David Jacobson's External Insights

Document destruction policies

When is a document retention policy really an unlawful document destruction policy? The issue was critical in McCabe v BATAS in 2002.

The trial judge struck out BATAS's defence because "the conduct of the defendant in relation to the destruction of documentary evidence [which] was part of a document management policy, the predominant purpose of which was the destruction of documentary evidence discoverable by and damaging to the defendant in litigation such as the present case".

But the Victorian Supreme Court, Court of Appeal in British American Tobacco Australia Services Limited v Cowell (as representing the estate of Rolah Ann McCabe, deceased) [2002] VSCA 197 (6 December 2002) set aside the default judgment given in favour of the plaintiff for her claim for damages, both general and exemplary, for personal injury allegedly sustained by her through smoking the cigarettes of the defendant and its predecessors.

In Victoria, the issue of unlawful document destruction is now dealt with by The Crimes (Document Destruction) Act 2006

The Act creates an offence of destruction of evidence which is, or is likely to be, required in legal proceedings that are in progress or are to be, or may be, commenced in the future.

But is that the end of allegations of document destruction by BATAS? No.

In (Re Mowbray) Brambles Australia Ltd v British American Tobacco Australia Services Ltd [2006]  NSWDDT 15, the Dust Diseases Tribunal of NSW has given an order for discovery of documents by BATAS in response to Brambles' claim that "BATAS, by reason of health and medical studies in the public domain, its own researches and investigations, and researches and investigations available to it from related corporate entities, at all relevant times knew that its products were addictive and otherwise physically harmful."

In this case, the late Alan Mowbray, a motor mechanic, contracted lung cancer in 2001 and died on 23 January 2002. His wife sued Brambles, his former employer, in negligence, asserting that the cancer was caused by asbestos fibres contained in the brake pads upon which he worked in this employment. On 27 February 2002 Brambles consented to the entry of judgment in favour of Mrs Mowbray in the sum of $200,000. Brambles, asserting that Mr Mowbray's cancer was also caused by cigarettes manufactured by BATAS, which he smoked between 1946 and 2000, seek from BATAS contribution to the judgment.

The bottom line? It's not just what you keep, it's what and when you destroy that's also important.

Cole Inquiry:AWB goes back to court

Commissioner Cole held a directions hearing today (30 May) to establish a process for dealing with AWB's outstanding claims for legal privilege over thousands of documents so that a timetable for hearing from any further witnesses could be established.

AWB's counsel  said AWB would be applying to the Federal Court to decide privilege rather than wait for Parliament to pass a Bill giving the Commissioner that power.

AWB Index

Defining knowledge management

Is knowledge management a system, processes or technology? Is it key words or search engines? How do you get people to share knowledge?

The Wikipedia entry for "knowledge management" gives an indication of the many possible meanings people attribute to "knowledge management".

Denham Grey in Knowledge-at-work suggests that the essence of KM is cultural: an environment that increases awareness, fosters learning and supports sense-making.

It certainly has a people element: they have to want to share their research and experiences  for the benefit of customers. How? The tools help but without the culture you can't "manage" knowledge.

NAB foreign currency traders convicted

The story of the NAB foreign currency losses that sparked a major Board and management change at NAB in 2004, as well as an organisation-wide cultural change project, has come to an end with the conviction of 2 of the traders after a lengthy trial. The other 2 traders pleaded guilty last year. (ABC News)

ASIC Chair Jeffrey Lucy observed : "This result shows that senior employees who breach their duties as officers of a company can cause significant damage to the company’s interests and shareholder value."

NAB Case Study

Internal controls, corporate governance and corporate culture

CFO Magazine has an article on the cost of internal controls designed to give Boards and management assurance over the level of control they command over their companies' systems and processes.

The key quotes:

they want to extract value from the systems and processes they have spent so much time and money embedding – to translate this into valuable information for themselves, their investors and their auditors...

what CFOs, directors and auditors are saying: that they have had a gutful of the changes the new regulations have imposed upon them and they want to focus on making improvements to what they already have...

