Enactment of major Act on regulatory reform (UK)

On 25 April, BIS Department announced that following adoption in Parliament the Enterprise and Regulatory Reform Act had received Royal Assent. This text aims to support long term growth through a range of legal, managerial and institutional measures:

• company law reforms to make sure there is a link between directors’ pay and long-term company performance by giving shareholders of UK quoted companies binding votes on directors’ pay;
• a better employment tribunal system encouraging parties to come together to settle their dispute before an employment tribunal claim is lodged;
• improved whistleblowing protection for company employees;
• new Competition and Markets Authority, bringing together the competition functions of the Office of Fair Trading and the Competition Commission; strengthened legal basis for the UK Green Investment Bank;
• implementing ideas collected via the Red Tape Challenge;
• modernise the UK’s copyright regime while strengthening copyright protections. New possibility to license orphan works; new system for extended collective licensing of copyright works;
• improve consumer protection: right to view and download the data businesses hold on them in an electronic format;
• simplify regulation through reduced inspection burdens; repeal unnecessary laws and time-limit new laws so that there are only ever relevant and necessary laws in place and extend the Primary Authority Scheme to provide consistent regulatory advice to thousands more small firms.

See the Gov site for details.

International regulatory cooperation comes of age

24 April 2013: the OECD has published a well-researched and thought-out stocktaking exercise on International Regulatory Cooperation: Addressing Global Challenges which provides an overview of recent trends, the range of existing regulatory cooperation mechanisms (and actors involved) and preliminary lessons taken from selected experiences. Probably the first such ambitious compendium in the field, it builds on 10 case studies covering a vast range of sectors and experiences (which will be published separately), a review of the literature and other sources. There is also a useful bibliography and a glossary at the end of the volume.
For an overview of the project, go to OECD Regulatory Policy pages on IRC.
The report shows the fascinating multiplicity of IRC arrangements and the important benefits that can accrue from greater regulatory cooperation but also, as it acknowledges, "the remaining analytical gaps and the complexity of implementing effective IRC." As one of the principles enshrined in the 2012 Recommendation (n°12) the development of IRC will be actively pursued in coming months and years, starting with the next OECD regulatory event: the 5th expert workshop on Assessing the Implementation of the 2012 Recommendation of the Council on Regulatory Policy and Governance, co-organised by OECD and Sweden in Stockholm, on 3-4 June 2013 (by invitation).

W. Woermans on regulatory compliance

"What can public authorities do in order to promote regulatory compliance? (from the summary) "This paper argues that understanding the compliance motives is key to any enforcement strategy. Simply stepping up the enforcement effort or stiffening penalties is – most of the time – quite ineffective. Especially attempts at engineering criminal law rules to achieve a heightened deterrence effects will generally be ineffective, social science research suggests. And – much in the same vein – raising administrative enforcement efforts does not automatically raise compliance rates proportionally. There is not a one-on-one relation between enforcement effort and compliance outcome, although this idea seems to be underpinning a lot of present-day enforcement strategies. Enforcement efforts are but one of the many norm-support cues to comply. Recent research rather suggests that a sort of bandwagon-effect exists as regards regulatory compliance. Compliant behaviour, or enforcement activities that reminds us of (or merely point out) the existence of a norm, prompt (more) compliant behaviour. Designers of enforcement strategies need to keep this in mind."

European policy courses relabelled "regulatory affairs"

Smart regulators are invited to take a look at an interesting article in European Voice, and other comments in the blogosphere (such as our LinkedIn group) about the new focus on Regulatory Affairs in European studies courses. EV notes that universities are giving them greater attention though it may be more a shift in labelling than a change of substance, according to Alberto Alemano, who is launching a "clinic" on EU policy and regulatory affairs for his law students at HEC Paris. “We used to talk about European policies and European law, and then we realised that most of the outcome of policymaking is about regulation. It is pretty clear that the privileged tool of European decision making is regulation.”
The HEC course covers theories of regulation, the regulation of markets and other economic activities, and EU regulatory governance. It concludes with current topics in regulation, such as financial supervision or prospects of the banking union.
At the University of Bonn, an existing EU studies master's focusing on regulation of the network industries will be broadened next autumn to include governance and regulation. It is clear that there is a shift and that regulatory studies are no longer the preserve of lawyers and people with a legal background, but require an interdisciplinary approach.
Also announced on LinkedIn, a one-day course on "How the EU Impact Assessment is changing advocacy: focus on 'New Comitology' (16-17 May) " From the announcement by A. Alemano: "As impact assessments are increasingly being performed by the Commission on delegated and implementing acts, new opportunities for substantive lobbying emerge. This one-day training will offer a unique opportunity to understand how your organisation may ask the Commission to run an Impact Assessment and also how to use it in the decision-making process. Our case studies will be based on the most recent and controvesial risk regulatory decisions such as Bisphenol A and Neonicotinoids. With a guest speaker from the European Parliament's newly created Impact Assessment unit, and former EU Commission officials and Court of Justice of the EU you will get a unique insight to the latest developments and get practical tips on how to work with IA in regulatory affairs."

