When is a smartcard an identity card
Queensland has already announced a driver's licence smartcard.
The Commonwealth Government has now announced a health and welfare services smartcard which seems to rule out a compulsory national security ID card.
Privacy case notes released
The Privacy Commissioner has published case notes 5 - 9 for 2006.
In particular the Commissioner reports that 2 complaints against accountants for disclosing clients' tax file numbers were upheld and resolved (Case Note 6 and Case Note 7). Apart from the privacy issues, as such disclosures might constitute a Tax File Number offence, the Commissioner advised the parties of this and referred the matter to the Australian Federal Police.
ASIC guidance on use of administrative powers in enforcing financial services laws
Licensing: Administrative action against financial services providers outlines
how ASIC will use administrative remedies to enforce compliance of
Australian financial services (AFS) licensees, and their
representatives, with the law. It is also targeted at consumers about
financial services, explaining how ASIC seeks to protect the public and
reinforce the integrity of the industry.
The guide indicates the matters ASIC takes into account in determining whether administrative action is the most appropriate regulatory response (rather than civil or criminal action). It also provides some indicative guidance on the kinds of factors ASIC will consider when determining the length of a banning order, including examples of relevant misconduct for illustration.
ACCC small business guide to trade practices compliance programs
The ACCC's Small business guide to trade practices compliance programs is designed to promote awareness of trade practices compliance issues in the small business sector and offer guidance to small business operators in their efforts to comply with trade practices obligations.
The guide also provides 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.
The ACCC explains that its policy does not seek compliance programs as a punishment: its purpose in requiring the implementation of compliance programs is to ensure that the business develops the skills and capacities it needs to minimise the risk of future compliance failures.
ASIC releases risk and return calculator for investors
ASIC's risk and return calculator uses a simple Excel spreadsheet: you input the investment type. the expected yearly return and the investment term and it will tell you whether the investment is risky or not.
It's no substitute for a financial planner but the assumptions seem reasonable.
Who is responsible for your organisation?
It seems that each time a new corporate crisis occurs or a rogue is exposed, governments and regulators find flaws in their existing systems and decide to redefine the notion of "responsibility".
There are long-standing laws which state the duties of company directors and officers to their company, shareholders and creditors. The courts fine-tune these laws from time to time to deal with particular facts, for example insolvent companies or the role of a chairman, but generally people understand these laws.
Recently the terms "responsible officers" and "responsible persons" have been added to the list of who is responsible for companies.
Under FSR, ASIC's AFS licence names the responsible officers: a responsible officer is the person who is responsible for making decisions about a product or service whether or not that person is the CEO . APRA has now introduced the concept of "responsible person" which extends responsibility from directors and senior managers to auditors and consultants. In each case the responsible person (or officer) must have particular competencies, skills or experience and be adequately trained to satisfy the regulator that the person is capable of carrying out their duties. Both ASIC and APRA have the power to disqualify persons who are not "fit and proper".
There is no guarantee that satisfying these new rules will make the business perform better or avoid future corporate failures but the message is clear: if you are responsible for a company, you will be held to account if you do not exercise the necessary skills.
Related article: Corporate governance update
AS 3806 - 2006 Compliance programs
Standards Australia has issued AS 3806-2006, Compliance programs to provide clearer guidance on implementing an effective compliance program in your organization. It supercedes AS 3806-1998.
The Standard provides 12 key principles to help organisations implement, monitor and measure and continually improve a compliance program.
Cole Inquiry and AWB: corporate culture and criminal responsibility
So far I have posted all my discussion about AWB and the Cole (Oil-for-food) Inquiry on my AWB Index on External Insights but I think it's time I did a cross-post discussing corporate culture and compliance .
If, as I noted at the beginning of the Inquiry, breaching the UN sanctions was not an offence under Australian law, what has the Inquiry been all about? According to the Terms of Reference, the Inquiry has been set up to determine:
whether any decision, action, conduct, payment or writing of:
(i) any of the three Australian companies that are mentioned in the Final Report ("Manipulation of the Oil-for-Food Programme by the Iraqi Regime") of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme; or
(ii) any person associated with one of those companies;
might have constituted a breach of any law of the Commonwealth, a State or Territory
The Inquiry has clearly shown how the culture of a public company tasked with serving its shareholders in a politically and economically sensitive environment (ie selling wheat to Iraq) affects its actions.
But there has been a misunderstanding about "corporate culture". Having a non-compliant corporate culture is not an offence in itself. Section 12.3 of the Commonwealth Criminal Code is a provision that, for the purposes of Commonwealth law (including the Corporations Act), sets out when a company is deemed to be at fault when an offence requires fault to be proved: fault .. must be attributed to a body corporate that expressly, tacitly or impliedly authorised or permitted the commission of the offence.
The means by which such an authorisation or permission may be established include:
(c) proving that a corporate culture existed within the body corporate that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or
(d) proving that the body corporate failed to create and maintain a corporate culture that required compliance with the relevant provision.
Factors relevant to the application of paragraph (2)(c) or (d) include:
(a) whether authority to commit an offence of the same or a similar character had been given by a high managerial agent of the body corporate; and
(b) whether the employee, agent or officer of the body corporate who committed the offence believed on reasonable grounds, or entertained a reasonable expectation, that a high
managerial agent of the body corporate would have authorised or permitted the commission of the offence.
corporate culture means an attitude, policy, rule, course of conduct or practice existing within the body corporate generally or in the part of the body corporate in which the relevant activities takes place.
So the nature of an organisation's corporate cultute is relevant to determining whether a company has committed a fault offence. Commissioner Cole has not identified that offence yet.
Achieving a risk management and compliance-focussed culture means that in addition to organisation values staff need to understand what the risks are and who is responsible for managing and monitoring them. It means being willing to report problems as they go wrong.
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Bill Facilities Regulation by Consumer Credit Code
The UCCCMC has invited comments on the Consumer Credit (Bill Facilities) Amendment Regulation 2006 which will apply the Code to credit arising out of a bill facility unless the credit is provided by an authorised deposit-taking institution. The Explanatory Notes provide background to the Regulation.
Section 7(5) of the Code provides that:
This Code does not apply to the provision of credit arising out of a bill facility, that is, a facility under which the credit provider provides credit by accepting, drawing, discounting or endorsing a bill of exchange or promissory note. However the regulations may provide for the application of the Code to the provision of all or any credit arising out of such a facility.
The closing date for submissions has been expedited to 12 May 2006 because of concerns that the use of the bill facilities exemption for consumer credit is being exploited.
The Department of Consumer and Employment Protection in WA has noted the emergence of fringe providers operating in the WA marketplace using promissory notes. Similar examples have been noted in New South Wales using bills of exchange. In both cases, these credit providers target highly vulnerable consumers including Indigenous consumers and Centrelink recipients.