Operations & Maintenance

The cost of non-compliance is increasing—and it’s no longer limited to fines.

In 2024 alone, global regulatory fines reached a record high. Interestingly, most of these companies believed they were compliant, but their systems had become obsolete. Besides huge financial penalties, traditional approaches have resulted in operational shutdowns, loss of public trust and severe safety incidents.  

Regulatory bodies, including environmental and safety agencies, have intensified enforcement across sectors. The Environmental Protection Agency (EPA) monitors the manufacturing, mining and petrochemical industries. Governments worldwide are introducing stricter laws on sustainability, emissions and waste management.

But what are the consequences of noncompliance and how can how can organizations proactively address these potential consequences? This blog will cover real examples of progressive operations strategies to go beyond compliance and prepare for what’s ahead.

What Are the Consequences of Non-compliance

Manufacturers have faced heavy fines for emission violations or manipulating tests, while chemical and petrochemical players have incurred penalties for improper handling of hazardous waste. Mining companies have also been sanctioned for damaging cultural heritage sites and ecosystems. But the cost of non-compliance extends beyond compliance penalties. What’s bigger than that are the fatal consequences and risks to lives that are most common in sectors such as oil and gas.

The Hidden Burden of Traditional Compliance

Many facilities still depend on spreadsheets, disconnected systems and paperwork. These tools are inadequate for today’s complex and rigorous regulatory requirements because of the siloed nature of separate business functions (and their respective data). For example:

• Sustainability disclosures require real-time emissions tracking 
• Functional safety must be integrated into engineering controls
• Compliance documentation must always be audit-ready 

Spreadsheets, disconnected systems, and manual data inputs introduce the possibility of errors and a potential lack of visibility that would otherwise facilitate smarter decision-making. Crucial efficiencies are sacrificed when compliance teams are constantly struggling to keep up without automated systems.

How Can a Proactive Approach Help

Reactive compliance methods are costly. According to IBM Security, a tech-enabled approach can reduce violation risks by 76%. Progressive companies are moving toward systems that automate reporting, provide real-time data and proactively identify potential risks before incidents occur. Some real-world examples underline these benefits:

• By switching to automated platforms, Deepwater Subsea reduced compliance reporting time by 95%.
• PETRONAS cut operator alarm rates by nearly 90% and improved risk governance through a focus on operational excellence and implementation of Hexagon’s PAS PlantSuite solution.
• Biomass Industries Associates minimized transcription errors and improved team coordination by completing 80% of a major refinery design in one digital model using CADWorx®. 

What are its long-term advantages

Businesses that invest in advanced compliance methods today will benefit by increasing the resilience and agility of their operations while also enabling the kind of visibility and informed decision making that will keep them ahead of the game. These businesses typically see:

• Reduced operational disruptions
• Enhanced ESG requirements
• Strengthened stakeholder trust
• Improved operational resilience 

Predictive compliance, which involves predicting and addressing issues before they escalate, is becoming a key differentiator among industry leaders. Automation and AI can help companies understand how regulations affect their operations before they face penalties. Real-time monitoring tools give teams instant insight into risks, allowing them to take preventive action instead of reacting after an incident.

As compliance grows more integral to daily operations, cross-functional collaboration across teams becomes essential. Legal, operations, sustainability and supply chain teams must work closely to address regulatory complexity without slowing down the business.

Moving Forward

The rising cost of compliance is a new business reality. The only way forward is through strategic investment in automation, integration and continuous monitoring.

Companies that act proactively will not only be avoid costly penalties but also create safter workplaces and gain a competitive advantage in an increasingly regulated marketplace.

To learn more about how organizations like yours are leveling up amidst increasing compliance demands, read our e-book, ‘The Compliance Conundrum: How Industrial Facilities Can Stay Ready for What’s Next’.