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Internal compliance

Compliance can be defined as the state in which it is necessary to work accordance with the established rules and guidelines. Compliance in context of an industry means to abide by the set industry regulation and government legislation.Compliance with the government rules and regulation is crucial for a firm in order to operate the business legally. Company transactions, safety procedures, and labor practices are the vital components of the compliance. An organization should know about the proper rules and regulation of the industry otherwise the business might be affected (Yakovleva, 2017). Internal and external are the two types of compliances. However, the internal compliance ensures that a firm is running the business with full integrity and is free from corruptions. External compliance focuses on the environment in which the business is running. Various reprimands are considered as the internal compliance and government issues restrictions on noncompliance in external environment.Noncompliance may cause operational risk in an organization. This study deals with the compliance nature of Birchfield Coal Mining firm that is situated in New Zealand.

Birchfield Coal Mines is a well-known coal mining industry in New Zealand. This organization extracts coal from Rotokohu coal measures, which is situated near the Giles Creek basin. Such coal is sub-bituminous and contains low in Sulphur. Birchfield Coal Mines is a private company and is owned by a family. The director of this organization has established their business on the West Coast. In 1984 this organization is established their infrastructure in order to extract and process the coal. Their coal product is cleanest burning coals and popular in the energy market. The fine clean ash does not burn the chimney. Their coal product contains higher heat value and faster burning feature. BirchfieldCoal Mines supplies their coal to dairy, meat, horticulture and wood processing and service industries. They try to comply with the rules and regulation of the government as well as the industry (Birchfieldcoal, 2017).

Internal Compliance requirement

Internal compliance of the mining industry includes health safety of the worker during their work. The company needs to follow three major internal compliances that in their mining fields. Health and safety is a big issue for the mining industry that needs to be carried out by the organization (Murray, Peetz, &Muurlink, 2017).It is essential for the workers to comply with the organizational policies during their work to get compensation for any work-related injury. Defining hazards substances is an internal compliance for the mining industry. It is vital, as the miners of the company should be well informed about these substances. Use of latest and safe equipment is another vital requirement of the internal compliance in the coal-mining factory (Reveley& Singleton, 2017).

External compliance

According to health and safety compliance, the company needs to maintain standards like first aid, protective equipments, ventilations and precautions against dust, explosions and others.Suchstandards of the company fall under Health and Safety at Work Regulations Act 2016.Health and Safety at Work Regulations Act 2016 is a crucial law of New Zealand. According to this legislation, it is crucial for the company to maintain the health safety of the worker during the coal mining. Compliance with these internal codes, policies and the practices is important for the company.

According to the compliance with the Hazardous Substances the company needs to maintain a limit in exerting harmful and toxic substances in the environment.Noncompliance with this policy may affect the employees badly by affecting their health (Fang, Zhang& Li, 2017). Hazardous Substances and New Organisms Act 1996 is the desired legislation that is responsible to reduce the hazards substances in the coalmines(Worksafe, 2017).

Lastly, keeping safe equipment in the mines for the miners is essential to making the mining process faster and facilitating the miners to do their job effectively. The company should carry out regular equipment check to make the mining process proper and reliable. Mine Safety and Health Administration is an agency responsible for carrying out the necessary steps towards maintaining safe equipments in the Birchfield Mines.

In the context of Birchfield Coal Mines, such three internal compliances are necessary to minimize the operational risk. However, safety equipment is mandatory for the coal mining industry in order to comply with the internal requirements. 

Application of the internal compliance in the context of Birchfield ltd.

Implementation of the framework to comply with the internal legal requirements is necessary for Birchfield Coal Mines(Yakovleva, 2017). Health and safety is the major internal compliance in the context of Birchfield Coal Mines. Health and Safety at Work Act 2016 will help the organization to ensure safety requirements of labors in Birchfield mines.

On the other hand, defining the hazardous substances in the Birchfield Mines is another compliance that the company needs to follow. In order to comply with this requirement, Brichfield needs to follow the principles of Hazards Substance and New Organisms Act 1996. Birchfield Coal Mines should research about the hazardous substances that may result from their mining activities and take necessary precautions to reduce the effect on the miners as well as on the environment.

