Compliance programmes

Commitment to competition compliance

How does a company demonstrate its commitment to competition compliance?

An effective and comprehensive compliance programme can demonstrate a company’s commitment to competition compliance.

Key elements of an effective compliance programme include:

  • a detailed and tailored compliance manual;
  • a board policy whereby the company commits to develop and maintain a culture of compliance;
  • regular compliance training for employees, including senior managers at least once a year;
  • appropriate mechanisms to allow for reporting to senior management;
  • an appropriate complaints handling system;
  • appointment of a suitably qualified compliance officer to oversee the compliance programme;
  • the provision of whistle-blower protections;
  • regular reviews and updates to the compliance programme;
  • appropriate approval processes, including legal approval processes before entering into arrangements that may give rise to competition law issues; and
  • sanctions for individuals who do not comply with the compliance programme.

 

Risk identification

What are the key features of a compliance programme regarding risk identification?

Compliance programmes will vary between companies as they need to be tailored to account for the company’s size, industry sector and market power.

A key feature of risk identification involves promoting a culture of compliance within the organisation and educating all employees (at both senior and employee level) on competition risks that the company faces, along with a regularly updated compliance manual and other training materials.

Risk identification involves consideration and identification of:

  • the competitors of a company and how the company interacts with those competitors (eg, if they collaborate or cooperate in respect of business ventures or share information);
  • supply and distribution arrangements that the company has in place (eg, whether they are exclusive);
  • the industry or market sector in which the company operates and the level of competition that exists in the market; and
  • the market share of the company.

 

Risk assessment

What are the key features of a compliance programme regarding risk assessment?

Ideally, any risk assessment should be undertaken by senior management, with appropriate input from the company’s appointed compliance manager as well as external legal advisers.

A formal process and protocol to assess risk should be developed and adhered to, with specific regard to the requirements of the Act. It may also be appropriate to develop a classification system in respect of risks that different functions of the company may face ensuring they are escalated accordingly.

Risk mitigation

What are the key features of a compliance programme regarding risk mitigation?

As part of any risk mitigation strategy, a compliance programme should include:

  • appropriate training for employees (in particular, senior managers), to identify and avoid potential competition risks;
  • identifying particular areas of risk for the company (eg, procurement and sales functions of the business and having appropriate protocols in place to avoid competition risks);
  • having an appropriate risk assessment and approval process, with input from external legal advisers; 
  • implementing a system for logging complaints and decisions; and
  • whistle blower protection mechanisms to protect those coming forward with competition complaints.

 

Compliance programme review

What are the key features of a compliance programme regarding monitoring and review of business practices?

Any monitoring and review should:

  • be broad in scope in confirming that the company is complying with the requirements of the Act;
  • be conducted annually;
  • be undertaken by a suitably qualified and independent compliance professional (who is provided with all relevant sources of information relevant to conducting the review); and
  • result in a compliance report evaluating the company’s compliance and providing areas for improvement.