Stay compliant with better information management solutions

Stay compliant with better information management solutions Construction is currently “one of the most highly regulated industries in the country from the perspective of both the industry and its clients.”[1] The industry is serious about compliance with those regulations too. The Australian Building and Construction Commission (ABCC) has the power to impose severe penalties on non-compliant companies, and investigates even in the absence of any specific complaint.[2]

This makes compliance more than just a matter of only gathering documentation when something goes wrong – it necessitates maintaining an audit trail at all times. This is complicated, however, by the information management practices of typical companies. Paul Wilkinson explains in his in-depth publication on construction collaboration technologies: In traditional paper-based construction projects, the project team may have exchanged literally thousands of pieces of information, including estimates, schedules, contracts, meeting minutes, change order, RFIs, CAD drawings, submittals, maintenance manuals, correspondence, faxes, memos and email. Some will now exist in paper form, some will be on computers; some may be stored in archive boxes or filing cabinets, others may be stored on computer disks, CDs, removable hard-drives or tapes. The information may be spread across several different organisations involved in the delivery of the project…[3]

When information is fragmented in this manner, compliance can be a very difficult endeavour. Even if a company keeps all its data in one place, under-resourced indexing can make it difficult for staff to know how to search for what they want. This also elevates the cost, time, labour and complexity of document discovery in the event of civil or criminal litigation.

Another important compliance consideration is document retention requirements. Distinct from the practice of good information management during projects, retention requirements demand that companies keep physical copies of certain documents for at least seven years (for items relevant to the Fair Work Act 2009) and up to 20 years (for patents). Sentencing schedules must then be set up to ensure that documents are destroyed once the required retention period ends, both to prevent money being spent on unnecessary storage and, in the case of human resources documentation, to maintain compliance with the Privacy Act.

However, in much the same way as it impedes searching, poor indexing causes issues when it comes to defining document destruction dates. Most companies are aware of where their retention obligations end, but are unwilling to commit to sentencing schedules because of uncertainty over what their archives contain – especially if those archives date back to the pre-digital era. From a liability perspective, the relatively small cost of ongoing storage is more than justified by the possibility that an arbitrary sentencing mechanism might accidentally destroy something important. They could audit the archives themselves, of course, but the time- and money-consuming task of going through them would require a financial investment equivalent to the cost of decades of static storage.And yet, the price of years of unmanaged storage adds up. Wilkinson cites the 2004 example of Arup, a multi-disciplinary consultancy that, over 70 years of project work, “had accumulated more than 100,000 archive boxes, with an index held in 150 lever-arch files, and over 650,000 drawings held on microfilm,”[4] much of which was likely no longer legally relevant nor of any historical interest. If the company was storing their boxes in-house, they would have been paying for it through the opportunity cost of poorly optimised real estate. If they were using a third-party storage solution, they would have been committed to an unnecessarily large storage contract.

Situations like this are still common in construction, and in other industries that deal with large volumes of information assets.
Engaging a good third-party information management solution immediately simplifies compliance by making documents easier to find so they can be quickly handed over to regulatory authorities or in-house lawyers. These companies are conscious of the evolving legislative environment and can keep track of stored information over time, setting up retention and sentencing schedules that ensure destruction occurs when documents reach the end of their lifespan. They can also assist with proof of compliance by providing certificates of destruction.        The benefits of better compliance in the highly regulated construction industry become particularly evident during an official audit when more effective indexation can save companies a considerable amount of money. This is especially true if lawyers have to be retained.

Additionally, having an information management partner paying close attention to sentencing schedules means that documents are less likely to occupy costly shelf space – both in-house and off-site – which dramatically reduces information storage overheads.Finally, accurate retention and destruction calendars help ensure archives comply with the Privacy Act and reduce the risk of costly litigation down the track. Find out more in Grace’s FREE in-depth information management report for government agencies – available exclusively at www.grace.com.au/information/construction

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[1] Housing Industry Association, Housing Australians – Increasing Australia’s Future Prosperity Discussion Paper – 5 year Productivity Review, (December 2016) p.16.[2] https://www.abcc.gov.au/compliance-and-enforcement/how-we-investigate/what-expect-investigation[3] Wilkinson, P., Construction Collaboration Technologies: The Extranet Evolution, Taylor & Francis, Oxford, United Kingdom (2005) p. 119.[4] Wilkinson, P., Construction Collaboration Technologies: The Extranet Evolution, Taylor & Francis, Oxford, United Kingdom (2005) p. 122.