Compliance from the company’s end also include the maintenance of safe equipments for the miners. Safe equipments and their usage should be taught to the new miners through training to reduce their effects. Mine Safety and Health Administration agency will help the company to guide and formulate safe equipments in their mines.

Business background

Application of such Act within the organization will enable the miners to remove the hazards and keep them safe during the coal mining (Clapcott, Goodwin& Harding, 2016).

Analysis of the issue

Keeping the updated record of the business operation is an important and new internal requirement for the mining industry (Wright, Belmer& Davies, 2017). The security update is mandatory for Birchfield Coal Mines such as well-protected mines, data maintenance and offering security to the employee. However, this organization has fulfilled this requirement partially but not completely that is a big issue for this organization. It is important for Birchfield Coal Mines that their employees should be fully equipped with proper information of security. For this reason update, security information is required that is not done properly by this organization. The firm to update the security information should follow data Protection Act 2017.

Impact of lack of security onBirchfieldCoal Mines

Lacking the updated security information may affect the business of the Birchfield Coal Mines. Such effect can be severe for the organization as this will affect the safety law of their mining operation (Lu, et al., 2017).In order to update the security information, the organization should disseminate the information while hiring. This is because the new hires will readily get to know about the security policies of the company at the time of entrants. Old employees can be informed through meetings and trainings. However, if the employees are not updated with the security information then the operation process using new technologies will be hampered. Breach of the information can occur in Birchfield mining industry, which may affect the entire business operation. On the other hand, breach of the information may disseminate the company information that will increase the competition in the market for Birchfield.

Password protection: In order to maintain the security password protection is necessary for Birchfield Coal Mines. This will enable to protect their company information and to comply with the security in the information update system that is a crucial internal compliance.The agency that would help Birchfield to implement password protection in their information system is Standards New Zealand.

Audit via external agency: Involvement of the external agencies to ensure the safety and security of the mining operation in the context of Birchfield Coal Mines is essential. Secure Systems Ltd. is one of the important external agencies of New Zealand that carries out the inspection process to ensure the safety and the security of the operation process of the mining industries. Involvement of such audit agency in the safety and security assurance process will be beneficial for BirchfieldCoal Mines.

Internal industry compliance requirements

The response of the employees during the emergency: The employees of Birchfield should respond during time of emergency such as failure in the usage of certain equipments, sudden deteriorating health of a miner and others. In a mining industry, an emergency can come during the technical operation and field operation. Thus the employees of the organization should respond to any operational risk including security and safety. They should inform such situation to the higher authority or take up sudden step by themselves in severe cases.

Description of the compliance

Types of the miningthat can be permitted in a region are the basic external compliance for the mining industry (Liu, et al., 2017).This is because, in every area, similar types of mining cannot be done. Thus, it is important for Birchfield Coal Mines to follow Crown Minerals Act 1991 and the minerals program that is The Minerals 2013. These two programs are associated with the detection of types of mining based on area.

Submission of the annual report of the business is another external requirement for the mining industry (Vasin, Kozyreva&Tyuleneva, 2017). This annual report should be submitted to the state government. In the context of Birchfield, their annual report should be submitted to the New Zealand government. Annual reports help the state to determine the condition of a mining company and the chances of growth it has in future. Coal Mines Act 1979 can be followed to implement such compliance system.

In order to carry out the business in New Zealand, franchise tax should be given by the mining factory to the government (Hofmann, Burke, & Zohar, 2017). Franchise Tax is a tax that a company needs to give to the state government for running their business organization in that state.This can be done by following the principles of Coal Mines Act 1979. New Zealand government uses different formulas for the franchise tax in the context of different mining industries.

