This independent blog collects news about projects or achievements in regulatory reform / better regulation. It is edited by Charles H. Montin. All opinions expressed are given on a personal basis.
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31 March 2015

Business groups review administrative burdens (UK)

Another good practice from the UK, showing how smart regulators can enlist and subsidize responsible stakeholder support to identify regulation in need of streamlining or deletion.
On 23 March, the British business minister (note the specific title) reported on the outcome of the Government's March 2014 invitation to industry groups such as trade associations to bid to lead one of 3 'pathfinder' reviews, allowing them to collect evidence of the impact on industry of current enforcement practices and challenge problems like duplicated paperwork, inconsistent advice or unhelpful guidance. The successful organisations each received a grant of up to £4,000 to contribute towards the costs of their projects. As a minimum, the review teams were required to match the funding from their own resources.
The press release summarizes the findings presented by participant organisations: Fresh Produce Consortium, National Farmers' Union (NFU) and techUK. It shows how these business groups made proposals respecting the benefits of regulation:
  • The Fresh Produce Consortium scrutinised imports of fresh produce into the UK. After carefully considering their findings, the Food Standards Agency will be taking a number of steps including reviewing official control turnaround times at airports and investigating disparities in the costs that are charged by Port Health Authorities for their inspections.
  • techUK have reviewed the export licensing of electronic products. The government's Export Control Organisation (ECO) will explore options to re-introduce their control list classification advice service to make it easier for businesses to know whether a product requires an export licence. They will also continue to pursue export licensing reforms aimed at providing businesses with more flexible licensing solutions which minimise the impact on the exporter and the regulator. This review was explicitly not permitted to make any recommendations on the UK's strict vetting and licensing system for military or dual-use products.
  • The National Farmers' Union examined livestock inspections and found issues with duplication of visits from different regulators and inconsistencies across the country in terms of the number of inspections. The Department for Environment, Food and Rural Affairs have welcomed this important work and are considering what action to take.

Cost of delays included in regulatory costs (Australia)

This blog has regularly reported on the current discussion worldwide on what regulatory costs should be measured when considering new legislation (see regulatory costs category containing 46 posts). The best summary is available on the OECD "Measuring Regulatory Performance" page, which contains many useful resources including  the 2014 OECD Regulatory Compliance Cost Assessment Guidance.
A revised  guidance note on  "Regulatory burden measurement framework" has been issued in February by the Australian Office of Best Practice Regulation. The Australian approach targets a broad range of regulatory costs, to include substantive, or compliance costs in addition to the more commonly considered "administrative costs".
What is perhaps the newest is the section on "cost of delays", page 11 of the document, and copied below:
"Measuring delay costs is more complex and might not necessarily involve estimating labour costs or purchase costs. Often, once the regulation is implemented, delay costs could be considered as administrative costs, compliance costs, or both.
Delay costs should only be calculated when a business is waiting on government action to commence trading. For example, an entity may have to wait six months to obtain government approvals to sell a product on the Australian market. Where the entity is otherwise able to begin trading on the day it lodges its application, the delay costs comprise lost sales over the six-month approvals period. However, if the entity is not ready to commence trading until four months after lodging the application, the delay costs will comprise only two months of lost sales.
Delay costs are often incurred through the holding of land and capital. In these cases, you should be careful to consider what the business-as-usual case (that is, without the proposed regulation) is expected to be and whether the cost is a delay cost, a substantive compliance cost or an administrative cost. As an illustration of this distinction, consider a regulation that results in a business purchasing a machine but, as a result of an application delay, the machine sits idle for two months. The cost of the machine is not considered to be a delay cost, as the machine is needed to comply with the regulation, and would instead be a substantive compliance cost. However, the cost of the machine sitting idle is a delay cost and could be calculated as the loss of income incurred by the business as a result of the machine not being used."
A more detailed methodology on the measurement of the cost of delays in France was published by your blogger in 2007, and still online in the archive section.

