Compliance resources
Under the Essential Services Commission
Act, the Commission has a strong role in relation to compliance and
enforcement in regulated industries, with a suite of associated powers which it
utilities to ensure that consumers’ long-terms interests are appropriately
protected.
The Essential Services Commission Act 2002, specifies that the statutory functions of the Commission
include:
-
monitoring and enforcement of compliance with,
and promotion of improvement in, standards and conditions of service and supply
under relevant industry regulation Acts; and
-
in appropriate cases, conducting prosecutions
for contraventions of the Essential Services Commission Act or relevant
industry regulation Acts.
The Commission regards those functions as being
of the utmost gravity, considering the essential nature of the industries it
regulates, and gives effect to its regulatory compliance role through a number
of related actions. First, it is important that regulated entities are made
aware of the regulatory obligations imposed on them and of the possible
consequences of non-compliance. Secondly, compliance must be monitored, and a
variety of strategies implemented to ensure that an effective monitoring regime
is in place. Finally, appropriate enforcement action must be taken in cases
where non-compliance is detected.
In undertaking its compliance role, the
Commission is guided by its legislative objectives, and in particular the need
to protect the long-term interests of South Australian consumers with respect to
the price, reliability and quality of essential services. A strong culture of
compliance is likely to be consistent with protection of consumer interests, but
it must not be such as to impose high levels of regulatory costs on regulated
entities.
The Commission has sought to balance these needs
through establishment of a collaborative compliance regime established under
industry specific regulatory instruments (for example Energy Guideline No 4 that:
- encourages regulated entities to actively cooperate in the early reporting
and rectification of any identified non-compliance;
- uses a risk based approach as far as possible in both compliance monitoring
and enforcement, based on the likelihood of a breach of a regulatory obligation
and the possible consequences (for example, on South Australian consumers) of
such a breach; and
- reserves stronger enforcement action (for example, prosecution) for more
serious cases involving wilful or systemic non-compliances with major
consequences, or circumstances in which other processes have not had the desired
remedial effect.
The Commission’s enforcement processes can be
categorised as follows:
- Administrative – through the exercise of roles and functions which are
prescribed under legislation or arise in the ordinary course of performance of a
legislative function;
- Disciplinary – through the exercise of powers granted under legislation to
protect South Australian consumers; and
- Prosecutorial – through the exercise of powers granted under legislation to
bring punitive action against an entity, which does not comply with legislative
requirements.
The Commission has published an Enforcement Policy, providing guidance on the criteria and
processes it uses in determining the type of enforcement action required on a
case by case basis. In general terms, the exercise of the Commission’s
administrative process is the primary means of enforcement used by the
Commission, with disciplinary and prosecutorial processes reserved for the more
serious matters of non-compliance.
In the context of general regulatory compliance,
the Commission uses a range of strategies to promote and facilitate compliance
by regulated entities, including:
- the provision of education, advice and assistance;
- compliance reporting; and
- compliance audits that the Commission may itself undertake or require
regulated entities to undertake.
The Commission also has a range of stronger
administrative enforcement options such as verbal and written warnings, plus
formal Warning Notices provided for in the Essential Services Commission
Act and relevant industry regulation acts, together with prosecutorial and
disciplinary powers.
In the energy industry, consumer complaints are
an important means of detecting non-compliance and the Commission therefore
liaises closely with the Energy and Water Ombudsman of SA on such matters. The
Commission also liaises with the Office of the Technical Regulator concerning
energy industry entities’ compliance with safety and technical obligations.
In 2019 the Commission undertook compliance action against EnergyAustralia in relation to a shortfall in its achievement of its 2018 priority group energy efficiency activity target.