Better Regulation to support better health

Better Regulation has always found in Health issues a rich terrain to test the effectiveness of the solutions it offers the economy and society. See the 23 posts of this blog under the Health category.

Our community will have a new opportunity to identify current trends and update our principles and tools, at the Annual conference of the European Public Health Alliance (EPHA), "Europe's leading NGO advocating for better health," to be held in Brussels on 2-3 September 2015.

The theme of the conference "Towards a European Union for Health - From Health in All Policies to EU Governance for Health and Well-Being?" will give rise to a number of panels and discussions, including one entitled: "Better Regulation for Better Health? Mainstreaming public health into the EU's agenda." The conumdrum is defined as: "Better Regulation is now an even greater priority for the European Commission through the REFIT process. Where does this leave broader issues of labour rights, health and safety, environmental protection or public goods that are perceived as sources of administrative burdens? "

Your blogger has been invited to speak, presumably to explain the benefits of BR to a panel and audience probably impatient with simplification and burden reduction efforts (judging by the wording of the issue). 

Also follow Alberto Alemanno, the great risk and regulation expert, who will fly our colours in the session on "Europe and Chronic Diseases : challenges accepted, lessons learned, ways forward"

Stay tuned for the outcome by visiting http://goo.gl/Ec51QS @EPHA_EU

Risk and Smart Regulation (EJRR)

The assessment and mitigation of risk is one of the more complex issues faced by smart regulators. Most regulators have devised strategies and developed tools to cope with this dimension: see for instance "Risk and Regulatory Policy: Improving the Governance of Risk" by OECD. The latest issue of the European Journal of Risk Regulation hosts inter alia a special symposium devoted to the operation of the Parliament’s own Science Unit: the Science and Technology Options Assessment (STOA). One of the articles addresses "The changing face of risk governance: Moving from precaution to smarter regulation” (by subscription or purchase.)
The EU definition of the precautionary principle in public decision making is given in another article: it concerns situations "where following an assessment of the available scientific information, there are reasonable grounds for concern for the possibility of adverse effects on the environment or human health, but scientific uncertainty persists. In such cases provisional risk management measures may be adopted, without having to wait until the reality and seriousness of those adverse effects become fully apparent."

Behavioural insights for smarter regulation (EU)

On the LinkedIn Smart Regulation forum, A. Alemanno informs us that DG SANCO has responded - on behalf of the European Commission - to his editorial "Nudging Europe” (see previous blog item) Published in the current issue of European Voice, the response lists a number of instances in which the European Commission (and the co-legislators) would have integrated behavioural insights into its policymaking. In a short analysis of the Commission's response, published on his blog Alberto argues that the Commission's cannot claim to have systematically introduced behavioural insights, though some ad hoc usage has occurred over the last few years in several DGs. Both the response and the new development make most interesting reading.

New reference on regulation and risk (A.Alemanno e. a.)

Our co-experts André Nijsen, Alberto Alemanno and Frank den Butter have just edited a book called "Better Business Regulation in a Risk Society." According to the presentation on Alberto's blog, "the premise of this volume (available at Amazon) is that business regulations are expected to grow in the near future as a consequence of the emergence of a "(world) risk society." Risks related to terrorism, climate change, and financial crises, for example, will penetrate all conditions of life. Increasingly, the decisions and actions of some bring about risks for many in this era of globalization. Controlling these risks implies managing the world through high-quality regulation, with a particular emphasis on businesses and financial institutions. Central to this approach is the argument that a major, if not the primary, aim of regulation is to internalize externalities, or in a broader context, to repair market failure. Such repair can only be accomplished when the costs are smaller than the welfare gains."

Can CBA be reconciled with the precautionary principle?

