New EU Better Regulation package

(from yesterday's press release labelled: "Better Regulation Agenda: enhancing transparency and scrutiny for better EU law-making") 

"Today, 19 May, The European Commission adopts its Better Regulation Agenda. This comprehensive package of reforms covering the entire policy cycle will boost openness and transparency in the EU decision-making process, improve the quality of new laws through better impact assessments of draft legislation and amendments, and promote constant and consistent review of existing EU laws, so that EU policies achieve their objectives in the most effective and efficient way."

Compulsory reading for BR experts, but nothing much in the way of novelties. The confirmation of the existing scheme is however welcome, and the new expressing of political commitment encouraging.

Perhaps the best element is the annoucement of a new inter-institutional agreement to improve the use of RIA by cooperation with the other institutions.

There are also updates on the regulatory burdens and REFIT programmes launched under the previous commission, which are worth taking note of.

Finally, there is an announcement that the Commission's Impact Assessment Board, operating since 2006, will be transformed into 'an independent Regulatory Scrutiny Board'. This confirms what was announced by VP Timmermans in December 2014, and corresponds to some MS suggestions (see joint paper). "Its members will have a more independent status and half of them will be recruited from outside the Commission. The board will have an expanded role in checking the quality of impact assessments of new proposals as well as fitness checks and evaluations of existing legislation."

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.

How to design market-friendly regulation (Nobel)

It's good news for all smart regulators when the Nobel prize for economy is given to an expert who has devoted part of his research to the negative impact of regulation on economic activity, chiefly by regulatory interference with markets, and offering solutions.

An article in last week's Economist (18 October) examines Mr Tirole's contribution under the title "It's complicated" (one of the laureate's favorite phrases). "Making sure companies compete fairly is a tricky business. The firms being regulated know far more about their business than those doing the regulating; bureaucrats can easily end up being too heavy-handed or too lax. On October 13th Jean Tirole, a French economist at the Toulouse School of Economics, was awarded the Nobel prize in economics for his work on this conundrum—"industrial organisation", in the jargon."

Egypt's ERRADA resumes its mission

After a 20 month interruption, the Egyptian Regulatory Reform and Development Activity (ERRADA) announced its re-activation as of March 2014 , in order to review regulations related to the business environment. Under new leadership, the agency will aim to complete the inventory and the review of related topics affecting the business climate, and establish a database service and an electronic registry compiling all applicable regulations. 

In doing so, the agency will promote the tools of Better Regulation, specially RIA (regulatory impact assessment) and ex-post evaluation, addressing respectively the flow and stock of regulation. For more, see on ERRADA site the announcements by the minister in charge and the executive director of ERRADA, Tarek Hamza. See also this blog's 2012 post on ERRADA.

British regulatory watchdog shows teeth

The UK independent regulatory oversight body, the Regulatory Policy Committee (RPC) has just released its 2013 annual activity report, which makes good reading for experts seeking to ascertain the possible authority of such an institution.
The RPC gives figures on how many new departmental proposals for regulatory change it has examined and how it has dealt with departmental estimates as to the anticipated regulatory costs for business and others, showing a strong determination to improve the evidence base for decisions concerning new regulation.
Excerpts from the Executive Summary:
- (the Committee) "rated 75% of first-time impact assessment submissions as fit for purpose, a reduction from 81% in 2012. The reasons for this are not completely clear. In some cases, the work may have been hurried due to parliamentary timetables. In other cases, the pressure to meet the One-in, Two-out policy may have reduced the accuracy of departmental estimates. The introduction of the fast track system in August 2012 makes comparisons between years harder, because some simpler cases no longer need to go through the full scrutiny route. This means that those subject to full scrutiny are now, on average, more complex.
- (the Committee) published four red-rated opinions as a result of departments consulting on proposed new regulations despite the RPC rating the impact assessment as not fit for purpose. "

Regulatory Discretion contributes to Smart Regulation

Our thanks to friend Florentin Blanc, the acknowledged expert on the inspections reform, who has shared with us a summary of the international seminar on regulatory discretion that took place at the International Academy for Legislation on 5 December 2013. Here are some of the insights. "Discretion in implementation of regulations is not only unavoidable in practice (there can be no entirely “neutral” enforcement, there is no rule that does not require some degree of interpretation) – but necessary to ensure that implementation of regulations leads to the desired outcomes of regulation. Without discretion, there is a real risk that enforcement is done in a “tick box” way, with two potential downsides: missing the real threats and risks, and harming the economy without a real positive impact on what the regulation aims to achieve (e.g. safety). At the same time, it is essential to have safeguards, in particular accountability, as a counterpart to discretion."

