Australian Regulatory Compliance Review

Collaborative compliance wiki

We are all looking for ways to store and find that document or piece of information we're going to need in the future.

And just as importantly we are looking to find ways to share that information with others.

In my quest for a solution, I have set up a wiki to help share tools and information to manage compliance. The goal is to create a "how to" resource as much as a "what to do" resource collectively with like-minded persons and to co-operatively improve our compliance resources.

Unlike Wikipedia which is an encyclopaedic open wiki, this wiki will be limited to compliance and can't be changed unless you register.

Communities of practice have become a cornerstone of the knowledge strategy of leading organizations.

If you're interested in risk management and compliance I invite you to join.

Go to www.complianceonline.com.au and have a look.

The site is designed to be co-operative: by registering (there is no fee) you can suggest topics, create new pages or add to or comment on existing topics. You can contribute by identifying problems you are trying to solve, outcomes you are trying to achieve, lessons learned or solutions you've already devised.

Or you may wish to focus on one issue rather than the variety I have started on.

Let me know what things are important to your business or the things that interest, challenge, excite or intrigue you. If we have common interests  I will try to provide the resources on the wiki.

You can just read collaborative compliance wiki if you want to but if you want to participate you will need to register.

April podcast

My second podcast is now available!

You can now listen to me while you eat your lunch (just turn up your speakers) or download it to your mp3 player and listen while you commute or go for a walk. Let me know what you think!

This month I discuss my collaborative compliance wiki, marketing, web 2.0 and communities of practice and what all that has to do with law, compliance and improving your business.

The podcast goes for 10 mins 35 seconds and is 9.69mb.

Listen now

New ASIC chair proposed

The Treasurer has written to the States and Territories proposing the appointment of Mr Tony D’Aloisio to the position of Chairman of ASIC and Mr Jeffrey Lucy AM (the current Chair) to the position of Commissioner of ASIC, effective 13 May 2007.

Mr D’Aloisio is a former Managing  Director and Chief Executive Officer of the Australian Stock Exchange.

Mr Jeremy Cooper the current Deputy Chairman of ASIC will continue in that role.

UPDATE 16 May: The Treasurer has formally announced the appointments of Mr Tony D’Aloisio as Chairman and Mr Jeffrey Lucy AM as a Commissioner of the Australian Securities and Investments Commission (ASIC).  Mr D’Aloisio has been appointed as Chairman from 13 May 2007 for a four-year period and Mr Lucy has been appointed as a Commissioner from 13 May 2007 for a two-year period.
Mr Jeremy Cooper who was appointed as  Deputy Chairman of ASIC on 12 July 2004 for a five-year term continues in that role.

Unlawful dismissal law further explained

In A. Cruickshank v Priceline Pty Ltd [2007] AIRC 292 the applicant sought relief pursuant to s.643 of the Workplace Relations Act 1996 following his termination of employment on 3 November 2006 by Australian Pharmaceutical Industries Limited, of which Priceline is a subsidiary.

It was argued by Priceline that the application should be dismissed on the jurisdictional ground found in s.643(1)(a) of the Act, in that there were genuine operational reasons, or reasons that included genuine operational reasons, for the termination of employment of the Applicant.

Even though the evidence showed that Priceline was undergoing a restructure following financial losses, the Applicant stated in his evidence that while he was purportedly terminated due to redundancy, he subsequently found his job advertised. He argued that where an employee is replaced by a new employee, in exactly the same duties, that is a situation that is a sham, notwithstanding some other financial difficulties.

Following Carter v Village Cinemas, the AIRC was satisfied that the Applicant’s termination resulted from the Respondents financial difficulties and the subsequent decision to reorganise its structure, and on that basis at least part of its decision to terminate the Applicant was for a genuine operational reason. It was not satisfied there is any evidence to substantiate a “sham”, or that the Applicant was targeted inappropriately.

APRA stops unauthorised bank

The Australian Prudential Regulation Authority (APRA) has obtained court orders preventing an unauthorised financial business, the ‘Federal State Bank of Australia’, from calling itself and acting like a ‘bank’.

Justice Susan Keifel in the Federal Court in Brisbane ordered that Donald Cameron and Darryl John Wheeley be restrained from using the word ‘bank’ after evidence was put to the court that hundreds of thousands of dollars in fake currency and cheques were being passed off as legitimate and that the word ‘bank’ had been used illegally.

