"SR for Dummies" now in Spanish

Colombian BR expert Christian Gill has posted on his blog a very accurate translation into Spanish of our best seller "Smart Regulation for Dummies" or "in 1200 words". The text of the article, officially entitled "REGULACIÓN INTELIGENTE: Un Desafío Global para los formuladores de política pública" is already published in English, French and Arabic. The most interesting part of this article is a compendium of best practices from around the world, drawing from 15 countries and 3 international organisations, which experts should find useful when drawing up national smart regulation policies and adapting tools.
Presentation of article: "Actualmente la regulación inteligente es el conjunto más avanzado de principios y herramientas disponibles para ayudar a los responsables de la política pública en garantizar un uso más efectivo y transparente en el uso de la regulación como medio para garantizar sus objetivos de política. Este breve artículo ofrece una visión general de su desarrollo en los últimos 10 años, finalizando con un panorama de las mejores prácticas en el mundo."Another reference post, the most visited of Smart Regulation.net is HQ Definitions (712 hits to date since its posting in January 2010).

Australian Parliament cleans up stock of legislation

On 13 September 2012, the Australian Parliament passed legislation to remove about 12,000 regulations from the statute books. The Legislative Instruments Amendment (Sunsetting Measures) Act 2012 (according to MoF media release) enables thousands of unnecessary regulations to be removed in an efficient, streamlined process, without the need to repeal them one-by-one. These regulations are described as spent and redundant regulations.
A second set of amendments provides for a more efficient repeal or 'sunsetting' of regulations after 10 years, and facilitates reviews of those regulations, for example, by looking at regulations across a particular industry sector as a whole. The Act provides that the sunsetting dates for regulations are staggered, so that not all reviews of sunsetting regulations are due at the same time. This will enable the review of sunsetting regulations to be conducted in a more efficient and effective manner (from our Australian federal correspondent).         

Report on gold-plating (Sweden)

Yesterday, the Swedish Better Regulation Council and the Board of Swedish Industry and Commerce for Better Regulation presented a joint report on "gold-plating". "Better Regulation = no gold-plating ?" asks Oscar Fredriksson on our sister page on LinkedIn SR group, asking us to respond to the discussion.
For the moment, the report is in Swedish only, but it may soon be published in English. On the Board's website, there is already some good material on the issue, see for instance "Smart approach to the single market " (Feb 2012). The annual reports of the Swedish BR Council are also very interesting.

Regulatory "coherence" helps regional economic integration (APEC)

In a previous post (November 2011) this blog reported action by APEC to strengthen good regulatory practices, following the the Honolulu declaration, to assist member economies establish closer economic and trade relations.
In 2012, under the general objective of reinforcing "regulatory coherence" as listed as a priority in the Honolulu declaration, APEC implemented a capacity building project to conduct regulatory impact analysis (RIA) training for APEC developing economies. The project, developed by Australia, and co-sponsored by Australia, Mexico, New Zealand and the Russian Federation, involved a series of training courses and workshops in interested developing economies, aimed at senior economic ministry and regulatory officials. For background, see 2011 NZ proposal to APEC. The first training course was provided by the Australian Office of Best Practice Regulation, with assistance from Mexico and New Zealand, to approximately 60 Russian officials on 9 and 10 February in Moscow. Subsequently, New Zealand provided training to Thailand and Malaysia, Mexico provided training to Chile and Peru, and Australia provided training to the Philippines. In the last two weeks of August, Australia, New Zealand and Mexico jointly provided training to Hong Kong and Chinese Taipei (see attached photo), and conducted an information exchange with China. Australia and New Zealand then conducted a workshop on regulatory impact analysis in Vietnam. For a more recent expression of this APEC policy, see Kazan (Russia) meeting of APEC ministers in charge of Trade (June 2012).

Agencies again in the spotlight (France)

After the Conseil d'Etat last week (see previous post), another senior body published yesterday its in-depth analysis of the Agency phenomenon under the title "The State and its Agencies", which is rich in public governance insights and is causing a national debate. The Inspection Générale des Finances had tabled its report in March, but it had been shelved because of the presidential election campaign and has just been released. Adopting a wider definition, the report finds 1244 agencies, under a multitude of statuses (including the categories excluded by the Conseil d'Etat, "operators" and independent regulators). The report is severe as to the proliferation of such agencies, chiefly because it cannot identify any real efficiency gain from such a solution. Among the 35 recommendations in the report, those related to the waste of public finance will be urgently addressed by a government which is currently looking for savings totalling some € 30 bn. The ministers in charge of finance and budget have also jointly announced that a review of government action will be launched in coming weeks to produce a global strategy of modernisation and reform of the State.

