New textbook on regulatory policy

Earlier this month, OCDE published a new reference book for members of our community: the first edition of the OECD Regulatory Policy Outlook 2015. This magnum opus summarizes 10 years of experience in designing and applying better rules and regulations to achieve economic and societal policy objectives. A press release summarizes the approach and the main conclusions, but experts will need to download the full material, which includes, to illustrate and give practical impact to each dimension (RIA, simplification, regulatory costs, etc), best national practices.

(From the press release): "The report finds that 33 of the 34 OECD countries have adopted an explicit regulatory policy and require regulatory impact assessments and public consultation for all new regulations, while 29 have a designated minister to promote regulatory reform.

However, a third of OECD countries have no policy at all on regulatory compliance and enforcement, and two-thirds have no system for evaluating laws once they are implemented. This creates unnecessary costs for businesses and society, the report says.

Internationally, co-operation in law-making is essential for creating global rules and standards, addressing trade frictions and environmental risks, and reducing the risk of regulatory failures such as the 2008 financial crisis or the recent VW emission tests scandal. Yet only a third of OECD countries have a clear policy for international regulatory co‑operation."

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.

4th annual Red Tape Awareness week (Canada)

Among sub-national governments giving priority to supporting business, British Columbia (BC) has a long-standing excellent performance, as illustrated recently by two events:

• the Canadian Federation of Independent Business (CFIB) organises every year a Red Tape Awareness week (semaine de sensibilisation à la paperasserie), which took place this year from 21 to 25 January 2013. The CFIB webpage lists a few other successful initiatives, including international comparisons and "Real Examples of Ridiculous Government Rules."
• as reported on 24 January by the Vancouver Sun, BC has the highest ranking in Canada for cutting red tape. Authorities have a legal requirement to publish annual reports about regulatory reform. Official figures show "a reduction of regulatory requirements by more than 42 per cent since 2001 - that's more than 155,000 off the books. We've also committed to a net-zero increase in regulatory requirements through to 2015". See also, in that same article, the New West Partnership commercial vehicle website launched in June 2012 by three provinces (BC, Alberta and Saskatchewan), offering a single website for the trucking industry to access information on permits, routes and other commercial vehicle information.

Transparency Portal (EC)

Yesterday, the European Commission opened a new central portal providing a access to a great variety of documents, most of which were already available but through separate portals. The initiative gives further substance to Article 255 of the treaty establishing the European Community, implemented through Regulation 1049/2001 of 30 May 2001, which grants a very general right of access to European Union institution documents. It is well worth visiting and including in your favorites as it gives a common entry point for EU law and other documents, RIAs, comitology groups, consultations, EU funds and even ethics, all in the name of the principle of Transparency, one of the basic tenets of smart regulation.

Regulatory Innovation Award goes to Cass Sunstein

Cass Sunstein, Administrator of the US Office of Information and Regulatory Affairs, has been named this year's recipient of the Burton Foundation's annual Regulatory Innovation Award. Morrison & Foerster established this award in 2008 through the Burton Foundation to honor an academic or non-elected public official whose innovative ideas have made a significant contribution to the discourse on regulatory reform. The independent panel of academics, practitioners and financial journalists named Mr. Sunstein for his commitment to understanding the nature of regulation and the role of incentives in formulating successful regulations. He has been overseing the review of new regulation offered by executive branch agencies to ensure that benefits outweigh the costs. With Richard Thaler, Mr. Sunstein is the author of Nudge, an influential book discussing the relationship between human behavior, decision making, and regulation (click for more)
Last year's award went to Mr. Eddy Wymeersch, until recently the Chairman of the Committee of European Securities Regulators, "well known for his successful efforts toward the establishment of the first pan-European regulatory authority (ESMA). He has been an articulate and unrelenting advocate of greater international cooperation to deal with the challenges created by the financial crisis, including the creation of the Financial Stability Board by the G20. He has also served as Chairman of the Banking Finance and Insurance Commission, which is Belgium’s integrated financial regulator, and is currently Chairman of the Public Interest Oversight Board, which is in charge of overseeing the auditing standards boards."

