June 2, 2023

Mind the gap: Compliance versus trust, and what it means for organisations

Mind the gap: Compliance versus trust, and what it means for organisations
There is a big difference between trust and compliance, and organisations need to go further than ticking the boxes if they want to build trust.

Most organisations have entire teams devoted to compliance, ticking the legislative and regulatory boxes required for them to operate. However, just because a chemical is compliant, does that mean you should use it? And if you choose to replace a hazardous chemical with one that has known impacts but lower-level regulatory requirements, will it pass the pub test?

Being compliant is not a guarantee of trust. As the examples show, you can be compliant but still make choices that could cause physical, reputational and financial damage. This is particularly important when it comes to the hazardous chemicals an organisation uses, which have the ability to impact employees, the environment and the community.

As ESG requirements and scrutiny increases – from boards, investors and the community – the pressure is on companies to behave in a manner that is trustworthy, as well as compliant. Getting there requires organisations to be proactive about making the right choices, rather than simply appearing to do so.

The compliance shortfall

Compliance is mandatory, and for good reason. By being compliant you adhere, in hazardous chemical terms, to the requirements of the GHS and WHS (or main OSH regulatory body for your region).

The regulations, which have been developed with the safety of employees, the environment and community in mind, are updated as new evidence comes to light, which can take time.

This means they’re the bare minimum, and not the only guide for good decision making.

For example, the drug Thalidomide is now widely known to cause birth defects/death. However, it was only banned by the Australian government 7.5 months after the manufacturer had withdrawn it from market. This meant companies operating only from a compliance perspective could continue to inflict harm of the greatest level for nearly eight months longer than they needed to.

Compliance also doesn’t take into account manufacturers making misleading statements.

E-cigarettes are one of the most obvious and current examples of this. Consumers assume e-cigarettes are safer due to lack of nicotine, but they still contain harmful chemicals. Manufacturers are making false claims regarding these chemicals. Already three e-cigarette companies (Joystick, Social-Lites, Elusion) have had to pay penalties of $55,000-$60,000 for misleading claims. However, it takes time to test and identify these issues, and while this process works through, the products remain legal and are being sold to unwitting consumers.

Trust, the level above compliance, is also not without its issues. Many companies choose to go above and beyond the regulatory requirements, but they don’t always get it right.

Bisphenol A is a chemical that is legal in most jurisdictions. By using it, companies in those jurisdictions are compliant. However there have been well documented health concerns regarding the chemical, leading many manufacturers to voluntarily remove it from their product. This is a good example of establishing trust and working in the interests of consumers. The issue is that many have replaced it with another bisphenol (e.g Bisphenol S), that less is known about, so it may be just as bad, or even worse.

Developing trust

Any organisation that uses hazardous chemicals should ensure in the first place that they are compliant with all the relevant legislation for the area in which they operate.

Once compliant, the process of harm reduction (and trust building) begins.

Companies that want to build trust need to make sure they use evidence-based information, not just good intentions, to guide decision making.

In order to build trust, you need to be making decisions based on solid information, and have a strong understanding of your organisation’s activities and its potential impacts.

A company that behaves in a trustworthy manner with its chemical management will always do the following:

  • Ensure it knows every chemical the organisation is using. This means having an easily accessible, well documented inventory that is regularly updated.
  • Have substantiated evidence, documentation and understanding of the potential impact of those chemicals, using independently verified information – not just relying on the manufacturer’s assurance.
  • Where possible, replace any hazardous ingredient with non-hazardous/less hazardous ingredients, actively reducing its impact above and beyond compliance.
  • Similarly, replace hazardous products with non-hazardous/less hazardous products
  • Be cautious and careful around any claims made around chemical use or management to ensure it can be validated.
  • When it comes to decision making around the use of chemicals in its operations, consider the impact on the customer and their interests, as well as the law.
  • Find ways to create strong protections for its customers, people, the environment and community.

Global management software tools like ChemAlert are critical to this process. Our data is rigorously reviewed by our scientific team, giving you the most accurate information and SDSs on the chemicals used by your organisation, and the ability to feed this information into reporting regimes where needed.