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Key Performance Indicators for the Regulation of Licensed Premises in Victoria 2011-2012

July 2011

Compliance Directorate Responsible Alcohol Victoria

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Notes


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Table of ContentsContents 3Introduction 4 Purpose of Responsible Alcohol Victoria 4 Compliance Directorate 4 Formation of the Victoriam Commission for Gaming 4

and Liquor Regulation Focussed inspection program for 2011/2012 5 Previous enforcement action 5 Off premises sales 5 Sporting clubs 6 Venues that close after 1am 6Metropolitan and regional compliance activities for 2011-12 6 Regional inspections 6 Metropolitan inspections 7 Definitionofinspection 7Special Projects 8 Directors’ initiative 8 Gaming venues 8 Pre-retail licences 8 Late night audit 8 Internet sales 9Key performance indicators (KPI) 9KPI 1: Number of inspections 9KPI 2: Strategic Regional Operations 10KPI 3: Enforcement actions 11KPI 4: Enforcement action taken 11KPI 5: Satisfaction 12 Random survey 12 Formal complaints 12Level of industry compliance 12Notes 12Summary table of KPI by category 13


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Introduction

Purpose of Responsible Alcohol VictoriaWithin the Department of Justice (DOJ), Responsible Alcohol Victoria (RAV) coordinates alcohol policy, administers the liquor licensing system, regulates the alcohol industry through risk-based compliance activities, and provides leadership across the Victorian Government on alcohol policy reform.

RAV’s key activities are:

• Developmentoflegislation,policy,andstandards to support improved alcohol management practices within Victoria

• AdministrationoftheVictorianliquorlicensingsystem and provision of support to the Director of Liquor Licensing in the performance of the statutory functions under the Liquor Control Reform Act 1998

• LiquorLicensingCompliancetosupplementVictoria Police operations in enforcing Victoria’s liquor laws

• Stakeholderengagementandprovisionofeducation and training

• ProvisionofinformationandadvicetotheMinister and the Department; and

• ProvisionofsecretariatsupporttoarangeofIntergovernmental and Ministerial committees concerned with ensuring the responsible use and supply of alcohol.

Compliance DirectorateThe Compliance Directorate’s key function is to ensure all licensees supply liquor to the community responsibly and in accordance with their mandated accountabilities. This is achieved through widespread inspections across the state with an enforcement response that is professional, proportional,firmandfair.

Many Victorians and visitors to our state responsibly consume alcohol each day.

Whether in pubs, clubs, restaurants, nightclubs, bottle stores or other venues, liquor and its allied industries employ tens of thousands of Victorians. However, as alcohol is a drug, it is appropriate for the state to regulate its distribution. This is the task of the liquor licensing system, of which a major objective is to minimise harm arising from the misuse and abuse of alcohol.

A substantial aspect of the Department’s response is the deployment of compliance inspectors1 throughout the regions. The majority of the compliance inspectors are located in the Southern Region and are responsible for delivering compliance and enforcement outcomes throughout metropolitan Melbourne and supporting regional inspectors when required. The remaining inspectors are located throughout Victoria in the fiveruralregions,namely:

• BarwonSouthWest

• Gippsland

• Grampians• Hume• LoddonMallee.

Formation of VCGLRIn 1 January, 2012, RAV will integrate with the Victorian Commission for Gaming Regulation (VCGR), forming a new regulatory body known as the Victorian Commission for Gaming and Liquor Regulation (VCGLR). Integration will be preceded by a physical relocation of some RAV teams to North Richmond in late 2011, with some policy and strategic functions to be retained within the Department.

The VCGRL’s Vision and Mission will be developed as part of the integration process from January 2012 onwards.

1 For this document, the term ‘compliance inspector’ includes complianceofficer.

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Focused inspection program for 2011-12Inthe2011-12financialyear,RAV’stargetfor inspections, compliance monitoring and enforcement activities will continue at 16,000.

This year’s inspection program is based on the following two principles:

Targeted Inspections: the law should operate to restrain those who are most likely to cause harm, rather than unreasonably restricting the licensees who act responsibly.

Enforcement: vigorous enforcement will act as aspecificdeterrenttothosewhomightbreakthelaw,butalsoprovideconfidencetotherestofthecommunity.

Previous enforcement actionThe Compliance Directorate aims to ensure that enforcement action results in a positive effect.

It is therefore important to follow up on previous actions and visit premises that were the subject of enforcement actions, i.e. premises that have received a written warning, infringement notice, enforceable undertaking, or are subject to a criminal investigation or disciplinary proceeding.

Premises that have participated in risk management discussions will also be followed up on to ensure that agreements between licensees and the Director Liquor Licensing are adhered to.

