Compliance has to be one of those terms that goes straight into the ‘boring’ pot for 99 percent of us, yet it stands as the dividing line between a Wild West nation where anything goes and rules are for losers, and a fairer and more just society, where the law protects the masses from wrongdoing and exploitation.
Which makes compliance a really big deal for Kenya, and something we have generally been poor at. Our downfall is two-fold. The first big hurdle is that it is relatively easy to make a law or regulation. For sure, there are costs involved in all that drafting and meetings and public consultations. But ultimately making a rule costs far less than enforcing a rule.
As a result, examples abound in every single sphere of rules made, but issued without any monitoring or enforcement apparatus at all, or with inadequate ones.
The second hurdle is that age-old issue of graft: you can have a whole department checking industrialists, or bank transfers, or gas canisters, or any other regulated thing, but if they can be ‘encouraged’ to turn a blind eye to breaches, then you still have no rule in place.
Yet, we are genuinely seeing spots of light around enforcement. This week, the Central Bank of Kenya announced it was sending out an undercover consultant to find financial products being sold in ways that breached its regulations. The consultant will be posing as a consumer and seeking to sign up for loans and other products for the next 12 weeks.
But the regulated don’t know which banking halls he or she will be walking into, and that can focus a lot of minds on whether their products comply – in a situation where the penalty is lost licences, lost directorships, fines for the company and fines for staff, too, who handle rule-breaking products.
Now, imagine if we had any similar approach to all the other areas that regularly kill, maim, cost or hurt us?
We hear, periodically, of pharmacists being raided to root out fake drugs, yet such raids barely seem to have recorded a blip on the radar for those trading in counterfeit drugs.
The issue could be the penalties. The government had promised much stiffer penalties for unregulated pharmaceutical sales, and finally came out this year with fines that have been raised to Sh370,000 for illegally operating a pharmacy business. We have seen rounds of inspections that have closed more pharmacies, too. But look at the track record.
In January of this year, 49 pharmacies in the Coast were taken to court and charged fines of between Sh10,000 and Sh60,000. Now, think about a common antibiotic, which can go for more than Sh2,000 a box — so, sell five to 30 of those, on some fake basis where the cost is way lower and that fine is covered.
On this basis, fines of even several hundred thousand don’t look like much of a deterrent when they can be covered with relative ease by the illicit earnings.
Moreover, the contrast with banking suggests that our protection still gets structured in a pecking order defined by privilege.
If a bank mis-sells you a loan, they can be fined Sh5 million. But if a pharmacy gives you drugs that means your 10-year-old isn’t getting treatment at all, but is fighting tick fever, or malaria, or pneumonia alone at the possible and even probable cost of their life, then the fine is not even 1/13th as much.
More monitoring
Now, any pharmacist willing to kill men, women and children to make a fast buck, is already lost to humanity. So maybe a monster penalty wouldn’t deter — they say psychopaths have no fear.
But as the CBK now shows us how little monitoring is truly needed to achieve compliance, if backed by huge penalties, it’s a lesson we should take further.
We aren’t ever going to have the government budget for massive teams of monitors, but we can employ a few backed by Armageddon, and see then how the rule-breaking evolves.
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Note: The results are not exact but very close to the actual.
