Compliance programmesCommitment 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.
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.
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.