The focus of 2011-12 enforcement action is with the non-compliantlicencesidentifiedin2010-11.Thesevenues will be re-inspected throughout 2011-12.

Off premises salesOff premises sales account for the majority of liquor sales2 in Victoria. The majority of these sales occur in bottle shops as opposed to hotels and other licences allowing for off premises sale. The focus of enforcement action will be on packaged liquor sales from packaged liquor, general and limited licences as there is a clear link between packaged liquor outlets and harm to the community in suburban areas3.

Throughout2010-11financialyear,significantfocus was undertaken on licences allowing off premises sales. Evidence from this inspection program indicated that licensees with an off premises component, although improving, still require further inspection activities.

Withlicenseeexpectationsnowfirmlyset,those that have not improved from the previous financialyearwillbedealtwiththroughmoreonerous enforcement actions, such as enforceable undertakings and disciplinary actions.

These premises will be inspected at least twice during 2011-12.

2 Victorian Government, 2009, Liquor Control Reform Regulations: Regulatory Impact Statement, Department of Justice

3 Livingston, M., 2008, ‘A longitudinal analysis of alcohol outlet density and assault’, Alcoholholism: Clinical and Experimental Research, Vol.32, No.6


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Sporting clubsThereisnospecificlicencecategoryforsportingclubs where liquor is sold. ‘Sporting Clubs’ is aimed to capture licences in the full club, restricted club or limited licence categories and whose premises name contains a sport name, e.g. football, netball, bocce, skiing, etc.

Clubs play an important role in community life and social gatherings. The Compliance Directorate recognises that generally, volunteers operate small sporting clubs. Volunteers need to be encouraged however, having a licensed premises run by volunteers raises some unique issues for licence holders. Sporting clubs supplying alcohol are required to meet their licensing responsibilities under the Act.

Throughout 2010-11 a broad based inspection program of club licences was undertaken and it became apparent that sporting clubs are an area requiring greater focus. Generally, sporting clubs are struggling to comply with their obligations under the Act.

In recognition of the ‘unique nature’ of sporting clubs, the process of enforcement will be based upon an educative approach and the use of enforceable undertakings is encouraged.

This does not mean inspectors are to lessen the enforcementresponsetoidentifiedbreachesbutconsider the use of enforceable undertakings as the firstoption.Ofcourse,inspectorsmaystillissueinfringement notices or take other actions as required.

Venues that close after 1amIn 2010-11, the Compliance Directorate undertook inspectionsofvenuestradingafter11pm.Buildingon intelligence gathered through this program, the Compliance Directorate will further focus their activities to monitor venues at various closing times throughout 2011-12.

This is particularly the case with venues that may close at 1am and act as a ‘feeder’ for venues that trade well into early hours. These premises must be inspected at least twice during 2011-12. Venues that close at 1am or later will be a focus for the Compliance Directorate. This does not include venues closing after 1am that hold a restaurant and cafe licence.

Metropolitan and regional compliance activities for 2011-12There is no differentiation in the application of the Act across Victoria however, there are some differences between metropolitan activities and regional activities.

Regional inspectionsTo assist with inspections in regional Victoria, regional compliance inspectors will be deployed to local government areas and are to inspect all venues within the area (with exception of restaurant andcafelicences,BYOpermitsandvigneron’slicences). To support this process, regions are required to coordinate their activities with Local Government Authorities and Victoria Police to ensure liquor licensing issues are dealt with effectively. At the conclusion of inspections within each area, compliance inspectors will be required to submit a report to the local council and Victoria Police detailing premises inspected and whether anybreacheswereidentified.Thisdocumentistobemarkedconfidentialandnotforpublicrelease.

It is recognised that not all local government areas will be visited by regional compliance inspectors. Departmental Local Area Managers are required to determine the relevant local government areas to be visited by the compliance inspectors.

Considerations for determining which local government areas are to be visited by regional compliance inspectors include:

• numberoflicensedpremisesinlocalgovernment areas

• localgovernmentareaswithknownnon-compliance history

• localgovernmentareasthathaveahighernumber of venues that are most likely to cause harm, including packaged liquor licences, on premises licences (excluding cafe andrestaurantlicences,BYOpermitsandvigneron’s licence) and general licences; and

• localgovernmentareaswithahighnumberofclub licences.

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Regardless of the local government areas chosen by Local Area Managers, all premises relating to the focussed inspection for 2011-12 MUST be inspected within that area.

In determining regional inspection programs,

the following inspection numbers are to be met by regional inspection teams in 2011-12:

• BarwonSouthWest-1,100

• Gippsland-1,100

• Grampians-1,100

• Hume-1,100;and

• LoddonMallee-1,100.

