The purpose of a trade practices compliance program is to minimise the risk of breaches of the Competition and Consumer Act 2010. Once a trade practices compliance program has been implemented or updated, its effectiveness and contribution to trade practices compliance within the organisation must be assessed.
An audit or review does more than provide assurance that a trade practices compliance program is being implemented as required by the undertaking. Review recommendations feed back into companies’ compliance programs in a cycle of continuous improvement.
Scope of the review
The review should be broad and rigorous enough to provide the corporation and the ACCC with a degree of assurance that:
the company has in place a trade practices compliance program that is effective at identifying, preventing and correcting breaches of the Competition and Consumer Act 2010
the company is complying (or otherwise) with trade practices compliance program elements of the s. 87B undertaking or court order
potential contraventions of the Act or weaknesses in the compliance program have been identified, and professional advice on how to rectify them has been provided to the company.
As well as the general assurances above, specific but divergent information is required from the review process by the company and the ACCC.
Trade practices compliance program review report (to be provided to the company)
The company requires detailed and comprehensive information on the performance of its compliance program, which may include:
if, and to what extent, the trade practices compliance program includes all of the elements required by the undertaking
if, and to what extent, the company compliance policy includes all the elements required by the undertaking
if, and to what extent, the trade practices compliance program covers the parties identified in an initial Trade Practices Act risk assessment conducted in accordance with the undertaking
if, and to what extent, the trade practices training is carried out and is effective
if, and to what extent, the company’s complaints handling system is effective
if, and to what extent, the company is able to provide confidentiality and security to whistleblowers, and staff are aware of the whistleblower protection mechanisms
actions recommended by the reviewer to ensure the continuing effectiveness of the company’s trade practices compliance program.
Trade practices compliance program review report (to be provided to the ACCC)
The ACCC requires information which may include:
details of the evidence gathered and examined during the Review
the name and relevant experience of the person appointed as the company compliance officer
the reviewer’s opinion on whether the company has complied with the trade practices compliance program component of the undertaking
actions recommended by the reviewer to ensure the continuing effectiveness of the company’s trade practices compliance program
confirmation that any actual and potential inadequacies in the company’s compliance program have been brought to the attention of the compliance officer and the governing body
confirmation that the reviewer has revisited any actual and potential inadequacies in the company’s trade practices compliance program identified in any previous review
any reservations that the Reviewer might have about the reliability and completeness of the information to which the Reviewer had access in the conduct and reporting of the Review
any comments or qualifications concerning the review process that the Reviewer, in his or her professional opinion, considers necessary.
It may sometimes be the case that summaries of the ACCC compliance program review reports are placed with the undertaking in the Commission's s. 87B public register.
To ensure that review reports provide well-informed opinions it is considered necessary that the reviewers have access to all relevant sources of information in the companies’ possession or control without limitation including:
inquiries of any officers, employees, representatives, agents and stakeholders of the company
the opportunity to view or sample relevant records, including but not limited to complaints registers, reports, training records, computer files, customer transactions and products
documents created by the company’s consultants and solicitors for use in its trade practices compliance program.
The review report should clearly state what evidence was collected and what methodologies were used in forming the review conclusions and recommendations. A review that relies on passive examination of a number of company records and a limited number of senior staff interviews, rather than actively probing into the compliance activities of the company is unlikely in most circumstances to be considered sufficient or rigorous enough by the commission, and will be of questionable benefit to the company.
Both the ACCC and the trade practices compliance profession make a clear distinction between compliance advisors that are involved at the design and implementation stage of a compliance program and the compliance reviewers who assess the outcomes and effectiveness of the company’s compliance efforts.
The compliance advisor should possess expert knowledge of trade practices compliance issues and a good understanding (or the ability to quickly acquire it) of the company’s industry conditions and the company’s business operations. The compliance advisor’s main role is to assist the company to carry out a trade practices compliance risk assessment, and design a trade practices compliance program that will minimise those risks and serve to imbue a culture of compliance within the organisation.
The compliance reviewer will be an expert in trade practices issues, and usually be independent of the company being reviewed. The reviewer will have skills and experience in compliance review methodology and be able to assess the condition of the company’s compliance program and CCA related business operations to the extent that recommendations and opinions can be offered in the review reports.
A separation of the compliance advisor and compliance reviewing functions is an essential component of review independence for medium and large companies.
The reviewer will qualify as independent on the basis that he or she:
did not design or implement the compliance program
is not a present or past staff member or director of the company
has not acted and does not act for the company in any Competition and Consumer Act related matters
has not and does not consult to the company or provide other services on trade practices related matters other than compliance program reviewing
has no significant shareholding or other interests in the company.
Please note: that these compliance review requirements provide a basic summary of the Commission’s current views on trade practices compliance program reviews in an evolving field. The compliance review requirements are not to be construed as legal advice and may be subject to alteration. Reviewers are advised to regularly visit the ACCC website for updated information, to check the currency of the requirements before starting their audits and for the opportunity to provide feedback.
If you wish to provide feedback on the compliance review requirements, please contact the ACCC Infocentre on 1300 302 502.