Cutting red tape in Colombia

Having just spent one week in Bogota as a guest of the Colombian government (Planning Department), your blogger is in a position to complete and update the previous post on regulatory reform in Colombia.
The most important initiative is the decreto-ley anti-tramites,a red tape cutting and legal simplification exercise based on a delegation from Parliament to the president (Mr Santos) to take all steps required to repeal "burdensome or unnecessary" procedures during a six-month period ending in January 2012. A more complete description of its content is available on the Legislative Observer site, with most significant measures described on Urna de Cristal. This "'omnibus" streamlined many procedures, gave legal status to certain electronic records (like company accounts) and modernised many procedures, like replacing fingerprint ID by official documentation.
A public consultation on further steps is also under way where citizens are invited to "denounce" a time consuming or uselfess administrative procedure, under the banner of "Anti-Red-Tape Crusade". The site reports that 70,000 citizens have already contributed. Most popular demands: the deletion of certification of documents, especially the three-monhly declaration of existence (to prove you are not dead) or the authentication by notary of each sheet of company accounts.
Another channel, more specifically designed for business, is the Competitive Regulation program, which comprises an online questionnaire but also a schedule of regional roundtables by sector, set up by the ministry of industry, trade and tourism in partnership with private actors.
For the same stakeholders, the Confederation of Chambers of Commerce has set up a network of well endowed one-stop-shops for registering a new business or formalising an existing one, with offices throughout the country where new entrepreneurs can receive legal help and carry out all the related procedures.
Finally, under development, a single online database of all administrative procedures (SUIT) already helps citizens, business and public officials (each has a separate access module) find relevant legislation. The site contains the official forms as well as information on completing the requirements to secure an ID document, a passport, a driving licence, etc.

Extra "regulatory flexibility" in Pennsylvania

For experts interested in the variability of regulatory policies accross the United States, significant of a certain type of regulatory competition, here is a new development worth noting. The governor of Pennsylvania has just enacted a new act to protect SMEs, giving further substance to principles contained in the Federal Regulatory Flexibility Act of 1980. Similar acts exist in other states, example: Illinois.
Pennsylvania's new Small Business Regulatory Reform Act, amends the State Regulatory Review Act to require state agencies to consider the impact of any proposed regulations on small businesses. Similar protection exists in the European Union under the Small Business Act policy of 2008, to adjust regulation according to the size of companies and avoid the "one-size-fits-all" solution.
The PA Small Business Regulatory Reform Act requires state agencies to identify the types of small businesses that would be impacted as well as the potential administrative costs of proposed regulations. If a proposed regulation is determined to have an adverse impact on small businesses, the Independent Regulatory Review Commission must provide a less intrusive or costly alternative that still achieves the intended statutory purpose. The objective is to require agencies to seek input from small business to better balance public welfare with economic growth. Additional competitiveness is to be obtained by reducing unnecessary regulatory hurdles and costly mandates. For good background note, see Small Business Council.
Meanwhile in the UK, the importance of cutting red tape specifically for SMEs is confirmed by new research published today by smallbusiness.co.uk an online advice site.

Report on agencies (France)

Though not dealing directly with regulation, the 2012 report of the French Conseil d'Etat on Agencies is well worth perusing for its conceptual and operational contribution to the understanding of the workings of a modern state, and how to improve public governance. The high administrative jurisdiction, which is an adviser to Government as a well as the supreme court for administrative litigation, sets out to define a doctrine for the use of agencies, which did not previously exist in the French legal order or literature. It takes stock of the situation, where a variety of legal statuses cover the many forms in which public authorities seek to introduce some managerial flexibility otherwise lacking in traditional administrations. It shows that contrary to expectations, the French administrative scenery is quite as pragmatic, when it comes to making the best use fof public resources, as other countries.
Seeking to define the scope of the use of agencies, the report finds that they are best identified by a degree of autonomy (not independence) and "structuring responsibility" for public policies. They must be distinguished from other resembling types of authorities such as "independent (economic) regulators" (called in French independent administrative authorities) and "operators" which is a budgetary concept where the entity lacks the structuring responsibility. There are in France some 103 agencies, employing 8% of public officials.
The report concludes with 25 recommendations for making the best use of this form of public service, most of which contain lessons certainly useful in many other countries.

