Bulletin on Corporate Compliance Programs

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Appendix A - Corporate Compliance Program Framework

Preface

This Corporate Compliance Program Framework ("Framework") was designed to help Canadian businesses design their own corporate compliance program in relation to one or more of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act ("Acts"). It should be used in conjunction with the Competition Bureau’s ("Bureau") Bulletin on Corporate Compliance Programs. The Framework is a flexible tool that could be adapted to the specific activities and resources of a particular business. The Framework refers to Appendices (such as a Training and Education Program, Procedures for Monitoring, Auditing and Reporting and a Disciplinary Code) to be drafted by businesses themselves to suit their specific needs and the competition risks they may face.

The Framework is not binding on the Commissioner of Competition ("Commissioner"). It is offered for the purpose of providing guidance. This Framework is not to be taken as a substantial corporate compliance program and needs to be tailored to a business’ needs. Furthermore, the content of the Framework and accompanying Appendices are not intended to serve as legal advice. Readers should obtain independent legal advice when developing a corporate compliance program.

To be completed by the subject Company.

[COMPANY X] CORPORATE COMPLIANCE PROGRAM

1 Introduction

1.1 Purpose

This Corporate Compliance Program (including Policies and Procedures) ("Program") has been established so that our business complies with the Competition Act / Consumer Packaging and Labelling Act / Textile Labelling Act / Precious Metals Marking Act (as appropriate)] while providing value to our customers and competing effectively in the Canadian and global economies.

It includes practical advice concerning rules of conduct that will help our business anticipate and prevent contravention before they occur, and detect and report contravention if they do occur. This Program is for use in our daily business by all employees.

1.2 Commitment to Compliance

1.2.1 Our business is committed to complying with the law in letter and in spirit. There may be instances where this Program sets standards that are higher than those required by the [Competition Act / Consumer Packaging and Labelling Act / Textile Labelling Act / Precious Metals Marking Act (as appropriate)]. Nevertheless it is imperative that its requirements be complied with strictly.

[A personal statement by the chief executive officer or his/her equivalent stressing his/her commitment to the policies and procedures contained in the Program, and his/her uncompromising adherence to the Acts may be incorporated.]

1.2.2 Our business has designated a person responsible for the development, implementation and maintenance of the Program. The [Compliance Officer or other appropriately titled position] may be contacted at: [Contact Information].

1.3 Employees’ Responsibility for Compliance

1.3.1 Responsibility for compliance with the Acts also rests with each and every employee of the business. Compliance with the Acts protects not only our business, but also our employees.

1.3.2 In addition, our business has developed Policies and Procedures, attached at Appendix [ ], in order to assist employees in recognizing improper conduct and knowing when to seek advice.

1.4 Canadian Competition Law

The purpose of Canadian competition law is to maintain and encourage effective competition in Canada. The Acts maintain a competitive marketplace by prohibiting certain activities that might reduce or prevent competition or harm consumers. The Commissioner and the Competition Bureau Canada (the "Bureau") administer and enforce these Acts.

Overview of the Acts

What is the Competition Act?

Canadian competition law is contained in the Competition Act, a federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing certain advertising practices and sets out certain prohibitions on how competitors may deal with each other, as well as how businesses treat their suppliers and customers. Specifically, the Competition Act addresses, among other things, conspiracy (such as price fixing), bid-rigging, price discrimination, predatory pricing, discriminatory promotional allowances, double ticketing, multi-level marketing and pyramid schemes, price maintenance, bait and switch selling, sale above advertised price, mergers, refusal to deal, consignment selling, exclusive-dealing, tied selling, market restrictions, abuse of dominant position, delivered pricing or specialization agreements.

What is the Consumer Packaging and Labelling Act?

The Consumer Packaging and Labelling Act is a regulatory statute relating to the packaging, labelling, sale, importation and advertising of pre-packaged products. It requires that pre-packaged consumer products bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The Act prohibits false or misleading representations and sets out specifications for mandatory label information such as the product's name, net quantity and dealer identity.

What is the Textile Labelling Act?

The Textile Labelling Act is a regulatory statute relating to the labelling, sale, importation and advertising of consumer textile articles. It requires that textile articles bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The Act prohibits false or misleading representations and sets out specifications for mandatory label information such as the generic name of each fibre present and the dealer's full name and postal address or a CA identification number.

What is the Precious Metals Marking Act?

The Precious Metals Marking Act is a regulatory statute relating to the marking of articles containing precious metals. It provides for the uniform description and quality markings of articles made with gold, silver, platinum or palladium to help consumers make informed purchasing decisions. The Act prohibits the making of false or misleading representations related to precious metal articles. It also requires that dealers who choose to mark their articles with representations related to the precious metal quality, to do so as described by the Act and Regulations.

Enforcement of the Acts

The Commissioner investigates complaints by business people as well as consumers. Under the Competition Act, the Commissioner’s investigative powers include, among others, the ability to search offices, seize records and interview individual employees under oath. Under the three standards-based acts, inspectors can enter and inspect business premises of a dealer of pre-packaged products, textile fibre products or precious metal articles, and seize such products and articles.

1.6 Penalties and Remedies under the Acts

1.6.1 The Acts can affect a vast range of activities engaged in by our business at many levels (and its customers and vendors as well). A contravention of the Acts, whether civil or criminal, can result in serious legal consequences for our business and our employees. Indeed, they can:

• expose the business to significant criminal fines or civil administrative monetary penalties, prohibition orders and recovery of damages by private parties; and
• expose employees convicted of criminal offences to criminal fines and imprisonment or to civil administrative monetary penalties.

1.6.2 [Discuss the penalties and remedies for both the company and employees that are associated with the provisions of the Acts that are the most likely to apply to the business’ activities based on the risks you may face.]

