The Science of Compliance

Compliance to regulations is more than meeting your legal commitments and it has significant economic benefits.

A report published by the Ponemon Institute in 2011 identified that on average it cost businesses 2.5 times more to be non-compliant than compliant. In conclusion this study of 46 multinational organisations showed that non-compliance can lead to business disruption and productivity losses as well as the consequences of legal actions.

ponemon

Ponemon Institute (2011) The true cost of compliance.

 

The UK Experience

Recently in the UK a company providing financial services (ironically) was fined £1.8 M (AUD$3M) for non-compliance with the UK HSE L8 legislation. A staff member had contracted Legionnaire’s disease. It was not linked to the business. An investigation of the business revealed their failure to meet the requirements of the legislation and the court fined them accordingly. The fine was not a result of the employee catching the disease.

fine

 

Compliance in the Australian Context

Australian Legionella regulations are less severe than those in place in the UK. Most legal actions have been civil cases resulting from outbreak investigations. So naturally the focus of the legal cases has been on how well businesses have met the demands of legislation. As a results codes, guidelines and established best practice are the usual emphases of litigation. Almost without exception figures settled on have been agreed out of court. As a result details of either the levels of compliance or the payout have not been made public. It is worth noting that in all of these instances the prosecution were able to show a lack of compliance. Reputedly payout figures have ranged from 10’s of thousands to 10’s of millions of dollars. These are fairly significant in terms of business disruption and productivity losses. Importantly this is before considering the costs and time in terms of human effort.

Changes on the Horizon

Recent changes in State laws have shown a gradual shift towards the UK HSE L8 approach of fines and penalties for non-compliance. Now new regulations in Queensland allow for significant fines for failure to implement effective water risk management plans.This shift increasingly points to the good business sense behind compliance to Legionella regulations, codes and guidelines. Additionally other States are in the process of reviewing their legislation. So preparing a Water Safety and Risk Management Plan (WSRMP) that encompasses both national and international standards is good sense. Most of all this is also a quick and cost effective way to meet your compliance requirements and cut costs.

Further Reading

Ponemon Institute (2011) The true cost of compliance.

Queensland Government, Public Health (Water Risk Management) Amendment Bill 2016

UK HSE (2013) Legionnaire’s disease: the control of Legionella bacteria in water systems

ACOP.

Legionella, water treatment, risk management plan, Legionella control,