"Like-minded" MS call for strong Smart Regulation Action Plan

Last week, in a landmark letter to President Barroso, the ministers in charge of economic affairs of 13 Member States called on the European Commission to inter alia "go beyond looking at administrative burdens (also including compliance costs; consider sectoral targets... and produce a roadmap to reduce the overall regulatory burden over the next 2 years." The letter also calls to publish an annual statement of the total net costs to business of new legislative proposals and maintain an annual balance of close to zero net costs. The rest of the 10 Point Plan addresses other dimensions of smart regulation (RIA, the Impact Assessment Board, the Think Small First principle, fitness checks, and common commencement dates.)
For positions agreed by all 27 MS, the best source is the regular Council conclusions (see for instance June 2012 Conclusions under Danish presidency) which are of course more consensual.
It is not rare that a group of MS publish a joint position on the development of smart regulation, see for instance the report "Smart Regulation: a cleaner, fairer and more competitive EU" issued by the UK, The Netherlands and Denmark in March 2010, but up to now, this group had not got so close to a majority of MS.
This new joint letter intervenes at a moment when the European Commission is finalising its Communication on "EU Regulatory Fitness", to be published on 12 December, two years after the issuance of its Communication on "Smart Regulation in the EU." In the past months, the Commission has been taking stock of the progress made and drawing lessons from its experience. A stakeholder consultation was open from June to September to collect views and proposals to inform the next communication. The Commission website publishes the consultation document and all 118 contributions received, among which those of European Chambers of Commerce and Industry (Eurochambres) and Businesss Europe. Both organisations strongly support the smart regulation process encompassing the entire policy cycle and in slightly different ways, their contributions both offer much technical expertise.

New source of expertise on Smart Regulation: Latin-Reg

Central and South American experts, led by Mexico's chief smart regulator Alfonso Carballo, are uniting to share news and lessons learnt from current projects. Latin-Reg is a new site, still partly under development, offering a clearing house for regulatory reform expert contributions in English and in Spanish originating from the region. Authors include Gustavo Mendoza, Margherita Corina, Rafael Hernandez and others.
Among the first papers in English:
- the (Mexico) System for Rapid Business Start-up (SARE) to promote regulatory simplification at the municipal level;
- the subnational regulatory managemetn systems, an adaptation of the OECD "Indicators of Regulatory Management Systems", to the federal structure of Mexico;
- benefits derived from the regulatory burden reduction program.
A site well worth visiting regularly. Spanish speaking experts will also be interested in the blog "Smart Regulation in Spanish."

How regulation influences companies' location

Emmanouil Schizas (London) points us to an interesting article published by the World Bank and entitled "Is better information always good news ? international corporate strategy and regulation." This paper develops a simple model to analyze the interaction between strategic corporate public good provision, international firm location and national regulation. An information-based strategic corporate public good provision mechanism is proposed to shed light on recent firm behavior within different regulatory environments.

MPs call for external scrutiny of public policies (France)

The French National Assembly (Evaluation and Control Committee), in its 22 November meeting (minutes just published) continued discussion of options for the modernisation of public action, the new concept which has replaced administrative reform in France. Two MP rapporteurs who had filed a December 2011 report on the comprehensive operation of general review of public policies (RGPP in French) have updated their analysis and now recommend that any future modernisation strategy be preceded by a systematic evaluation of the public policies concerned. What is new is that the Mr Cornut-Gentille suggests that the evaluation be done not as usual by an administrative body but by an independent "personality" (=VIP) "invested with a degree of legitimacy within the administrations based on their authority and willingness to reform." See reactions (including international comments) on the MP's official website. The Commitee endorsed the new report and set up a small parliamentary team to supervise its implementation. This keen interest of Parliament in administrative reform illustrates the importance of the institutional design issues at stake, and more specifically the "multi-level" issues of local governance, which will be revisited again in coming reforms. Last week an amendment was introduced by Parliament into the 2013 Budget act to oblige government to provide more regular information on progress of administrative reform.

New Dutch methodology to reduce regulatory costs

Delegates to the twice yearly meeting of (European) Directors and Experts of Better Regulation (DEBR) in Dublin (22-23 November) were informed about recent research and testing of a new methodology to remove or lower obstacles to business innovation and growth by way of further reductions in the regulatory burdens. A Cost-driven Approach to Regulatory Burdens (CAR) offers a change of perspective by taking as a starting point the actual costs incurred in companies to comply with regulation, irrespective of which legislation is at the origin of the cost. The new methodology, developed by SIRA Consulting in the Netherlands, a company to which we already owe the widely applied SCM, is being tested on two pilot studies (chemical industries and European bakeries) and is expected to be finalised during 2013. It seeks to correct some of the limitations of the Standard Cost Model. Delegates were impressed by the conceptual shift underway, but expressed concern that the new method may be expensive and/or difficult to implement. This contribution enriches the discussion started earlier this year by a key paper from Germany: Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government, which also aims to address the full range of regulatory costs.

One-in, two out to further cut red tape (UK)

The costs of red tape on business will be slashed at double the present rate, according to a new measure announced two days ago by the UK government.