Application of the compliance requirements in context of Birchfield

Mining is based on the different types of permits under the Crown Minerals Act 1991 and Minerals Act 2013 (Valluru, Dekker& Rae, 2017). In the context of Birchfield, it is important to follow Crown Minerals Act 1991 to mine the minerals. For this organization, mining permit is required as it provides right to the permit holder to mine for the minerals specific for their business such as for coal. Thus, mining permits are given to this organization according to this Act.

Internal compliance issue

According to the Coal Mining Act 1979, the annual report of the mining industry should be submitted to get the green signal from the government (Oliveira, Camanho, &Zanella, 2017).Depending on the report the government will advice the company to carry out their operations. In the context of Birchfield, this organization needs to show their annual operation report to the New Zealand government to get the license for mining in this country. Based on the annual report the government will allow such organization for further operation in this particular country.

The company needs to give franchise tax to the government to carry out their business without any legal obstruction (Salvioni, Gennari&Bosetti, 2016). Tax is a big part of any business as it allows the government to give legal permission to a business owner to carry their business. Birchfield Coal Mines and its partners should volunteer themselves in the Filing Compliance Agreement of their state and disclose all their files by making full payment that they are liable for. In the context of Birchfield, they need to follow Coal Mining Act 1979 in order to understand the government rules regarding the mining in New Zealand. However, for a coal mining factory it is essential to give the tax to the government within a scheduled time otherwise the operation can be forced to stop due to legal restriction.

Evaluation of a critical external compliance

Lack of environmental sustainability is the main issue of the mining industry because waste coming from the mining industry affects the environment (Clapcott, Goodwin& Harding, 2016).Having a state of environmental sustainability in the mining plant is another important external compliance for the company.Thus it is necessary forBirchfield Coal Mines to comply with the appropriate environmental law before conducting exploring and drilling activities in the soil. However, the research activities in the context of minerals are taken under the exclusive economic areas. It is mandatory for the mining factories to comply with Environmental or Exclusive economic zone and Continental Shelf Act 2012. Thus, non-compliance with environmental monitoring could lead Birchfield to face the issue in future. Some of the impacts that the company will face due to non-compliance to sustainability are increasing diseases, pollution, increased death rate and increased emission of harmful gases.

Non-compliance with the environmental law may force the business to change their operational process (Oliveira, Camanho, &Zanella, 2017).In the recent years, the New Zealand government focuses on the environmental protection from mining companies. Thus, for this reason, Environmental or Exclusive economic zone and Continental Shelf Act 2012 needs to be followed. However, if Birchfield will comply such environmental law then it can be beneficial for this organization to carry out their business without any legal restriction. On the other hand, people are more conscious about the environmental sustainability. Thus, non-compliance with the environmental protection Act may affect the brand image of Birchfield. On the other hand, lawful judgment can be made against Birchfield if they fail to maintain the environmental sustainability Act. Therefore, the company assets may be considered as vulnerable, which affects the business profitability. For controlling the situation the company and the government can take certain steps such as:

  • The company can make the employees sign a bond in which they will be deemed to follow the compliance policies of the company
  • Government can charge penalties from the company for not complying by the rules of the states
  • Government can also stop the operation of the mining firm for causing negative impact on the environment and human resources

Recommendations

Analysis of risk: Risk analysis is an important factor to minimize the noncompliance with government regulation. In the context of Birchfield, it will be effective for them to analyze the risk during the mining operation that may affect the environment. It will help them to comply with the Environmental Act.

Reviewing and Auditing: Association with the external auditing agencies such as Bureau Veritas New Zealand can be involved in the inspection process of Birchfield Coal Mines. This will be beneficial to review the process through which the external compliance requirements can be identified.

Continuity of the business: Business continuity will help BirchfieldCoal Mines to address the critical matter of their operation during the emergencies. Compliance with the internal and external factors will enable the organization to continue their operation. This is because it is the only way the harmful impact of mining can be controlled both on the environment and human resources.