Although commonly thought of as rivals, cost-benefit analysis (CBA) and the precautionary principle (PP) actually can be reconciled, if you are to follow Daniel H. Cole in a RegBlog analysis published earlier this month. Cost-benefit analysis (CBA) is a well-established, if fallible, methodology for ensuring that regulations enhance, rather than detract from, overall social welfare. It acts as a filter, capturing inefficient regulations while allowing efficient regulations to pass through. While many (if not all) of the elements of CBA are inherently subjective and, thus, subject to political manipulation to bias outcomes, the twin formal requirements of transparency of assumptions and replicability of calculations can provide a reasonably robust defense against outright manipulation. On the other hand, the precautionary principle (PP) generally calls for a higher level of regulation or other prevention of risky market activities. The PP and CBA are often treated as alternative, even competing, decision tools. The author argues that CBA is capable of incorporating a PP without sacrificing its own chief virtues of transparency and replicability.

Update on international regulatory cooperation

In times of economic turmoil, there is an increased risk that governments will be tempted to engage in "regulatory competition" and use regulation to promote national interests in contravention with their international commitments, and to give a temporary boost to competiveness. The risk seems greates in the area of financial services, as a number of countries like the US adopt tough financial reforms to reassure their citizens that they are proactive in dealing with financial instability and speculation. In some cases, there can be consequences for foreign firms operating on their markets, and even abroad. An article on Reuters.com of two days ago summarizes the current tension under the catchy title "ET, the new alien scaring global markets" where ET stands here for "extraterritoriality", or legal effect beyond borders of a national law. The article shows the risks of regulatory competition, and the need for international regulatory cooperation (IRC), or coordination, to avoid negative economic effects.
The European Union provides a good forum to broach these sensitive issues with major economic competing blocs such as the US and Japan. See the DG Enterprise page on IRC which reports on EC cooperation with a number of governments around the world to remove regulatory barriers viewed as a significant impediment to trade and investment. With the US for instance, "regulatory cooperation is an important tool to helping dismantle existing regulatory barriers and prevent new ones from emerging. Since the development of the EU-US Guidelines for Regulatory Cooperation and Transparency, Regulatory authorities on both sides aim at achieving greater convergence of technical rules through a number of sectoral and methodological regulatory dialogues. Since its inception in 2005, the High Level Regulatory Cooperation Forum has met regularly to focus on key regulatory issues of common interest and to facilitate the exchange of best regulatory practice across sectors." See previous post on EU-US regulatory dialogue
Following a similar initiative from the Commission, the UK Finance Minister George Osborne wrote to B. Bernanke (Federal Reserve) on 23 January to ask for regulatory dialogue "aimed at minimising any unintended consequences of regulatory reforms on either side of the Atlantic."
A good presentation of the US point of view can be found in a 2010 speech by the U.S.Securities and Exchange Commissionner who explored the history, the forms, the advantages and the limits of IRC in promoting efficient capital markets.
Another particularly necessary area for IRC is the cooperation about collective investment schemes (CIS), but it seems to be fraught with difficulties, as explained in an article of the International Financial Risk Institute (IFRI)"To date, a uniform and consistent approach to the global regulation of CIS has not been pursued by regulatory authorities. It is therefore important in this climate for regulators to develop strategies to deal with this increased global activity in order to improve their collective oversight of the markets. If regulatory authorities chose to ignore the current trend that cross-border activity is increasing, they run the risk of failing to effectively regulate their markets and decreasing investor protection. Alternatively, if regulators accept that globalisation is a permanent feature of the managed funds industry, they should consider ways of improving their oversight of the markets. The incentive for pursuing this approach is that a co-ordinated harmonised approach to international regulatory co-operation should promote and strengthen the securities markets globally, increase investor confidence, attract investment, as well as assist the mutual flow of business."
The issue of IRC was raised at the OECD conference in October 2010on the future of regulatory policy, and a break-out session was devoted to the rationale for IRC (see summary of discussion). The theme was recently incorporated in the Recommendationsfor Regulatory Policy and Governance of OECD as part of quality regulation: "In an increasingly globalised economy, international regulatory co-operation must become integral to systemic risk management and long-term policy planning. Governments should take into account relevant international regulatory settings when formulating regulatory proposals to foster global coherence" (draft under discussion). OECD will be further exploring how to share national best practice in this new workstream of regulatory governance.

