The public law will go further than financial reporting, the ASSE report notes, and require disclosure of a series of company operations, including those in safety, health and the environment. An organization will be required to report an operation that has a failure (safety, environmental or property) that may "significantly impact" the organization's financial soundness.
Among the recommendations, ASSE suggests that safety, health and environmental professionals discuss the law with senior management and legal counsel so that all parties are aware of what is expected. A legal opinion written by corporate counsel is also recommended along with writing, implementing and documenting communication structures detailing the corporate communication structure.
SH&E professionals with compliance responsibilities, the report notes, will be placed into the position of "navigating uncharted waters in regard to this act. There is little doubt that a series of legal proceedings will provide more frameworks for the reporting/disclosure requirements included in the Act. However, until this additional guidance is available it is incumbent upon all safety professionals to be aware of this Act and what potentially could play a very significant role in the practice of the profession."
The Sarbanes-Oxley Act of 2002 requires CEOs and CFOs subject to Securities and Exchange Commission (SEC) reporting requirements to meet stringent corporate accountability requirements that improve the quality of corporate financial reporting by reforming accounting practices and restoring investor confidence in the marketplace. In addition to establishing records retention requirements for audit papers, the law creates a new oversight board for accounting firms auditing publicly traded companies. It also addresses auditor independence, corporate responsibility at publicly traded companies, financial disclosures of publicly traded companies, and conflicts of interest of financial analysts.
The new law also creates protections for "whistle-blowers" applicable to private and public companies and imposes new criminal and civil penalties relating to fraud, conspiracy, and interfering with investigations. Under the Act's strong civil and criminal whistle-blower protection provisions companies must be prepared to defend their actions immediately if there is a claim. OSHA interim rules implementing Sarbanes-Oxley civil whistle-blower provisions were recently published in the Federal Register. The civil provision to protect a whistle-blower who reports corporate fraud allows for a right to job reinstatement, back pay and damages, and, the criminal provision makes it a felony to retaliate against a protected whistle-blower. The OSHA rules set up a stringent time frame for filing and responding to complaints.
The ASSE report titled 'Identification of Risks and Other Issues - Sarbanes-Oxley Act of 2002 Public Law 107-204' can be found at www.asse.org/prac_spec_cops_issues13htm.
