On October 24, 2008, the Competition Bureau published the final version of its updated information bulletin on Corporate Compliance Programs (the “Bulletin”). Expanding upon the Bureau’s original 1997 bulletin on this topic, the Bulletin outlines the Bureau’s views and preferred approach to corporate compliance programs and is intended to help ensure compliance with the federal Competition Act, Consumer Packaging and Labelling Act (“CPLA”), Textile Labelling Act (“TLA”) and Precious Metals Marking Act (“PMMA”). The Bulletin also includes suggestions for business policies and procedures that meet the Bureau’s requirements and provides a basic corporate compliance program template and due diligence checklist.
This Bulletin can be of assistance to Canadian businesses that wish to develop or improve their internal regulatory compliance program. While a compliance policy may not be legally required, a program tailored to individual business needs in consultation with expert legal counsel can be a proactive way of managing risks, promoting compliance with relevant laws and mitigating the consequences of any contraventions.
BENEFITS OF CORPORATE COMPLIANCE PROGRAMS
As the Bulletin points out in considerable detail, a corporate compliance program can serve both to facilitate the detection of contraventions of relevant legislation and to prevent, minimize and mitigate the risk of doing so. The Bulletin also notes that implementing internal compliance mechanisms allows firms to identify situations where it is appropriate to seek legal advice, prior to contravention, thus reducing or avoiding the legal, economic and reputational risks associated with non-compliance.
The Bulletin notes that the courts have, in some cases, recognized a credible and effective compliance program as a mitigating factor when assessing remedies in the event of a breach. The Bulletin states that, upon contravention, the Bureau may be inclined to pursue more lenient alternative case resolutions or civil remedies, rather than criminal sanctions, against a business which has an appropriate compliance program in place.
ESTABLISHING A CREDIBLE AND EFFECTIVE CORPORATE COMPLIANCE PROGRAM
The Bulletin reiterates the five basic requirements for a credible and effective corporate compliance program, which are:
- Senior management involvement and support – The Bulletin emphasizes that the involvement and support of senior management is crucial for an effective compliance program, as senior management’s “buy-in” is typically critical to fostering a corporate culture of compliance.
- Corporate compliance policies and procedures – Policies and procedures tailored to the specific needs of a business allow for greater utility and dissemination among employees and other stakeholders, which is critical to the success of a compliance program.
- Training and education – Appropriate training of employees who may engage in conduct which could place the business in regulatory non-compliance is essential to a compliance program. The content of a compliance program is best conveyed to employees through an accessible company publication and training materials, which must be regularly updated to reflect both changes within the business and in the law.
- Monitoring, auditing and reporting mechanisms – Effective monitoring, auditing and reporting mechanisms allow a business to better prevent and detect non-compliance and to improve a compliance program’s efficacy.
- Consistent disciplinary procedures and incentives – The inclusion of consistent disciplinary procedures (including suspensions, demotions or dismissals) and employee incentives increase a program’s effectiveness.
The Bulletin also provides tools to assist businesses in the development and implementation of a compliance program, including a basic Corporate Compliance Program Framework. These tools describe the essential components of a credible and effective program, which may serve as a useful starting point for businesses that wish to develop and implement a program. The Bulletin further provides a certification letter that businesses may wish to ask key employees to sign in order to certify that they have read and understood relevant legislation, and a non-exhaustive due diligence checklist meant to facilitate compliance.
The Bulletin serves as a reminder that firms should consider creating and implementing a strong corporate compliance policy, whether on a stand-alone basis or incorporated as part of a broader compliance program, to facilitate and ensure compliance with the Competition Act, CPLA, TLA, and PMMA. Such programs are key instruments to identify both permissible and prohibited anticompetitive conduct, and to detect more complex situations where a business would be well advised to seek legal advice. As the Bureau indicates, firms should consult their legal counsel for assistance in preparing and adapting these programs to their specific circumstances.