Audit, Compliance and Risk Blog

Attempt to Make Directors Liable for Alleged Defamation in Newspapers Rejected

Posted by Ron Davis on Mon, Nov 23, 2015

In Kent v. Postmedia Network Inc. (2015 ABQB 461), the Alberta Court of Queen’s Bench granted a summary judgment application by Paul Godfrey and Gordon Fisher, two directors of Postmedia Network Inc., and dismissed the defamation claims against them by the plaintiff, Arthur Kent. Kent claimed he had been defamed in a 2008 article written by Don Martin and published in the Calgary Herald and National Post and continuing to be available on various websites maintained by Postmedia. The article at issue was published while Kent was a candidate in the Alberta provincial election and he claimed it contained false and defamatory statements that were intended to have readers infer that Kent’s career as an international correspondent was insubstantial, he was unworthy of public trust and confidence, his election campaign was incompetent and he lacked support from both his campaign team and political party. In the course of the litigation leading up to the motion for summary judgment, Kent had both Fisher and Godfrey served with a Notice of Intention to bring an Action setting out the basis for his claim of defamation and seeking removal of the article from websites. Neither Fisher nor Godfrey sought the removal of the article from those websites.

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Tags: Corporate Governance, Canadian, directors

EPA Proposes Pharmaceutical Waste Management Requirements

Posted by Jon Elliott on Thu, Nov 19, 2015

Pills.jpgIf your organization manages pharmaceuticals, do you know if any of its waste pharmaceuticals are regulated as “hazardous waste” under the Resource Conservation and Recovery Act (RCRA)? And do you know which ones, and why or why not?

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Tags: Health & Safety, OSHA, Environmental risks, Environmental, Hazcom, pharmaceuticals

Hazardous Materials Commentary as Textbook for Professionals

Posted by Jon Elliott on Tue, Nov 17, 2015

For more than 25 years, I’ve taught one of the core required courses in the Hazardous Materials Management Certificate program offered by University of California Santa Cruz Extension (UCSC-Ex). The program is intended to provide professionals with a solid foundation in the principles, regulations, and technologies required to manage hazardous materials and hazardous waste. In my course–the Regulatory Framework for Toxic and Hazardous Materials–I provide overviews of:

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Tags: Audit Standards, Health & Safety, California Legislation, Training, Environmental risks, Environmental, EHS, Greenhouse Gas, ghg, Hazcom, mact

Your Employee Has A Drug Or Alcohol Problem—Now What?

Posted by STP Editorial Team on Tue, Nov 10, 2015

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Tags: Employer Best Practices, Health & Safety, Employee Rights, Workplace violence, Canadian

Expert Insights On Global EHS Auditing

Posted by John Nagy on Tue, Nov 03, 2015

The collective experience of 54 environmental, health, and safety (EHS) audit directors and managers from some of the world’s leading multinational companies provides valuable insights for companies of all sizes and audit-maturity levels in guiding EHS auditing activities. With the goal of promoting continuous improvement in EHS auditing effectiveness and practices, AECOM’s International Audit Protocol Consortium (IAPC) has published its Seventh Biennial Environmental, Health, and Safety Audit Practices Survey Report--a 123-page report presenting the results, analysis, and lessons learned from its membership in critical EHS areas of: Audit Scope versus Depth; Auditor Independence, Competency, and Training; Compliance Point versus Control Failures; Audit Program Metrics and Evaluations; and Stakeholder Value.

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Tags: International, Audit Standards, global

Department of Justice Targets Individuals While Investigating Organizations

Posted by Jon Elliott on Tue, Oct 27, 2015

Gavel-1.jpgWhen an organization breaks the law, the actual actions must be taken by individuals associated with the organization–whether it’s a rogue individual or a vast internal conspiracy. So who’s culpable and for what? Laws often provide civil liability for most violations and criminal liability for the most severe, and many include parallel provisions addressed both to organizations and individuals. Most enforcement agencies produce enforcement and prosecutorial guidelines for agency personnel to provide criteria that channel their “prosecutorial discretion.” Variations in such guidelines may tend to keep organizations and their personnel aligned – as when they’re all going to be prosecuted together anyway–or may encourage fissures between them – as when one can reduce its own liability by incriminating another.

The U.S. Department of Justice (DOJ) conducts most criminal prosecutions brought against violators of U.S. federal laws. DOJ’s U.S. Attorneys also provide legal support to many federal agencies in civil cases brought by the agencies for regulatory violations. To regularize these wide-ranging responsibilities, DOJ promulgates enforcement policies and priorities, which are compiled in the “U.S. Attorneys’ Manual.”

How Has DOJ Approached Individual Prosecutions For Organizational Wrongdoing?

DOJ has repeatedly adjusted its policies for prosecuting individuals in organizational wrongdoing cases. In 2003, DOJ issued an enforcement policy seeking to separate organizations from their agents – telling organizational defendants that indemnification of their officers (i.e., paying their defense costs under employment contracts and bylaws) would be interpreted as support for the individuals’ malfeasance, precluding DOJ from applying lenience to the organization for having “cooperate[d] in the investigation of its agents” (the “Thompson memorandum”). This policy was intended to prevent organizations from shielding their personnel, and so to encourage more individual prosecutions. However, this policy was rescinded after a 2006 court decision excoriated DOJ, holding that the policy violated individual defendants’ Constitutional rights by exerting undue pressure on organizations (U.S. v. Stein).

