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A Robust Compliance Program Can Keep You Out of Trouble

Powerful compliance programs create systems that identify smaller infractions before they escalate and include ongoing education on best practices for employees. When compliance processes are working well, they touch all parts of your organization, from regulatory affairs to employee management. And there are many benefits for companies with robust compliance programs that identify and address potential issues early. Here, Hinckley Allen’s attorneys offer insight about how self-discovery, self-reporting, and honest relationships with regulators can mitigate and reduce penalties that may arise from compliance issues.

Catch the Compliance Issues Before the Regulators Do

There need to be systems in place to identify compliance issues early, before regulators find them. Robin L. Main, Co-chair of the Firm’s Environmental and Energy Practice Groups, gives a great example: “For construction projects that have the potential to affect a water supply or generate hazardous material or waste, you should have protocols in place to regularly check on the proper disposal of any such material or waste and make sure your protocols include any applicable permitting requirements. Sound corporate compliance programs require that all regulatory programs are identified and complied with to the extent applicable to protect your organization and the environment.” With vigilant internal oversight, you can play an active role in voluntary discovery. Having a regulator discover a failure to comply is not a good scenario, creating issues about a company’s abilities to provide adequate oversight of their project. Discovery has to be a part of your compliance program and any issues that are uncovered should be promptly disclosed.

The Importance of Self-Reporting

“A powerful compliance program needs to be a living document, not something that’s put on a shelf and never looked at,” said Construction Partner Christopher W. Morog. Once your organization identifies a potential problem, you should take time to investigate, but do not wait too long to report it to your state or federal regulators. There are often timelines or deadlines related to reporting compliance lapses. Timely reporting is an essential element in minimizing your risk and reducing any potential harm.

Honesty Builds Strong Relationships (and Can Even Reduce Penalties)

They say the truth will set you free. In compliance, the truth may not help you completely escape consequences, but it will certainly help you mitigate them in the long-run. “When you engage in investigation and self-reporting, you’re not only building credibility and good relationships with the regulators and the overall community, but the amount of the civil penalty is often reduced under various voluntary compliance regulations because the regulators want to encourage this behavior and they’re pleased that the regulated community has come to them in advance,” said Main. There may even be mitigating factors applied to penalties that are self-reported.

Missteps in compliance, however, are not the end of the story. “People need to learn from their mistakes,” said Morog.  Additionally, you need to take steps not to repeat the same mistakes. “If you’ve got someone in your organization who is not filing the forms properly or adhering to the protocols, you need to educate them,” said Main. Laws are complex and they are not often written for the layperson.  Use the resources that you have and employ consultants to help prevent a recurrence. Finally, talk to the regulators if you have questions – you can even use hypotheticals to gain a better understanding of the regulatory program. In most cases, regulators want to help companies get into compliance.