Canada: Canadian Competition Bureau Issues Updated Bulletin On Corporate Compliance Programs

On October 24, 2008, the Canadian Competition Bureau released its revised bulletin on corporate compliance programs. The Bulletin provides the Bureau's perspective on the "essential components" for credible and effective corporate compliance programs designed to ensure compliance with the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act (collectively referred to as the "Acts"). While the core essential elements have not changed since the Bulletin was first published in 1997, the revised Bulletin provides more detailed guidance on how to ensure these elements are reflected in any compliance policy. The updated Bulletin also provides, for the first time, specific guidance as to how the presence (or absence) of an effective compliance program may influence the Competition Bureau's enforcement decisions.

For companies looking to implement a corporate compliance program, the updated Bulletin now includes a template for such a program. Where businesses already have a compliance program in place, it may be prudent to take the opportunity to ensure that the essential components highlighted in the Bulletin are all present, where relevant. A brief overview of the main points of the Bulletin is provided below.

Requirements for Credible and Effective Corporate Compliance Program

The Bureau views the following five elements as essential to a credible and effective corporate compliance program regardless of the actual compliance program adopted, its complexity or the size of a particular business:

  1. senior management involvement and support for the program;
  2. development and documentation of corporate compliance policies and procedures;
  3. ongoing training and education of employees;
  4. implementation of monitoring, auditing and reporting mechanisms; and
  5. consistent disciplinary procedures and incentives.

Firstly, and not surprisingly, the Bureau views active senior management involvement as a key element of any credible and effective compliance program. Specifically, the Bureau recommends that senior management expressly commit to compliance with the Acts and voice support for the compliance program. The Bureau also recommends that businesses appoint a member of senior management as compliance officer and that senior management be held accountable in the event of any breach.

The second key element requires the development and documentation of a set of clear compliance policies and procedures which are specifically tailored to the business' operations. These policies and procedures should be continuously updated and be available to all employees in a readily accessible format. The Bureau also recommends that employees be asked to sign a certification letter stating that they have read and understood the compliance program materials.

Thirdly, in order to ensure the ongoing effectiveness of the compliance program, the Bureau recommends that training be offered to all employees at all levels who are in a position to potentially engage in, or be exposed to, conduct in breach of the Acts. The training provided should address the general principles of compliance as well as specific situations which may arise. Senior management should also play an active role in ensuring ongoing compliance by undertaking the necessary compliance training and reminding employees of the existence of the program in speeches and presentations.

The fourth key element requires the implementation of monitoring, auditing and reporting mechanisms to encourage employees to detect and report possible contraventions of the Acts. The exact format and frequency of the mechanisms may depend on the business' particular needs and should be commensurate with the risk of contravening the Acts. However, all monitoring efforts and reporting mechanisms should be well-documented since evidence of an effective monitoring program may (where applicable) support a "due diligence" defence if a company is found to be in contravention of the Acts. The role of an effective compliance program in a "due diligence" defence is discussed in greater detail below.

Lastly, an effective compliance program should contain a disciplinary code or policy for those who engage in conduct that is in breach of the Acts or do not abide by the compliance program. The compliance program should specifically state that disciplinary actions (e.g., suspension, demotion, dismissal and even legal action) will be taken where an employee contravenes the Acts. Again, all disciplinary actions and procedures should be documented since such efforts may be used to support the credibility and enforcement of the program or potentially a defence of due diligence.

To help companies design a compliance program that adequately reflects all of these elements, the Bulletin includes a compliance program template as well as a checklist of prescriptive actions to ensure compliance with the Acts. However, the template and checklist are provided only for illustrative purposes and companies will need to tailor their corporate compliance programs to suit their specific needs.

Consideration Given to a Corporate Compliance Program

The updated Bulletin also provides guidance as to when the presence of a program may be considered a mitigating or aggravating factor in the Bureau's enforcement decisions. For instance, under the false or misleading representations of the Competition Act, the Bureau may choose to pursue the matter under either a criminal or a civil track. In making this determination, the Bureau may take into account whether a company has in place a credible and effective compliance program. That is, the Bureau may be less likely to pursue criminal charges where a company has an effective compliance program in place.

Similarly, the Bulletin provides that the Commissioner will be more inclined to consider an alternative form of resolution (e.g., consent agreement rather than litigation) where it can be demonstrated that:

  1. the company terminated the conduct as soon as it was detected;
  2. the company attempted to remedy the adverse effects of the conduct;
  3. the conduct was contrary to corporate policy in existence at the time of the contravention; and
  4. the contravention occurred at a lower level in the business and was not endorsed by senior management.

The existence of an effective corporate compliance program may help a company ensure that these four goals are met.

In addition to potentially influencing the Bureau's enforcement decisions, the presence of an effective compliance program may assist a company in defending itself against any enforcement actions taken. For instance, under certain provisions of the Acts (e.g., certain misleading representations provisions of the Competition Act), a company may successfully defend itself from any litigation if it can demonstrate that it exercised due diligence to prevent the conduct. In such cases, the presence of a corporate compliance program and well documented efforts to enforce the program may help to support a claim of due diligence.

An effective compliance program may also help a company to quickly detect contraventions of the criminal provisions of the Competition Act. In certain circumstances, businesses or individuals may approach the Competition Bureau and request immunity from prosecution in exchange for co-operating with the Bureau's investigation and any ensuing prosecutions. Immunity is generally available only to the first company to report the conduct. Thus, early detection may enable a company to seek immunity under the Bureau's Immunity Program, if appropriate.

Where immunity is not available, the Bulletin provides that a credible and effective program may nonetheless be treated as a mitigating factor warranting a reduction in the penalty that the Commissioner would otherwise recommend to the Director of Public Prosecutions. Similarly, in civil matters, the existence of a credible and effective program may have a positive impact on the magnitude of the remedy sought by the Commissioner. For instance, the presence of a program might reduce the amount of the administrative monetary penalty sought by the Commissioner in a deceptive marketing practice case.

Just as the presence of an effective compliance program may be viewed as a mitigating factor in certain circumstances, the wilful disregard of a compliance program may be treated as an aggravating factor and negatively influence the Bureau's enforcement decisions. For instance, where an individual knowingly contravened the law (despite the presence of a compliance program), this may be treated as an aggravating factor and increase the likelihood that the Commissioner will recommend that criminal charges be laid against individuals as well as the company. Similarly, if a program has been implemented as a sham in order to conceal or deflect liability, this would be considered an aggravating factor for sentencing purposes or any other form of resolution (including determining the quantum of administrative monetary penalties).

Although the Bulletin provides helpful examples of when the Bureau may take into account the presence (or absence) of an effective and credible compliance program, it is important to remember that the Bulletin is not binding upon the Commissioner. As a result, the Commissioner's enforcement decisions in any particular case may vary from what is stated in the Bulletin.

Conclusion

An effective compliance program can be a valuable tool to minimize legal risk and increase the chances of early detection of any violations of the Acts. The Corporate Compliance Bulletin provides useful guidance on structuring and maintaining an effective compliance program. The Bulletin also provides helpful insight regarding the Competition Bureau's views on the essential elements of a credible and effective program. Since the presence or absence of these elements may influence the Competition Bureau's enforcement decisions, businesses are well-advised to review any existing compliance programs to ensure that these elements are addressed where relevant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions