Small business trade practices compliance

ONE of the major challenges confronting small business is deciding how much time to devote to running the business and how much attention to direct towards ensuring the business complies with its regulatory obligations. In many cases, despite the best efforts of its owners, small businesses are not able to devote the same levels of time and resources to compliance issues as large businesses. Nevertheless, small businesses that are determined to succeed should make a commitment to compliance, obtaining some professional trade practices risk assessment and compliance advice. To this end the Australian Competition and Consumer Commission (ACCC) has produced the Small business guide to trade practices compliance programs to promote awareness of trade practices compliance issues in the small business sector and offer guidance on compliance. This guide includes information on what the ACCC is likely to require from a small business in the event that it has failed to meet its trade practices obligations. When the ACCC considers that a company may have breached the Trade Practices Act, it has the option to resolve the matter by accepting a court enforceable undertaking from the business. These undertakings may require the company to implement, maintain and regularly review a trade practices compliance program. The ACCC does not seek compliance programs as a punishment. Its purpose in requiring the implementation of compliance programs is to ensure the business develops the skills and capacities it needs to minimise the risk of future compliance failures. The guide explains what a compliance program is and provides a brief overview of the trade practices compliance elements all small businesses should consider implementing to minimise their risk of a trade practices breach. It then presents a detailed discussion of the compliance program elements the ACCC considers essential to enable small businesses to address their trade practices risks. What is a trade practices compliance program? For small business, it is important the risks of contravening any legislation are comprehensively assessed at the business start-up stage and at intervals as the busi-ness develops, and that strategies are adopted to minimise those risks. An initial risk assessment is something that can be undertaken by a professional business/legal advi-ser, who may recommend a tailored trade practices compliance program to manage any identified risks. A trade practices compliance program is a mechanism that can both assist in reducing the risk of breaching the Trade Practices Act and in remedying any breach that may have occurred. It contains a number of essential elements and can only be effective if they are correctly implemented and operational. It is not enough to simply have a compliance program ‘on paper’. It must be incorporated into the business and become part of the way the business functions. The ACCC considers that an effective small business compliance program can be as simple as implementing regular trade practices training for all relevant staff – those employees that may place the business at risk of a trade practices breach. Training underpins the develop-ment of any compliance program Small business staff must be provided with regular training to reinforce the trade practices compliance dimension of their work and to be able to prevent inadvertent breaches of the act. Effective training can also enable employees to identify trade practices breaches by competitors. An effective complaints-handling system As well as having a positive impact on the small business’s relationship with its customers, effective complaints handling provides an early warning system if the complaint gives rise to a systemic trade practices issue. Well-trained staff and a capable person entrusted with the responsibility for compliance should be able to remedy the issue and take measures to minimise the chances of a similar failure recurring. An effective product safety and recall program (if applicable) Some products are subject to mandatory standards. All businesses need to comply with the standards relevant to their products. An effective product safety and recall program will help identify any potential risks, the relevant product safety obligations and, in the event of the risk arising, a means to remedy the problem. A position responsible for compliance within the small business, a compliance officer The appointment of a compliance officer means the responsibility for the business’ compliance with its regulatory obligations rests with that person. It also makes it their job to ensure the business is up to date with all regulatory developments and its products are in accord with the relevant mandatory standards. The ACCC considers that the compliance officer should be supported in his/her job by all staff as, ultimately, compliance with the law is everyone’s responsibility. Regular compliance reviews to ensure continual improvement Regular reviews of all compliance elements help ensure the compliance program continues to meet its purpose – to be effective in minimising the risk of a trade practices breach by the business. For a copy of the ACCC’s Small business guide to trade practices compliance programs, call the ACCC small business team helpline on 1300 302 021 or access

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