Operational Compliance in the spotlight

Compliance is not a nice to have, but rather a way to create a prosperous business and a better life for all South African Citizens. The article below will focus on Operational Compliance. 

It is fascinating to see how organisations see compliance. When the word compliance is used, most people associate it with money and financial management. This is important and certainly a must for any business to ensure financial compliance. But compliance does not stop with your financial system. It is actually just one aspect of a business’s overall compliance management system. To differentiate, we use the words operational compliance and financial compliance.  Our focus here is on operational compliance. We are leaving the financial compliance to the experts in the financial field. Legal compliance would form part of both operational and financial compliance; therefore, it is critical to ensure compliance in both disciplines.

Define operational compliance

-It is compliance with any legislation which a business needs to implement to ensure its operations and processes are in line with the specific legislation e.g. Occupational Health and Safety Act, Health Act, Disaster Management Act, Environmental Legislation, Employment Equity Act, Transport Act, Dangerous Goods, By-Laws to name a few – the legislation is a framework on how you shall do business in South Africa based on your operational processes and services.

-It is compliance with regulations linked to the legislation you need to comply with at an operational level.

-It is compliance with any SANS code linked to any of the legislation which you need to comply with and implement at an operational level.

Why do I need to ensure operational compliance?

-All JSE Listed organisations must provide an annual report and operational compliance is part of that report. It shows leadership, responsibility, and accountability of the organisation’s commitment to people and the environment.

-For business growth and sustainability as operational compliance ensures processes are formulated and waste streams identified and eliminated while ultimately increasing the bottom line.

-To avoid accidents which can result in major losses, business closure, loss of trust in brand and sustainability, and will have a severe impact on the bottom line.

-To avoid prosecution of top Management structures which will impact brand, bottom-line, and sustainability.

-Avoid costly penalties that impact the bottom-line.

How to implement Operational Compliance?

-Implement an integrated management system which looks at the compliance of different legislation, standards, and SANS codes applicable to your operations

-Base the integrated system on ISO9001 even if you don’t plan to audit and integrate as many as possible ISO standards into one management system. ISO is beneficial once a business grows and starts to tender or deal with international organisations.

-Ensure the integrated management system is implemented at all levels in the organisation. When everybody does a little towards compliance it makes it easier and more manageable to ensure full compliance at all times.

-Appoint a person who can champion or drive the integrated management system.

-Work smart and use software to manage the integrated management system and do not rely on a person who will police the system. You want behaviours to drive the system, not a police officer enforcing the system to ensure sustainability and culture change.

How does an Integrated Management System function?

Example of Operational Compliance and how the Integrated Management System works

-Risk assessments identify the activities and associated risks – e.g. working with lifting equipment – the risk of falling objects causing injuries

-Controls identify what legislation, SANS codes, and best practices are used to maintain and operate lifting equipment – e.g. annual load test, design of equipment, training of operator, medical fitness

-Policies – e.g. outline what the business will do to ensure the safety of the employees and the environment.

-Procedures and WI (work instructions)– e.g. explains how often by whom the inspections will be done. Daily checks of the equipment are done by the operator based on WI and training. Procedures for medical fitness is used to manage HR concerns