A major challenge for managers and regulators alike is that the effectiveness of an internal control regime can only be as good as the culture within which it is embedded. Implementing a system to prevent fraud is one thing, creating a climate in which people don't wish to commit it is another.

National telemarketing standards and the Do Not Call Register

The Do Not Call Register Bill has been introduced into Parliament.  The Do Not Call Register (Consequential Amendments) Bill 2006 accompanies the Do Not Call Register Bill 2006. It will provide for the Australian Communications and Media Authority (ACMA) to make national standards which will regulate aspects of the making of telemarketing calls.

Currently, telemarketers operate under a number of different rules established by industry bodies on a voluntary basis, State and Territory laws, as well as some Commonwealth legislation. A national legislative framework for telemarketing would provide a single regulatory framework for the telemarketing industry and to consumers. The national standards would apply to all telemarketers, including those organisations which are exempt from the prohibition on making unsolicited telemarketing calls. The standards are expected to be in force from early 2007.

More

Cole Inquiry: Royal Commissions Act to be amended

Attorney-General Philip Ruddock has announced that the Government will propose amendments to the Royal Commissions Act 1902 in response to a request on May 19 by the Hon Terence Cole AO RFD QC, who is conducting the Oil for Food Inquiry.

Judge Young identified limitations in the Act in his recent judgment.

"The amendments will assist Commissioner Cole, and any other Commission of Inquiry under the Royal Commissions Act, to deal effectively with privilege claims," Mr Ruddock said.

The Government will introduce the amendments as soon as possible with the intention that the amendments will have immediate effect in assisting Mr Cole with his Inquiry.

UPDATE 31 May: the Amendment Bill has been passed by the House of Representatives

AWB Index

Cole Oil for Food Inquiry publishes AWB document

The Cole Inquiry has published the AWB document (pdf) in dispute until yesterday's Federal Court decision.

The one page, 6 paragraph "draft statement of contrition"  states that "AWB accepts in paying money for inland transportation and after sales service, it paid money to the Iraq government in contravention of the UN sanctions."

The document also states that "even though there were warning signs to some employees that this may have been occurring, AWB did not challenge the payments..".

The statement says AWB should have had their own internal systems of checks and balances to not participate in any abuse of the oil-for-food program.

AWB Index

Improving productivity: what Bill Gates says

It is now accepted that modern companies can improve productivity by better management of their employees, especially if they are "knowledge workers".

According to Bill Gates "estimates are that information workers spend as much as 30 percent of their time searching for information, at a cost of $18,000 each year per employee in lost productivity. Meanwhile, the University of California, Berkeley predicts that the volume of digital data we store will nearly double in the next two years."

His solution? Microsoft is now focused on creating software that addresses specific businesses priorities:

"Productivity:  tools that help information workers prioritize their work and focus on the tasks that are truly important.

Collaboration: New meeting technologies will make distributed meetings simple and cost effective, and provide rich tools that enable team members to work together to create documents and plans. In addition, companies will be able to capture all of the interaction in meetings and preserve institutional knowledge that is often lost today.

Business intelligence: Powerful yet intuitive software that supports advanced visualization and modeling of information will be used every day by information workers to find meaningful patterns in the vast sea of data they collect.

Workflow optimization: Smarter workflow software will eliminate friction points that hamper organizational agility. These tools will automate the movement of approvals, alerts and exceptions. They will also have the intelligence to recognize inefficiencies in existing processes and make improvements. "

The race for better search engines is well and truly on.

Risk management and business software performance testing

The performance test specialist within the Infrastructure Services division of finance services group Suncorp Metway says that a new approach to risk management has sped up the process of application testing by using a risk management technique to help business owners and application testers jointly assess the real risk posed by new applications.

That risk assessment then determines the extent of testing and the time and resources involved.
(via ZDNet)