How to make best use of PPPs (OECD)

The OECD Council has approved the OECD Recommendation on Principles for Public Governance of Public-Private Partnerships (PPPs). The Principles should be helpful to policymakers as they explore the use of PPPs to make savings and deliver effective public services.
Public-Private Partnerships (PPPs) are long term agreements between the government and a private partner whereby the private partner delivers and funds public services using a capital asset, sharing the associated risks. PPPs may deliver public services both with regards to infrastructure assets (such as bridges, roads) and social assets (such as hospitals, utilities, prisons). By combining private sector innovation and financing, and sharing the risks in innovative ways, PPPs can provide much needed savings for the public sector and a fair deal for the private sector. This presents policy makers with particular challenges that should be met with prudent institutional answers, considering the economic impact of decisions: PPPs in OECD countries currently represent about 0.8 trillion USD, and there are projects in the pipeline of about equal value. Experiences from our Member countries show that it can be difficult to get value for money out of PPPs if government agencies are not equipped to manage them effectively. Moreover, PPPs can obscure real spending and make government actions un-transparent, using off-budget financing. This means PPPs are potentially risky for fiscal sustainability, possibly leading to credit rating down-grades as has happened in some OECD countries.
The Principles will help ensure that new PPP projects add value, and prevent ill-designed projects from going forward. For instance, they offer concrete guidance on when to use a PPP – not for projects using rapidly changing technology such as IT, but possibly for those using well-known, generic technology such as building roads. They focus on how to align the different parts of the public sector to ensure success: institutional design, regulation, competition, budgetary transparency, fiscal policy and integrity at all levels of government. The Principles also stress that just as much attention should be devoted to the PPP after the deal is done – i.e. during the operational stage, which can often be 20-30 years.

UK news: Quality of RIA improving, focus on enforcement

On 8 March, the independent Regulatory Policy Committee charged by government with assessing the quality of analysis and evidence supporting government departments’ proposals to regulate,published its annual report for 2011 ("Improving Regulation") which demonstrates that Departments achieve year on year improvement of the quality of RIAs, but a quarter of regulatory proposals remain ‘Not fit for purpose.’
Among significant factors that have brought about the improvement, the Government’s "One-in, One-out rule" has according the chairman of the RPC, "undoubtedly put pressure on Departments to strip away regulation" (see also press release.)

Also in the UK this week, the launch of Focus on enforcement campaign, asking the public to help identify where enforcement can be improved, reduced or done differently to improve the business environment and reduce administrative burdens.
Finally, also this week, a Beta version of a new central site for administrative information goes online: GOV.UK The "INSIDE GOVERNMENT section is dedicated to departmental information: policies, consultations, news etc - the type of content that is currently to be found on http://www.bis.gov.uk/.

Stoiber Group report published

Yesterday the Commission made public “Europe can do better”, the report of the High Level Group of Independent Stakeholders on Administrative Burdens, chaired by Dr E. Stoiber (Germany). The report, which was due since November last year, was handed in yesterday to Mr Barroso, who in a press release is reported to have said that “It shows impressive examples how Member States implement EU law in an intelligent way so that its positive effects can unfold and are not hampered by unnecessary administrative burden at national level. I call on Member States to look at these examples and learn from them. Through mutual inspiration on smart regulation we can further improve the business environment and support growth and jobs in Europe." In summary, the report, which lists 74 best practices makes the point that there is ample scope for improving the implementation of EU legislation. The online press pack includes a useful update on measures proposed and delivered under the Action Plan for reducing administrative burdens in the EU (especially figures concerning delivery).

Anti-fixer campaign (Philippines)

In Manila, the Civil Service Commission (CSC) has designed new “Anti-Fixer Campaign” posters to underscore the need to campaign against any act of fixing. These posters are to be posted in conspicuous places in government agencies to inform the public about their rights. This policy builds on the impetus provided by the Anti-Red Tape Act (ARTA) of 2007, which imposes stiff penalty on fixers. In parallel, agencies receiving the public are being asked to provide all-day service, and the "no-noon break" policy is also widely advertised.
See previous post (December 2011). Because this is such a powerful idea to inform the public and combat corruption, this item is filed in our Best Practices category.

Best practice in communicating RR: ERRADA

Providing access to relevant items of legislation, informing the public about regulatory policy initiatives, offering tools to policy-makers, these are some of the reasons for which maintaining a lively website is part of the basic functions of regulatory reform, and most agencies devote significant resources to communication, which at least we experts like to use and compare.
Among the good examples of such RR websites, the one managed by ERRADA, the Egyptian Regulatory Reform and Development Activity, stands out as particularly well devised and kept up-to-date. There is plenty of news about current activities of the agency teams, updates about on-going projects, and expert resources, all pages in both languages Arabic and English. I only noted one weakness: the glossary only covers RIA, and not the other aspects of RR.
For these reasons, the ERRADA website can be listed among the "Best Practices" category that this blog will now be offering, to provide colleagues around the world with a shortcut to significantly successfull examples promoting the concepts and tools of regulatory reform and smart regulation.