NL ACTAL releases 2012 report on administrative burdens

(Official announcement) "2012 was Actal’s first full year in its new role. In the Regulatory Burden Audit, we assessed if and to what extent ministries have taken the regulatory burden effects into account properly and consistently in preparing new policy. We also issued ex ante opinions on planned legislation on the consequences of regulatory burden proposing less burdensome alternatives within the bills assessed. Signals from society also lead to various advices to tackle the regulatory burden in existing legislation. We believe our activities of last year can contribute to less regulatory burden for businesses, citizens and professionals, making more commitment possible. Our digital Annual Report 2012: Less regulatory burden, more commitment. gives an overview of all our activities and the most important developments of last year."

New measures for SMEs (France)

At the Cabinet seminar on 18 April 2013 on monitoring the implementation of the Competitiveness Pact, the Prime Minister announced that nearly two-thirds of the agreed simplification measures are already implemented or have been launched. He also announced the reduction in accounting requirements for smaller businesses and measures to promote the investment of small saving accounts in business ventures. See ministry of economy media release.
Also interesting to note, a new site on simplification and related issues (such as "quality of the law") by the DGCIS (department in charge of business attached to the ministry of industrial renewal and ministry of crafts, trade and tourism.)

World Class Economic Regulators join up in OECD

Economic regulators will soon have their own forum in OECD to discuss, with assistance from the international regulatory experts, issues of common interests such as how to guarantee the right degree of independence from government or how to measure their performance and give their economies value for money. On 24 April, some 20 regulating agencies and supervisory departments from some 15 countries met at OECD HQ for the third time to address a range of governance and efficiency issues. Best practices from the US Energy Commission (by John R. Norris) and the Portugal Water Authority (by J. Melo Baptista, from ERSAR) were scrutinised. The quality of the group's work and potential future contribution to the sustainable management of national public utilities (such as energy, telecom and water) may be recognised by member states by granting the network official status under the Organisation's operating rules. This will ensure that a new wealth of OECD economic literature will be updated for regulators world-wide, drawing lessons from success stories, sharing best practice and providing guidance to governments on when and how it may be best to delegate to an arms-length agency the management of such network assets. Any new published resource will be reported on this blog.

How to apply EU law without goldplating (UK)

Two very useful guidance documents have just been published by UK BIS (Business, Innovation and Skills Department). They may be of interest to smart regulators in other countries, particularly in European countries
Guiding principles for EU legislation : This publication contains guiding principles underlying the government’s approach to implementing EU measures, with a view to bringing an end to goldplating. Ref: BIS/13/774 PDF, 76.1KB, 2 pages
Transposition guidance: how to implement European directives effectively : Aimed at policy makers and lawyers across Government, this guidance gives a step-by-step method to transpose EU Directives into UK law in accordance with the guiding principles for EU legislation. It can also be referred to by, but is not binding on, officials in the sub-national administrations. Ref: BIS/13/775 PDF, 342KB, 32 pages.

Red Tape Blitz picks up momentum (Australia)

The Australian Government's ComLaw site publishes the "Attorney-General's (Spent and Redundant Instruments) Repeal Regulation 2013" which includes lists totalling 1000 regulations and other instruments repealed, in what observers call a "red tape blitz." Regulations repealed include the National Handgun Buyback Regulations 2003, which governed the purchase of outlawed weapons and other obscure instruments including marriage regulations that referred to unmarried men and women as ‘spinsters’ and ‘bachelors’. The oldest of the repealed laws was made in 1967. According to Attorney-General, the program aims to delete more than 12,000 this year. Minister for Finance and Deregulation, P. Wong indicated that the repeals followed amendments made by the Legislative Instruments Amendment (Sunsetting Measures) Act 2012, with the repeal instrument registered on the Federal Register of Legislative Instruments now taking full effect. "The latest repeals were in addition to reforms through the COAG Seamless National Economy agenda, which the Productivity Commission had estimated would save businesses billions of dollars each year when fully implemented." For background see previous Sept 2012 post, and for comments, Public Service News article.

