US regulatory reform goes into overdrive

Last week the House of Representatives passed two far-reaching regulatory reform bills long sought by many in industry, though the White House has vowed to veto both bills.
On Friday, the House voted 253-167 for the Regulatory Accountability Act (H.R. 3010), a major reworking of the 1946 Administrative Procedures Act. It would codify requirements on agencies to pursue earlier public outreach, improved scientific data, less closed door regulating, more built-in cost benefit analysis and more formal reviews of evidence of the effects of proposed "high-impact rules" costing more than a $1 billion.
On Thursday, the House voted 263-159 for the Regulatory Flexibility Improvements Act (H.R. 527), which would require agencies to step up efforts to identify costs that new regulations could impose on small businesses, write the regulations in ways that reduce costs and increase input from small businesses in the process.

Denmark unveils smart regulation agenda for next 6 months

Last Friday, the Danish incoming EU presidency unveiled its priorites and a dedicated presidency website went online. Within the green growth agenda, it is likely that Smart Regulation will receive a fresh impetus. This can be inferred from a speech, earlier this month by the Minister for Business and Growth, Ole Sohn, at the conference “Directors and Experts of Better Regulation”, held on 8 December in Copenhagen, (text avaiblle online.)
(Extract) "In dealing with this crisis, we must find a way out that creates jobs and growth all across the EU. Getting the economy back on track will be of benefit for everyone in the EU.
Smart regulation can be part of the answer when it comes to creating smart, sustainable and inclusive growth, as set out in the Europe 2020 strategy.
But at the same time we must keep in mind that smart regulation as a policy area is not an end in itself. The agenda has a higher purpose. The principles of smart regulation only result in added value when they are used in a targeted way to bring about overall policy goals, such as competitiveness and growth.
When smart regulation is put into practice we see considerable effects. More resources are set free for business to devote their time to core activities instead of doing unnecessary paper work.
And one thing we have to remember: A smooth business environment with few administrative burdens is key to creating an attractive business environment.
Doing business in Europe has to be simple. We have to understand that the level of burdens is an important parameter, and a key element in encouraging start ups and attracting foreign business.
In short, we must simplify while making sure that we do not put fundamental levels of protections at stake. "
The two prominent features of the Danish approach are: 1/ a focus on the "end user" and 2/ a broader perspective including the full regulatory cost.

UK makes specific proposals to simplify EU law

On 29 November 2011 the UK Government published areport, Let's get down to business: smart regulation, more growth, better Europe (PDF, 1.9 Mb) , on the conclusions of a review conducted since March 2011 on ways to improve European growth opportunities for UK businesses. The report includes detailed reform proposals submitted in the form of case studies by leading companies surch as Balfour Beatty, GlaxoSmithKline, Kingfisher and Tribeka Limited. The case studies are intended to illustrate the UK proposals, which view European growth as conditioned by a reform of the EU regulatory framework to reduce overall burdens.
The key messages from the UK businesses, as recorded by BIS, include the need to reduce the overall European regulatory burden, foster innovation and ensure the internal market realises its growth potential For context (the wider Better Regulation agenda), see the BIS policy page on the topic.

Admin burden in EU: what next?

Last week the four European independent regulatory "watchdogs" in DK, NL, GE and UK have published an important joint paper entitled "The end of the Commission's action programme for reducing administrative burdens in the European Union - What comes next?"
These advisory bodies take the view that "in times of economic and financial crisis, political support for the EU is liable to decline. Transparent procedures and smart regulation are needed more than ever to drivecompetitiveness and support of the EU as a positive institution for growth.
They suggest that "the EU should continue to reinforce its programmes on smart regulation. As the Action Programme for reducing administrative burdens will end in 2012, a new programme needs to be developed to keep the momentum. Some progress has been made so far, but there is still quite a way to go. A change in the mindset, a cultural shift towards smart regulation as a basic prerequisite of proposed legislation has not yet been reached."
The paper draws lessons from the Smart Regulation agenda initiatives over the recent past: for admininistrative burdens, it notes the 31% reduction proposals from the Commission and recommends widening the scope of the programme to the overall regulatory burden; for impact assessments, it points at a number of "inconsistencies" of current efforts and suggests improvements in the consultation and quality check; to support progress, it recommends extending the mandate of the HLG of independent stakeholders ("Stoiber Group") to advise all three institutions on the full range of smart regulation issues.
For more see DG Enterprise and Industry site on smart regulation which includes a section on the Stoiber Group.