EP updates stance on smart regulation

In July, the Commission on Legal Affairs of the European Parliament issued its "Report on the EC's 18th report on Better Legislation - Application of the principles of subsidiarity and proportionality (2010)", including a motion that updates the EP's position on Better Regulation. According to the explanatory memorandum, which is a particularly interesting document to trace the evolution of Smart Regulation:
"Parliament, together with the other European institutions and the Member States, must now do its part to ensure that the momentum gained is upheld and that activities are stepped up in all relevant areas. There is in particular a dire need for the Interinstitutional Agreement on better law-making from 2003 to be updated to the current legislative environment created by the Lisbon Treaty, (our emphasis) for instance concerning correlation tables, the practical modalities for legislative procedures and the demarcation between delegated and implementing acts. Action is also needed in the areas of subsidiarity checks by national parliaments and when it comes to impact assessments conducted by the Parliament and the Council. Lastly, adequate follow-up of the functioning of adopted legislation needs to be made, not least in order to gain feed-back to be used for the amendment of legislation identified as possible to ameliorate, but also in order to combat the practice of ‘gold-plating’, i.e. the introduction of additional national requirements not included in a directive, thus creating additional unnecessary burdens for citizens and business. The Commission is foreseen to publish a report on the progress of the smart regulation agenda in the latter part of 2012. Parliament should make sure to remain vigilant in identifying shortcomings and suggesting improvements in this area." All these points are fully developped in the motion (tip from M. Hainque).

Two papers on regulatory performance (OECD)

Two must-reads have just been published by OECD, crowning several years of research into how governments can best invest in making smarter regulation. They are accessible from the project's publications webpage (see "expert papers"):

• A first paper discusses the complexity of attributing changes in economic or welfare outcomes to changes in regulation and regulatory policy. It shows the categories of measures for evaluating regulatory policies and reports a number of indicators that can be used to measure outcomes, which can inform the practical application of an evaluative framework;
• A second paper examines country practices for measuring the performance of regulatory policy, and develops options for a set of indicators that OECD countries can use for their regulatory policy evaluation.

New concept: "Regulatory charter" (Midlands, UK)

Can you use regulation to promote a better relationship between regulators and business? Judging from a recent experience in the Midlands (UK) conducted in connection with the Better Regulation Delivery Office , a consensual approach, based on discussion and agreeing on principles enshrined in a "regulatory charter", may seem preferable. The Charter called ‘Better Business for All, ’ developed after consultation with business, features the following key elements:

• Businesses to have a single point of contact for local regulation via a web portal that has been developed and branded ‘Talk to Reg’ (due for launch in September)
• Regulators to tailor advice and approach to match the business lifecycle – i.e. start-up, growth stage and mature
• Regulation made simple – a straightforward explanation of the ‘who, why and what’ of regulation

The Charter, which is available in full from the Birmingham Chamber of Commerce website asks regulators to commit to be more open and to proactively support local businesses to grow. Firms can expect to experience less red tape and bureaucracy, quicker and easier access to information and a greater understanding of their problems. For more, see press article.

Red tape "blitz" (UK)

Yesterday a press release from BIS (the Business Innovation and Skills department) announced new plans by the British Government to "slash the burden of regulation". "From April 2013, the Government intends to introduce binding new rules on both the Health & Safety Executive and on local authorities, that will exempt hundreds of thousands of businesses from burdensome health & safety inspections. In future, businesses will only be inspected if they are operating in high risk areas, such as construction, or if they have a poor record. The Government will also change the law next month so companies will only be liable for civil damages in health and safety cases if they can be shown to have acted negligently."

RIA developments in France

This week the French Prime Minister issued the second of two circulars detailing how some of the impacts should be handled in the RIA process. These texts are meant to illustrate commitments of the new legislature:
- circular dated 4 September on including the impact for handicapped persons of new regulation. The text asks all ministries to examine how their reform project may impact this category, and provides a template for assessing the impact; it refers to guidance given by the UN convention (ratified by France in 2010) and national legislation for standards of protection;
- circular dated 20 August on taking into consideration gender issues in new regulation. The text asks all ministries to check at an early stage of drafting new regulation that the project does not increase discrimination against women and verify that the draft need not include specific new rules to protect women or prevent further discrimination. Please refer to the original text for the exact wording as this is an approximate summary.
Our thanks to V. Beloulou for pointing to this interesting development.

Cuba fails to limit red tape on FDI

Under the title "Red tape, bureaucracy and ideology limiting foreign investment in Cuba", MercoPress, a South Atlantic press agency, examines Cuba's investment reform plan announced last year, which spoke positively of foreign investment, promised a review of the cumbersome approval process and stated that special economic zones, joint venture golf courses, marinas and new manufacturing projects were planned. The article reports that diplomats said that "there have been more promises than changes and many obstacles to foreign investment remain". A complaint shared by many foreign companies interested in Cuba is that Cubans insist on 51% ownership of new ventures, which companies do not want because they effectively lose control. For a comparison with other Latin American countries, see the article.

