Naming and shaming bureaucrats (Canada)

Paperweight Awards (2) and Dishonourable Mentions (3) are some of the "prizes" awarded by the Canadian Federation of Independent Business (CFIB) at the close of its fifth annual Red Tape Awareness WeekTM to ministries not sufficiently attuned to the need to make life easier for SMEs. This is a highly visible way of drawing attention to worst cases of red tape, where administrations have cooked "ridiculous rules" imposing extra burden on small business. Most cases seem to be a knee-jerk reaction to a real issue such as fraud where the whole business sector is punished for the disdemeanour of a few truants, or the slopiness of the rule, where other solutions may have been just as effective, but at the cost of some extra work for the public agencies. It is difficult to say whether this "naming and shaming" technique is effective, but it has the merit of sending a strong signal that consultation on a review of the rules is necessary.

Canada's 5th annual Red Tape Awareness Week

According to a press release taken up by several media, the 5th edition of Canada's Red Tape Awareness Week™ (from 27 January) will continue to demonstrate " how real the red tape burden is for business owners and ordinary Canadians, and where we are in the effort to reduce that burden. " From a report card that grades individual governments on their own red tape reduction efforts to recognizing leadership that has made a difference in cutting it, the event will be worth following. See also this blog's post on last year's edition.

New steps to support SME growth (UK)

On 7 December, the UK government published a new series of papers under its ‘Small Business: GREAT ambition’ initiative. The policy, designed in response to feedback from small business, aims to support new entrepreneurs to start up a business and focuses on small businesses who are ready to scale up their business. It sits alongside the British Industrial Strategy. The launch of ‘Small business: GREAT ambition’ is part of a wider programme of activity to promote the support available for small businesses and includes the Business is GREAT Britain campaign.

In an attractive format, with case studies illlustrating each of the objectives, the paper tackles the various dimensions of the life of a company, i.a. finding funding for growth, hiring people, developing new ideas, breaking into new markets.

Untapped potential of Smart Regulation for SMEs

According to a press release, from the Lithuanian (rotating) presidency of the EU organized on 29 October a panel discussion on Smart Regulation for SMEs, attended by Brussels based European business organizations, representatives of companies, EU institutions and diplomats. The event focused on impact of regulation to medium sized enterprises in Europe and possible ways to reduce regulatory burden. 

In his opening remarks Deputy Permanent Representative of Lithuania to the EU ambassador Arunas Vinciunas noted that as a rotating Presidency Lithuania has placed special attention on smart regulation and SMEs in its Presidency Programme. "Smart regulation for SMEs is an important priority for the European Union as efficient and fit for purpose legislation in that area is a prerequisite for economic growth and for strengthening the competitiveness of Europe. Regulation has a direct impact on businesses, on performance of the companies. Our task during Lithuania's presidency - to make at least a small step forward to make life easier for the creative and hard-working business people," said ambassador Vinciunas.

According to him Smart Regulation should not sound as just a political slogan. Smart Regulation contains a number of important instruments to be fully employed and still has undisclosed potential to make EU and national legislation less burdensome for enterprises and effective at the same time.

Culture change for regulators (Australia)

The Australian Productivity Commission release a research report earlier this month on "Regulator Engagement with Small Business" according to which "Regulators can do more to reduce the compliance and enforcement burdens they impose on small businesses. The Commission argues that regulators should ensure they understand how regulation impacts on small business and keep the compliance capacity of small businesses at the forefront of their minds." A regulator's culture and attitude towards business should include the following improvements:

• Regulators should adopt a multi-channel approach to communicating with small businesses with a focus on the brevity, clarity and accessibility of information. 
• Compliance and enforcement strategies should be proportionate to risks posed to communities and facilitate voluntary compliance. 
• Regulators should commit publicly to target timeframes for key processes, report on their performance in meeting targets, and consider other measures to improve timeliness. 
• Regulators should have access to a sufficient range of enforcement tools and be resourced to do their job effectively, to avoid the shifting of direct and indirect costs onto businesses.