Outside of the local government area approach for regional inspections is the requirement that all venues with previous enforcement action from 2010-11 must be inspected.

The following number of venues with previous enforcement action are to be inspected in 2011-12:

• BarwonSouthWest-27• Gippsland-56• Grampians-37• Hume-30;and• LoddonMallee-22.

Metropolitan

The metropolitan Compliance Directorate including Southern, Eastern and North Western Regions of the Department of Justice have the highest concentration of licensed venues in Victoria.

The Compliance Directorate in this region will conduct 10,500 inspections in 2011-12. 434 venues with previous enforcement action in metropolitan Melbourne will be inspected.

Definitionofinspection

To assist with compliance activities, the following definitionsareprovided:

Inspection - an inspection is not limited to physical attendance at licensed premises, it may also include inspections conducted on the business practices adopted by the licensee and may involve an inspection of documents. Inspections also include re-attendances for follow up checks, external and internal observations, risk management discussions and records of interviews conducted at the premises.

Physical inspection - attendance at the licensed premises and an inspection carried out with the licensee, reviewing the conditions and operation of the licence.

Observations - these are also included as an ‘inspection’. They include external or internal observations (unannounced to licensee) to gather evidence or intelligence.

Risk management discussion - conversations held between licensees and compliance inspectors where nobreachhasbeenidentifiedbutwhereasignificantriskisidentifiedthat,ifnotrectifiedcoulddevelopinto an issue of non-compliance.

Premises closed - if the premises is closed this is not to be included as an inspection. However, where a premises is no longer trading, it can be included as an inspection and a report needs to be prepared to the attention of the Director of Liquor Licensing to advise of the premises closure.

Compliance inspectors may wish to record other activities as an inspection. However, prior to doing so approval must be sought from the Compliance Manager. Approval must be recorded intheinspectionfile(s)includingthedateandtimeapproval was provided.

Where the Compliance Manager’s directs particular action to be undertaken, approval will form part of the brief given to the compliance inspector prior to the commencement of inspections.


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Special Projects

Directors’ initiativeIn 2010-11, the Compliance Directorate completed an inspection of all body corporate licence holders. TheprogramensuredthatallDirectorsofBodyCorporate licences have sought appropriate approval from the Director of Liquor Licensing. This ensured that the appropriate people involved in the liquor industry are not hiding behind a ‘corporate veil’.

On completion of phase one of this program, the intelligence gathered in partnership with other regulators at both a Federal and State level, further investigation will be undertaken in 2011-12 to ensure the integrity of the licensing regime is maintained.

The metropolitan Compliance Directorate will coordinate this program with all inspections included in the 10,500 inspections for this region.

Gaming venuesIn response to the integration of the gambling and liquor functions within the Department, all Victorian gaming venues will be inspected in a joint operation between RAV and the Victorian Commission for Gambling Regulation prior to 31 December 2011. As of 9 May 2010, there are 515 venues that holdboth a liquor licence and a gaming licence. The metropolitan Compliance Directorate will coordinate this program. These inspections will be included in the 10,500 inspections.

Pre-retail licencesInthefirsttwoyearsofoperation,theComplianceDirectorateidentifiedthatricewinecanbepurchased from stores that do not hold a liquor licence. This has raised concerns with the ability of minors accessing alcohol in similar circumstances to vanilla essence (prior to amendments to the regulations governing liquor supply).

Whilst actions are taken against those retailers supplying liquor without a licence, the Compliance Directorate will be working with Federal agencies and using information gathered through the inspection processes to identify wholesale providers of these products.

The metropolitan Compliance Directorate will coordinate the program. These inspections will be included in the 10,500 inspections.

Late night auditA number of large capacity nightclub venues throughout Melbourne and regional centres have beenidentifiedashavingthepotentialforalcoholrelated harm.

The Compliance Directorate will audit late trading venues with large capacities to ensure that licensing and security conditions are appropriate to protect patrons and the broader community.

The program will be coordinated by staff from 121 Exhibition Street, Melbourne and will require regional staff to undertake targeted audits. These inspections are to be included in the regional inspections targets.

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Internet salesThere are 407 licensees with the ability to sell liquor over the internet. Historically, the Compliance Directorate have prosecuted and taken other enforcement actions against internet sellers for failing to adhere to the Act. These enforcement actions have been related to the supply of liquor to minors, licence ‘lending’ or for supplying liquor not in accordance with the licence.

Throughout 2011-12, a full audit and random test purchases will be conducted to ensure licensees arefulfillingtheirobligationsandthatthosesellingliquorwithoutalicenceareidentifiedandprosecuted, where necessary.