26 March 2015

Reg. ref. to boost bilateral trade (Australia/Korea)

(Yonhap press release) "The Australian Embassy in Seoul on Friday (13 March) hosted a forum on regulatory reform and deregulation with the South Korean government in a bid to explore ways for cooperation in these areas, officials said.
The one-day forum titled the "Best Practice Regulation Workshop" came as Seoul and Canberra seek to boost cooperation in the field of regulatory reforms with a free trade agreement between South Korea and Australia (KAFTA) going into effect late last year.
"Services and investment are important parts of KAFTA, but they cannot reach their full potential unless the regulatory environment improves," Bill Paterson PSM, the Australian ambassador to Seoul, said at the opening of the forum.
"Predictability, transparency, consultation, consistent application, and cutting red-tape are essential and both our governments are committed to achieving a more business friendly regulatory environment," he added.
Kang Young-chul, deputy minister for regulatory reform, also said that "drastic reform is necessary for the success of regulatory reforms," adding that South Korea and Australia will continue to carry out cooperation in this sector.
South Korea said that it will scrap more than 100 administrative rules cited by local companies for hindering businesses as it seeks to prod more companies into increasing investment to jump-start the local economy.
Australia is in the process of reducing tape worth $1 billion every year in its drive for deregulation, the embassy said."

Red tape "worse than censorship and propaganda" (China)

For experts engaged in simplifying procedures and cutting red tape across the world, this article from the NY Times will bring some solace: there are always places where the bureaucracy is more corrupt, where reform seems impossible. The article shows how Chinese bureaucracy ensnares and paralyses its honest citizens in a maze of red tape, with dramatic but also funny consequences such as: unmarried women do not qualify for the birth permit; unregistered children cannot go to school, etc.

12 March 2015

Communicating regulatory reform (Egypt)

After a two  year interruption from June 2012, the  Egyptian Regulatory Reform and Development Activity (ERRADA) has been posting news on a regular basis and sharing valuable resources in English. It portrays how a MENA country can put to use the principles of better regulation in support of economic initiative and growth. Of special interest are the news section, reports on the methods used for inventory and review of regulations, with emphasis on those that affect business, and the RIA material, including a workplan for the introduction of RIA and guidelines for practitioners.
There is however still a long way to go for ERRADA, as Egypt only ranks 112th in the Doing Business 2015 ranking.

British regulatory watchdog publishes 5-year report

The Regulatory Policy Committee (RPC) published on 3 March a comprehensive report on its action since the beginning of this Parliamentary term. Since 2010 the regulatory watchdog has scrutinised over 1,200 regulatory proposals affecting business and civil society organisations, of which 951 became law. This resulted in the RPC issuing just over 2000 opinions on the quality of the evidence base supporting these proposals. It claims that this scrutiny led to the withdrawal or modification of draft legislation saving business £2.2 billion per year in administrative burdens.
In parallel, the RPC has just been strengthened with the appointment of four new members, while retaining its chairman Mr Michael Gibbons.

Commission unclutters EU legislative agenda

One of the most original features of the EU smart regulation policy, not often present at national level, is the periodic removal of older, outdated or obsolete  proposals from the legislative agenda, to be replaced by revised or more comprehensive initiatives more likely to be adopted by the legislators (Council and Parliament). This has been practiced regularly by the European Commission since the beginning of the better regulation initiative in the early 2000's. A new wave of "withdrawals of pending proposals" was announced by the EC on 7 March 2015 and is presented as a way to cut red tape and remove regulatory burdens, contributing to an environment conducive to investment. With fewer and more recently drafted proposals from the Commission on the table, the legislative procedure is supposed to be better focused and produce clearer rules.   From the press release: "The Commission decided the withdrawal of 73 pending legislative proposals, with the adoption of the Commission's Work Programme for 2015 on 16 December 2014. The list of withdrawn proposals has now been published in the Official Journal of the European Union. This confirmation of the withdrawals follows constructive discussions with the other institutions in which the Commission has heard their views. The Commission will continue to work on the implementation of its Work Programme in close partnership with the other institutions, including through the tabling of more ambitious and comprehensive proposals on the Circular Economy, after the withdrawal today of the Waste Package."

10 March 2015

Eurasian Commission spells out RIA method

Thanks to our friend D. Tsygankov (HSE, Moscow), we are kept informed about the progress of RIA in the Eurasian Economic Commission. We know that RIA became operational on 1 January 2015 in this "supranational regulatory body" formed between four ex-USSR countries, for a number of economic decisions (see post dated 31 December 2014).
Chapter IX  "Regulatory Impact Assessment of the Commission's draft decisions" of the EEC's rules is now available in an unofficial translation which has been sent to the blog for the information of international readers.  
The specific mechanism of the "Eurasian" RIA, including exclusions (RIA targeting), was discussed at the international workshop held last December in the Chamber of Commerce and Industry of the Russian Federation. Chapter IX defines the scope of the scheme, specifies which service is in charge of the research, outlines consultation obligations and most interestingly lists the various economic impacts that need to be measured. We would now need to see some of these RIAs published online for the instruction of RIA pratitioners worldwide.