Accounting obligations simplified for European SMEs

The Irish Presidency has announced a success in the discussions on the simplification of accounting rules across Europe, to further improve the functioning of the single market. New measures will cut red tape for SMEs and increase transparency with inclusion of “country-by-country” reporting. The agreement secured on 9 April in Brussels on the Accounting Directive will further reduce red tape for European SMEs, according to Irish minister R. Bruton, current chair of the Competitiveness Council (see page 10 of 18-19 Feb session). "The Directive is one of the final outstanding parts of the Single Market Act I. One of the Directive’s key proposals is the simplification of accounting rules for SMEs. Among the measures contained in the draft Directive are the reduction of reporting requirements for SMEs and the introduction of an exemption from preparing consolidated financial statements for small groups." See also European Voice.

Dodging Indian red tape :)

A nice little story about how to get a hotel up and running in India in less than 12 months, in spite of local red tape: Business Times Singapore

Commission to test the efficiency of national courts

On 27 March, the European Commission launched the EU Justice Scoreboard, "a tool to promote effective justice and growth", which according to the press release, offers a comparison of the justice systems of member states in a bid to assess how their activity can affect economic growth.The justice scoreboard will focus on the business and investment climate, such as the efficiency of EU courts to resolve civil and commercial disputes. The Commisison is working on the assumption that the quality of national courts can affect the entire EU, since a lack of implementation of EU law in one court can affect the functioning of the single market as well as undermine the rights of citizens and businesses operating across borders. Smart regulators will not disagree and they will welcome this additional tool to measure implementation and enforcement of regulation. For more, see Euractiv article: "Commission to test the efficiency of national courts" (tip from L. Allio.)

2013 Index of Economic Freedom

Not yet mentioned on this blog, another convenient international comparison of how regulations can impact economic achievement: the Index of Economic Freedom, calculated and published since 1995 by The Wall Street Journal and The Heritage Foundation, an American think tank. The 10 benchmarks used to gauge the economic success of 185 countries around the world are well supported in economic and political economy theory (primarily by A. Smith), and are illustrated by country case studies. The definition of economic freedom itself is not without interest: the 10 economic freedoms are grouped into four broad categories or pillars of economic freedom:

• Rule of Law (property rights, freedom from corruption);
• Limited Government (fiscal freedom, government spending);
• Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and
• Open Markets (trade freedom, investment freedom, financial freedom).

Each of these four pillars provide useful indications as they are, like the indicators used in the World Bank Doing Business ranking, dedicated to measuring the economic impact of a prudent use of regulation.

Town council creates BR council (Mexico)

The Mayor of Querétaro, a municipality not far from Mexico City, officially inaugurated a Regulatory Improvement Council to make Quéretaro a "city of knowledge" and facilitate a "better use of the talent of its people". In his mind, regulatory reform can usher in good governance and responsiveness to the needs of citizens and business, and improve competitiveness. The president of theFederal business council (Coparmex), who was present at the event, supported the initiative.
A similar step has been reported in Cuatlancingo, where a better regulation unit has been set up.
Meanwhile, the State of Durango has amended its Regulatory Reform Law for a more balanced geographical distribution of the benefits of growth.
See also similar news from Ttaxala and deregulation results in Puebla.

Italy commits to smart regulation

Photo from left to right: C.H. Montin (France), F. Barazzoni (Italy), Minister Patroni Griffi, J. Nijland (Netherlands), M. M. Leitao Marques (Portugal), V. Cerulli Irelli, and P. Nurmi (Finland).

Following publication of "Towards Smart Regulation in Europe" (Maggioli Editore) the university of Rome Sapienza organised on 5 April a workshop on the future of smart regulation with some 40 academics, senior officials and some of the authors of the new book. The minister of public administration and simplification, H.E. Mr F. Patroni Griffi (3rd from left), who is also a section president of the Council of State, attended most of the "incontro di studio" and summarized results of the Italian simplification policy over the past 20 years. Prof. V. Cerulli Irelli, former MP and eminent administrative lawyer, and Prof. M. D'Alberti (also from La Sapienza) showed how the principles of smart regulation were at the root of Italian simplification policy. The authors present (see photo) drew from their national and international experience key points for implementation of smart regulation policies and possible cooperation with academe. For more about the overview of better and smart regulation in Europe, see 19 February post.

