By Justin Dominic Chi Wen, Jack Lee Yong Jie, AZMI & Associates
A compliance programme is, simply put, a set of guidelines and procedures developed internally within an organisation to ensure that it abides by the laws and regulations of a country where it operates. One method to put in place a compliance programme is by having a compliance manual that consists of guidance and supporting information, together with procedures, policies, controls and measures to ensure that an organisation complies with all applicable laws and regulations.
Key items of a compliance manual
Corporate regulatory affairs
This category governs the system of rules and practices by which an organisation is controlled and essentially balances the interest of the organisation’s stakeholders. The important policies include (but are not limited to):
- Compliance with the company’s onstitution
- Operation of the board of directors
- Operation of the stakeholders’ meeting
- Annual audit
- Seal management
- Authorisation and execution
This category governs the relationship between the employer and the employees, which provides guidelines for employers when dealing with employees. The important policies include (but are not limited to):
- Employee benefits and compensation
- Probation period management
- Labour hours and leave
- Occupational Safety and Health Act 1994
- Anti-harassment or protection of special groups
- Management awards and punishments
- Visa compliance (for foreign employees)
Protection of personal data
This category governs the processing of personal data in regards to commercial transactions under the Personal Data Protection Act 2010, which applies to any person who collects and processes personal data in regards to commercial transactions. A commercial transaction is defined as any transaction of a commercial nature, whether contractual or not, including any matters relating to the supply or exchange of goods or services, agency, investments, financing, banking and insurance.
This category governs the prevention of corruption in respect of public and private sectors under the Malaysian Anti-Corruption Commission Act 2009 (MACC 2009). The offence of corruption under the MACC 2009 are as follows:
- Giving or accepting gratification
- Giving or accepting gratification by agent
- Corruptly procuring withdrawal of tender
- Bribery of officer of public body
- Bribery of foreign public officials
- Offence of using office or position for gratification
Non-compliance with any applicable law may cause an organisation to be subjected to potential fines or imprisonment. For example, pursuant to section 15 of OSHA 1994, it provides that every employer and every self-employed person has a duty to ensure the safety, health and welfare of all its employees at work. Failure to do so is an offence liable to a fine not exceeding M$50,000 or to imprisonment for a term not exceeding two years.
Furthermore, non-compliance with any applicable laws governed under the Local Government Act 1976 may result in retraction of business and advertising licences by the local authority such as Dewan Bandaraya Kuala Lumpur. Without such licences, organisations are prohibited from operating their businesses and this may cause losses to the organisation and potentially loss of reputation within the industry.
Benefits of a compliance manual
Creating and having in place a compliance manual may be a daunting task at the beginning, but putting one in place is beneficial. A well-written compliance manual allows an organisation to communicate with its employees clearly on what is expected of them. It introduces the employees to the organisation’s culture, mission and values, and also educates the employees about what they can expect from the management and leadership of the organisation.
A compliance manual provides guidance to the manager or supervisor within an organisation to ensure compliance with the relevant laws and regulations to guarantee the smooth operation of the business of the organisation. This would in turn prevent an organisation from falling into any potential hazards that may cause the organisation to incur more costs.
In conclusion, having a compliance manual in place allows an organisation to adhere to the laws and regulations of a country by requiring its people to use best practices that can then enable the organisation to secure its business against severe risk.
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