Prevention better than a cure

Companies should ensure they understood trade practices law rather than risk the ire of the Australian Competition and Consumer Commission, ACCC Deputy Chair, Ms Louise Sylvan, said today.

Addressing the Australian Compliance Institute national conference in Sydney*, Ms Sylvan said one of the most effective measures to take was to develop a trade practices compliance program.

"Well designed and successfully implemented compliance programs minimise trade practices risks", she said. "Businesses are able to identify compliance failures if and when they occur and take prompt corrective action.

"Once developed, a compliance program shouldn't be left to sit on a shelf, gathering dust. It must be implemented and integrated into the day-to-day operations.

"Prudent businesses should take note of the Federal Government's decision to further strengthen the trade practices laws when deciding whether to introduce or upgrade their compliance programs.

"The ACCC provides trade practices compliance program templates on its website. The templates provide a framework for the development of procedural and behavioural mechanisms the ACCC sees as essential in any effective compliance program.

"Procedural mechanisms address and mitigate high risk areas in a business's operating environment, while the behavioural mechanisms emphasise the business's commitment to developing a positive compliance culture".

The ACCC considers that ongoing assessment and review of compliance programs is also an essential component in maximising their effectiveness. Careful monitoring and regular reviews ensure that a compliance program continues to meet the business's needs and is effective in detecting potential or actual breaches of the Trade Practices Act 1974.

"Where businesses fail to have a compliance program, or where it is ineffective, they are essentially relying on others to bring that failure to their attention. In the event that this results in a contravention, a consequence might be enforcement action by the ACCC. This is likely to involve court orders or enforceable undertakings and significant reputational damage".

*A copy of the speech will be available on the ACCC website.