Evidence presented by APRA to the court showed that:

• a total of 12 transactions have been identified where fake currency and cheques purporting to be valued at over $500,000 were attempted to be used as legitimate payment for various transactions including payment of rent, printing, telephones, the discharging of mortgages and legal fees;
• the ‘cheques’ were presented by unsuspecting recipients to various bank branches in Queensland, Sydney and Perth, none of which was honoured;
• the unauthorised bank and affiliated institutions operate out of a home in suburban Moorooka in Brisbane, which is the subject of a mortgage foreclosure;
• Cameron was declared a vexatious litigant by the Supreme Court of Queensland in March 1996; and
• Cameron had previously failed to address an APRA demand that he stop using the words ‘bank’, ‘banker’, ‘banking’ or any similar words or phrases in relation to the business in contravention of section 66 of the Banking Act 1959 (Banking Act).

The court ordered Cameron and Wheeley to stop using the word ‘bank’; to not advertise, represent or state that they will carry on banking business; to not issue or be in any way involved in issuing any purported cheque or negotiable instrument drawn on the account of the ‘Federal State Bank’; and to not issue any bill or note for the payment of money.

The Banking Act prohibits anyone from conducting a banking business without the appropriate authority from APRA. It also prohibits the use of words that connote the carrying on of a banking business.

Automated Assistance in Administrative Decision-Making

The Australian Government Information Management Office (AGIMO) has issued a Better Practice Guide to help government agencies using computer systems for administrative decision-making purposes.

The Guide contains checklists to assist managers and project officers during design and implementation of automated systems, and with ongoing assurance processes once an automated system is operational.

It will be interesting to see whether agencies disclose whether a decision was generated by an automated system and the assumptions behind the decision-making process.

NRMA v Whitlam: scope of director's indemnity

In Whitlam v National Roads and Motorists’ Association Limited [2006] NSWSC 766, Nicholas Whitlam, a former president of the NRMA was granted an indemnity for his legal costs in bringing 2 defamation actions arising out of events when he was president.

NRMA appealed and the NSW Court of Appeal allowed the appeal: NATIONAL ROADS AND MOTORISTS' ASSOCIATION v WHITLAM [2007] NSWCA 81 (11 April 2007).

Both defamation actions settled but the total amount of costs claimed by Mr Whitlam against NRMA exceeded $100,000.

At issue was whether the director's Deed of Indemnity extended to a claim for loss of reputation or for costs relating to that claim. The Court decided that it did not. The Court of Appeal distinguished commencing an action from defending an action:

When Mr Whitlam incurred the costs of the defamation actions, he was seeking to redress consequences of actions he had taken as an officer, but in incurring those costs, he was not, then and there, acting as an officer. In these circumstances, when Mr Whitlam incurred legal costs in connection with the defamation action, his commencement of those defamation actions was not part of his duties as an officer of NRMA. Nor, when he had specifically asked whether NRMA would meet any costs he incurred concerning the defamation action, and was told that NRMA would not meet those costs, could he have been of the impression that NRMA regarded itself as liable to pay for the costs of that litigation. In those circumstances, the incurring of the costs was not in his role as an officer of NRMA.

The Court of Appeal also rejected a claim for indemnity under general law.

Mandatory Comparison Rates extended

Queensland Parliament has passed an amendment to the Consumer Credit Code to extend comparison rates for a further two years.

The sunset date for comparison rates will be 1 July 2009 to accommodate the finalisation of a review.

Queensland code of conduct to regulate finance brokers

The Queensland Government has released for public consultation a Regulatory Impact Statement (pdf) on a proposed code of conduct to regulate finance brokers.

The proposed regulation incorporates a mandatory Code of Conduct which aims to address the following areas:

• disclosure of broker commissions, fees and other information;
• justification of professional recommendations;
• caveats or restrictions over consumer assets to secure brokers fees; commissions or other benefits;
• professional standards of behaviour;
• confidentiality and privacy of customer information; and
• dispute resolution.

Comments can be made until Friday 11 May 2007.

Rudd identifies compliance as a productivity issue

The Opposition Leader's Speech to the National Press Club on 17th April 2007 proposes "an agenda which radically reduces the regulatory burden of Australian business that is currently stifling productivity growth."

The truth is business regulation is now right out of control. The quantity and complexity of business regulation today is eating away at the entrepreneurial spirit of Australian business. But while enterprise is necessary to drive long-term economic growth, too much of our business community’s time, effort and attention is being consumed by glorified compliance agents on behalf of governments, both Federal and State...

The Productivity Commission estimates that the cost of compliance with business regulation is up to 4 per cent of GDP, or $40 billion dollars per annum.

Rudd commits to 7 specific steps to reducing the regulatory burden, including "the setting of a national objective in partnership with the States and Territories to harmonise key regulations imposed on businesses operating across jurisdictions within five years of coming to office. This includes occupational health and safety regulation, administration of payroll tax, building codes, and trades and professional body recognition."