"From an economic perspective, discretion is undeniably needed to ensure that costs and benefits of regulation are optimised. From a legal perspective, it is seen that (a) whether or not discretion is allowed (for regulators, for courts) depends on the context (country, legal tradition, fact-finding or deciding on sanction etc.) and (b) the evolution of laws and norms (transformations in wording where it is less and less “self evident” whether a given situation is or is not in violation), the complexification of economic activities etc. lead to a gradual slide towards more (explicit) discretion.

"At the same time, there are serious potential concerns with discretion. The first is lack of consistency in treatment, from one inspector or officer to the other. The second is what can happen in a situation where professionalism of public officials is low, ethics are in doubt, wrong incentives are present etc. so that corruption and abuse of power are a real possibility. In such situation, more discretion will lead to more corruption and worse outcomes at all levels. Discretion may also be abused by regulators not for personal gain, but for excessive demands for “ever more safety”. In such situations, “regulating regulators” may not be enough, and looking for alternative mechanisms to ensure compliance (e.g. insurance requirements rather than inspections) may be interesting."

Icelandic independent regulatory council

An announcement from our colleague Pall Thórhallsson: This week, the Icelandic Government tabled a bill in Parliament proposing an independent regulatory council. The Council will review draft legislative bills and proposals for secondary laws which have a significant impact on businesses and competition. The Council will in particular scrutinise the impact assessments accompanying regulatory proposals. The opinions of the Council will be published on its website and attached to Government bills. Parliamentary Committees are also invited to consult (i.e. they are not obliged to do so) with the Council on members bills and on amendments to Government proposals. The Council can also at its own initiative issue opinions on Parliamentary documents in its field. Furthermore, the Council will issue statistics on the evolution of regulatory burdens of businesses. The bill makes clear that not only administrative burdens should be monitored, but also compliance burdens in general. Tax proposals and proposals based on minimum requirements due to the agreement on the European Economic Area (i.e. the incorporation of EU-law) are excluded from the mandatory scrutiny of the Council. The bill was drafted following a Seminar held in Reykjavik on 2-3 September 2013 in which Nick Malyshev from the OECD, Michael Gibbons from the UK Regulatory Policy Committee and Peter Bex from SIRA-Consulting took part. For more, see English translation of the bill and to the Government´s action plan in this field. 

See also recent post on the Norwegian regulatory council which cites the other European oversight authorities (GE, NL, UK.)

Independent better regulation council to be formed in Norway

According to a news item from  Regelrådet,(the Swedish Better Regulation Council), the newly elected Norwegian government has announced in its platform that an independent better regulation council will be formed. It is to be formed based on its Swedish counterpart. The government has also set a net target of 25% for reducing costs to businesses incurred by legislation. They also intend to simplify the public reporting portal Altinn even further to secure that businesses only have to report once." There are already such oversight bodies in the NL (Actal)), the UK (RPC)) and Germany (NKR). There is other interesting news on the Regelrådet page, like the government decision to make Regelrådet a permanent feature in the Swedish legislative process.

French national assembly adopts regulatory watchdog

According to the Gazette des Communes, MPs adopted on 19 September a bill tabled by two senators to create a national council for the evaluation of norms. This new body (CNEN) would replace an existing council, with added power to examine the regulatory stock, not only the flow of new legislation and its advice wold be binding on the government. This development follows the trend in France to focus regulatory policy on consequences for subnational authorities, which have many unfunded legal obligations and have accrued heavy deficits recently denounced by the national Audit Court. As part of the same policy, a moratorium on all new legislation affecting local authorities was decreed on 17 July.

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.

New regulatory czar nominated in Washington

We are always keen to hear about examples of supervisory or oversight authorities entrusted with the mission of curbing over-activity of regulators, or chasing bad regulation. The US, with its "regulatory czar", offers a good model, but the seat of this high function is vacant since last August. A successor may be taking over, as President Obama has some weeks ago nominated economist Howard Shelanski to serve as administrator of the Office of Information and Regulatory Affairs (OIRA). If confirmed by the Senate, Mr Shelanski would succeed Cass Sunstein. See also other posts in "US/CND category."
Regwatch comments: "With Congress mired in gridlock on many fronts, the Obama administration has increasingly sought to accomplish its policy goals through regulatory action. The shift has added clout to the OIRA administrator role and outside groups from across the political spectrum have awaited Obama’s selection with significant interest. There are currently more than 100 federal rules, ranging from air quality protections to proposed worker protections, awaiting review at OIRA, which is housed in the White House Office of Management and Budget."
Also on the US blogsphere: under the title "Draft Bill Would Limit EPA Rulemaking Power," Regblog discusses draft legislation examined by a House subcommittee, to require the Environment Protection Agency to submit a report to Congress whenever one of its proposed regulations related to energy would cost more than $1 billion. The report would include the estimated direct and indirect costs of the proposed rule, its potential effect on energy prices, and any likely impact on employment. The regulatory reform zeal of Congress shows no sign of abating.

