• Industry: Energy & Natural Resources
  • Type: Business and industry issue, Publication series, White paper
  • Date: 2/7/2014

Regulatory compliance: demonstrating good corporate citizenship 

Regulatory compliance
It is part of everyone’s job to help avoid incidents that could harm people, the environment and the corporate reputation. However, a compliance culture can only be built on strong ethical and structural foundations.

Compliance is an essential part of good organizational governance and risk management, with the Board holding ultimate responsibility.

Authorities are clamping down on perceived anti-competitive behavior, while business practices that are common in certain parts of the world – such as fees for facilitating licenses or shipments – may contravene national and international anti-bribery and corruption laws.

Punitive fines and other penalties may be dealt out to businesses who fail to comply with laws and regulations relating to health and safety, environmental damage, employment conditions, labor relations, bribery and corruption and financial statement reporting. In the worst cases, senior executives could be imprisoned and the mine shut down – all of which is extremely harmful to the corporate reputation.

Key regulatory compliance issues

  1. Labor and industrial relations.
  2. Tenure of license, rights or permits.
  3. Evolving environmental laws and regulations.
  4. Relationships with regulators.
  5. Increasingly complex regulatory environment.
  6. Health and safety of mine employees.

Building a robust compliance structure and culture

Businesses should be aware of how relevant local, regional and global laws and regulations could affect their business and then prioritize these according to their level of risk. Next, they need to assess the effectiveness of current policies, practices, behaviors and attitudes around the world and uncover and address any gaps.

A centralized approach tends to bring greater consistency, but in a large global business, operating across multiple geographies, it can be difficult to keep abreast of local operations. In a decentralized model, on the other hand, those with oversight are closer to the action, but equally, there is more chance of divergence from policies and inconsistent reporting.

With new regulations emerging constantly around the world, mining companies have to find a way to keep track of such developments, evaluate their impact, and integrate them into their processes. A good relationship with regulators is an asset, clarifying existing obligations and making it easier to prepare for emerging changes.

“Individuals who are responsible for compliance should be trained to fulfil these duties, with compliance forming part of every employee’s performance management review.”

Learn more about regulatory compliance as a key driver o f value (PDF 1.7 MB)


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Dr. Kerry Jenkins

Dr. Kerry Jenkins

Partner, Advisory, Regulatory Compliance, KPMG in South Africa

+ 27 83 297 1197