Costa Rica tackles red tape by egov

An interesting article posted today in Tico Times sumarizes the Costa Rican government's project to apply technology to help improve the business environment. The policy is implemented by CINDE, a nongovernmental organization in charge of investment promotion, which relies primarily on introducing egov solutions. But, notes the article, "there is a huge gap in Costa Rica between the well-paved regulatory highway that CINDE and the government have set up for deep-pocketed foreign companies, and the pothole-filled obstacle course that ordinary Costa Ricans who just want to start up a mechanic's shop or a restaurant are forced to navigate... Costa Rica is drowning in red tape." The Doing Business index remains very low: Costa Rica ranks 121st of 183 countries. In Latin America and the Caribbean, Costa Rica ranks 25th out of 32 countries, behind every other Central American country except Honduras. Called the Digital Government project, the project is operationally a division of ICE, the country's power and telecommunications utility, but answers to a government commission presided over by the Prime Minister. It seeks to leverage the information technology expertise of ICE to put as many government processes online as possible. The basic building block, the "digital signature," is already developed. Tico Times also develops the recently introduced silence procedure: law 8,220, the Law (n°8220) for Protection of Citizens against Excessive Requirements and Administrative Processes introduces the concept of Positive Silence: that once all paperwork is presented, the government authorization requested will be deemed granted if the government institution does not respond within three days. Unfortutaly, Tico Times notes, this reform "has been a dead letter because ordinary citizens cannot drag a notary around to certify presentation of every paper required in bureaucratic processes." But if presentation is online, digitally documented by means of a digital cédula, the government authorization game could change radically in favor of ordinary citizens."
See also a presentation of the better regulation policy on the ministry's website and a news item on the National Plan for Simplification and Cutting Red Tape.

           

Template for regulatory reforms (ASEAN)

According to an ASEAN Korea Centre news item, "ASEAN is moving towards creating a template that would institutionalize regulatory reforms that would guide the region in its trade negotiations with other regional trade partners as the ten-member states fully integrate their economies by 2015."
This template would serve as ASEAN's guiding principles when they negotiate for other regional trade deals or the so-called ASEAN + 3.
So far, ASEAN has entered into regional FTA deals including China, EU, Japan, US, Australia-New Zealand, India, among others. On top of that, individual ASEAN members also conduct their own bilateral FTAs with other trading partners. These FTAs are no longer governed by ASEAN rules.
But this guiding principle will not supplant existing ASEAN agreements but rather broaden the economic reach of ASEAN as it seeks to expand trade and investments through regional FTAs.
In July this year, the Philippines hosted the first ASEAN Regulatory Reform Symposium for ASEAN (ARRS) integration in preparation for the ASEAN full economic integration or the ASEAN Economic Community (AEC) by 2015.

WEF 2012-13 global competitiveness report

Today the World Economic Forum released its much awaited new edition of the Global Competitiveness Report 2012-2013 which assesses the competitiveness landscape of 144 economies, providing insight into the drivers of their productivity and prosperity. The rankings are supported by good research into the economic impacts of the respective regulatory frameworks, and include other data such as perception surveys.
Main findings:

Competitiveness gap widening among European countries

US remains world's innovation powerhouse despite decline in overall ranking

People's Republic of China most competitive among large emerging markets; India, Russia fall

From the press release: "This year's report findings show that Switzerland tops the overall rankings in The Global Competitiveness Report for the fourth consecutive year. Singapore remains in second position with Finland, in third position, overtaking Sweden 4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands, Germany and United Kingdom respectively ranked 5th, 6th and 8th. The United States (7th), Hong Kong (9th) and Japan (10th) complete the top 10. The Report emphasizes persisting competitiveness divides across and within regions, as short-termism and political deadlock continue to hold back the economic performance of many countries and regions. Looking forward, productivity improvements and private sector investment will be key to improving global economies at a time of heightened uncertainty about the global economic outlook. Read the full report, press release and access the full rankings."

IMF seminar on goblal regulatory developments

From an IMF press release dated August 31, 2012:
"The scope and intensity of the recent financial crisis, and the significant risks posed by financial institutions viewed as too important to fail, have brought to the fore the importance of strengthened financial sector regulatory reform to make the financial system safe. In this context, the IMF organized today a one-day seminar at the IMF-Singapore Regional Training Institute to take stock of progress on refining the regulatory framework and to define the current challenges in the design of the reform agenda, particularly in the Asian context.The seminar—titled Evolving Financial Regulatory Framework—is part of an extended series of events in advance of the October 2012 IMF/World Bank Annual Meetings in Tokyo, Japan. Panelists and participants, who included officials from central banks and regulatory agencies in Asia, private sector representatives, academics, journalists and IMF staff, discussed key issues in global regulation pertaining to both banks and capital market intermediation. They also discussed how the Asia-Pacific region is prepared to deal with the changes envisaged in the international regulatory framework as well as the future directions and implications for the financial system in the region.
Participants agreed that the regulatory reform agenda was still a work in progress and highlighted some of the implementation challenges and unintended consequences of regulation that may arise. Issues that drew particular attention were related to the impact of new capital and liquidity regulations; supervision and resolution of systemically important financial institutions (both banks and nonbanks); home-host cooperation; potential extra-territoriality arising from national initiatives; and implications from new regulation on capital market-related intermediation."