1.7 Subject Personnel

1.7.1 The Program applies to all employees, at all levels, who are in a position to potentially engage in, or be exposed to, illegal conduct (hereinafter referred to as "employees").

1.7.2 It is the personal responsibility of all employees to conduct their activities on behalf of our business in compliance with both the letter and the spirit of the Acts. No one who is employed by our company has the authority to engage in any conduct, or knowingly permit a subordinate to engage in any conduct, that contravenes the Acts or this Program.

1.7.3 Anyone who engages in such conduct, fails to request assistance to determine the legality of a situation, or who otherwise contravenes the Program or the Acts may be subject to appropriate disciplinary or corrective measures, up to and including dismissal.

1.8 Annual Employee Acknowledgment

1.8.1 Each employee is required to acknowledge that he/she has read and understands this Program and that he/she understands his/her obligations under it.

2. Senior Management Involvement and Support

2.1 "Senior management" is defined as [list the positions].

2.2 Our business recognizes that Senior management's clear and unequivocal support is the foundation of a credible and effective program.

2.3 Senior management, in the performance of their fiduciary duties, must always exercise care, skill and diligence and act in the best interests of our business.

2.4 It is senior management’s duty to promote and ensure compliance with the Acts. Senior management is accountable for promoting and complying with the Acts.

2.5 While senior management is accountable for compliance, the responsibility to promote and ensure compliance may be delegated to a specific individual or group.

3. Corporate Compliance Policies and Procedures

3.1 The business recognizes that strong compliance policies and procedures are critical to the success of the Program.

3.2 Policies and Procedures pertaining to our business activities are attached at Appendix [ ]. Appendix [ ] will be updated to reflect material changes in the business, the law, the Bureau's enforcement policies, or the industry. Reasonable measures will be taken to promptly notify all employees of such changes.

[ Policies and Procedures shall:

• be written in plain language and made available to all employees;
• identify activities that are illegal or questionable and the consequences for contravention under the Acts;
• provide clear examples to illustrate the specific practices that are prohibited, so that employees can easily understand how the application of the Acts may impact on their own duties and responsibilities; provide guidelines on document retention, creation and management; define the notion of obstruction of justice under the Acts; inform employees of the consequences of obstruction of justice under the Acts; outline the possible consequences of breaching the Program and the Acts; inform employees regarding the provisions of the Competition Act that protect whistleblowers and the consequences of retaliation; inform employees about the Bureau’s Immunity Program under the Competition Act; provide a code of conduct giving clear instructions on how to respond when a search warrant is executed or when an inspection is being conducted by the Bureau; provide a code of conduct giving clear instructions on how to respond when a court order compelling the production of records or oral testimony is served; and provide a code of conduct regarding the participation of its employees to any trade association activities.]

4. Training and Education

4.1 Our business recognizes that to be effective, the Program must include an ongoing training component that addresses compliance issues for all employees.

4.2 A Training and Education Program is attached at Appendix [ ].

[The Training and Education Program shall:

• require each employee to participate in ongoing training provided by our business;
• require all new employees to participate in training as soon as practicable after the commencement of their employment;
• cover all compliance issues the business may face;
• highlight the general legal principles under the Acts;
• provide employees that face particular exposure to the Acts with more in-depth training;
• provide guidance on specific business conduct that should be avoided;
• ensure that all relevant training materials are available;
• allow sufficient opportunity for questions and discussion during training sessions;
• ensure that training is delivered by experts and that it is consistently given throughout the company to avoid conflicting information;
• provide a method of evaluation as well as its frequency; and
• be evaluated regularly to make sure it reflects the business activities and the state of the law.]

4.3 A copy of this Program will be distributed to all employees upon commencement of their employment.

4.4 The Program can be found on [list: Intranet, Internet website, etc.].

5. Monitoring, Auditing and Reporting Mechanisms

5.1 Monitoring

5.1.1 The [Compliance Officer or other appropriately titled position] shall monitor all business activities continuously or periodically, as appropriate, to ensure compliance;

5.1.2 The Compliance Officer [or other appropriately titled position] shall review and update this Program when issues are detected; and

5.1.3 Procedures for Monitoring are attached at Appendix [ ].

5.2 Auditing

5.2.1 The [Compliance Officer or other appropriately titled position] shall conduct periodic, ad hoc or event-triggered audits, as appropriate, to confirm whether our business is fully complying with the Acts;

5.2.2 The [Compliance Officer or other appropriately titled position] shall review and update this Program when issues are detected; and

5.2.3 Procedures for Auditing are attached at Appendix [ ].

5.3 Reporting

5.3.1 All instances of non-compliance with the Program or the Acts shall be reported and communicated to the [Compliance Officer or other appropriately titled position] who shall regularly report to Senior Management;

5.3.2 The Program is intended to help employees comply with the requirements of the Acts, recognize improper conduct and know when to seek advice;

5.3.3 If employees have any questions concerning the Program or the Acts, they are strongly encouraged to contact the [Compliance Officer or other appropriately titled position];

5.3.4 If employees become aware of a breach or possible breach of the Program or the Acts, they must report it to the [Compliance Officer or other appropriately titled position] immediately;

5.3.5 No employees shall suffer any adverse employment consequences for reporting a possible contravention of the Program or the Acts; and

5.3.6 Procedures for Reporting are attached at Appendix [ ].

6. Disciplinary Procedures

6.1 The business is strongly committed to compliance with this Program and the Acts. We take non-compliance very seriously.

6.2 Any breach of this Program and/or the Acts will result in disciplinary action.

6.3 A Disciplinary Code is attached at Appendix [ ].

[Signature of senior management]