Compliance in Industrial Parks
The term „compliance“ merely expresses the obvious, i.e. that companies strive to conform to the law. Every serious-minded entrepreneur also pursues the aim of avoiding conflict with relevant regulations and legislation, i.e. of being „compliant“ in all areas of the law. Only in this way is it possible to avoid corporate liability for damage to the environment, defective products etc., penalties for infringements being served on senior management (organisational culpability) and on subordinate officers, and administrative pressure from the competent authorities.
Meanwhile voices can now be heard which consider the concept of compliance to imply more than mere conformity to the law. For example, reference is made to aspirations to implement measures against corrupt behaviour in companies in the name of compliance. Ultimately, however, this is also no more than the fulfilment of legal requirements because corruption is a punishable offence in most countries. Yet the tasks of a compliance officer can extend beyond existing law whenever it is necessary to observe standards or codes of practice set by the company itself, whose level of stringency may well be higher than that of statute law or, for instance in the case of EMAS-certified organisations, has to be higher because a process of permanent improvement is demanded here.
However, it is not an easy task to implement compliance in all areas of an enterprise. Even with the best will in the world, enterprises are repeatedly confronted by harsh realities. With regard to the environment, problems may simply arise from a technical failure for which nobody can ultimately be charged, provided that the plants were properly maintained and serviced. The fact that many compliance officers are nevertheless pursuing successful careers throughout Europe is due to the recognition that every company, however much it might be genuinely concerned about compliance, comes more or less short of the ideal image of a company complying with all applicable laws, and in fact fails to comply in all areas. Another reason for the popularity of compliance officers in executive offices is that they could be thought to distract from the responsibility of the top executives, especially in situations where the public prosecutor has reasons for initiating criminal investigation proceedings against a company.
Although compliance officers may technically relieve the burden on top management, they can never do so completely from a legal standpoint. That is because every compliance officer is an employee of the company who is subject to the general rules of delegation and for whom corporate management naturally has to exercise its generally valid duties such as selection, instruction, and supervision. No corporate management can contract out of these obligations.
If these legal requirements are fulfilled, compliance officers can make a significant contribution to ensuring that their company conforms to the law. For it is their principal task to attend to the fulfilment of legal obligations by the company and to prevent the company from coming into conflict with the authorities, public prosecutors, the law courts, or injured parties. Thus far their tasks resemble those of statutorily prescribed environmental protection officers and occupational safety experts. However, the tasks of a compliance officer go beyond those of the other persons mentioned, i.e. the duty to inform and to take the initiative, because he or she often also has operational responsibilities. Unlike in the past, when it was mainly the legal department which attended to matters of legal conformity, compliance officers are today no longer perceived as stonewallers or obstructionists – sometimes disrespectfully called pedants – but as an important component in safeguarding the company‘s long-term success. In some cases they are granted far-reaching powers of implementation even going as far as the right to issue instructions to other employees of the company. However, the job description of a compliance officer is not legally predetermined, but depends solely upon the terms of his or her contract of employment.
German law assigns compliance officers „special accountability“ for the integrity of their area of responsibility, which closely approaches the responsibility of executive management. Thus a compliance officer whose duties included the prevention of legal violations by the company was regarded as the guarantor and personally held criminally liable for violations of the company from the standpoint of omission?. This should serve as a warning to all potential compliance officers to pay the utmost attention to a precise description of their duties.
Special Demands in an Industrial Park
Compliance officers of companies located in industrial parks are subject to very special demands which are not encountered by their colleagues in stand-alone companies. That is because neither European nor national legislation knows special regulations for the many interfaces between different companies that are characteristic of an industrial park. As a rule, EU regulations and EU directives and national legislation enacted for their implementation focus solely on individual plants and individual environmentally relevant activities, and fail to consider the interfaces between different companies in close proximity to one another. One pertinent example is the IPPC Directive?, which stipulates under what conditions it is necessary to obtain a permit to operate numerous different plants. And the waste directive?regulates waste management and is implemented by drawing up obligations directed primarily at those who generate or are in possession of waste. The list, which could be extended indefinitely, shows that obligations arising from environmental legislation are always implemented by assigning responsibility to individual natural persons or legal entities; the same applies to occupational health and safety legislation.
In contrast, no standards exist? which regulate the cooperation of legally independent companies sharing an industrial site. The companies involved are themselves called upon to act. They have to agree upon the rules of the game governing their actions and interactions in a civil law contract, with the aim of maintaining the level of safety in the industrial park at least as high as it would be in a facility operated by a single company which has access to all on-site human and material resources and hence exercises overall responsibility. Companies in an industrial park lack this all-embracing access. No person or legal entity has overall responsibility for the whole site; instead, each company is responsible only for its own area, for its plants, for its hazardous substances, and for its personnel, but not for the plants, hazardous substances, and personnel of the neighbouring company, with which it may share individual infrastructural facilities of the site.
Even though environmental and occupational health and safety legislation does not expressly prescribe civil contractual agreements, a need for such agreements already results from general liability law and the need for protection of legal interests. The establishment of an industrial park amounts to creation of an ongoing safety hazard for which all parties involved are required to do everything possible and reasonable to ensure that third parties or the environment are not harmed (general legal duty to maintain safety). Thus contractual agreements between companies in an industrial park also belong within the remit of a company‘s compliance officer because legal conformity would be impossible to achieve without them.
For this reason compliance officers in industrial parks must therefore also have a comprehensive knowledge of the contractual law of the state in which they are situated. This is not always the case because such knowledge depends upon a sound legal training. It is not yet generally known that an industrial park is subject to very special requirements in its attempts to attain compliance. The situation may admittedly differ in large and professionally managed industrial parks whose personnel possess the necessary expertise. However, problems of this kind do arise at the innumerable small sites where two or more companies share the existing infrastructure. The need for mutual legal agreements has often not even been considered. Only if the corresponding contractual arrangements have been effectively agreed and subsequent checks made to ascertain that they are respected and implemented will it be possible for companies to come closer to the goal of compliance. And it is only by adhering to the terms of these agreements that compliance officers in industrial parks can avoid the risk of being held personally criminally liable if something goes wrong in spite of all the precautions taken. Compliance officers should be aware of the above considerations and bear them in mind when agreeing to the terms of their employment contracts. Only then will their risk remain calculable.
??BGH (German Federal Suprem Court) Judgement of 17.07.2009 (5 StR 394/08), NJW 2009, 3173.
 Directive 2008/1/EC of the European Parliament and of the Council of 15.1.2008 concerning Integrated Pollution Prevention and Control, Off. J. EC Nr. L 24 of 29.1.2008, pp. 8 et seqq. 26, last modified on 23.4.2009, Off. J. EC No. L 140, p. 114.
?Directive 2008/1/EC of the European
Parliament and of the Council of 19.11.2008 on Waste and Repealing Certain Directives, Off. J. No. L 312, p. 3, corr. Off. J. 2009 No. L 127, p. 24.
 A first exception is found in German national legislation in Section 59 WHG (German Federal Water Resources Act (see: CT-41) and Section 1 GGBefG (German Dangerous Goods Transportation Act).
Facts for Decision Makers
- Meanwhile voices can now be heard which consider the concept of compliance to imply more than mere conformity to the law. For example, reference is made to aspirations to implement measures against corrupt behaviour in companies in the name of compliance.
- To achieve compliance, more and more companies are appointing so-called compliance officers.
- Although compliance officers may technically relieve the burden on top management, they can never do so completely from a legal standpoint.
- Compliance officers of companies located in industrial parks are subject to very special demands which are not encountered by their colleagues in stand-alone companies.