EU Council supports Commission SR proposals

Though devoted principally to economic governance and employment issues (see also statement of the heads of state and government), the European Council on 9 December restated its commitment to growth, in which smart regualtion, and particularly the reduction of administrative burdens, has a role to play.
The Council conclusions recalled key priorities for growth, identified in October 2011, "in particular, the Single Market Act, the Digital Single Market and the reduction of overall regulatory burden for SMEs and microenterprises," and called the legislator to fast-track the Commission's proposals. It also endorsed the actions proposed by the Commission in its report on minimising regulatory burdens for SMEs.
Regulatory impact assessment was also discussed at a 30 November ECOFIN council, in which member states "underlined the need for the Council to consider, where appropriate and necessary, the impact assessment of new legislative proposals on competitiveness and public finances without prejudging the importance of their social and environmental impacts."

6th progress report of public policies review (France)

Yesterday the Council of Ministers heard a report about progress of the general review of public policies (RGPP), the major initiative under way since 2007 to reform public administrations in France. Our interest will be in the list of measures taken under the general heading "improve the quality of public services." This programme includes structural reforms (such as the creation of one-stop-shops and reducing the number of departmental offices at the local level) and an impressive list of 100 simplification measures reducing red tape for citizens and businesses over three years. The emphasis is on electronic procedures, which now cover most of the most current benefits. Success of the programme is claimed from the results of regular satisfaction surveys ("perception of complexity") rather than measuring the reduction of burdens. Some of the simplifications require the amendment of legal clauses. Another major component of the RGPP is the reduction of public spending through staff reductions (150.000 positions suppressed over 5 years by not replacing one out of two staff on retirement) and increased productivity. The full report (300 pages) draws a complete picture of administrative reform, distinguishing cross-cutting issues and departmental reforms. It also reads as the final report of this goverment's modernisation plans for the public sector, in the run-up to the elections in the first part of 2012.

Common commencement dates launched in France

As mentioned before on this blog, the French government has set up a tool to help businesses cope with the regular flow of new legislation by making sure that they have at least 2 months to become aware of the new norms and adapt if need be, and by reducing the number of commencement dates in the year.
Full explanations of the scheme are online in a new rubric on the governement's legal portal Legifrance.
A first table offering a summary of the new legislation, by commencement date, has also been published online, with a legal disclaimer.

Open consultation now operational (France)

As reported in a previous post, the 5th simplification law adopted in May 2011 introduced the possibility for administrations to replace a legally obligatory consultation of a standing advisory body by an "open consultation" using the internet, prior to finalising new legislation (article 16 of the law dated 17 May 2011). The implementation text (décret) has now been adopted (dated 8 December). It specifies that the reform applies from 1 January 2012 and provides for a centralised publicity for such consultations. Not mentioned in the aforementioned previous post: by law, the minimum duration of an open consultation is 15 days. A good comment by a French expert highlights the wordy by poor content of the text which does not promote a culture of consultation but only organises it legally.

Red Tape closely associated to corruption (Philippines)