Good roadmap for regulatory reform (Rhode Island)

Experts seeking a recent formulation of a regulatory policy addressing the needs of small business could do well to check out a recent article by Ms Serpa, Rhode Island Democratic state representative and chairwoman of the House Committee on Small Business. "Regulatory reform isn’t the sexiest topic in state government, but for small-business owners it’s everything. I know this, many of my colleagues in the General Assembly know this, and it is my belief that Rhode Island is coming close to achieving tangible progress in streamlining our regulatory processes."
Ms Sherpa refers to a RI Office of Regulatory Reform paper entitled “Period 1 Regulatory Look Back Report”  which takes stock of the current review of all legislation and formulates 10 key recommendations (summarized as follows):
•"Map the regulatory environment: Rhode Island should provide an up-to-date map of state-government organization so small-business owners aren’t lost as to where to find information about how to start a business, how to expand their businesses or simply how to stay in compliance with state guidelines.
•Reduce the number of statutory exemptions: More than 20 percent of reviewed regulations across 22 regulatory entities were exempt from the reform process because of either separation-of-powers considerations or the law’s definition of “small business.” The lack of clarity in the definition of “small business” poses a consistent challenge, and it’s one ORR recommends we tackle in the future.
•Improve accessibility to regulations: Small businesses reported needing outside professional help to navigate the 26,240 pages of regulation. The report aptly points out that those documents are the equivalent of 10.1 copies of “War and Peace.” To worsen matters, each regulatory entity uses a different template for writing regulations. The bottom line: We need to make this process more uniform.
•Rejoin separated regulation: Breaking down one regulation into separate regulations in the past has resulted in confusion about how to comply with basic guidelines. This must be rectified.
•Reform audit, inspection and enforcement processes: These practices have as much impact on small business as regulatory policy and need to be reviewed alongside regulatory reform.
•Promote lawmaker and small business participation in reform: Lawmakers should be involved in this process just as much as members of the business community should provide feedback. We are only in the first stage of recommendations. There needs to be more dialogue. I would even go one step further to suggest a presentation to the General Assembly on these ORR findings and recommendations so we can put a spotlight on these issues and deliberate on them effectively in future sessions.
•Support improved cost-benefit analysis: The state is always concerned with data quality, and we want to strive to ensure that it can accurately quantify basic regulatory statistics.
•Push regulatory reform efforts beyond current performance levels: Of the 179 regulations identified by entities and ORR as having a small-business impact, 26 were offered for amendment and repeal. We can do better. As we move forward with rigorous review, ORR will challenge our departments to find more areas of reform. A large part of our economic environment is dependent upon how quickly this state can turn around and streamline these processes for small businesses."

British Columbia appoints official to cut red tape

According to a Canadian online news provider, the BC Government has just launched the "Small Business - Doing Business with Government Project" headed by a senior official whose task will be to work with small businesses to break down barriers and seek to increase small business procurement by at least 20 per cent. Emphasis will be on direct consultationwith business owners and operators to develop recommendations to make it easier for small businesses to compete for and win government contracts. This type of appointment is no longer rare, and can be considered good practice as it puts a face on the simplification effort, and stresses the participation of stakeholders in the effort.

Iceland streamlines business regulation

Just translated into English, and pointed out to us by Icelandic BR expert Pall Thorhallsson, the new government's action plan to improve the regulatory environment of business, according to the coalition agreement and decisions by the Cabinet meeting of 23 May. The PM's office will prepare a report by end 2013 on the items of legislation most onerous for business and open a web page to consult the public on simplifications of business regulation. For more, see government website.

Simplifier le millefeuille des aides aux PME

Avec le 11ème salon "Planète PME",  c'est l'occasion de faire un tour d'horizon des dispositifs destinés à faciliter la croissance des PME. Leur abondance brouille souvent leur compréhension et leur utilisation. [...] Un récent rapport d'Ernst and Young a analysé la complexité des dispositifs, et sondé les bénéficiaires. Plus de 70 % des personnes interrogées y exprimaient une réelle difficulté à les identifier et à accéder aux aides publiques, avec en ligne de mire leur nombre trop important (32 %), la complexité des dispositifs (25 %) et la multiplicité des sources d'information (21 %). La CGPME avait déjà signalé cette faiblesse en 2012 dans son étude sur l'évolution des PME depuis dix ans. 74 % des dirigeants se déclaraient favorables à la création d'un guichet unique pour clarifier l'accès aux aides. Ce jugement négatif se conjugue avec une appréciation très critique de la majorité des structures publiques de soutien aux entreprises, perçues comme mal coordonnées et parfois concurrentes.Voir aussi commentaire sur Pro.Orange, un portail d'informations professionnelles.

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.)

France cuts red tape in competitiveness drive

Last week, the French government published a very complete press pack on the National Pact for Growth, Competitiveness and Employment, (the download includes anEnglish translation) which is a particularly welcome document for all experts monitoring, for comparative purposes, the new official policy.

Approach: As regards red tape onbusiness, the approach is spelt out in section VII of the paper ("simplfify administrative procedures and the regulatory framework surrounding business"): the government confirms its commitment "to exploiting all possible drivers to make things easier for companies (SMEs in particular), reduce the administrative burden on them and reduce administration processing times. These objectives will be pursued in the general interest and in line with Government guidelines in terms of ecology, public health, worker and consumer protection, etc."

