Compliance vs. Due Diligence

Gaye FrancisDue Diligence

Compliance vs. Due Diligence


The management of risk in Australia, with the introduction of the new model Work Health & Safety Act took a major leap forward with the introduction of the legislation in most states and territories from January 2012. By way of background, it is a requirement under the new model Work Health Safety Act for an officer to positively demonstrate due diligence which has created an interesting conundrum with respect to the concept of compliance.

For work health and safety matters, officers of a person conducting a business or undertaking (PCBUs) must positively demonstrate due diligence which is more than showing compliance with Regulations and Standards.

Although the intent of Standards is to often address safety concerns with respect to a particular issue such as major hazard facilities, they are often prescriptive as to the specific controls and precautions that should be implemented.

As noted in Safe Work Australia’s Guide for Major Hazard Facilities: Safety Case: Demonstrating the adequacy of safety management and control measures (January 2012) This approach assumes that those who developed the code or standard did all the necessary thinking to select the necessary control measures for the operator’s situations or if a possible control measure is not specified in the code or standard, it must not be practicable to put it into practice.

In particular, the elimination option, which is always the first option to consider under the hierarchy of controls, is often overlooked in standards.

As the WHS Act typically takes precedence over other existing legislation, the requirements of the Act must be met in the first instance. Which we believe is a positive outcome.

Therefore to demonstrate due diligence all practicable precautionary options is the first objective and the subsequent discussions can then to determine which options or combinations are not reasonably practicable.

Positively demonstrating due diligence is a much more thorough and holistic view of managing risk. It is best practice and now in most states of Australia is law. Being focused on compliance is simply no longer ‘good enough’.