Business licensing: a concern on both sides of the Atlantic

Our network now comprises an expert in business inspections and licensing reform, Florentin Blanc, who has just drawn our attention to the rise in the number of regulated professions. He points us to a Wall Street Journal article highlighting the "insane proliferation of professional licensing cartels" across American state government and examining some of the political economy behind it, which is that the licensing fees charged by licensing agencies can turn into profit centers reducing the need for more transparent forms of taxation.
This article has naturally sparked a lively discussion in the blogosphere (see example of such a post). The main issue is whether licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services.
This type of development is of course in contradiction with the principles underlying the recent landmark Executive Order from President Obama which is too general to directly address such an issue. In the European Union, on the contrary, the Services Directive was the starting point of a major review of all regulatory requirements against the criteria of nondiscrimination, necessity and proportionality. This investigation covered different types of requirements such as prior authorisations, registration requirements, territorial restrictions, etc), which may constitute unjustified barriers to the functioning of the Single Market (obstacles to cross-border provision of services). The results to the "mutual evaluation process" have just been published by the Commission (27 January 2011). Merci Florentin !

Businesses welcome security regulation

In these days of Wikileaks dominated news, will regulation as a protection rather than an obstacle make a comeback?

According to a recent survey in the US, which fielded answers from a total of 285 security pros in industries such as food and agriculture, defense and information technology, it appears that the companies with the most industry regulations to address tended to have better security practices. 39 percent said the government should "enact more stringent cyber-security legislation along the lines of PCI." Thirty-two percent believed the government should create legislation with higher data breach fines.

More and more, better regulation means delivering efficiently the whole range of public policies, not just reducing paperwork. Appropriate regulatory response to risks is an essential component of good regulatory management.

For more, see "Is More Cyber-Security Regulation the Answer?

Announcement of Conference on REACH - 22/2/2011, Brussels

This blog has been informed of a Conference on REACH - Challenges after the registration deadline of 1 December 2010 - 22 February 2011,  in Brussels
 It's about the challenges after the first of three registration deadlines of the REACH regulation which has just passed: Substances in high quantities and CMR substances had to be registered by 1 December 2010.
At this conference, the second in the field of law which is covered by our European Journal of Risk Regulation (EJRR), we will evaluate and discuss the impacts and challenges of this registration deadline for the chemical industry. At the beginning of the conference the actual situation after December will closely looked at 1 from different points of view with seven speakers from various backgrounds informing the audience about their experiences. Towards the end the speakers will concentrate on a possible revision (panel discussion with all speakers).
More information and registration at bock@lexxion.de

France reviews precautionary principle

France is probably one of the only countries to have written the precautionary principle into its Constitution, in 2005. The need to forestall any re-occurence of the "scandal of the contaminated blood" was one of the driving forces behind the reform. Attention has recently been drawn back to the issue by the excessive precautions taken against the swine flu that did not materialise, and again yesterday 21 June by the publication of a report on the past hasardous effects of an insecticide in the Antilles. Earlier this month, Parliament held a seminar bringing together lawyers, philosophers, academics and others to publicise and discuss the results of a parliamentary review of the implementation of this principle. Today, Parliament examined the report.
The 2005 constitutional amendment introduced a Chart of the Environment defining conditions (grave danger, uncertain scientific evidence) in which specific risk assessment procedures and conservatory measures should be used. The drafters of the review have noticed that the principle was being applied to a wider range of issues than initially foressen (on this see previous post on this blog) and call for a new text to further specify the conditions, stressing proportionality and insisting that precautionary measures should always be temporary. Good dossier on Vie-Publique.fr (in French.)

Impending simplification of GMO authorization

As announced in March, the Commission is working on a review of its approval system for genetically modified (GM) crops. With most Europeans showing no appetite for GM produce in food, EU politicians have approved just two varieties for growing in 12 years, compared to more than 150 worldwide. Following an in-depth evaluation of GMO policy, proposals due to be adopted on 13 July, will give the European Commission greater freedom to approve new GM varieties for cultivation, in return for letting EU governments decide whether or not to grow them. According to the press release shows that EU policy is to be based on scientific assessment of health risks and sustainable innovation, and challenging the "instinctive fear and suspicion (that had) taken hold among European consumers due to scaremongering and a reluctance of industry to explain the science behind their products" (J. Dalli). This "regulatory risk" approach to EU law is consistent with President Barroso's new political guidelines. Good background on Euractiv dossier.