How will the new policy be delivered: "Working closely with companies and their representatives, an initial multi-year programme to simplify administrative procedures is to be developed" by the next meeting of the Conseil interministériel pour la modernisation de l'action publique (CIMAP) in December 2012. It can be updated regularly with proposals from companies and ministers. Progress of this work will be monitored on the basis of precise indicators decided by companies and the CIMAP (quarterly). Companies will be closely involved in developing and monitoring the simplification measures.

Fast-track actions:

• a five-pronged approach to reducing red tape on companies ("tell us just once" scheme to reduce information obligations, single declaration process for social information, streamline commercial property procedures, simplify aid mechanisms, limit gold-plating of EU law);
• a sustained red tape cutting exercise under the authority of the Prime Minister;
• an "SME test" for new draft legislation with the strongest potential impact on SMEs, to include tax issues;
• by the end of 2012, a "rationalisation" drive on the tax burden, on the basis of zero net growth: no new tax to be levied without a corresponding reduction.

 

Departments working to support the policy (see also previous post):

• Secretariat General for Modernisation of Public Action;
• Commissioner for Simplification (PM's office);
• DG for Competitiveness (dgcis, Ministry of economy)
• General Control (Economy and Finance)

"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.

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.

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.

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.

Australian (new) Business Advisory Forum

The involvement of business in orienting regulatory reform can take many forms. Earlier this month, the Australian Government announced the creation of a Business Advisory Forum to advise on deregulation, according to the official press release. Business leaders of the nation’s biggest companies will join state and territory leaders in a new deregulation dialogue . Senior business figures on this Forum will have two main roles:
• To advise Governments on how best to coordinate and progress the remaining areas of competition and regulatory reform; and
• To nominate new areas of regulatory reform that will help lift productivity and drive investment, therefore growing businesses and creating new jobs.
Small business will also be directly represented on the Forum, given smaller firms often disproportionately feel the impact of regulatory burdens. 
The forum will work alongside the Council of Australian Governments to identify regulations that are hurting economic activity across state boundaries, such as inconsistent standards for tradespeople who move interstate , to unlock a combined $4 billion in productivity gains.

Comments in the press highlight the need for the Governement to make peace with the business world after several key reforms meeting difficulties. The Australian recalls that  "the creation of the forum, after extensive lobbying by business, follows a report last month from the Council of Australian Governments' Reform Council, which warned that 12 key reforms were at risk including harmonised occupational health-and-safety laws, a national trade licensing system, a nationally consistent approach to the imposition of personal criminal liability on company directors, national regulation of the legal profession and energy reforms. " See also Sydney Morning Herald for more comments.

European small business against exemptions

A difficult topic for us Smart Regulation experts is how widely should we use exemptions to ensure the best possible effects to regulation. That is the question posed by the European Commission's proposals in November 2011 to alleviate the regulatory burden on SMEs, and already discussed on this blog, when the ACCA (Chartered Accountants) published its position paper recommending that ""Smart regulators must be able to tell regulatory burdens from regulatory capital."
Now the European Association of Craft, Small and Medium-sized Enterprises (EUAPME), a leading stakeholder organisation in Brussels, has also come out against the EC policy, explaining in a Position Paper issued 27 January why "exempting micro enterprises from EU legislation is not an option." While they welcome the recognition that compliance with regulation is more burdensome for small companies, UEAPME believe that "Standards and regulations which are related to the quality aspects of enterprises, their products and their services must also be respected by smaller enterprises, if they want to be successful and remain competitive on the market, even locally."

New package for SME's (France)

As mentioned in a 2 December post, the French ministry in charge of SMEs has published 1/ a second set of measures (16) to reduce red tape on companies and 2/ a status report on the government's SME policy. Among the 16 measures, most notable could be the creation of a hotline for SMEs, the extension of RIA to secondary legislation affecting business, raising the threshold for public tenders, lightening company law obligations, creating one-stop-shops for classified facilities, and for air-transport taxes, and streamlining various procedures. Each measure is presented as a response to business concerns. The status report also gives an update on how each of the government's 80 measures announced in April is being implemented, and lists the measures put forward by the July 2011 Warsmann report to the government, which the government is addressing in priority, distinguishing between those requiring legal adjustments, from those that can be applied without any prior legal change. To support the impact assessment of intended business-related regulation, the ministry of economy, finance and industry is going to set up a dedicated evaluation structiure which will work in connection with the Commissaire à la simplification who operates from the Prime minister's office. To capitalise on the recent consultation of business, an advisory national council is also being planned.

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.