Regulation Review - IPART - NSW Government

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3 Identifying reform opportunities 3.3 Best practice regulatory enforcement The principles of best practice regulation are now enshrined in NSW Government regulation making processes through BRO’s 2009 Guide to Better Regulation. However, the principles of best practice regulatory enforcement have not been explored to the same extent in NSW. In considering whether unnecessary burdens are being imposed through existing regulatory enforcement practices and identifying possible reform options, it is useful to consider what best practice regulatory enforcement would look like. International jurisdictions such as the UK, and international bodies such as the OECD, have done considerable work in this area. In NSW, the BRO is also undertaking work in this area. The following OECD principles capture the key elements of best practice regulatory enforcement: Proportionate: regulators should only intervene when necessary. Remedies should be appropriate to the risk posed, and costs identified and minimised Accountable: regulators must be able to justify decisions, and be subject to public scrutiny Consistent: government rules and standards must be seamless and implemented fairly Transparent: regulators should be open, and keep regulations simple and user friendly Targeted: regulators should be focused on the problem, and minimise the side effects. 53 As an example, the UK’s Hampton Review set out a number of principles for good regulatory enforcement. 54 These are outlined in Box 3.2 below. 53 OECD, Guiding Principles for Regulatory Quality and Performance, Paris, 2005. 54 Philip Hampton, Reducing Administrative Burden: Effective Inspection and Enforcement, March 2005. 34 IPART Regulation Review
3 Identifying reform opportunities Box 3.2 Principles of good inspection and enforcement Regulators, and the regulatory system as a whole, should use comprehensive risk assessment to concentrate resources on the areas that need them most. Regulators should be accountable for the efficiency and effectiveness of their activities, while remaining independent in the decisions they take. All regulations should be written so that they are easily understood, easily implemented, and easily enforced, and all interested parties should be consulted when they are being drafted. No inspection should take place without a reason. Businesses should not have to give unnecessary information, nor give the same piece of information twice. The few businesses that persistently break regulations should be identified quickly, and face proportionate and meaningful sanctions. Regulators should provide authoritative, accessible advice easily and cheaply. When new policies are being developed, explicit consideration should be given to how they can be enforced using existing systems and data to minimise the administrative burden imposed. Regulators should be of the right size and scope, and no new regulator should be created where an existing one can do the work. Regulators should recognise that a key element of their activity will be to allow, or even encourage, economic progress and only to intervene when there is a clear case for protection. Source: Philip Hampton, Reducing Administrative Burden: Effective Inspection and Enforcement, March 2005, p 7. IPART seeks comment 18 Are the principles of best practice regulatory enforcement (as set out in this paper) a sound basis for assessing good compliance and enforcement practices and testing reform options? 19 How do State Government and councils review or assess councils’ regulatory performance? How could this be improved? 20 To what extent do councils follow best practice enforcement principles? 3.4 Possible reforms to regulatory practices – leading practices The ToR for this review requires us to consider the appropriateness and feasibility of NSW adopting the leading practices identified in the PC’s report Performance Benchmarking of Australian Business Regulation: The Role of Local Government as Regulator. Regulation Review IPART 35
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