The metropolitan Compliance Directorate will coordinate this project. These inspections are to be included in the 10,500 inspections.

Key performance indicators (KPI)

KPI 1: Number of inspections The Compliance Directorate is expected to complete 16,000 inspections in the 2011-12 financialyear.

It is assumed there will be peaks and troughs throughouttheyear.BarwonSouthWest-1,100

• Gippsland - 1,100• Grampians - 1,100• Hume - 1,100• Loddon Mallee – 1,100; and• Metropolitan Compliance Directorate –

10,500.Note:thefinalfigurehasanacceptancerate of +/- 5 per cent.


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KPI 2: Strategic Regional OperationsAlthoughpriorityareashavebeenidentified,itis recognised that there are unique operational matters that arise for compliance inspectors across Victoria.Thiswillrequirespecificresponsesforoperations in regions to address events that present a risk to the responsible service and consumption of alcohol.

These events may be related to sporting events, such as horse racing or local community festivals.

To support the need to address late night trading venues and sporting clubs, regional compliance inspectors are required to conduct at least three strategicoperationsspecificallyfocussingonlatenight venues closing at or after 1am and three strategic operations focussing on sporting clubs operating on weekends. Other strategic operations are to be determined as required. However, at least 10 regional operations (including those listed above) must be completed.

It is also expected that compliance inspectors will continuetoshowinitiativeinidentifyingspecificproblems with the various licensed premises and issues of non-compliance and develop strategic solutions to address these matters.

As these operations will be unique to individual regions they will require detailed operational planning that will be presented and authorised to Local Area Managers (LAMs) of the relevant Department of Justice regions.

It is the responsibility of compliance inspectors to calculate the appropriate resources from within the Department of Justice and external partners, including Victoria Police and Local Government Authorities.

The following number of strategic regional operations is required to be completed as a minimum:

• Southern-25

• BarwonSouthWest–10

• Gippsland–10

• Grampians–10

• Hume–10;and

• LoddonMallee–10.

At the completion of all strategic regional operations, a memorandum is to be submitted to LAMs and the Compliance Manager within Responsible Alcohol Victoria.

If the operation is conducted over more than 5 workingdays,abriefingmemorandummustbesubmitted to LAMs and the Compliance Manager, Responsible Alcohol Victoria, on every 5th working day of the operation.

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KPI 3: Enforcement actions There are a number of enforcement options available to compliance inspectors. The following measurements apply from the moment the offence is detected:

3.1 Criminal prosecution 75 per cent recommended to VGSO within 4 months.

90 per cent recommended to VGSO within 6 months.

100 per cent initiated within 12 months.4.

3.2 Disciplinary action 75 per cent recommended to VGSO within 3 months.



3.3 Enforceable undertaking 80 per cent of enforceable undertakings recommendedtotheVGSOfinalisedwithin 2 months.

100 per cent of the enforceable undertakings recommendedtotheVGSOfinalisedwithin 4 months.

3.4 Infringement notice 80 per cent recommended to team leader within 14 days of the offence being detected.

100 per cent recommended to team leader within 21 days of the offence being detected.

Note: KPI for the timelines of internal reviews will be based on statutory requirements of the Infringements Act, namely completion within 90 days of application.

3.5 Written warnings 80 per cent recommended to team leader within 1monthofthematterbeingidentified.

100 per cent will be re-visited within 3 months to ensure the action plan is being adhered to.

3.6 Risk management discussion 80 per cent recommended to team leader within 1monthofthematterbeingidentified.

100 per cent will be re-visited within 3 months to ensure the action plan is being adhered to.

3.7 No action 98 per cent determined on day of inspection. 100percentfinalisedwithin7days.

KPI 4: Enforcement action takenAny enforcement action undertaken by compliance inspectorsisasignificantpublicstatementandthe implications for licensees are substantial. To maintaintheconfidenceofthepublicandtheliquorindustry the quality of the actions undertaken by RAV are set at a high level:

4.1 95 per cent of all criminal prosecutions resultinafindingofguilt.

4.2 85 per cent of all disciplinary hearings result in successful outcome (lower burden of proof).

4 This does not include prosecutions resulting from the issuing of an infringement notice


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KPI 5: Satisfaction Satisfaction of the inspection process needs to be proportionate and measured, as it can provide useful insights into procedural improvements and confirmtheactivitiesofthecomplianceinspectors.

ThemeasuresofsatisfactionaresplitintofiveKPIs:

5.1 At a minimum 100 per cent of inspectors behave appropriately and with courtesy when dealing with licensees or venue representatives.