From January 2013, every new regulation that imposes a new financial burden on firms must be offset by reductions in red tape that will save double those costs.

The new 'One-in, Two-out' rule will be imposed across all ministries, and will apply to all domestic regulation affecting businesses and voluntary organisations.

It will replace 'One-in, One-out', which requires the costs of every new regulation to be matched by savings of an equivalent amount. According to BIS, this policy "has already reduced net costs on business by almost £1bn since January 2011 helping to make government leaner, fitter and more focused on what businesses need, enabling them to get ahead and compete in the global economy."

 

Indian reform caught in red tape

“India's boldest attempt in two decades to sweep away the remnants of the License Raj permit system that has crippled infrastructure development has fallen victim to the very scourge it was designed to defeat. A proposal for a government panel (a “National Investment Board”) chaired by Prime Minister to fast-track major infrastructure projects and boost a flagging economy seems to have stalled amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus” (Indian Express). See also Times of India article.

Swedish experts clarify Gold-Plating of EU legislation

 

The Board of Swedish Industry and Commerce for Better Regulation (NNR) and the Swedish Better Regulation Council (Regelrådet) have published a joint report with recommendations for how to improve implementation of EU legislation 'Clarifying Gold-Plating – Better Implementation of EU Legislation'. The term 'to gold-plate' is frequently used in regulatory contexts in the EU when national implementation of EU legislation exceeds what a legal act requires while staying within legality. There seems to be agreement that this practice can lead to increased costs, unnecessary regulatory burdens and competitive disadvantages for business, as well as a fractured single market. This in turn hampers growth and job creation. However, there are different understandings of what the concept gold-plating actually covers. Some people assign more to the concept, and others less. This uncertainty about how to define gold-plating was the starting point for NNR's and the Swedish Better Regulation Council's joint project. The recommendations in the report are addressed to the Swedish Government but could be applicable in other EU Member States as well. The authors call for clarification on how the concept 'gold-plating' should be interpreted to allow for objective discussions on how to solve problems related to it. A clear definition would enable those responsible for implementation of EU legislation to explain and justify if and why gold-plating is used. Further information from Karin Atthoff, Senior Advisor, The Board of Swedish Industry and Commerce for Better Regulation.

"Rule of law" ranking (World Justice Project)

Soon released:  the WJP Rule of Law Index 2012 report covering 97 countries and jurisdictions, representing over 94 percent of the world's population, will be released on November 28. The Index provides new data on eight dimensions of the rule of law: limited government powers; absence of corruption; order and security; fundamental rights; open government; regulatory enforcement; civil justice; and criminal justice. These factors are further disaggregated into 52 sub-factors. Together, they provide a comprehensive picture of rule of law compliance.

The Index rankings and scores are built from over 400 variables drawn from two new data sources: (i) a general population poll (GPP), designed by the WJP and conducted by leading local polling companies using a probability sample of 1,000 respondents in the three largest cities of each country; and (ii) a qualified respondents' questionnaire (QRQ) completed by in-country experts in civil and commercial law, criminal law, labor law, and public health. To date, over 100,000 people and 2,500 experts have been interviewed in the following 97 countries and jurisdictions (with The Colombist).

France cuts red tape in new "Competitiveness covenant"

Acting very fast on the basis of the Gallois report filed two days before, the French government announced on 9 November a national pact (covenant) for growth, competitiveness and jobs, which includes powerful measures such as a €20bn reduction of social contributions paid by business and a number of tax changes. Among the "non-cost-of-labour" measures, we can note the "simplification and stabilisation of the regulatory environment" of business, to be achieved by streamlining five recurring administrative procedures and "stabilising", over the five years of the legislature, five key tax schemes. Other measure promise to improve the administation's footprint on the economy: more efficient "commercial justice" and helping SMEs and innovating companies access public orders.

Heseltine report calls for growth strategy

Presenting his "independent" review on 31 October, "No stone unturned in pursuit of growth" the former deputy prime minister Michael Heseltine "urged the government to build on what it is already doing, to speed up the process and to leave no stone unturned in pursuit of growth."

The report sets out a comprehensive economic plan to improve the UK’s ability to create wealth. His independent report makes the case for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector. It makes 89 recommendations which aim to:

• inject stability into the economy
• create the conditions for growth, and
• maximise the performance of the UK.

At the heart of the proposals are measures to unleash the potential of local economies and leaders and enable every part of the UK economy to raise its game.

In his presentation, Lord Heseltine stressed governance and implementation issues:

"The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.

As well as a clear strategy, the government needs the means by which it can deliver it."

"The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.

As well as a clear strategy, the government needs the means by which it can deliver it."

(see BIS site.)

