LIKELIHOOD OF «CONVERSION» (A THEORY OF ENTERPRISE MODELS)

The first outcome is certainly the dynamic nature of the organised crime law. This is still a trend line that, as mentioned before, is still moving its first, important steps also on the international stage, where (for instance) specific instruments have already been introduced to contrast organised crime. Indeed, the legal doctrine has proven its ability to display quite remarkable creativity in this regard, innovating its own parameters according to social and historic changes, also at international level. In brief it has proven a virtuous ability to overcome its limits and – quite unexpectedly – tune in with the facts and analysis of current affairs and the pressing urgencies they outline in spite of its somewhat rigid convictions. Finally, the legal heritage devised in Italy in the past decades (though generally in a very unsteady way) seems to have stood as a very important point of reference for all. The


increases awareness found in European society as to the economic, political and criminal menace of organised crime (in this regard, see the “Risk map”) pushes towards convergence among legal systems and looks at the Italian experience, precisely because of its historic relevance, as something to take reference from in terms of instruments and investigation and judicial practices.

If this acquisition concerns the theory of law, the theory of the State is even more intensely entwined with direct, practical references. Indeed researchers, as they come to terms with the stories of seized and confiscated companies, had to deal with a two-speed State. On the one side a State who was at times diffident, lazy, idle and rather prone to the failure of the very polities it had put in place to prosecute the social and economic power of organised crime: a maze of red tape, lack of ethical motivation, unwise choices made in the name of the general good, cultural estrangement to the purposes of confiscation and reallocation of criminal enterprises. On the other, another State, connected and yet opposite from the former, which research has singled out as crucial and vital for the purposes of a “successful” use of the law: whose workers have an institutional sense of loyalty and duty, whose procedures are adequate (and creative), whose administrative structure in well aware of the challenge against criminal power and whose actors are willing to put their energy and efforts at the service of others in a network.

One may observe, then, put this way, the state is once again nothing but a “two-faced” organisation, a characteristic that has accompanied it across the entire co-existence with organised crime. Certainly, though, it was interesting to notice how this theory re-emerges at every passage in the confrontation between legality and illegality, and how the latter is favoured by the slowness and inefficiency (as well as the complicity) of those whose ultimate mandate is to represent the former.

If this is true, then a theory of local systems may also be derived whose grounds – once again – were proven empirically. As a matter of fact

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it clearly emerged that not only are local systems the product of lengthy economic and social processes, of layer upon layer of historic conditions and demographic variables, but also (as Weber would put it) of specific combinations of people involved in the exercise of public authority or socially relevant functions, from banks to trade unions, from the press to associations.

This is indeed one of the most relevant aspects of this research. Punitive strategies against criminal assets, that is, works and are effective, all the way to reconverting companies to legal economy, if – by a sudden “historic chemical reaction” a group of dynamic people get together within the local centres of responsibility to guarantee the consistency across all phases of the bureaucratic process by deploying the best problem solving strategies at every passage. The local system, then, will be stimulated to action by the very presence of this group of people. And then the other side of institutional power will try to weaken such a dynamic combo using the most diverse channels and stratagems. Being based on a recognition of networks made of people, the theory of local systems is at one a theory of the ability to alter/modify such systems through targeted measures (for good and bad) applied from above.

Now we have come to our fourth theoretical outcome, the most relevant of all, of our research. A fundamental outcome in terms of the message sent to institutional policies: converting criminal businesses into the legal economy, their inclusion in market economy, is possible. This outcome discredits the theory whereby conversion is by definition impossible and hindered by the loss of the abnormal “competitive advantages” enjoyed by the company by virtue of its specific nature. The difficult path which a specific political and legal culture has decided to follow, in the light of the definition of urgencies and the specific approach to the organised crime phenomenon, can indeed be successful. Obviously this happens at certain conditions, that is – as mentioned before – when some favourable elements converge. As a matter of fact, the lack of even one of these elements may (though


not always) jeopardise the success of the process.

It is worth giving a suitable reference model for the analysis of said factors, which were already described and analysed in the previous pages. To this end Chart 3 describes the complexity of all relations that must be kept under consideration from a theoretical standpoint and to influence/modify from an operational one.