5.2 100 per cent of inspectors identify themselves before commencing a physical inspection.

5.3 75 per cent of all licensees subject to an inspection receive an outcome report of the inspection within 7 days.

100 per cent within 14 days.

5.4 100 per cent of written complaints about licensed premises are contacted within 14 days.

5.5 85 per cent of valid complaints about inspectorsarefinalisedwithin21days.

100 per cent within 2 months.

Level of satisfaction is to be reported in terms of process not outcome.

To establish the satisfaction aspect of compliance inspector’s performance, a staged approach will be used to determine satisfaction, as follows:

Random surveyThe Compliance Manager within RAV will conduct a random audit of inspected premises throughout Victoria to establish the level of satisfaction of the inspection process (as distinct from the outcome of the inspection).

Formal complaintsSatisfaction will also be measured by the number of formal complaints received by the Compliance Manager within RAV. All formal complaints against the Compliance Directorate must be lodged in writing. For the purposes of the complaints process a complaint by e-mail is considered to be in writing.

The RAV complaints process will be followed and prior to reporting, a complaint will be determined as either a valid or non-valid complaint.

All complaints will receive a written response.

Level of industry complianceThe level of compliance within the industry will not be measured by the number of enforcement actions undertaken as this may develop a concept of quotas rather than developing a culture of compliance in the industry.

The number of enforcement outcomes will be reported on a yearly basis.

The number of internal reviews requested for infringement notices and the general outcomes will be reported twice a year.

NotesThis document does not bind the Compliance Directorate or its employees. The Compliance Directorate retains the right to deviate from this document in accordance with operational needs and on approval or request from executive management of RAV, regions or the department.

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Summary table of KPI by category

KPI 1: Number of inspections

1.1 Barwon South West

1,100

1.2 Gippsland 1,100

1.3 Grampians 1,100

1.4 Hume 1,100

1.5 Loddon Mallee 1,100

1.6 Metropolitan 10,500

KPI 2: Strategic Regional Operations

2.1 Operations to be approved by regional management

Metro (Southern) - 25BarwonSouthWest–10Gippsland – 10Grampians – 10Hume – 10Loddon Mallee – 10

2011-12 financialyear

KPI 3: Enforcement actions

3.1 Criminal prosecution 75 per cent of criminal prosecutions recommended to VGSO within 4 months.

90 per cent of criminal prosecutions recommended to VGSO within 6 months.

100 per cent of criminal prosecutions to be initiated within 12 months.

On-going


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3.2 Disciplinary action 75 per cent of disciplinary action to be recommended to VGSO within 3 months.

90 per cent of disciplinary action to be recommended to VGSO within 6 months.

100 per cent of disciplinary action recommended to VGSO within 12 months.

On-going

3.3 Enforceable undertaking 80 per cent of enforceable undertakings recommended to VGSO within 2 months.

100 per cent of enforceable undertakings recommended to VGSO within 4 months.

On-going

3.4 Infringement notice 80 per cent recommended to team leader within 14 days of the offence being detected.


On-going

3.5 Written warnings 80 per cent recommended to team leader within 14 days of the offence being detected.


On-going

3.6 Risk management discussion 80 per cent recommended to team leader within within one month ofmatterbeingidentified.

100 per cent will be re-visited within three months to ensure the management plan is being adhered to.

On-going

3.7 No action 98 per cent on day of inspection.

100 per cent within 7 days.

On-going

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KPI 4: Enforcement action taken

4.1 Criminal prosecutions At a minimum 95 per cent of all criminal prosecutions result in afindingofguilt.

On-going

4.2 Disciplinary hearings At a minimum 85 per cent of all disciplinary hearings to result in successful outcome (lower burden of proof).

On-going

KPI 5: Satisfaction

5.1 Courtesy of inspectors At a minimum 100 per cent of inspectors behave appropriately and with courtesy when dealing with licensees or venue representatives.

On-going

5.2 Inspector identification 100 per cent of inspectors identify themselves before commencing a physical inspection.

On-going

5.3 Outcome reports 75 per cent of all licensees subject to an inspection receive an outcome report of the inspection within seven days.

100 per cent within 14 day.

On-going

5.4 Written complaints about licensed premises

100 per cent of written complaints about licensed premises are contacted within 14 days.

On-going

5.5 Valid complaints about inspectors 85 per cent of valid complaints aboutinspectorsarefinalisedwithin 21 days.

100 per cent within 2 months.

On-going

Responsible Alcohol VictoriaGPO Box 4304

MELBOURNE VIC 3001

Telephone 1300 650 367Website www.justice.vic.gov.au/alcohol

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