Smart regulation relevance re-affirmed (EU Council)

EU presidencies are influential in nudging agendas and conclusions of the European Council, though of course official texts represent the consensus. The press release (see section page 11 and text of conclusions) published yesterday (30 May 2011) following the Competitiveness Council puts smart regulation back right at the top of the agenda, from which it had seemed to decline in recent presidencies. Council recognises the success of better regulation and asks that MS "move up one notch" and "systematically apply smart regulation principles throughout the EU policy-making process."
The Council adopted conclusions on "smart regulation", underlining, among other elements, the continuous need of reducing administrative burdens for businesses to what is strictly necessary, in order to allow them to work and compete more effectively. Ministers also put emphasis on the need to establish mechanisms which would allow the Council to conduct impact assessments. In particular, the conclusions provide with orientations, addressed to the national governments, the European Parliament and the European Commission, for:
– improving the implementation and enforcement of existing EU legislation;
– ensuring high quality of new legislation through impact assessments, simplification and reduction of unnecessary administrative burdens, in particular for SMEs; and
– making EU law more clear, easily understandable and accessible to all citizens.
In addition, Member States backed the Presidency’s proposal on easing the financial reporting burden of micro-entities and adopted conclusions on 12 concrete actions of the Single Market Act, but could not reach an agreement on the creation of the European Private Company (see presidency press release).

US RR programme publishes results

Today the media (ex Bloomberg) are giving great coverage to the announcement  by the White House of the outcome of the review launched  by President Obama in January, with a view to "create a 21st-century regulatory system – one protects public health and welfare while promoting economic growth, innovation, competitiveness, and job creation. His Executive Order on Regulation, in short, said the following: Always consider costs and ways to reduce burdens for American businesses when developing rules; expand opportunities for public participation and public comment; and ensure that regulations are driven by real science." As a result of that review, more than two dozen agencies have identified initiatives to reduce burdens and save money. The agency plans are now available on the White House site, special portal for Regulatory Reform.

Single Market Act to usher in new growth

The European Union Single Market Act (SMA) was signed on 13 April,  concluding a process launched in 2010 with the Monti report aimed at revitalising the European Internal Market, a vast space of free movement of goods, services, capital and people. The SMA offers a series of measures to boost the European economy and create jobs. The whole project can be said to be an implementation, on a continental scale, of the better regulation principles. Since 1992, the Single Market has brought tremendous econimic and social benefits. But making possible free movement requires deliberate action on amending national legislations and introducing simpler administrative procedures. The European market is still not fully integrated. Pieces of legislation are missing, and administrative obstacles and deficient enforcement leave the full potential of the Single Market unexploited. The SMA, which is based on 12 projects to "relaunch the Single Market", is supposed to open the doors to new, greener and more inclusive growth. The twelve instruments of growth, competitiveness and social progress range from worker mobility to SME finance and consumer protection, via digital content, taxation and trans-European networks. Their aim is to make life easier for everyone on the Single Market: businesses, citizens, consumers and workers (see IP/10/1390, EC press report.)

Improving the regulatory environment for business is specifically target as one of the 12 projects: companies are hoping that doing business in the Single Market will be made easier and that fewer resources will be lost on regulatory and administrative constraints. To promote such change, the Commission is proposing a simplification of the accounting Directives as regards financial reporting obligations, and a reduction of the administrative burden, especially for SMEs.

How well is EU law implemented?

An answer to that question is given by the European Commission itself, which regularly publishes interesting data summarizing MS efforts to transpose EU directives, and pinpointing gaps or delays. This action is publicised as an additional stimulus to MS to comply. In its most recent monthly package of infringement decisions, the Commission informs the public that it is pursuing legal action against each of the 27 Member States for failing to comply properly with their obligations under EU law. These decisions cover many sectors. They aim at ensuring proper application of EU law for the benefit of citizens and businesses. The Commission has taken 320 decisions, including 6 complaints taking Member States before the European Union's Court of Justice. In this package, 1 decision relates to failure to respect a previous Court ruling and might imply financial penalties. The most prominent cases are listed in a table giving links to each individual item, with the corresponding press release. It shows that the poorest area is Transport. Those interested can check out the specifics, which are are most often quite technical, as seen from an example: one decision concerned, the Commission requests France to align safety standards of hoods for protection of fire-fighters, and rejects a French objection that the European legislation is not sufficiently elaborate (freedom of circulation of goods can cater, says the EC.) The press memo also gives the legal background for the Commission's infringment procedures, which is naturally fully endorsed by the MS themselves, which are all "offenders" on some subject or other.

SME advocate in each EU member state

In each EU MS, a newly appointed Ms or Mr SME will advocate for the interests of Small and Medium sized Enterprises (SMEs). Chiefly they will check the correct application of the EU law on SMEs and ensure that policies at national, regional and local level are enterprise friendly''. These appointments were recommended in the recent SBA Review to ensure that the "Think Small First" concept is applied at all levels of policy making. They mirror at MS level the appointment of a new EU's SME Envoy. For more, see 25 May press release.

