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this page The Professional's Dilemma-How To Report Issues That May Affect Public Welfare By Craig Waldie, P.Geo., Senior Geologist, Ontario Securities Commission*A dilemma for professional geoscientists is how to report situations that they believe may endanger the welfare of the public. This article includes an outline of the reporting process, tips for making an effective complaint and information about the organizations to which professionals can turn to, depending on the nature of the concern. Duty to Report Under a professional association's code of ethics, professionals have obligations both to their client/employers and to the public. Occasionally, these obligations will be in conflict. On one hand, the professional is obligated not to disclose information of the client/employer and must avoid the use of such information to the disadvantage of the client/employer. On the other hand, failure to report a situation that a professional believes may endanger the welfare of the public would constitute professional misconduct on the part of the professional. Nevertheless, there should be no doubt as to how the professional must act. The professional shall regard his duty to the public welfare as paramount. Another key point is that a professional's obligations cannot be "contracted out of". Any contract in which a professional agreed to not report, no matter how necessary it seemed to be, would not be recognized as a legal contract. Responsible Disclosure Professionals must act out of a sense of duty, with full knowledge of the effect of their actions, and accept responsibility for their judgment. For this reason any process which involves "leaking" information anonymously is discouraged. There is a basic difference between "leaking" information and "responsible disclosure." The former is essentially secretive and selfish, with an apparent objective of revenge or embarrassment; the latter is open, personal, conducted with the interest of the public in mind and obviously requires that professionals put their names on the action and sometimes put their jobs on the line. First Step Initially, professionals are encouraged to raise their concerns with their employer/client in an open and forthright manner and jointly determine an alternative and acceptable course of action before reporting a complaint. Although there may be situations where this is not possible, professionals should attempt to resolve problems themselves as the first step in the process. In the rare case where a standoff is reached with the client/employer, the professional has a duty to take the next step. Reporting To Regulators Professionals have several reporting options available depending upon which is most appropriate for the particular concern. The following briefly explains the roles of various regulators, each of which has a formal complaint process. If resolution as outlined above is not possible, professionals may report situations to regulators or professional associations. Although each regulator or professional association has its own formal complaint process, the overall procedure is similar. Situations of concern may be reported by telephone, although it is best to report in writing. Professionals must be prepared to identify themselves and be prepared to stand openly behind their judgments if it becomes necessary. 1. The reporting professional will be expected to provide the following information: a) Name of the professional who is reporting the situation; b) Name(s) of the professional's client/employer to whom the situation has been reported; c) Statement of the professional's concerns, supported by any available evidence and the probable consequences if action is not taken. 2. The regulator or professional association will treat all information, including the reporting professional's name, as being confidential to the fullest extent possible. Although in some situations, personal information must be disclosed to other authorities. 3. The regulator or professional association will conduct a preliminary review and confirm the factual nature of the situation and determine whether further investigation is warranted. If formal proceedings begin, the regulator or association cannot comment on investigation matters or provide status reports until it becomes a public record. Provincial Securities Commissions When any company wants to raise money by selling its securities, it must follow the requirements of the Securities Act. Each provincial regulator is responsible for enforcing the Act and to protect the interests of shareholders in their respective provinces. If a public company is reporting in a number of provinces, the primary regulator is usually the province where the company is registered or has its principle place of business. Securities regulators can investigate and act against market misconduct by companies which may include, among other issues, market manipulation, misleading disclosure and failing to report information required by public companies. Each provincial securities regulator has a formal complaint process for issues that fall under its direct authority and has the power to impose sanctions on individuals and companies that breach securities laws. TSX, TSX Venture and Market Regulation Services Business practices and disclosure issues of any company listed on the TSX or TSX Venture are dealt with directly by the TSX or TSX Venture. Each exchange has the authority to investigate the conduct and disclosure practices of its listed companies and to investigate complaints regarding any breach of exchange requirements. Trading-related matters involving public companies are covered by Market Regulation Services Inc. (RS). RS is the independent market regulator for Canadian equity markets, including the exchanges, alternative trading systems, as well as quotation and trade reporting systems. RS regulates securities trading in real time on these marketplaces to ensure transactions are executed properly, fairly and in compliance with trading rules. RS has the power to investigate complaints regarding any breaches of trading rules or other exchange requirements and to take disciplinary action. Professional Association Geoscience is a regulated profession in virtually all of Canada and legislative acts restrict the practice of geoscience to individuals who are registered members of, and licensed by, self-governing professional associations. Each provincial association has Acts and regulations that require compliance with professional standards of competence and ethics and has disciplinary powers with respect to a breach of the Act and/or Regulations, including unskilled practice or a breach of the association's code of ethics. The legislation protects the public and investors by providing regulated associations with the power to admit only qualified persons, to encourage continuing professional competence, to discipline members for professional misconduct and to prevent unqualified individuals from practicing. Tips On Making An Effective Complaint The following are necessary actions to take when making a complaint: 1. Clearly define the problem and the desired outcome. 2. Write down the main points in the order that they occurred. 3. Note the name of the individuals, key dates and the circumstances surrounding the issue. 4. Put together a file of any supporting documents and include copies of agreements, background information and all relevant correspondence. Once the complaint process begins, document all the steps taken to get it resolved. This includes telephone conversations, e-mails and faxes. Keep a log of the times and dates of phone calls, who was spoken to and what was discussed. Communicate in writing as much as possible and keep copies of all correspondence. Summary Regulators and professional associations have a mandate to provide protection to the public and investors and ensure confidence and integrity in capital markets and will cooperate with any professional who reports a situation that may affect the welfare of the public. Wherever possible, the confidentiality of reporting professionals and the information they disclose will be maintained. The professional's duty to report is critical in providing regulators and professional associations with important information on potential issues affecting public welfare. *The views expressed in this article reflect my personal views and do not necessarily reflect the views of the Ontario Securities Commission or the staff of the commission. |
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