Due Diligence and the practice of being on the good side of the law

After hours of brainstorming about what title would be appropriate for what I want share today, I settled for Due Diligence and the practice of being on the good side of the law.

For those who are not so clear on the exact meaning of due diligence, Google defines due diligence as “reasonable steps taken by a person to avoid committing a tort or offence”.

So here is the gist

Two weeks ago, I got a distress call from a friend who renders fumigation services to a big supermarket in Lagos. The State’s Environmental Protection Agency had paid a visit to their facility and a letter, sent to them to present the following:

  1. Environmental assessment report
  2. Evidence of environmental development charge paid
  3. Accredited certificate of their fumigator
  4. Picture of their solid waste receptacle
  5. Picture of their power generating set and diesel storage

The last three items posed no challenges but the first 2, they had no idea of!!! They had 2 days to report to the agency with the listed items. Unknown to them an environmental assessment report cannot be produced in 48 hours. An environment assessment helps to unveil the potential effects (positive and negative) certain activities would have on the environment. An environmental assessment in this situation, would look at every activity that ensures that the objectives of the business are met and outline the possible effects that each activity would have and ways the negative effects can be mitigated and controlled. Let’s look at this hypothetical bakery, Ethical Bakeries.

Ethical Bakeries is in the business of providing freshly baked gluten-free cakes, bread and cookies to cater to the sweet cravings of health-conscious people. Located in Ikeja, they have 10 staff members including a dispatch rider and security guard. The main activities carried out in a bakery include, among others:

  • Loading and unloading of raw materials and finished products
  • Storage of raw materials (flour, water, eggs, yeast, leavening agents, preservatives and other ingredients such as onions, herbs, olives, dried fruits etc.)
  • Preparation (mixing, shaping, placing in tins)
  • Baking (removing from tins, cooling, frosting, decorating)
  • Packing (slicing, wrapping, packaging)
  • Selling of products

The major environmental concerns associated with bakeries are:

  • Site selection
  • Solid waste
  • Waste-water
  • Noise
  • Odor and sanitary nuisances
  • Vehicular movement
  • Emissions and dust nuisances
  • Energy and water consumption

Based on the list above, an environmental assessment would look at the best way to manage each item to minimize the negative effects on the environment and comply with regulatory standards where applicable.

Know what to do, then do it RIGHT!

When people start making distress calls after been visited by regulatory bodies, one of two things cause it – not knowing to do in the first place or knowing what to do and intentionally trying to cut corners. This is common in Nigeria due to the weak institutions we have (this is a talk for another day). I always tell clients to seek to know what you are supposed to do then make sure you do it right. Ask questions, go to public offices and make necessary inquiries. It might seem weird but trust me, it’s the best thing to do in the interest of your business. There is no feeling as peaceful as knowing that no matter what regulatory body comes to your facility for inspections, you are always ready to tender every item they need, stress-free.  We all know that feeling of showing the road safety corps everything they ask for without the fear of being fined for non-compliance.

Going beyond compliance

Asides from being on the good side of the law and preventing fines and unnecessary legal issues, taking the extra steps to ensure that all activities have low negative impact on the environment and the people portrays a business as a responsible one. Doing the right thing solely for compliance purposes puts us under undue pressure because we would not be proactive and would most likely be making distress calls like my friend’s client. The hidden effects are lost work hours, unstable emotions among employees and disruption of business activities in some cases.

One may ask, “What does it take to move beyond compliance?”

Identifying what values guide you as a business. Understanding this will help to bring together the right team and cut out inconsistencies. When everyone puts their feet forward to do the right thing for the sake of it being the right thing to do, the path towards sustainability will be set clear.

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10 thoughts on “Due Diligence and the practice of being on the good side of the law

  1. Very insightful. I’d love to read more on moving beyond compliance as a topic in its own. I’ve always wondered in what possible ways does a small business affect our environment. This post has definitely provided a better understanding of what environmental sustainability is. Well done and thanks.

    Like

  2. Interesting piece. I like the ideology of being on the good side of the law and not stopping there. This is something every organisation/individual should be doing. Continuous improvement on processes and due diligence. Good work! Keep them coming.

    Like

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