Australian government launches new RR review

A new member of the network draws our attention to several recent developments in Australia.

-  the government just announced this week a review into the identification and evaluation of regulation reforms.  It will be conducted by the Productivity Commission, an independent government research body/think tank. See also media release. 
- Australian official response to the 2009 OECD review of regulatory reform in A.
This blog has already reported on a report from the institute of public affairs (addressing the link between deregulation and the industrial revolution), and more recently the creation of an independent regulator for not-for-profit sector. At state level, we have taken a look at what Victoria had achieved (red and green tape). In view of this high-level conceptual activity, we are now opening a category of its own for Australia and NZ on this blog.

 

SME expert position in Bangladesh

This blog has been approached to publicise a position as a regulatory expert in Bangladesh. Details can be accessed on the site of SOFRECO, along with a number of other job offers. See:  Key Expert No.1: Team Leader/SME Development Strategic Planning Expert. Full-time position in Dhaka with travel around Bangladesh for 36 months and intermittent for 12 months.

Caution: closing date 31 May

5th simplification law published (France)

Yesterday, the 5th simplification law was published by the French Parliament.This blog has reported on the difficult progress of the omnibus simplification bill, bogged down in the parliamentary discussion for 18 months. But all is ending well, and a substantial text comprising 200 articles was finally published on 17 May. The legislative drafting technique does not make for easy reading and it is sometimes difficult to grasp what is new, what is simpler than before. But experts may be interested in taking a look at at least two articles:
Article 16 legalising "open" consultation, on a par with institutional channels for canvassing stakeholders. In a rather legalistic manner, the text organises the right to replace the consultation of a standing advisory body by an open channel including internet websites, except in specific cases such as the mandatory consultation of an independent authority, or obligatory consent of an external body. Opportunely, the text provides for consultees to receive feedback, and for the summary of views received to be published.
Articles 4 to 6 build on the successful "civil rights" approach to red tape introduced by the law of 12 April 2000 and provide further refinements in the pursuit of hassle-free procedures and improvement of the "relationship" between the citizen and the administration. A fool-proof system of exchange of information between administrations is planned, to avoid asking the citizen for the same data on multiple occasions.

Doing Business in Kosovo to take leap forward

An update on state-of-the-art methods to raise a country's ranking in the Doing Business indicator is provided by the Kosovo Government plan made public earlier this month. The package of measures, influenced by best practice as promoted by the World Bank, includes the simplification of the administrative procedures, the abolition of half of the permits and licenses, the improvement of the legal framework and the creation of a database for legal acts in order to provide transparency and protect investors, the further digitalization of the municipal services, the improvement of inspection capacities and the increased voluntary formalisation of the economic activities (for more see article in Balkan Chronicle 8 May.) These reforms seem necessary, given a recent report of the World Bank which ranks Kosovo in 119th position following an unfortunate recent reform. More information about the business regulatory environment is given on a dedicated website of the Investment Promotion Ageny of Kosovo.

Australian insights and recent developments in BR

According to news reports (such as ABC), an independent regulator for Australia's not-for-profit sector will be set up in the budget to be presented this week, with the aim of cutting the red tape that burdens the sector. As in other countries, the sector is seen by many as burdened by rules at state and federal levels that require them to write numerous reports for different government departments.
Reflection and lobbying are quite intense in Australia on BR issues, and can yield some good insights, owing to the traditional Australian tendency not to mince words and speak in plain English.
An example is provided by blog Safety at work that presents the current dilemma between “due diligence” and “red tape” faced by the Australian Government and its OHS regulator, Safe Work Australia. "How is compliance (due diligence) to be proven without a subsequent increase in paperwork (red tape)? In New South Wales this question is far more than a simple academic exercise on administrative process, it is a real political challenge that, if not handled carefully, could result in outrage from many business and community sectors with very little upside" asks the blog. Apparently the agency that is coordinating the changes has yet to provide detailed guidance on what is expected from “due diligence” obligation imposed on businesses but observers fear new information obligations in the form of safety audits and subsequent paperwork. The New South Wales WorkCover Authority that implements that legislation has been listed number three on the NSW Business Chamber’s list of “top 5 red tape offenders”(?), released on 9 March 2011 .





Regulation inside Government is also addressed in detail in Australia with a recent report by the Management Advisory Committee (MAC) report on Reducing Red Tape in the Australian Public Service which highlights the need for a change in thinking and approach across the public sector in order to achieve a sustained reduction in internal red tape. The report sets out a framework (to review administrative requuirements) to assist agencies in dealing with their "risk aversion" and a number of self-serving myths which the report identifies.


Meanwhile the Federal Government is not remain inactive: today it announced measures to assist SMEs in coping with red tape: The advice telephone line would be continued under new Budget funding, and a resources kit would be made available. The kit, on a USB flashdrive, lists the most common problem areas for small entrepreneurs. It would help them find government grants and assistance; be a guide for operators looking for finance and credit comparisons; and offer planning templates prepared with prominent business and financial advisors. Senator Sherry said there also would be templates for marketing and succession plans; simplified contracts for independent contractors plus a guide to such matters as tax and super measures.

US not land of free entreprise?

This week's Economist (Schumpeter's column), under the caption "the terrible threat of unlicensed interior designers" gives us a brillant (witty) study of the damage that can be done by over-regulating access to run-of-the mill occupations. Of course  professions such as doctors or lawyers are not concerned where true qualifications are required to safeguard the public's health and safety or other interests. The author describes how excessive pandering to lobbyists by politicians weakens their resolve to promote job creation by cutting licensing requirements for positions such as florists, handymen, wrestlers, tour guides, etc. Incumbents can often go to great lengths to defend access to their cash-cows: one advocate seeking regulation on interior designers claimed that amateur practice could lead to clashing colour schemes that might inter alia adversely affect "salivation," and bring about other undesirable effects.
The article does not mention similar current efforts in Europe to curb the tendency under the banner of the Services Directive which calls for a review of all such licenses with a view to eliminate national legal requirements that are discriminatory, unnecessary or disproportionate (and other measures already reported on this blog).

Report tackles Russian bureaucracy

An article in the Moscow Times on 6 May reports on recent academic research showing that inefficient bureaucracy and bribes are doubling the markup on retail goods in Russia. Food could cost 15 percent less, communications could go down by 10 percent, and real estate could be 25 to 30 percent cheaper. The problem is bureaucracy and legalized corruption, government experts say. A group analyzing the competitive environment of Russia's economy, as part of an update to the overall national development strategy, has identified defective institutions that impede business activity and economic growth and are part of the cause of higher prices for goods and services. An ineffective and corrupt bureaucracy has the greatest effect on the real estate sector, the construction of office buildings and stores, the establishment of farms and rental of land, according to a report issued by the European University in St. Petersburg.

Kenya launches new batch of RR measures

On May 5, according to press reports such as KBC news item, the Kenyan government announced several initiatives to improve the business regulatory environment, with the support of the World Bank Group. Based on findings of a three-day workshop, the measures seek to improve the ease of doing businesses on four indicators which include starting businesses, dealing with construction permits, registering property and enforcing contracts. They also address discrepancies in implementation of regulations across counties, and pursue an efficiency drive for inspections. Further background is provided by All Africa article, especially on the local dimension, which is supported by the UK LBRO: counties are encouraged to compete for investments and that those that are well managed with less cost of doing business will be more attractive for investment. Licensing reforms were also being carried with plans to operationalise e-registry. These recent improvement build on preceding RR efforts such as the application of the Regulatory Guillotine™ strategy which has supported the radical licensing reform in Kenya since 2006.

Serbia embraces BR agenda

As reported in a previous post, the Republic of Serbia has successfully implemented many of the Better Regulation concepts, with special emphasis on RIA and consultation. But much remains to be done, political support must be maintained, for on-going efforts to be completely fruitful and give their full contribution to the country's EU accession preparation. This is made clear in a very well documented and convincing short report by network-friends Slavica Penev and Andreja Marusic.
There are also a number of resources online on the Government Regulatory Reform portal (not in English). Worth visiting are the pages in English of the RIA portal of the ministry of economy and regional development, which include documentation on methodologies and results in impact assessment, of great interest (including opinions on the quality of the assessments published by the RR Council.

Spain enlists BR for sustained development

This blog does not mention Spain often enough, so network friend Juli Ponce Solé (University of Barcelona) has pointed us to some interesting new documents, in support of the discussion about the nature of Smart Regulation currently under way in our LinkedIn group.
The recent National Sustainable Economy Act 2/2011 includes several articles (4, 5, 6 and 7) about "good regulation." Experts interested in this development can consult the act (in Spanish)  (caution 6.6 Mb file) and find more about this act on the Moncloa site. There is also good summary in English of the law.

Water regulator defines own RIA method (UK)

In a recently published policy document, OFWAT, the economic regulator of the water and sewerage sectors in England and Wales has committed to improving its decision making process and reviewed it use of impact assessments (IA). Their goal is to ensure that decisions are targeted (only at the areas where they are necessary), proportionale to the issues at stake, accountable, consistent and transparent. OFWAT gives its definition of IA, describes what information they will contain, when the procedure will be used and how impacts will be reviewed. Though the IA process is now well-known, it is good practice for a regulator to take steps to inform the public on what to expect from such a technical improvement to its decision making process (from a tip from Tom Kiedrowski at OFWAT.)