Chart 3

1. FREEMAN’S STAKEHOLDERS THEORY

2. THE RELATION BETWEEN BUSINESS AND THE ENVIRONMENT

3. THE RELATION BETWEEN ORGANISED CRIME AND THE ENVIRONMENT

4. CONFISCATED BUSINESSES AS ASSISTED BUSINESSES (THE CHALLENGE ELEMENT)

5. COLE’S THEORY OF ENVIRONMENTAL ELEMENTS

6. THE RELATION BETWEEN SOCIAL APPROVAL AND DEVIANCE/HERESY

7. THE THEORY OF COLLECTIVE ENTREPRENEURSHIP

THE REFERENCE THEORETICAL FRAMEWORKA SUMMARY OF COMPOSITIONAL ELEMENTS

The first structural element of this conceptual framework is the popular stakeholders theory postulated by Freeman in the Eighties to suggest the quality and quantity of counterparts businesses must relate to in the pursuit of their goals and targets. As already mentioned in the “Integrated Theoretical Model”, along their path confiscated companies must come to terms with a plethora of stakeholders, which are very different from the one described by Freeman and many of his acolytes. This difference is in terms of quantity and quality, and

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even revolutionised in the hierarchy of its constituting elements: just think of the primary role assigned to such profiles as the Presiding Judge, the Prefect, anti-crime organisations (to this regard, see the “Recommendations”), the Court Receiver of the same for the administration and allocation of assets seized and confiscated from organized crime.

But if a re-visitation of the stakeholders theory is clearly mandatory due to the specificity of the operational contexts, as controversial and problematic this issue may be, the analysis of the relation between businesses and the outside world cannot stop here. Deep understanding is needed here of the general relation, finely spun every day, between a company and its target social and cultural system, which may, for instance, display a certain degree of scepticism towards the recovery project see as unrealistic and costly social innovation (the business will certainly “shut down”, its employees will lose their jobs and public efforts will be diverged towards a “failing project” instead of addressing “people’s real needs”). After all it may happen that the cultural favours of the community go, though not in a clear-cut way, to the persons the law is meant to prosecute, that is, the organised crime group in control of the area, which could be (or have been) favoured precisely because of consensus built in time. Besides the resources that may be mobilised in the “anti-mafia” project, on the opposite side indifference, scepticism but also hostility should be considered, as they can easily translate into intimidation and even violent attacks against businesses.

The path of confiscated businesses, then, is bound to unwind, especially in some areas and communities, on a conflict-ridden terrain, which gives it the sense of a true challenge. A challenge that is at once economic, social, cultural and political. A challenge with the market and also with the power of organised crime, which can not only intimidate, but also determine the chances of a company to succeed by influencing the attitude of banks, suppliers or even customers. So, back to the defining passage, confiscated businesses must draw from


the support of multiple public actors, either private or public, (for physical protection, administrative measure, etc.) and in this regard they are not dissimilar from assisted businesses. Not so much as the beneficiaries of an income (irregular financial support in spite of the operating performance) but rather as the bridgehead of a collective challenge and, as such, the hinge of a much broader solidarity system. In this regard it is useful to go back to the model designed after World War II by Arthur Cole, the great business history scholar, and go back to the success and failure factors that he pointed out, trying to relate them with the context in which our type of businesses operate. More specifically it is crucial to reflect on the factors Cole deemed most important: safety (the peacefulness of the context), relations with politics, available cash, social practices (other than the laws); all thee factors have proven their decisive worth in the ICARO research and in the experience of confiscated businesses.

To these factors Cole adds – as described un the “Integrated Theoretical Model” the characteristics of the “bringers of entrepreneurial roles”. In our particular case these subjects are absolutely critical. In deed they must know how to live up to the challenge by making the most of the social approval they enjoy (and possible expand it) and interpreting heresy, or deviance, from a system that rests on diffidence and practices whose mix of ingredients includes idleness, traditionalism and complicity. In a nutshell, they must be able to navigate in a difficult, unsteady balance between consensus and innovation. A role that, in order to be “played” effectively, requires entrepreneurs to be able to rest on broader support, whose adamant resolve is to share the challenge and tackle it in a collaborative way in order to make the most of all necessary or useful social functions. Entrepreneurs, in brief, must be at the heart of a phenomenon that we have previously referred to as the collective entrepreneur.

This is the conceptual framework that this research offers as a reference for its main theoretical outcomes (the dynamic nature of organised crime law, the two-faceted nature of the State, the alterable nature of

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local systems and the possibility of “conversion to legality” to happen) to translate into guidelines for collective action: from useful strategies ensuring the safety of businesses to collective entrepreneurship training processes. Finally, this is the most profound result of this research: a conversion into white economy is possible, though it is the result of a cumulative process in which all or almost all actors play with dedication and a sense of selflessness (exactly like artists and actors) the part given by them by the law or the institutional spirit.

This project has been funded with support from the European Commission. This communication reflects the views only of the author, and the European Commission cannot be held responsible for any use

which may be made of the information contained therein.

All information and other content of the document is intellectual property of the partners of the project Icaro. The copying, distribution and utilization of this

document as well as the communication of its contents to others without expressed authorization is prohibited.

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