Online RegRef course offered by Mexico

Experts around the world have been receiving an invitation to participate in a new, online, training on regulatory reform offered by COFEMER, the Mexican Federal agency for regulatory reform, with the Latin American RR network. During the 60 hour course designed for policy-makers, the concepts and tools of better regulation will be presented. Four sessions will be dedicated respectively to 1/ theory of regulation and regulatory governance; 2/ Ecomic regulation; 3/Social regulation and 4/ RIA. The course, in Spanish, is free. Infomation and registrations on : www.cofemer.gob.mx/diplomados. Successful course members will receive a diploma ! The deadline for registration is 10 February.

How to simplify company law (UK)

A stakeholder consultation, with a company law and commercial law focus, is launched today by the UK Red Tape Challenge. D. Trnka comments that this new approach can be seen as "an interesting example of how social networks can be used for crowd-sourcing efforts to improve regulatory framework" and is therefore quite worth checking out. Quote from press release "Companies of all shapes and sizes have today been asked for their views on how to tackle unnecessary bureaucracy in company and commercial law.

For the next three weeks, the latest phase of the Red Tape Challenge will focus on more than 120 company law regulations, guidance and enforcement processes that businesses deal with on a daily basis.

The campaign asks for a variety of suggestions about how regulations can be improved, simplified or abolished, whilst maintaining a company law framework that gives companies the flexibility to compete and develop effectively.

Examples of areas open for comment include:

• Internal workings of companies and partnerships: Rules on shares and share capital, requirement to hold information at business premises and rules on meetings and resolutions.
• Accounts and returns: The content, form and auditing requirements of financial accounts and other reports.
• Business names: The rules covering company names.
• Disclosure of company information: The regulations covering the information companies must supply to the official register."

See also new group on LinkedIn

South Australia Red Tape report

The South Australian Government (Competitiveness Council) released a report on action taken in 2010-2011 to reduce red tape for business at the state level. The programme sets out to cut administrative burdens by $150 million a year. The first tranche finished $18 million ahead of target and the second (to be completed by April 2012) is ahead of schedule.
Regulatory costs to the broader community are also to be addresse. Also of note at the South Australian level: in December 2010, a Better Regulation Handbook was issued to all agencies in order to improve transparency in reviewing and designing regulation. (tip from S. Trnka).

Canada: two exemplary assaults on red tape

On Thursday, the Canadian Red Tape Reduction Commission, created in January 2011, as part of the Economic Action Plan, released new findings concerning irritants to business, identified thanks to an extensive survey (published in the What Was Heard Report, in September 2011). Having found 2,300 specific irritants about how regulations cause unnecessary cost and frustration, the Commission set out to identify causes of red tape, and recommending solutions. It has now produced 90 specific recommendations involving 18 Government of Canada departments and agencies. The Commission, which is composed of six MPs, an an equal  number of business representative,  inter alia recommends introducing the "one-in, one-out" system for new legislation. See press release and the appended dossier for more. The Government has reacted favourably to the report. The communication is also available in French.
At the same time, The Canadian Federation of Independent Business (CFIB) recently released its annual Red Tape Report Card, which ranks Canadian public authorities according to the friendliness of the business environment. In an approach similar to that of the Doing Business subnational indicators of the World Bank (see also 2012 report page 18), the report evaluates federal and provincial governments’ progress to date on regulatory reform. It looks at measurement, political leadership, constraints on regulators and a permanent commitment to report. Not unexpectedly, the scorings are widely reported and commented, for instance Nova Scotia got a "D" score, for having slackened its effort, after several years of good rankings, while Manitoba was ranked "F" (the lowest grade). British Columbia earns top marks for its leadership. In addition to measuring the red tape burden for a decade, it recently passed first-of-its-kind legislation requiring an annual report on regulation. For a summary of the report, go to the CFIB site or consult Canada Newswire.
These two initiatives are, by international standards, cutting-edge ventures and may inspire other countries wishing to improve their business environment.

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.

