The seat belt latch switches and passenger seat pad sensor Steven refers to are run "closed loop" and return different resistances to the airbag controller if a seatbelt is latched or a seat is occupied. Either will set the SRS light and register a fault code if it becomes disconnected from the controller. The controller then makes some worst case assumptions to continue to protect the car's occupants. For example, if the seat pad sensor goes bad, it assumes someone may be in the passenger seat and will also deploy the passenger airbag in a collision.
You probably don't have to worry about a bad seat belt latch switch on a 316i as I think that those were/are an addition for the North America market. NA cars have to also protect people who don't wear their seat belts.
A dealer can read out what is setting the SRS light using the BMW MoDiC or DIS tester. My dealer will do that for free as a public safety gesture and to bring in more business.
I hope that answers your question.
Out of curiousity what year and market is your Compact?
EDIT: I am slowing down in my old age: Steven beat me by one minute! | 
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