Compliance and monitoring

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In-house compliance system

The body administering the code must ensure each signatory has an in-house system to ensure compliance with the code. It can assist compliance by providing advice and training.

The Australian Standard on Compliance Programs (AS3806) is commonly used by industries to develop code compliance manuals.

Sanctions for non-compliance

Commercially significant sanctions may be necessary to achieve credibility with, and compliance by, participants. Such sanctions may also help to create stakeholder confidence in the code.

If included, sanctions should reflect the nature, seriousness and frequency of the breach.

Examples of commercially significant sanctions include:

  • supplying a product or service free of charge when a code rule is broken 
  • censures and warnings 
  • corrective advertising 
  • fines 
  • expulsion as a signatory to the code 
  • expulsion from the industry association.


The wider the coverage a code has in an industry, the more effective it will be.

Coverage should be measured in terms of number of code signatories against the number of potential signatories within the industry, and in terms of coverage of the issue that the code is attempting to address.

For example, if a code aims to correct a market failure caused by a minority group, and the minority group does not become a signatory, the code is unlikely to achieve its objective.

Administration of code

Diverse representation provides a ‘public window’ to the scheme’s operations.

To ensure the rules are applied effectively, the code’s promoters must develop and implement an administrative arrangement. Larger industry associations may wish to establish a formal committee to administer the code.

The body charged with administering the code should ensure the successful implementation and ongoing effectiveness of the code.

Typical stakeholders that should be involved in the code’s administration include:

  • trade associations - historically, trade associations have helped develop and maintain codes of conduct and generally are able to incorporate a code administration committee into their existing infrastructure 
  • consumer representatives - consumers play an important role in the development of business-to-consumer codes, code administration and consumer dispute resolution schemes. Consumer participation will help to ensure the code provides for robust consumer protection and is more likely to be accepted by stakeholders. Consumer representatives should reflect the viewpoints of consumers generally, not just their own personal experience. They should also have the confidence of consumers and consumer organisations 
  • regulatory authority and consumer protection agencies - usually have expertise useful in developing or administering a code.

If a code administration committee is established, the appointment of members should be for a set period and reviewed regularly to ensure the committee’s continued effectiveness.

Data collection

Effective codes require collection of data about the origins and causes of complaints, and the identification of systemic and recurring problems that industry members need to address. 

Data collected should include:

  • complainants 
  • businesses complained about 
  • the types and frequency of complaints 
  • how complaints are resolved 
  • time taken to deal with complaints 
  • types of sanction(s) imposed. 

The data must be suitable for analysis of systemic issues and areas for improvement. These reports provide important feedback to assist compliance with legislation.

When collecting data, organisations should ensure they comply with all relevant privacy standards. For more information about your obligations relating to privacy, please visit the Office of the Australian Information Commissioner website.

Monitoring and review

Regularly monitor compliance with the code to ensure it delivers the desired outcomes for all stakeholders and the wider community.

A system for monitoring compliance may include evaluating data collected regularly, to identify and remedy problems and to find ways to increase compliance. 

An annual report should be produced on the code’s operation, allowing for periodic assessment of its effectiveness. These reports should be readily available to stakeholders and interested parties. The detail required will vary depending on the scope of the code.

The code should provide for regular reviews to ensure its standards meet identified objectives and community expectations, and that it is working effectively. 

Competition implications

Codes should not be written in an anti-competitive way, as this could put them in breach of the Competition and Consumer Act 2010 (Commonwealth). 

Under Part IV of the Act, serious anti-competitive behaviour includes:

  • competitors agreeing to charge the same or similar prices, or to restrict the territories within which they trade 
  • competitors agreeing to prevent another from acquiring or receiving goods and services 
  • misusing substantial market power to eliminate or damage a competitor or potential competitor 
  • misusing substantial market share by engaging in predatory pricing 
  • refusing to supply—this may infringe the Act under some circumstances such as if the purpose of the refusal is considered to be to damage another business 
  • stipulating minimum resale prices for goods supplied to a retailer.

The Australian Competition and Consumer Commission (ACCC) may authorise anti-competitive codes of conduct when the public benefit outweighs any detriment. However, such authorisation is not common.

The ACCC can provide advice about potentially anti-competitive provisions in a code of conduct. A ‘Guide to authorisation’ is available on the ACCC website.


If a hypothetical ‘Victorian Oyster Industry Code of Conduct’ required signatories to negotiate collectively with retailers, it could potentially be anti-competitive under Part IV of the Competition and Consumer Act 2010.

The ACCC could authorise this anti-competitive behaviour if it considered this to be in the public interest.

The Victorian oyster industry would need to contact the ACCC to seek advice during the development of the code.

Performance indicators

Performance indicators are a means to measure the code’s effectiveness. They should be developed with reference to the criteria in these guidelines.

The measurements may be qualitative or quantitative but should be objective, so that another person in similar circumstances would obtain the same measurement.

View the following examples:

The level of detail in these reports will vary depending on the scope of your code.