About voluntary industry codes of conduct

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What is a voluntary industry code of conduct?

A voluntary code of conduct aims to help industry members improve business practices and meet their regulatory obligations. It sets out specific standards of conduct – voluntarily agreed to by signatories – about how industry members deal with each other and their customers.

An effective industry code can provide greater protection for consumers and reduce the regulatory burden for business.

Criteria for an effective code

An effective code relies on a strong industry association, supported by a significant proportion of industry members.

To be effective, a voluntary code must:

  • have widespread support within the industry 
  • have clear objectives 
  • be well designed 
  • provide benefits to signatories 
  • be effectively implemented 
  • be underpinned by an effective complaint handling system 
  • be administered by an appropriate body 
  • be properly and objectively enforced 
  • be regularly evaluated and reviewed to retain currency and support from stakeholders.

Codes place obligations on signatories and can be costly – so it is important that they are carefully implemented and administered. A poorly designed or administered code will not achieve its objectives; it will also impose costs and other burdens on signatories, without sufficient benefits.

Consumer Affairs Victoria’s role

Consumer Affairs Victoria has published this information to help industries develop high quality business practices by adopting voluntary codes of conduct.

Our role in helping an industry develop its own code will depend on the issues it identifies and its preferences.

We may:

  • provide information and guidance to an industry association considering a code 
  • advise on code development and administration 
  • provide advice on code monitoring and evaluation. 

For more information about how we can assist with code development, contact our Business InfoLine on 1300 098 631.

Benefits of a voluntary industry code 

The benefits for an industry include:

  • enhanced reputation and business practices 
  • a marketing advantage for signatories, who can present themselves as meeting industry best practice 
  • consistency across the industry 
  • greater stakeholder and investor confidence in the industry 
  • reduced customer dissatisfaction and complaints 
  • more efficient compliance with legislation.

Other reasons for developing a voluntary industry code include:

  • it is easier to adjust than legislation, to meet changing needs 
  • it is less intrusive than legislation or regulation 
  • participants have a greater sense of ownership and are more likely to comply 
  • the code acts as a quality control benchmark for the industry 
  • it provides an efficient and user-friendly means of resolving complaints.

When is a voluntary code necessary?

An industry should only adopt a voluntary code of conduct when this will deliver effective compliance with legislation and address identified problems or issues. 

Factors to consider include:

  • whether there is an identified issue or problem within an industry that can be addressed effectively by a code 
  • conduct and compliance history within the industry 
  • the level of confidence, trust or credibility that the industry has within the community and among its customers 
  • the nature of the industry; for example, its size and structure. Is it an emerging or mature industry? Are there consistent practices across the industry? 
  • features of the code likely to inspire greater community and consumer confidence 
  • whether there is an appropriate industry group with sufficiently broad coverage to administer the code.