New simplification package (France)

On April 2 the governement held the second session of the CIMAP (interdepartmental committee to modernize public action) to address a full range of legal, institutional and managerial issues related to simplification. The new policy launced in December intends "to establish a new balance in our society by way of structural reforms to adapt to major demographic, economic, digital and environmental changes". The press release and very complete press file provide details on the package of measures which include:
- a commitment to fewer and simpler regulations: in a four-line standing instruction, the governement urges prefects (in charge of local enforcement) to "personally ensure" that administrations facilitate implementation of rules by adopting smart interpretations (in French "interprétations facilitatrices"), "to simplify and accelerate the implementation of public and private projects." A moratorium on new rules implies that any new regulation must now be offset by a "corresponding simplification," (one-in, one-out policy.) Performance evaluation of central administration directors will include how how they have delivered on this government policy..
- Evaluation: a comprehensive review of all public policies is to be completed by the end of the current administration (2017). A detailed schedule is announced.
- Managerial: a package of 30 practical measures to improve local delivery; RIAs to include a study of impacts on local implementation of any new regulation; a list of some 100 advisory bodies already abolished has been published;
- Fewer state agencies: new rules on the creation of QUANGOs and the immediate merger or deletion of about 15 agencies were announced.
For more, see analysis from Acteurs Publics article or Expansion and download the press file.

"Freedom day" for UK business

The BIS Department has announced a large set of red tape cutting measures coming into force on 6 April, to achieve an additional £21 million in overheads expenses for companies. Examples of changes include moving registration and payment online and introducing a UK-wide registration system for the first time. Deregulatory changes to building regulations are part of a wider package that will save business in total over £50 million per year, whilst ensuring buildings remain safe and sustainable. These reforms also include reducing administration on low-risk electrical works, and clearer, more consistent guidance on requirements for access to buildings, glazing and protection from falling. For more, go to official press release.

Simplification "shock" in France

Regulation in the spotlight in France, as factor in economic woes. "France has avoided the most severe impacts of the global economic crisis and turmoil in the euro area, but must now take action to boost competitiveness and create jobs, according to the OECD's latest Economic Survey of France." The Survey, presented in Paris by OECD Secretary-General Angel Gurría to French Minister of Economy and Finance Pierre Moscovici, urges France to attack the pervasive bottlenecks that have limited economic growth and maintained high unemployment over the past decades. "The French economy has tremendous assets and considerable potential, but excessive regulation and high levels of taxation are gradually eroding its competitiveness," Mr Gurria said. See OECD media release, and (posted 28 March) the French ministry of finance website, with the minister's statement.
Mr Gurria's message seems to have been heard: In his television interview on the public channel France 2 on 28 March, President Hollande announced the drastic reduction of the number of administrative procedures, particularly for small and medium-size enterprises, in what he termed a "simplification shock." "Currrently, a small company is obliged to respond yearly to some 3000 requests for information from the administration, yes, 3000!" said the president, who promised: "Tomorrow we will divide that figure by two or by three." This high-level announcement has been widely commented in the media, who also reported, quoting OECD, that the savings to business could reach €60 bn a year, or 3% of GDP.
Speaking on radio on 2 April (today), the minister in charge of public administration reform (Mme Lebranchu) said that this reform drive was different from its predecessors as it was based on the willing participation of the civil service, and not on reducing staff numbers. A site reserved to officials has already collected 1500 simplification ideas from within the administration.

"The Glorious Regulatory Revolution" (Russia)

1 April: our Russian correspondent and director of the RIA Centre Daniel Tsygankov published in RBK, a daily newspaper, under the grand title "The Glorious Regulatory Revolution" a summary of recent regulatory policy developments in Russia since the April 2012 conference reported on this blog.
Daniel remembers: "Russian and international experts were unanimous: RIA cannot “pull off on its own”, in the best case it will gradually degrade to the new interagency coordination, and at worst it will be buried at the cemetery of administrative reform. There is an urgent need to conduct a comprehensive regulatory reform, to persuade policy decision makers that regulatory policy is one of the three key levers of state power, along with budgetary and monetary policy."
So what does Russian regulatory reform look like? Its main components are listed in the article as follows:
(1) a “new start” for regulatory impact assessment, positioning of the head RIA body at the central level of government and creation of public data bases to measure the regulation effects,
(2) mandatory public consultations – industry panels, focus groups with stakeholders or crowd sourcing,
(3) reducing of administrative burden, the use of standard cost model as the main tool for measuring compliance costs,
(4) principles of transparency that guarantee stakeholders’ access to “electronic dossier” of the proposed regulation at all stages of law making,
(5) adoption of the “Federal Law on Legal Acts”, including the Parliamentary RIA, sunset legislation, plain legal language, introducing moratoriums on regulations that worsen the conditions for doing business, tools for cleaning up the regulatory stock,
(6) analysis of impact on public budget parameters and public sector institutions.
And Daniel modestly concludes: "For me it was important that for the owners of mini-bakery in a village or auto repair shop in a small town something has changed for the better and for the majority of end users affected by the regulation it is now easier to work. We breathed hope in grassroots."
See Blog's "Russia/Ukraine" category for more posts on the subject.