In 2006, DOJ softened the offending policy by reemphasizing that many criteria may apply to charging and prosecutorial decisions, and stating explicitly that an organization’s decision to follow state laws and establish indemnification provisions would not be considered a failure to cooperate sometime later with federal prosecutors (“the McNulty memorandum”; later enshrine in the U.S. Attorneys’ Manual section 9.28). Thus, DOJ policy for nearly a decade has not explicitly attempted to pit organizational defendants against their individual human agents – but also has not provided clear guidance to prosecutors in determining whether to proceed against organizational defendants, individual defendants, or both. During these years, the trend has been toward fewer prosecutions of individuals, even where it seems likely that top managers were integral participants in financial or regulatory violations. This lack of headline-grabbing prosecutions has produced a political backlash and pressure to re-balance prosecutorial policies.

How Does DOJ’s Newest Policy Favor Individual Prosecutions?

In September, Deputy Attorney General Yates issued DOJ’s latest enforcement policy memorandum, addressing “Individual Accountability for Corporate Wrongdoing.” DOJ will apply this latest revision to all criminal prosecutions, and to civil enforcement as appropriate. The memo sets forth 6 basic criteria for U.S. Attorneys to apply and follow:

  1. “To be eligible for anv cooperation credit, corporations must provide [DOJ] all relevant facts about the individuals involved in corporate misconduct.
  2. Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.
  4. Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.
  5. Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized.
  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay.”

If organizations respond to these incentives by providing incriminating facts about individuals, the new policy will tend to create wedges between organizations and their personnel, which DOJ is now pledging to prosecute more vigorously. It remains to be seen how these incentives will actually be applied by prosecutors, followed by defendants, and reviewed by courts.

Self-Assessment Checklist

  • Has the organization established compliance and/or ethics programs to prevent and detect violations of applicable laws?
    • Do formal organizational policies define standards and procedures for agents and employees?
    • Are specific high-level personnel assigned responsibility and authority to ensure these standards and procedures are followed?
    • Does the organization provide training and/or other means to communicate standards and procedures effectively to its agents and employees?
    • Is there an effective program for enforcing these standards (e.g., monitoring and audits)?
    • Are there internal reporting mechanisms (including protections against possible retaliation)?
    • Does the program include clear and effective disciplinary mechanisms?
    • Does the program provide for immediate and appropriate steps to correct the condition giving rise to any detected offense or violation (e.g., program changes and individual disciplinary actions)?
    • Does the program include provisions for self-reporting to appropriate authorities?
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Tags: Corporate Governance, Employer Best Practices, Employee Rights

Waste Reduction Tips For Your Office

Posted by Jane Dunne on Mon, Oct 19, 2015

waste_tipsOctober 19 to 25th is waste reduction week in Canada. Households across the country are making a real effort to reduce the amount of waste produced at home, however, there may also be some actions you can take at the office to cut down on trash.

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EPA Proposes To Revise Hazardous Waste Import-Export Requirements

Posted by Jon Elliott on Wed, Oct 14, 2015

The U.S. Environmental Protection Agency (EPA) administers rules governing the import and export of hazardous waste regulated by the Resource Conservation and Recovery Act (RCRA). These rules implement requirements established by RCRA, and also ensure that the U.S. meets its international responsibilities as a member of the Organization for Economic Cooperation and Development (OECD) by creating national rules that meet agreed-upon OECD standards. The proposal should appear in the Federal Register soon, opening a 60 day comment period after which EPA will decide whether to finalize the changes.

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Tags: Health & Safety, Environmental risks, Environmental, EPA, Hazcom, RCRA, Canadian

Cal/OSHA Updates Safety Rules for Storage Batteries

Posted by Deb Hunsicker on Tue, Oct 06, 2015

Cal/OSHA has adopted final rules, effective October 1, 2015, that update the state’s regulations relating to storage battery systems and to changing and charging storage batteries. The purpose of this action is to update standards for storage batteries to address modern types of batteries in addition to clarifying regulations applicable to traditional lead–acid batteries.

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Tags: Health & Safety, OSHA, California Legislation, Environmental risks, Environmental, Hazcom

EPA Catches Volkswagen Cheating On Emission Tests

Posted by Jon Elliott on Thu, Oct 01, 2015

In recent years, VW officials have sometimes been quoted touting their “clean diesel” vehicles by paraphrasing one of their competitors—“this isn’t your grandfather’s diesel.” This month VW finally admitted to the U.S. Environmental Protection Agency (EPA) and customers worldwide that it “isn’t your regulator’s diesel” either. The company had programmed the electronics in millions of vehicles to provide false data during required emissions tests.

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Tags: Health & Safety, Environmental risks, Environmental, EHS, EPA, Hazcom, CAA, Transportation

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