According to news from the Philippines published yesterday, the struggle against red tape, closely linked to fighting corruption, is active though according to the Doing Business index, the country is still losing ground at 136/183, a region where it has been stuck since the beginnings of the ranking.
A press report yesterday gives some details about how the government combats bureaucracy, on the legal basis provided by the Anti-Red Tape Act (Arta) of 2007: among other tools, the Civil service commission conducts a Arta Report Card Survey at regional level (RCS) to gather feedback on how agencies, including local government units, follow provisions of their Citizen’s Charters. The RCS also rates the agencies performance and clients’ satisfaction in relation to frontline service delivery. Results of the survey may be used by the agencies in improving or modifying their frontline services and Citizens Charter.
The Philippine Public Transparency Reporting Project (a Human Rights group) gives some background about the main item of legislation (Arta), which was introduced in 2007 in an attempt to make government services more business-friendly and help stamp out corruption. One of its most salient provisions is to automatically grant requests for renewal of licenses, permits and authorization should a government office fail to act within a prescribed period. The Anti- Red Tape Act was in fact only the latest in a long line of attempts to address inefficiencies and corruption in government services in the Philippines. They included the "People First, Not Later" program in 1994 which encouraged a client who is dissatisfied with the service of a government office to file a complaint at the Civil Service Commission. The Commission was supposed to ensure immediate action is taken to investigate and resolve the complaint. The “People First” campaign was later reinforced through the program TEXTCSC where citizens were invited to report irregularities and allegations of corruption in public service to the CSC simply by texting 0917-TEXTCSC. Transparency Reporting describes in detail how the "fixer" system works (fascinating), and concludes: "More than a decade after these programs were launched, the general public sentiment is that the quality of government service has improved very little if not actually worsened." For other measures in PH, see posts dated 11 September and 19 August.

Delivery: the new challenge for smart regulators?

Not really but there is news on the topic.  The new term ("delivery") is being brought in to focus the issue of "enforcement and compliance of regulation" on outcomes, especially in the business world. Regulation is perceived as a service authorities deliver to society. Local Better Regulation Office (LBRO) members posted on the Smart Regulation LinkedIn group news of the publication of an interesting report by the Department of Business, Innovation and Skills (BIS) on "Delivering Better Regulation." This report, well worth reading, summarizes the responses to a consultation on the future of the LBRO, especially in relation to its transfer into BIS, "to make greater use of its experience and expertise as part of the core policy-making of the Department."

The UK experience with LBRO was quite unique in providing this delivery and service role for regulation, which will be preserved in the new structure.

Among the comments received on LinkedIn: Oscar F. reminds us that "NNR ( www.nnr.se  ) presented a study on the need for Better Regulation on the local level in Sweden a few months ago. Next step towards Better/Smarter Regulation needs to focus more attention to regulations on local level as well as the use of "Goldplating " within the EU."

Smart Regulation in its EU version equally places emphasis on the full cycle of regulation, including implementation, and emphasises the transposition and application of EU law.

OECD did some gathering of good practices some years back: chapter 5 of "Regulatory policies in OECD countries" (2002) defines "tools to improve implementation of regulations." (only on a WB site.) More recently, it included an indicator in Government at a glance 2011, (see page 162 indicator "preparing for effective compliance and enforcement of regulations) which contains an interesting table showing which member states have an enforcement policy.) Now a new stream of projects on enforcement and compliance has been launched.

The World Bank, in keeping with its development of business approach, focuses on modernising and making more effective inspections. A kind of manual is offered by "How to reform business inspections: design, implementation, challenges" (main author Florentin Blanc, see his March 2011 ppt for an introduction.)

 

US goes back to basics of (drastic) RR

A major discussion has been going in past weeks in Washington about the nature and extent of a new wave of regulatory reforms. There is too much information and opinion online for this blog to summarize. But it is by our standards a major event, and interested experts are invited to check it out, for potential new insights. An apparently objective introduction is provided by an online article in the Washington Post.
What is most striking for us observers is the intensity of the attack on regulation, which makes the UK deregulation unit look moderate.
For a detailed presentation of the draft Regulatory Accountability Act, one of the new texts under consideration, see an article from the Heritage Foundation.

New package for the business environment (France)

This week's Council of Ministers heard a report by the minister in charge on the package of 80 measures in favour of business. Most of them originate in the feedback received during the Assises de la Simplification on 29 April. The most innovative is the creation of an "electronic safe" where companies can store information often requested by administrations, to avoid multiple submission of the same data. Another ground-breaking initiative is the possibility for firms to get a legally binding position from the administration on a permit or authorization scheme, prior to taking a corporate decision. Statistical requirements are also being reduced. About three quarters of the measures have been implemented on schedule, 30 being subject to amendments of existing legislation (see bill adopted by the National Assembly, now in the Senate). A new package, stemming from a parliamentary report, will be presented on 6 December, when a second session of the Assizes will be held. The invitation to the press was published yesterday.

