PolicyPoint's Andrew Stein, Grant Anderson, Don Eade and I recently participated in the ACI's 13th Annual Conference, in Sydney.

Among the many highlights of the Conference was the presentation 'Compliance makes good business' by the ACCC's Commissioner, Sarah Court, which touched on a number of topics to do with trade practices compliance.

This extract, from her speech, provides an intelligent response to the question why worry about compliance?:

"So, first and foremost – why should you worry about compliance?

• Firstly, the risk of your firm’s reputational damage and associated loss of business.
  If your firm does breach the Trade Practices Act, and the ACCC takes enforcement action, one of the principles of our enforcement practice is transparency in our approach – this means that we do not do private deals, and that all of our enforcement outcomes are made public. In our experience consumers and the press are very interested to know when companies have been found to have engaged in misleading or deceptive conduct, and the risk of brand or reputational damage is one of the prime motivators for companies in seeking to achieve compliance. This is particularly so in respect of large and well-known companies or brands – but protection of reputation seems also to play a significant role with small business.
  Obviously damage to a firm’s reputation brings with it a potential loss of business – both through reputational impact but also if your customers have poor consumer experiences.

• The cost for the firm of remedying any wrongs
  Even if legal action is not taken, there is always a cost associated with remedying trade practices contraventions – these can be indirect costs associated with wasted management and staff time, or direct costs such as customer refunds, legal costs and engaging independent auditors or reviewers.

• The potential results of legal action - significant financial penalties, injunctions and other remedial measures
  While the ACCC takes legal action in a very small percentage of cases that it investigates, the impact of legal action can be very significant – court orders may include significant financial penalties, injunctive relief, corrective advertising and community services orders, together with the publicity that goes with these results. Contraventions of consumer protection provisions can also result in criminal prosecution, as can contraventions of the new cartel offence provisions.
• The impact on management time, staff and individuals involved in any breach
  Finally, as already noted, there can be a significant impost on any business involved with even a potential breach of the Act if the ACCC elects to investigate – the ACCC’s investigatory powers are broad, and include coercive statutory powers that compel the production of information and documents, or compel employees and directors to answer questions under oath. This has an obvious impact on those staff involved. Finally, the investigation and remedying of any breach can involve significant unproductive downtime for all involved.

"But it is not all bad news – there are other reasons to establish a compliance program beyond the avoidance of risk. Let’s turn now to the broad benefits of compliance.

• Management confidence that the business is operating within a lawful framework
  If management can be confident that the corporate governance and compliance processes are in place and effective, management time can be devoted to growing the business and pursuing other worthwhile endeavours, rather than putting out compliance spot-fires whenever they emerge.
• Reduction in customer complaints and improved business reputation
  If your systems are working properly, this is also in your customers’ interests – which means that complaints and disputes should lessen and the firm’s business reputation will be enhanced. This saves time in dealing with and resolving complaints, and in dealing with regulators if customers or your competitors have made complaints to the ACCC.
  
  
• Efficient and effective dispute resolution processes
  Our experience suggests that companies that pay close attention to the feedback they receive – from customers and suppliers, are more likely to be successful in building their reputation.
  An effective complaints handling mechanism – as part of a broader compliance program – can be an invaluable resource. It is another way to improve processes that reduce complaints.
• Avoidance of wasted resources on regulatory and enforcement investigations
  And as already noted, enormous amounts of internal resources may have to be expended when responding to an ACCC investigation. If a company can readily demonstrate to the ACCC an active compliance program and demonstrate its due diligence processes to achieve compliance with the Act, the ACCC will take this into account when considering the range of enforcement responses available to it."

Ms Court's address provides valuable insights that further strengthen the business case for enterprises seeking to strengthen their compliance framework. A transcript of Ms Court's address is available at the ACCC: and PolicyPoint has further information for those who are seeking to boost their compliance-readiness. This includes providing comprehensive Trade Practices training. For more details, contact the author at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .