The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Chubb Security Holdings Australia Limited and Chubb Security Australia Pty Limited for the implementation of a comprehensive Trade Practices Compliance Program.
On 30 December 2004 the Federal Court imposed a fine of $1.51 million against Chubb for criminal breaches of sections 58(b) and 75AZL(3) of the Trade Practices Act 1974.
In her judgement, Justice Annabelle Bennett noted the various compliance steps implemented by Chubb and concluded that "…Chubb has, in changing the culture of compliance and the systems affecting its provision of mobile security services, rehabilitated itself such that there is a low likelihood of future offences of this kind".
The court enforceable undertakings provided by Chubb to the ACCC are aimed at locking in the elements of its Trade Practices Compliance Program, outlined to Justice Bennett in the case, to reduce the likelihood of Chubb contravening the Trade Practices Act in the future. The main elements of the Chubb Compliance Program are as follows:
- changes to compliance and reporting structures, including regular compliance committee meetings and a disciplinary code for employees
- changes to company procedures to ensure that Chubb can respond to trade practices compliance issues, including a review of existing company procedures and linking employee performance appraisals and incentives to trade practices compliance
- introducing new hand held technology to provide for the electronic verification of service delivery in Chubb's mobile patrol business
- establishing new procedures for the review of all company advertising and promotional material
- implementing annual trade practices compliance training for relevant employees and officers and ensuring that such training is provided to new employees as part of their initial induction program
- retaining an independent compliance practitioner to conduct annual audits of the Compliance Program
- to review existing complaints handling procedures and to ensure that these procedures are consistent with the relevant Australian Standard (AS4269-1995).
Chubb has also undertaken to develop a voluntary code of conduct for the mobile patrol industry and to provide a copy of the code to all recognised security industry associations.
The ACCC has also entered into a Global Settlement Deed with Chubb to resolve a number of the ACCC's current investigations into Chubb, and to establish a protocol for dealing with any new ACCC investigations into Chubb which may arise over the next three years.
The ACCC also notes the financial contribution of $500 000 made by Chubb to the Australian Security Industry Association Limited for the establishment of a new Centre for Security Compliance Excellence.
"The ACCC supports the measures which Chubb is implementing to improve trade practices compliance within its company. The ACCC is satisfied that Chubb has, in Justice Bennett’s words, demonstrate(d) a genuine desire to effect changes and make hard decisions to ensure future appropriate behaviour," ACCC Chairman Mr Graeme Samuel said today.
"Others in the security industry should note that Chubb obtained a significant discount off the likely penalty (of $6 million as indicated by Justice Bennett) for the breaches, primarily because of:
- its early plea of guilty
- its cooperation with the ACCC
- the reparations paid to consumers (of approximately $630,000 to customers on affected runs)
- its good prospects of rehabilitation.
"Clearly, in the absence of such mitigating factors, the ACCC would be seeking a significant criminal penalty against any other security provider which is engaging in similar conduct".