Accountants criticise EC plan for SMEs

Friend of the network Manos draws our attention to his organisation's reaction (published today on Euractiv) to the recent report by the Commission on relief from EU law for SMEs (23 November). Under the title "Smart regulators must be able to tell regulatory burdens from regulatory capital," the Association of Chartered Certified Accountants (ACCA) points out that the Commission's inititatives on exempting small businesses from individual regulations risk misinterpreting the needs of SMEs and introducing "two-tier markets". This viewpoint is based on the newish concept that regulation does not only impose costs (which when not justified are called burdens): "some regulations, including those governing financial disclosures, "are more like public investment in that they build capital – trust, standards and confidence – which private firms can then leverage to create value." Exemptions from these specific rules would not be economically stimulating. For discussion.

EC upgrades Think Small First principle

Last week the European Commission presented a number of initiatives to boost the contribution of Small and Medium Enterprises (SMEs) to the creation of growth and jobs, relying principally on exempting the smaller companies (micro-enterprises) from some EU laws. A press release summarizes the news, but it is worth reading through the Report to Council and Parliament on "minimizing regulatory burden for SMEs." The new steps are taken within the Europe 2020 strategy with smart regulation playing a rôle in making European business more competitive by providing a lighter regulatory environment. They build on the Small Business Act (2008) which has eased access to finance. The report states that administrative burdens have already been reduced by 22%, with more proposals from the Commission (totalling 33% reduction) still in the legislative pipeline and lists existing full or partial exemptions granted to micro-enterprises. The package also contains an action plan to involve SMEs better in law-making. A landmark document which will contribute to the reflection on what will come after the end of the current Action Programme for reducing administrative burdens, which closes next year.

Smart Regulation slated to promote sustainable growth

Yesterday, your blogger attended the conference in Paris on "Smart Regulation and Sustainable Growth" organised by the Korean Legislative Research Institute and the University of Aix-Marseille (FR). The two communities of experts were represented and explored how they could better work together for more effective policy outcomes. This would include tapping the potential of the principles of Better/Smart Regulation to improve the long-term perspective in making and enforcing regulation, to enhance results in the areas of green growth, climate change and biodiversity. Contributions also addressed the effectiveness of regulations compared to other interventions, and means to enlist citizens in securing enforcement, including through easier and less costly access to litigation. Korea put forward the point that incentives could be a major factor for obtaining the right change of behaviors. Participants were referred, for further study, to the OECD publication "Towards Green Growth" (April 2011) which includes sections on how well conceived regulation can contribute to the policy (see pp 45 sq). This blog will report as proceeds are published online.

European regions ponder smart regulation

With all eyes on the new Belgian government constituted after a record inter-regnum, how could we not signal that Flanders has just uploaded proceeds of the conference announced on this blog, which invited officials from regions of European countries to reflect on "How do Flanders and the other European regions cope with the competency for smart regulation in a multilevel environment?" Representatives from Wales, Lombardy, Scotland and Flanders presented their regional policy of smart regulation and discussed with OECD, EC and the Committee of Regions how they could interact with the smart regulation central strategy. The other Belgian region (Walonia) seems not to have been present. A pity neither German lander, nor Spanish communities (for a study of their regulatory work see a previous post), attended. (For more information see also post on Commitee of Regions multi-level governance and better regulation.)

Visas hinder ease of doing business

Making it easier to enter the country for people bringing investment seems a pretty obvious way for a naitonal administration to increase business opportunities and returns by fostering FDI. But many countries have not yet been able to curb their bureaucratic tendencies and cease penalising themselves. This has recently been highlighted at the 5th Arabian Business Forum in Dubai. A quick look around the world shows that Singapore, top performer in business and competitiveness indexes, offers a variety of visas for potential workers and investors. The city-state has a specific Entrepreneur Pass for those intending to set up businesses, and a Multiple Journey Visa can be issued for up to five years.