China tests regulatory reform at province level

The regulatory reform scene in China has up to now not provided much news, but this may be soon changing. According to the People's Daily online published yesterday, "the central government has made Guangdong Province a pilot region for reform of the state and provincial regulatory and administrative process by removing or adjusting 100 regulations that require government approval, the Guangzhou-based Nandu Daily reported Monday.
The State Council recently issued an official document that approves the trial reforms during the 12th Five-Year Plan period (2011-15). Thirty-four administrative approval items will be canceled and the administration of 34 other items will be transferred from the province to lower levels of government. In addition, 32 items will be handed over to industry associations. The decision was made at an executive meeting of the cabinet presided over by Premier Wen Jiabao in August, the newspaper said.
The move is in a bid to reduce approval requirements and let markets allocate resources more efficiently.
On the list of the 34 regulations that have been canceled are the annual examination of tour guides, approval of building companies that conduct small-volume trade with Taiwan and approval of used car appraisal agencies.
Administration of 32 items will be gradually handed over to associations of specific industries, which aims at reducing government intervention and giving full play to markets. This list includes the annual check of asset evaluation agencies, registration of software products and hotel star ratings.
Provincial government departments will administer 19 regulations, while 15 others will be regulated by lower level governments. This covers programs in energy, transportation, raw materials, mechanic manufacturing and establishing local enterprises.
"The reform of administrative approval will help transform the government's functions, clarify its responsibilities and make more room for social development. This is to build a bigger society and smaller government," Zhu Lijia, a public administration professor with the Chinese Academy of Governance, told the Global Times.

Blog breaks audience records

For the second month running, Smart Regulation has reached record numbers of visits, doubling its audience since August, with 2,505 visits in September, 3,631 in October, against only 1,776 in August. For you BR experts, this means that it is a convenient way to reach colleagues and an informed general public for your news about new concepts or results of national policies in support of the smart use of regulation. Contributions always welcome and immediately posted provided they convey some newsworthy content.

New deal for French public administration reform

Last Wednesday (31 Oct), the French Council of Ministers announced a series of institutional changes aimed at giving a fresh impetus to public administration reform (PAR), in accordance with the electoral commitments of the new (socialist) government:
- transfer (back) of the prime agency in charge from Economy/finance/civil service to the Prime Minister's office: the DG State Modernisation staff are transferred back to Matignon (the PM's office) to create the Secretariat General for Public Action Modernisation; to our knowledge there is no official assessment of the five years of PAR under Finance, nor of the reasons for the new setup;
- creation of a supervisory body, the Interministerial Committee for Public Action Modernisation;
- in the detail of the functions entrusted to the new SG, and the announced agenday for the first meeting of the Interministerial Committee, several themes already identified as new priorities are confirmed: the fine-tuning of local government (under the heading of "partnering public policy") including simplifying regulation inside government, and the further integration of electronic services to PAR. Several existing policies are endorsed, like quality of service and legal simplification. The new strategy also intends to place civil service HR higher on the PAR agenda.

Better Regulation in support of constitutional and civil right changes (Morocco)

Your blogger was priviledged to be invited to a conference in Rabat (Morocco) dedicated to strengthening the "legal capacity" of the Ministry of Interior and its deconcentrated services. The event was organised by OECD SIGMA within the Morocco-European Union Programme supporting the democratic transition, and was linked to the extensive legal reforms required by the adoption in July 2011 of the new Moroccan constitution.
More specifically, the new constitution introduces the right to good administration and governance, which covers inter alia quality of legislation. The two day conference 'The Challenges for Drafting Quality Legal Texts' brought together 14 experts and some 150 participants stemming from different government services with legislative responsibility and discussed topical elements of better legislation in three different panels. The first panel was dedicated to the meaning and the requirements of the rule of law for good administration and the quality of the law. The second panel looked into Politics, the law and budgetary choices, and the final third panel considered the demands of better lawmaking for legislative drafting. Experts like Prof. Jacques Ziller (University of Pavia Italy), Mme Pascale Léglise (French Court of Administrative Appeal), Prof. Wim Voermans (IAL, University of Leiden, the Netherlands), Ramiro Riera (former Inspector General of public administration France) and Joana Mendes (Amsterdam University Netherlands), presented and discussed in the first panel. Justice Benabedellah of the Moroccan Supreme Court, Charles-Henri Montin (French Ministry of Finance), prof. Miquel Martin-Casals (University of Girona, Spain) and Christos Ntouchanis (Member of the Council of State Greece) lead the way in the second panel. In the third panel (held on the second day) prof. Herwig Hofmann (University of Luxembourg) Abdelilah Fountir (Secretariat General of the Moroccan government), Mohamed Hanine (President of the Moroccan Human Rights Commission), Edward Donelan (of Sigma and formerly the Irish judiciary) en C.H. Montin, W.Voermans and M. Martin-Casals.
The conference was a very lively one with abundant questions and comments from the floor. The issues of rule of law and good quality of drafting and legislation are afoot in Morocco one can feel. The conference concluded with eight recommendations to the Moroccan government, all of them amounting to setting up a drafting manual, exchange of knowledge, training and capacity building in the institutions with legislative responsibility in the Kingdom of Morocco. The Moroccan government and Sigma are pursuing their cooperation in this field in the upcoming years (with Wim Voermans). Blogger's presentions (in French) are available from the Publications page.