A remedial action is an undertaking to correct a problem or issue. Such actions can be done as part of a voluntary compliance program, with a person or company making changes to address an issue of concern without being specifically asked. In other cases, people are ordered to fix a problem, usually by regulatory agencies, and must complete a remedial act within a set time period in addition to facing penalties like fines.
One example of a remedial action is environmental remediation. When the environment becomes polluted as the result of business activities or other events, it must be cleaned up for safety and welfare. If the culprit can be identified, it will be tasked with taking remedial action or applying for financial assistance if it cannot pay for the cleanup. In other cases, government agencies step in to handle cleanup.
Other remedial actions can include recalls of defective products for repair or replacement, correction of inaccurate financial records, and changes to company policies considered to be violations of the law. The action is corrective in nature and is intended to fix a problem that has been identified, whether internally or externally. Sometimes, remedial action is intended to prevent legal penalties, such as fines for not keeping accurate records.
When companies are proactive about a remedial action and engage in this activity to protect health and safety before regulators step in, they may promote their activities, using them to show that they care about customers and are committed to fixing problems. Public relations departments will try and put a positive spin on an event like a recall to avoid problems like customer dissatisfaction or erosion of consumer confidence. When companies lag their heels on addressing a problem and are ordered to do it by government regulators, they tend to downplay the event as they do not want the general public thinking poorly of them.
Remedial actions can be triggered by issues identified by company personnel, consumer complaints, or problems identified by inspectors and regulators. They can be very costly, and companies take steps to avoid them as much as possible, ranging from very strict testing and quality control to prevent problems to strong defenses in liability suits to avoid being forced to undertake expensive product recalls. People who purchase products subject to remedial action should be aware that the company bears the responsibility for correcting the problem and replacing the product or providing compensation.