Preparation of Compliance Programs
A compliance program is more than just a document. It is a living process that helps you stay out of court. Since 1995, we have helped multiple medium and large sized businesses develop and implement compliance programs.
What is a Compliance Program and why is it necessary to have one?
A compliance program refers to an organisation's strategic plan for conducting all of its activities within the law. It involves:
Businesses can reduce their risk of breaching the law if they have in place a compliance program, which is specifically tailored to that business’s organisation, and is effective in fostering a culture of compliance.
- identifying the laws that apply to the organisation's activities;
- identifying areas where the company's activities are at risk of breaching these laws;
- putting in place systems and procedures to try to prevent such breaches ( "procedural compliance");
- educating and changing behaviour through training and other measures where this is necessary ("behavioural compliance"); and
- identifying ways in which the organisation's compliance culture can be enhanced.
The size of an organisation and the extent of its activities will determine the nature and extent of the compliance program required.
To achieve its objectives and to be cost-effective, a compliance system should be built into the business operations of the organisation. It should truly be part of the business plan for the organisation, in the same way as other key result areas like marketing, finance and operations. The aim should be to achieve a compliant organisation rather than to have an organisation with a compliance program siloed "off the side".
The laws that apply to companies are many and varied. Some legal obligations are well publicised, for example occupational health and safety, workcover, superannuation and trade practices, whilst others are less well known.
Some industries must comply with legislation that is specifically targeted at them, for example, the financial services industry. Other industries are less regulated but must still comply with legislation that is common to all. Examples include laws relating to taxation, employment issues, privacy, and competition and consumer law.
A breach of some laws can be very expensive indeed. For example, breaches of the competition provisions of the Competition and Consumer Act (formerly the Trade Practices Act) could result in civil penalties being imposed on corporations which will be calculated as the greater of:
As well as minimising the chances of breaching the law, an effective compliance program will be taken into account by Courts on the severity of the penalty imposed. An Australian Standard, AS 3806, has been developed to assist organisations in developing compliance programs. Whilst this is not a compulsory standard, it is very helpful and is known by the Courts and the regulators.
- $10 million;
- Three times the value of the gain obtained from the breach; or
- If the gain from the breach cannot be ascertained, 10% of the annual turnover of the company for the 12 month period prior to the breach.
Contact us to find out how we can assist you with your requirements.
Competition and Consumer Law (previously Trade Practices Law)