Conclusion

From the above analysis it can be concluded that compliance with the regulation and rules of the mining industry, both in the internal and external environment, will help the company to grow sustainably. Noncompliance with the internal and external requirements may adversely affect the business of Birchfield Coal Mines. Birchfield Coal Minesis a coal mining industry and needs to cooperate with the internal and external requirements. It has been found that health and safety of the workers is critical in the coal mining industry. It is necessary to protect their health within mining operations. On the other hand, any environmental issue that may occur due to the coal mining often restrict the mining operation, which may cause huge loss for this organization. Compliance with the environmental protection law should be adopted by Birchfield to avoid the legal issues in their business. Apart from this, security information should be updated to reduce the breach of the confidentiality of the company information.

References

Birchfieldcoal.co.nz. (2017). Coal Mining West Coast | Coal Supplies Canterbury & Nelson.  Retrieved 25 November 2017, from https://www.birchfieldcoal.co.nz/

Clapcott, J. E., Goodwin, E. O., & Harding, J. S. (2016). Identifying catchment-scale predictors of coal mining impacts on New Zealand stream communities. Environmental management, 57(3), 711-721.

Fang, L., Zhang, Z., & Li, X. (2017). Synergistic and complementary safety supervision mode in coal mines: a case of coal mining companies in China. Tehni?kivjesnik, 24(4), 1179-1186. doi.org/10.17559/TV-20170713143428

Hofmann, D. A., Burke, M. J., & Zohar, D. (2017). 100 years of occupational safety research: From basic protections and work analysis to a multilevel view of workplace safety and risk.

Liu, Q., Li, X., Qiao, W., Meng, X., Li, X., & Shi, T. (2017). Analysis of embedded non-safety regulation games in China's two types of coal mines through safety performance disparity, 1980–2014. Resources Policy, 51, 265-271. doi.org/10.1016/j.resourpol.2017.01.009

Lu, L., Jiang, H., Han, G., Ma, S., & Sun, R. (2017). Multi-criteria routing metric for supporting data-differentiated service in hybrid wireless mesh networks in coal mines. International Journal of Distributed Sensor Networks, 13(1), 1550147716689796.

Murray, G., Peetz, D., &Muurlink, O. (2017). Structuring Gender Relations Among Coal Mine Workers. In Women, Labor Segmentation and Regulation (pp. 119-136). Palgrave Macmillan US.

Oliveira, R., Camanho, A. S., &Zanella, A. (2017). Expanded eco-efficiency assessment of large mining firms. Journal of Cleaner Production, 142, 2364-2373. doi.org/10.1016/j.jclepro.2016.11.039

Reveley, J., & Singleton, J. (2017). Carbon copy: the mock bureaucratic setting of colliery explosions in early twentieth century Britain and at Pike River, New Zealand. Journal of Management History, (just-accepted), 00-00. doi.org/10.1108/JMH-07-2017-0037

Salvioni, D. M., Gennari, F., &Bosetti, L. (2016). Global Responsibility and Risks of Compliance Failure in Emerging Markets. In Risk Management in Emerging Markets: Issues, Framework, and Modeling (pp. 37-77). Emerald Group Publishing Limited.

Valluru, C. T., Dekker, S., & Rae, A. (2017). How and why do subcontractors experience different safety on high-risk work sites?. Cognition, Technology & Work, 1-10.

Vasin, A. A., Kozyreva, E. A., &Tyuleneva, A. S. (2017). Optimization of the occupational safety compliance control (OSCC) system at a coal mining enterprise. Journal of Computer and Systems Sciences International, 56(5), 810-817.

Worksafe.govt.nz.  (2017).  Hazardous Substances and New Organisms Act 1996 (HSNO Act) | Worksafe. Retrieved 25 November 2017, from https://www.worksafe.govt.nz/worksafe/information-guidance/legal-framework/hsno-act-1996

Wright, I. A., Belmer, N., & Davies, P. J. (2017). Coal Mine Water Pollution and Ecological Impairment of One of Australia’s Most ‘Protected’High Conservation-Value Rivers. Water, Air, & Soil Pollution, 228(3), 90.

Yakovleva, N. (2017). Corporate social responsibility in the mining industries. Routledge.

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