Swedish report on regulatory cooperation

H. Lund, senior adviser in the Swedish Board of Trade, draws our attention to an interesting new report which contributes to one of the most challenging dimensions of regulatory cooperation. The following is a quote from a Board's news report:

Free movement of goods and services are increasingly dependent on preventing and eliminating technical barriers. Therefore, technical barriers to trade between the EU and the U.S. are a key issue in the ongoing free trade agreement negotiations, the Transatlantic Trade and Investment Partnership (TTIP). This is also established in the National Board of Trade's new report "Regulatory Co-operation and Technical Barriers to Trade within Transatlantic Trade and Investment Partnership (TTIP)".

The report has been produced as a contribution to the negotiations and highlights the regulatory aspects of TTIP. It outlines how the regulatory systems for trade in goods is structured in the EU and the U.S. and provides an analysis how TTIP relates to the WTO legal framework and existing free trade agreements. The report also includes an analysis of how TTIP can affect five selected sectors: automotive, information- and communication technology (ICT), chemicals, pharmaceuticals and medical devices.

The challenge in the negotiations consists of finding the level of regulatory cooperation that offers clear benefits in terms of enhanced trade opportunities between the U.S. and the EU. This, while legitimate interests such as health and safety are maintained and while observing that trade conditions with third countries are not impaired. An important part of the analysis is to clarify the Swedish interests and estimate the extent to which they coincide with the interests put forward by various stakeholders in the EU.

Measuring Regulatory Policy (OECD, Stockhom, 3-4 June)

This 5th expert workshop in Stockholm is part of the OECD programme on Measuring Regulatory Performance which addresses two very important issues for the Regulatory Policy Committee and the OECD: how can countries measure regulatory performance to diagnose success and failures, improve regulatory policies, programmes and tools, and to communicate progress? How can they demonstrate that an investment in their systems for regulatory policy and management is delivering improvements to their economies and societies? At the 5th workshop, delegates and experts will discuss best practice implementation of the 2012 Recommendation on Regulatory Policy and Governance and how to benchmark progress over time. This is an important step in measuring progress in the implementation of the Recommendation in countries, and the preparation by the OECD of a Regulatory Policy Outlook in 2014.
Background: The 2012 Recommendation provides a list of 12 "principles", which can be used as a checklist of measures that governments can and should take to support the implementation and advancement of systemic regulatory reform to deliver regulations that meet public policy objectives and will have a positive impact on the economy and society.

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."

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.)

UK Gvt streamlines inspections on food outlets

Just published, a very good summary on the official Government site on how to improve enforcement of legislation by introducing risk-based inspections and publishing better guidance to manufacturers on how to comply. In this Better Regulation approach, more efficient enforcement of regulation serves higher standards of protection by way of less bureaucracy.

"The Government's Focus on Enforcement campaign asked small food manufacturers with up to fifty employees to report on their experiences of working with national regulators and local authorities.

Acting on the feedback received, the Food Standards Agency (FSA) will:

• Allow businesses with a good record of compliance fewer inspections
• Deliver enhanced training for enforcement officers, helping them understand the law and the businesses they are regulating – including an innovative e-learning package that will also benefit business
• Work with local authorities to improve consistency in the quality of enforcement, creating a level playing field for businesses and a dependable level of protection for consumers
• Explore alternate appeals mechanisms in cases of disagreement between the business and the enforcing officer
• Ensure guidance for the food industry on food safety management is clear and concise. FSA will continue to review the guidance on control of cross-contamination of E.coli O157, and engage one of the leading food science laboratories and research centres in the UK to test independently the alternative controls to cross-contamination proposed by stakeholders. This will ensure any unnecessary burdens on businesses can be removed while strengthening the effectiveness of public health protection.
• Working with industry stakeholders, the FSA will assess what guidance is currently available, whether this is accessible and used by industry, and what the FSA can do to help small manufacturers."

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.

Food law enforcement under public scrutiny (UK)

On 1 May, the Department of Business, Innovation and Skills (BIS) launched the first review theme for the Government’s Focus on Enforcement campaign (see previous post), which will concern food manufacturing companies. This initiative is important for us experts as it provides a practical illustration that Better Regulation policies must include steps to determine how enforcement of regulation can be improved, reduced or done differently.

To provide facts for the future review of regulation, For the next five weeks, small businesses in food manufacturing are invited to share their experiences of working with national regulators and local authorities. This can include:

• Dealing with paperwork.
• Inspections.
• Advice given by regulators on how to comply.

Swedish Better Regulation Council's annual report for 2011

"Regelrådet's third annual report is now available in English. For more information about Regelrådet please visit our new website. We hope the report will be useful to you in the work of tackling unnecessary regulatory burdens for businesses." (from Christina Fors, Director, Swedish Better Regulation Council / Regelrådet.)

Swedish update on regulatory costs

The Board of Swedish Industry and Commerce (NNR) has now published the English translation of its report "The Total Cost of Regulations to Businesses in Sweden - 2008 compared with 2005". Results show that changes to financial regulatory obligations have had more of an impact than changes to administrative obligations on the total cost to business. In spite of very numerous simplification measures taken by the Government, it seems the effects on the ground are limited.
Summary by D. Besnainou: The Board of Swedish Industry and Commerce for Better Regulation (NNR), is an independent, non-party political organisation. NNR is entirely financed by its members, who include 15 Swedish business organisations and trade associations that together represent more than 300,000 companies. (a third of all active enterprises in Sweden, in every sector and of all sizes). NNR is also an active advocate of regulatory reform at EU level and chairs the BUSINESSEUROPE Better Regulation Working Group.
This report is based on in-depth discussion with 6 companies on their administrative burdens:
For each company, the report describes the regulatory burden trend, the distribution of regulatory costs in 2005 and 2008 per segment (administrative, financial and material) and per category (labour market, environment, taxes and sector). The report also includes the opinions of the companies on future change and needs.
The general conclusion of the report is "In all, the companies have in quite different ways been affected by the implemented changes. For three of the companies, changes in costs were virtually non-existent from an overall perspective. One company, Tranås Energi, reported substantially higher costs due to additional requirements in sector regulations. For WelcomeGruppen, costs dropped by 8.9%, a decrease linked entirely to lower employer contributions.
A close examination of the report shows that there was no increase of administrative burden between 2005 and 2008, according to the SCM methodology. Reduction of costs is visible in all companies, due to new legislation on employment which reduces the costs of hiring younger people. This reduction is not completely compensated for with the increase of burden in, for example, time spent reporting on or obtaining permits.

Swedish NNR publishes BR progress report

Most of us have received from the Board of Swedish Industry and Commerce (NNR) the English translation of its "Regulation Indicator 2009". The Regulation Indicator has been published annually since 2002 and gives a business view of the progress of Swedish government in the area of better business regulation. NNR has also published a follow-up to its 2006 report on "The Total Cost of Regulations to Businesses in Sweden". The new report includes information on how changes made to regulations during three years have affected the cost to business of complying with regulation. Results show that changes to financial regulatory obligations have had more of an impact than changes to administrative obligations on the total cost to business.

Comment: this report relates to the recent discussion on the cost of regulation - although unfortunately it does not investigates what is the proportion between EU and national legislation on the overall burden. It states that the Swedish government should make more progress in assessing gold-plating, since assessment practices to date remain partial and ad-hoc (CHM with L. Allio).