improving regulatory enforcement and inspections draft best practice principles daniel trnka oecd,...
TRANSCRIPT
IMPROVING REGULATORY ENFORCEMENT AND INSPECTIONS Draft Best Practice Principles
Daniel TrnkaOECD, Regulatory Policy DivisionDirectors ad Experts for Better Regulation Meeting – Vilnius, 7 June 2013
• Compliance crucial for regulatory efficiency• A phase of the Regulatory Governance Cycle
that have been addressed less systematically• Emerging issue –reforms in the area of
inspections, innovations, governance arrangements for regulators
• Insufficient contact between those responsible for regulatory policy and regulators/inspectors who have front-line experience with implementation
Regulatory compliance & enforcement
• 50% of respondents did not have cross sectoral policies for organising inspection authorities.
• 58% do not have policies to reform inspection functions.• 79% do not hold a central register of inspection
authorities.• Performance of inspection authorities isn't measured
consistently or transparently.• Accountability lines and the level of independence
varies. • 50% of respondents do not have to co-ordinate amongst
themselves to avoid duplication.• Inspectors behaviour is key to improving compliance
with the majority of businesses needing advice.• Inspection plans are not generally communicated.
Some key findings from the OECD survey on inspections and enforcement
4
• OECD was asked to develop a set of best practice principles on improving enforcement and inspections
• Main goals are to:
• Summarise existing knowledge and good practice
• Present some overarching, common principles that can be used by policy-makers and “smart regulators”
• Promote inspection reforms
• Give those countries that are starting/considering such reforms a comprehensive guidance
• Draft based on the 2012 OECD survey, two expert papers, existing documentation and experience of non-OECD countries
OECD Principles - background
5
• Draft principles cover the whole set of issues that allow to sustainably improve regulatory enforcement and inspections – making them more effective, efficient and transparent
• Policies: • Evidence- and measurement-based enforcement/inspections• Use enforcement/inspections only where strictly necessary• Risk-based and proportionate enforcement• “Responsive Regulation” approach
• Institutions:• Stable institutional mechanism for reform/improvements• Consolidation/coordination of inspection functions• Governance +HR policies geared towards professionalism, outcomes
Improving policies, institutions and practices (1)
6
• Tools: • IT to ensure risk focus, coordination, information sharing• Clarity and rules of processes• Promote transparency and compliance through toolkits, check-lists etc.
• Over-arching aims: maximize positive outcomes, minimize costs and burdens
Improving policies, institutions and practices (2)
7
• Do not inspect and actively enforce “everything that is regulated”
• Rather, evaluate the risk level posed by different types of regulations and regulated areas
• Allocate resources and efforts proportionally to potential outcomes
• Evaluate and adjust based on results
1 - Evidence-based and measurement-based
8
• Market forces, civil litigation etc. all have considerable power to prevent negative outcomes or enforce rules
• State-driven inspections and enforcement should only be used when these alternatives are demonstrably absent or insufficient
• In any case, stakeholders need to be involved – compliance and outcomes cannot be obtained purely “by force”
2 – Whenever possible, “alternatives to enforcement” should be explored
9
• Frequency of inspections should be proportionate to risk level
• Severity of sanctions and burden of enforcement should be proportionate to actual hazard/damage
• Risk = probability x magnitude (scope x severity) of hazard
3 – Proportionate and risk-based
10
• Enforcement modulated based on behaviour of regulated entities
• “Honest mistakes” and one-off violations treated differently from systematic, criminal misconduct
• Aim: promote compliance and positive outcomes
4 – “Responsive Regulation”
11
• Official policy, clear objectives for continued improvements in enforcement – long term perspective
• Institutional set-up gathering all relevant ministries, institutions, stakeholders
• Strong policy leadership
5 – Clear objectives and stable institutional mechanism to drive improvements
12
• Less duplication and overlaps – reduced costs and burden
• Greater coherence, better information flow – more effectiveness
• Core list of inspection/enforcement functions to match rational analysis of types of risks – not “historical” list of institutions
6 – Consolidation and coordination of inspection functions
13
• Governance: put inspections/enforcement “at arm’s length” from political decisions for day-to-day operations – give more stability to institutions through collective governance
• Ensure professionalism in recruitments and in particular for top management
• HR policies, performance measurement etc. to support improvements, promote outcome-orientation
• Inspectors’ training needs to incorporate risk-management, compliance-promotion, and a whole set of “competencies” related specifically to enforcement
• Aim to increase consistency, quality – reach better outcomes
7 – Governance and HR policies to support professionalism, outcomes orientation
14
• Interconnect databases and systems used by different inspectorates / whenever possible set up single/joint systems
• Data sharing and shared planning mean less duplication, more efficiency – but also better outcomes because key information is shared effectively, risks are better identified
• Initial investment can deliver considerable benefits and efficiencies
8 – Information technology for coordination, information-sharing, risk-focus
15
• Framework legislation/regulations to ensure that inspections/enforcement process are clear and consistent
• Rights and obligations of all parties and stakeholders to be clarified – and abuses prevented
9 – Clarity of rules and process
16
• Ensure that regulated subjects know what is expected from them
• Enforcement to be consistent and predictable
• Compliance promotion achieves better outcomes at lower costs
• Tools adapted to different types and profiles of establishments
10 – Promote compliance and transparency through toolkits, check-lists etc.
17
• The draft should serve as a basis for triggering discussion
• Set of principles plus explanatory texts summarising main issues
• OECD Regulatory Policy Committee agreed with publication for comments
• The draft is be published on our website, the consultations will be advertised and widely promoted
• We would like to ask you to kindly do the same in your countries
Further process
18
• Is the document fit for its purpose?
• Do the principles sufficiently describe all the issues important for effective regulatory enforcement and inspections?
• If not, which issues should be added? Which ones should be taken out?
• Do the principles provide sufficient guidance for reformers?
• How do these principles relate to the practice in your country?
Questions for discussion