RR expert draws lessons from Eyjafjallajökull

As predicted by this blog, the regulatory risk experts are starting to draw lessons from the Icelandic volcano eruptions and the resulting disruptions on air travel.
Alberto Alemano will be providing, in the next issue of the European Journal of Risk Regulation (expected in the coming days), an analysis of the regulatory answer developed across Europe in the aftermath of the eruption of the Icelandic volcano Eyjafjallajökull. In the meantime, a preview is available online, attempting to answer, on the spur of the moment, a few questions: Who did the assessment of the hazard posed by volcanic ash to jetliners? Who was competent to take risk management decisions, such as the controversial flight bans? Is it true that the safe level of volcanic ash was zero? How to explain the shift to a new safety threshold (of 2,000 mg/m3) only five days after the event? Did regulators overact? To what extent did they manage the perceived risk rather than the actual one? Fascinating reading for us BR experts. Thank you Alberto !

New report on Risk Governance Deficits

The international risk governance council (IRGC) has informed this blog that they had published a "Policy brief " on risk  governance deficits, defined as specific elements of risk governance where processes often fail. This policy brief is a follow-up to a report (published in autumn 2009), which was supported by detailed case studies (23) illustrating the impact of deficits on some past risk issues. It highlights aspects that may assist decision-makers in the evaluation of their own organisation's risk governance capability .

The next step:  IRGC is now focussing on emerging risks  – issues that are perceived to be potentially significant but which may not be fully identified, understood and assessed, thus not allowing risk management options to be developed with confidence. The aim is to develop practical guidelines for practitioners in business and the public sector to help them improve their own capabilities to anticipate and respond early to emerging risks.

BR approach to bio-waste (Commission)

In a press release circulated yesterday, the Commission promotes, for a specific area of EU law, better implementation of existing texts, rather than adding new rules to the corpus. Speaking about the management of bio waste, Environment Commissioner Janez Potočnik said:   "We already have a significant body of legislation governing bio-waste in the EU. But through better implemention and enforcement, we can squeeze even more benefit from bio-waste."

See also Euractiv comment.

New insights from OECD on quality regulation

Lorenzo Allio, an independent consultant and member of our network of experts, has been authorized to publish his personal summary of recent developments at the second meeting of the Regulatory Policy Committee, which contain some valuable indications as to how regulatory quality will be promoted by the new Committee.

Also from OECD: a very interesting synthesis of current thinking on "Risk and Regulatory Policy", published 27 April 2010.

Volcano highlights challenges of regulatory risk management

Stranded BR experts will have had time to reflect on the stakes at play in managing air travel regulatory risks. No doubt there will soon be plenty of literature inspired by recent events. In the meantime, a leading editorial in this week's Economist outlines some of the issues, such as how to plan for such natural disaster risks, in this case how to set a safety level of volcanic ash. In summary asks the editor: "was all this chaos man-made—an immense and costly overreaction by regulators to a spectacle that posed only a minor and manageable risk?"

New publication about European risk regulation

Yesterday I attended the launch of a new technical publication of great interest to BR experts: the European Journal of Risk Regulation (EJRR). You can order the first issue free from this website.

As we know, risk management is one of the most difficult challenges of BR. There is an abundant literature and research, with OECD centralizing reflection for practitioners.

Last night, the many challenges for regulators were listed, among which: the perception of risk by the public, based on correct science or not, the need to manage these perceptions and the risks themselves through appropriate regulation or other policy instruments, and the complexity of the variables involved. And nowhere are risks as difficult to tackle as in the area of public health, covering inter alia food and feed, pharmaceuticals, chemicals, pesticide, hence the need for a specific medium to engage both regulators and stakeholders, and provide the theoretical backdrop for action.
The first issue contains a valuable update on recent trends in RIA by L. Allio, including consequences of smart regulation.

For more on risk regulation, read an article (33 pages) by Jonathan Wiener and Michael D. Rogers.

Contributions are to be forwarded to the editor of EJRR: Alberto Alemanno (HEC Paris).