Interdisciplinary conference on RIA: 10 June, Paris

Our friend and high expert A. Alemanno announces that an International Conference on "Theory and Practice of Regulatory Impact Assessments in Europe: A Comparative and Interdisciplinary Perspective" will take place on Monday 10 June 2013 from 12 noon at the Ecole Nationale d'Administration (ENA.) Organised by the UCL Centre for Law, Economics and Society, "the main goal of this conference is to portray and analyze the development of the use of Impact Assessments throughout the European Union and its member States as a standard of good governance and, in some cases, as a legal standard which imposes constraints on the administrative action, regulatory or legislative actions." The conference will also be an opportunity to present the first empirical results of the joint project of Ecole Nationale d’Administration (ENA) Gutenberg chair and the Centre for Law, Economics and Society (CLES) at University College London (UCL) on Regulatory Impact Assessments in Europe. For more information on this project, headed by Dr. Ioannis Lianos (Director, CLES/Gutenberg chair at the ENA) you may check here. Alberto will be speaking in Panel 3 devoted to Impact Assessment and its Actors. The key note speech will be given by the newly-appointed, yet not confirmed, Obama's regulatory tsar: Howard Shelanski.

French PM mainstreams oversight of regulatory quality

On 19 February, the Prime Minister's private office signed a new circular (standing instruction) to ministries to present an updated policy for simplifying the regulatory environment, tackling both the stock and the flow of regulation, and more effective consultation of stakeholders, in keeping with the interministerial action plan defined in December. Steering and coordinating are to be handled inside the Secrétariat Général du Gouvernement by Ms C. Vérot, deputy to the head of the general secretariat, "in charge of simplification." Ms Vérot replaces Mr R. Bouchez, the Simplification Commissioner since November 2010 (see his last annual report reported on this blog) with an extended mandate including implementing regulatory simplification measures decided by the interministerial committee (CIMAP). The circular also states that she will be liaising with two other simplification efforts, directed at local authorities (MPs Lambert and Boulard) and business (MP Mandon) and reminds the ministries of the different simplification agendas they must prepare by the end of June 2013.

Japan PM makes regulatory reform "top priority"

As a member of OECD, Japan is no stranger to regulatory reform. In the early 2000s, a Council for Regulatory Reform conducted a number of projects which were assessed in an OECD review.
It now seems that the new government under Mr Abe has put the policy at the top of the government agenda. On 24 January, the Prime Minister attended the first meeting of the Regulatory Reform Council (the name has changed). According to the official site, "The Regulatory Reform Council is a council to respond to the consultation of the Prime Minister from the perspective of promoting measures on basic and important policies related to economy, to comprehensively research and examine the basic items on the reform on how the necessary regulation should be for carrying forth the structural reform of economy and society, and to give opinions to the Prime Minister on relevant items."
The PM makes an interesting distinction between his predecessor's policy "regulatory reform for its own good" and his own approach where "the purpose of the regulatory reform is clear. It is a regulatory reform for revitalizing the economy. It also aims to achieve economic growth through regulatory reform, and create employment. I expect that these purposes are set forth clearly" Japan is to use Regulatory Reform to fullfill the PM's ambition: "What we aim for becoming is number one in the world."
Work is proceeding swifty, according to Daily Yomiuri Online, who reports that during the second meeting of the council on 15 February, the secretariat presented 59 possible regulatory reform targets in four fields--health and medical care, energy and the environment, employment, and new enterprises and industrial revitalization. Controversial issues such as more flexibility in the labour market are being considered. A new growth strategy is to be compiled in June.

Victoria (AUS) appoints red tape commissioner

As reported by Property Observer Melbourne yesterday, Australia's first red tape commissioner has beenappointed in Victoria and will start compiling a list of problem areas to target and bring to the state's government's attention.
Already in October, the Federal Government has appointed the first small business commissioner.
Victoria has a target to reduce red tape by 25% – if this experiment proves useful, other states could follow with similar appointments