ASEAN pursues regional regulatory dialogue

As reported in the international press (example Thailand), on 17 November 2011, ASEAN held its 19th ASEAN Summit in Bali, Indonesia, followed by a meeting with the ASEAN Business Advisory Council (ABAC). Key issues discussed at the Summit were ASEAN Community building by 2015 (see the Blueprint), the role of ASEAN in the global community and other regional and international issues of mutual interest.
At the end of the Summit, ASEAN Leaders signed a Bali Declaration on the ASEAN Community in the global community of nations and witnessed diverse technical agreements.
Regulatory reform remains high on the agenda to achieve regional integration, and is most visible in the third pillar, which calls for streamlining standards and technical barriers to trade including systems of standards, quality assurance, accreditation and measurement. Leaders called for the institutionalisation of the High-level Task Force on Regulatory Reform, whose first meeting was held in Jakarta on Aug. 3, 2011 (as reported on this blog.) For more on this event, see an article in Jakarta Post.

APEC promotes good regulatory practices

In complement to yesterday's post about the APEC ministerial, our network correspondent in Chinese Taipei, who was at the conference, draws our attention to the APEC Leaders' Honolulu Declaration ("Towards a seamless regional economy) published yesterday. Go to Annex D "Strengthening Implementation of Good Regulatory Practices" to see how member countries will try "to embed the concepts of non-discrimination, transparency, and accountability into the regulatory cultures of APEC economies", to help create jobs and promote economic growth. Experts will want to check the new formulation of principles of high-quality regulation contained in that document. Compared to the new OECD principles, which are now close to finalisation and publication, the APEC text provides a shorter and more general list of actions to be implemented by November 2013. On substance, there is little new in this document (except perhaps the notion of "incentives to review regulation") but we can hope that it will create some momentum for domestic reform in member countries.

Doing Business 2012 studies 245 business regulatory reforms

Released today, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year's report data cover regulations measured from June 2010 through May 2011. The report rankings on ease of doing business have expanded to include indicators on getting electricity. The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong SAR, China; and Singapore.

The global report shows that governments in 125 economies out of 183 measured implemented a total of 245 business regulatory reforms—13 percent more reforms than in the previous year. In Sub-Saharan Africa, a record 36 out of 46 economies improved business regulations this year. Over the past six years, 163 economies have made their regulatory environment more business-friendly. China, India, and the Russian Federation are among the 30 economies that improved the most over time.

This year, Singapore led on the overall ease of doing business, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. The Republic of Korea was a new entrant to the top 10.  The 12 economies that have improved the ease of doing business the most across several areas of regulation as measured by the report are Morocco, Moldova, the former Yugoslav Republic of Macedonia, São Tomé and Príncipe, Latvia, Cape Verde, Sierra Leone, Burundi, the Solomon Islands, the Republic of Korea, Armenia, and Colombia. Two-thirds are low- or lower-middle-income economies (from the press release.)

A "minister for red tape" (Ontario)

According to a Canadian online article, Conservatives in Ontario want to intensify the fight against red tape. A candidate has promised to cut the size of cabinet by 20 per cent if he wins the Ontario election, but at least one of the ministers left standing will find a new list of duties added to the job description – minister of red tape. The Progressive Conservative platform calls for “red tape” to be reduced by more than 30 per cent.

Armenia adopts "guillotine"...

...of course, only for excessive regulation ! Following Scott Jacobs's trip to Yerevan earlier this year, reform is under way in Armenia, as already noted here. See latest news on yesterday's Arka press item. Extracts:  "Prime Minister Tigran Sargsyan presented prospects for introduction of the Regulatory Guillotine, a rapidly spreading regulatory reform tool, in Armenia (...) Introduction of this instrument that lessens bureaucracy and enhances state administration in Armenia has been initiated by the Armenian government and okayed by the OSCE Yerevan Office.
“You know what the Regulatory Guillotine concept is,” the premier said. “I met with Mr. Scott Jacobs, one of its main authors, and I want to thank the OSCE for giving me such a chance. After we got familiar with the broad concept, we approved it. The economy ministry’s team has worked with Jacobs, and this is five months our team is carrying out necessary preparations for introduction of this concept. The concept has been upheld also by the Armenian president. We have decided to set up an interdepartmental council for coordinating this work.”  Sargsyan stressed the importance of reformation in regulatory area saying it would lessen corruption risks and improve business environment in the country. He said the concept also implies improvement of tax and customs administration.