WHILE THE Federal Government has been keen to talk up its agenda to reduce red tape and lower compliance costs, it has locked out the nation’s peak body for compliance professionals from key talks on corporate regulation.
After launching a review of corporate and financial services regulation in November last year, Parliamentary Secretary to the Treasury Chris Pearce said the proposals contained in it would reduce the compliance burden.
“The release of this proposal’s paper is an exciting step forward to achieving a simpler regulatory system”, Pearce said.
However, some five months later, the Australasian Compliance Institute (ACI), which represents more than 1,700 compliance professionals, has found itself locked out of working groups looking at the proposed reforms.
“Since making our submission to Treasury we have become aware that the Treasury has planned to conduct a small group workshop on the proposed reforms and ACI has been excluded from this process,” said Martin Tolar, CEO at the ACI.
“We have made numerous representations to Treasury to be included in these discussions but on each occasion our request has fallen on deaf ears.”
Treasury’s refusal to include compliance professionals in the reform process will render the reforms impotent, Tolar added. “We have explained to Treasury that there is no point in including compliance professions in these discussions after the key policy decisions have been made,” he said.
“ACI should be at the centre of this debate as it is our members who will be responsible for implementing the reforms and ensuring their respective firms comply with the new regulations once they have been determined.”
He added that the Treasury is clearly not concerned with the opinions of the compliance community and that it risks having to retrofit its reforms to meet compliance requirements by leaving ACI out of the initial discussions.
“ACI is extremely disappointed with the approach taken by Treasury as they are not giving proper consideration to how these reforms will be implemented. Our membership operates at the coalface of the legislative process and it’s clear to us that Treasury does not value their view of the world.”
High-profile figures have previously criticised the Government on its attitude towards meaningful engagement with the business community on regulation.
Professor Bob Baxt AO, former chair of the Trade Practices Commission, recently urged directors and other professionals to protest the Government’s stance on regulation.
Professor Baxt, who is now a partner at law firm Freehills, told an audience of governance professionals late last year that recent regulatory moves showed the business community must lobby federal and state governments to avoid being burdened with inappropriate regulation.
He cited the Private Health Insurance Bill as an example of the Government ignoring the advice of its own advisers — in this case, the Corporations and Markets Committee (CAMAC), an influential group comprising senior lawyers, regulators, governance experts and company directors.
“The very government that set up CAMAC is ignoring it,” Professor Baxt said. “This is happening regularly, and across the board the same unacceptable approach is being adopted.”
He urged governance professionals and others to protest now and in the future adding that “this must not be allowed to happen”.
He added that directors are under greater scrutiny than ever before. “With more and more regulation, directors find it difficult to escape liability,” he said. “The days of the sleeping director are over.”
Stuart Fagg is the Editor of Risk Management magazine, Lawyers Weekly’s sister publication.