South Africa is a highly regulated market which places an onerous burden on corporates to stay abreast of frequent changes in the regulatory landscape. Failure to comply could have costly consequences such as hefty fines and jail time, with boards and directors principally held accountable for non-compliance with applicable laws.
Recent major legislative updates that could potentially place non-compliant businesses at risk pertain to – but are not limited to – the Employment Equity Act, the Basic Conditions of Employment Amendment Act, the Broad-Based Black Economic Empowerment Act, the Protection of Personal Information Act, the Financial Intelligence Centre Act (FICA), the Competition Act, the Public Finance Management Act, King III Principle 6.2 and the impending King IV Code on Corporate Governance, together with various laws applicable to health and safety and environmental compliance.
“A well-coordinated compliance management system is therefore critical for business efficiency and for meeting the requirements of a myriad of legislation in today’s fast paced, competitive and regulated environment,” said Raffael Beires, Business Developer at LexisNexis South Africa. The firm recently conducted research into what companies are doing to manage risk and compliance. This went on to inform its development of a new compliance management solution called LexisAssure.
“We found that the current approach in the market is very reactive, rather than preventive and pro-active, with very few if any directors or employees able or willing to spend time reading hundreds of pages of regulations,” he said.
Beires said without insight into relevant legislation, companies could not recognise compliance threats in advance, nor know how to practically implement and monitor compliance – which can be costly.
To illustrate this, recent punitive measures against non-compliance include MTN’s $5.2-billion (about R72-billion) fine from the Nigerian Communications Commission. The South African Reserve Bank (SARB) imposed a R125 million total fine against the country’s four largest banks, as well as smaller fines against Frankfurt-based Deutsche Bank and Capitec for inadequate FICA controls. A major airline was fined R900 000 for failing to comply with the Employment Equity Act (EEA). The Competition Commission has levied fines against cartels and price collusion in sectors ranging from construction to aviation. More recently ICASA levied penalties against eight South African companies for non-compliance with licence regulations. There is also the ongoing struggle to get South Africa’s industrial giants to comply with environmental regulations.
“Even where companies invest in internal compliance and legal teams, there is still the risk of missing something crucial, which could be a costly mistake. Based on our findings, we realised that companies really needed help to identify threats before they impacted their business,” said Beires.
Beires says the new LexisAssure compliance solution aims to fill that gap in the market by comprehensively addressing many of the compliance pain points for businesses. The digital solution has attracted leading corporate clients even ahead of its official launch in March 2016.
“LexisAssure offers a built-in notification service that informs customers of any regulatory changes that could specifically put their businesses at risk. It is a pro-active radar that won’t let you miss a trick and it gives you 100 percent risk assurance,” said Beires. “The beauty of this solution is that every company is able to customise the tracking to alert them of changes in their specific regulatory environment – which in turn significantly reduces the hassle and expense of trying to remain compliant.”
LexisAssure is backed by a team of LexisNexis journalists and subject matter experts providing the information companies need to interpret emerging legislation. The solution keeps users abreast of regulations to determine their compliance obligations within the context of their own industry and organisation. This information powers the regulatory change management engine, ensuring that users never miss an important regulatory event and that they can action the necessary changes quickly and effectively.
The LexisAssure base package covers Human Resources, Financial and General Compliance. For a more comprehensive solution organisations can then add industry specific packages such as Banking and Financial Services, Manufacturing, Transportation and Retail.
Some of the features of LexisAssure include:
- Regulatory Universe – A view of all the relevant Acts relating to the users’ business as well as the level of associated compliance risk for each Act.
- Real-time alerts – which assists customers to keep abreast of changes affecting their regulatory universe via daily email alerts
- Meaningful Expert Analysis –with simple, clear explanations of any changes to the client’s regulatory universe, relevant compliance obligations and any penalties resulting from non-compliance
- Compliance Calendar – which reminds customers about important effective dates of legislation, regulations and penalties affecting their regulatory universe.
- Guidance – appropriate links to LexisNexis’ web-based Practical Guidance solution which provides the ‘how to’ around mitigating risk via guidance notes, checklists and other tools to assist with compliance.
For more information, visit http://www.lexisnexis.co.za/lexisassure/
About LexisNexis® Legal & Professional
LexisNexis Legal & Professional is a leading global provider of content and technology solutions that enable professionals in legal, corporate, tax, government, academic and non-profit organizations to make informed decisions and achieve better business outcomes. In South Africa LexisNexis®, has been assisting companies and professionals to remain abreast of changing legislation and shifts in the regulatory environment for over 80 years, using leading-edge technology, tools and online solutions. In November 2015 LexisNexis South Africa’s acquisition of Korbitec (Pty) Ltd established the company as the leader in conveyancing solutions in the South African legal market, as well as expanded its reach to other spheres and stakeholders within the property transfer process.