The mining and natural resources industry continues to face far-reaching challenges, including regulatory, financial, employment and currency volatility. In these circumstances, there is often extensive pressure on cost optimisation, which in turn places significant pressure on both human and financial resources.
Inevitably, compliance comes under the spotlight, which often results in discussion and debate on what compliance means and, in particular, what are the minimum levels of compliance to be achieved in order to satisfy the requirements. Levels of compliance that may be accepted when financial resources are readily available, even where these levels of compliance include the "nice to haves", are questioned. It is essential that all stakeholders acknowledge that compliance is a critical component of the success of any enterprise. The consequences of non-compliance could be extensive and impact on the medium to long-term success of enterprises. Consequences include regulatory enforcement, administrative and criminal fines, reputational harm, loss of trust with key stakeholders and among key stakeholders, and impact on the relationships with the regulatory authorities.
Identifying whether or not an enterprise is legally compliant provides a useful snapshot of the status of compliance at a particular point in time. This does not, however, give an accurate reflection regarding whether or not the enterprise is substantially compliant, which is generally the primary focus of the enforcement agencies. Enforcement agencies are consolidating efforts, and cooperating with one another, to ensure that a holistic approach is taken to compliance by enterprises. This not only means that a multidisciplinary approach is adopted, but also that the focus is on many, if not all, of the applicable laws.
The consequence is that enterprises are required to have a full working knowledge of the challenging range of legislation applicable to the mining and natural resources industry. To do so, requires active participation by the directors and officers of companies with support from internal and external advisers. Existing and proposed legislation often contains a central theme, namely potential personal liability for non-compliance, jointly, with the companies they serve.
One thing is certain, and that is that the regulatory authorities are stepping up their attempts to enforce the applicable laws and, where necessary, to seek the prosecution of directors, officers and, in certain instances, advisers for non-compliance. The regulatory authorities are being taken to task by stakeholders where stakeholders perceive the consequences of non-compliance, such as administrative and criminal fines, as being a "slap on the wrist". This puts the regulatory authorities under the spotlight and requires them to take a more robust approach to compliance.
People responsible for compliance often regard it as an end goal to be achieved. It is essential that all stakeholders acknowledge that compliance is an ongoing, dynamic process that requires continuous review, revision and commitment from all stakeholders. Sadly, it is often the case that compliance is achieved as a result of enforcement by the regulatory authorities. This mindset needs to change, with greater emphasis on a proactive approach, which acknowledges that compliance is a significant component of the operations, and through the commitment to the allocation of proper and adequate human and other resources.