Component 2 Legal Approximation

The overall objectives of this component is to review the Standards Act (which it is actually a national quality infrastructure Act) to align it with the National Quality Policy and clarify the obligations for each element of the national quality infrastructure and the legal obligation and responsibilities for these. To propose a Good Regulatory Practice Policy document, develop a RIA for the proposed draft NQI Bill and model documents for RIAs and Technical Regulations and provide train the trainer on these practices.

Should governments regulate businesses?

Most people would reply “yes” to that question, but if asked why, these same people would find it difficult to provide reasons as to why.

There are many reasons which could be provided such as:

  • in order to prevent businesses from engaging in fraud or misrepresentation;
  • regulate business in order to protect people from “market failures;
  • ensure safety of the goods provided by the enterprises;
  • to provide quality for the goods being placed in the market;
  • to protect health and /or the environment or welfare of animals etc;
  • or many other reasons

In general government regulate in order to “change behaviour” which is being negative to the national interests such as business environment or to consumers.

In the absence of regulation, the world of enterprises would divide itself into two camps, those that  know that being known for selling faulty products would ruin their reputation and business and those who do not care and have abusive and fraudulent intentions.

Unneeded and harmful regulation has very real costs to people that shows up in fewer jobs, less international competitiveness, less freedom, and a lower standard of living for most people. In many cases legal instruments are adopted based on knee jerk reactions by politicians in response to civil society demanding action, therefore a systematic approach is important to be able to develop well thought out legislation based on accurate data and not on perceived civil society overreactions.

What is Good Regulatory Practices (GRP)

Good Regulatory Practices are internationally recognised processes, systems, tools and methods for improving the quality of regulations based on the requirements shown in the figure below.  

In general, GRP may be described as a set of practices that are to be applied to the development, implementation and maintenance of controls – including laws, regulations and guidelines – in order to achieve a public policy objective.


Source: OECD Website

OECD Best Practice Principles on the Governance of Regulators[1]

The 2012 Recommendation of the Council on Regulatory Policy and Governance recognises that an effective regulatory policy includes “a consistent policy covering the role of functions of regulatory agencies in order to provide greater confidence that regulatory decisions are made on an objective, impartial and consistent basis, without conflict of interest, bias or improper influence.”

To assist countries in translating this recommendation into practice, the OECD developed Best Practice Principles for the Governance of Regulators that reflects public consultation and key inputs from OECD member and non-member countries. The Principles address the different facets of a regulator’s governance and identify the best or good practices for:

  1. Role clarity
  2. Preventing undue influence and maintaining trust
  3. Decision-making and governing body structure for independent regulators
  4. Accountability and transparency
  5. Engagement
  6. Funding
  7. Performance evaluation

The principles complement the 2012 Recommendation of the Council on Regulatory Policy and Governance and can be used by member and non-member countries to guide their reforms.

The following clarify the OECD principles and their application[2]:

  • Legality: Regulation should have a sound legal basis and should be consistent with existing legislation, including international norms or agreements;
  • Impartiality: Regulation and regulatory decisions should be impartial in order to be fair and to avoid conflicts of interest, unfounded bias or improper influence from stakeholders;
  • Consistency: Regulations should be clear and predictable; both the regulator and the regulated party should understand the behaviour and the conduct that are expected and the consequences of noncompliance;
  • Proportionality: Regulations and regulatory decisions should be proportional to the risk and should not exceed what is necessary to achieve the objectives;
  • Flexibility: Regulations should not be prescriptive; they should allow flexibility in responding to a changing regulated environment and different or unforeseen circumstances;
  • Effectiveness: Regulations should produce the intended result;
  • Efficiency: Regulations should achieve their goals within the required time, effort and cost;
  • Clarity: Regulations should be accessible to, and understood by, the users;
  • Transparency: Regulatory systems should be transparent; requirements and decisions should be made known to affected parties and, where appropriate, to the public in general.
Source: WTO Agreement Series – TBT

Typical Legal Instruments and alternatives

A broad range of options is available to government for influencing behaviour and advancing public policy. These options range from laws and regulations to public education and even economic, public and peer pressure. An appropriate choice of option, or mixture of options, can lead to an effective public policy intervention at an acceptable cost.

Laws and regulations

In its broadest sense, the term “regulation” is used to include the full range of legal instruments (also called statutory instruments) by which institutions at all levels of government impose obligations or constraints on behaviour.

Constitutions, parliamentary laws, subordinate legislation, decrees, orders, norms, licences, plans, codes and even some forms of administrative guidance can all be considered as regulation.

Laws, often referred to as primary legislation, are passed by the parliament or congress – i.e., the legislative branch of government. Laws define in general terms the role, rights and obligations of all  parties involved.

When considering a legal instrument that could be applied to a problem, it is vital that there be clear legal authority for its use.

Guidelines

Guidelines are administrative instruments that interpret regulatory requirements and assist regulated parties to understand how to comply with them. Guidelines are also used to assist in the fair and consistent application of the regulations. As administrative instruments, guidelines do not have the force of law. However, they are sometimes referred to as “quasi-regulation”, especially if applied rigorously so that non compliances poses an enforcement risk for the affected party.

Voluntary standards

Voluntary standards are developed by consensus by a recognized standard-setting body. These reflect the consolidated results from science, technology and experience and are widely accepted by governments and other parties. The use of international standards as a basis for technical regulation facilitates trade, and is supportive of international agreements such as the WTO’s Technical barriers to trade agreement.

Self-regulation and co-regulation

Self-regulation is a voluntary arrangement whereby an organized group regulates the behaviour of its members through rules and codes of conduct. The group is responsible for writing the rules and for monitoring and enforcing compliance. A co-regulation arrangement may be similar except that there would be direct government involvement to provide the legislative backing for the arrangement to be enforced. Self-regulation and co-regulation approaches are suitable for industry associations where detailed technical knowledge is involved.

Information, education and promotion

Faced with a problem, government seeks ways to influence behaviour effectively. Most instruments work directly with the regulated industry. However, for some problems, information and education can be more effective and efficient than regulation.

Information, education and promotion campaigns can be combined with other regulatory actions; they should not be viewed as solely the government’s responsibility. Well-planned campaigns can enlist industry and civil society – all of which have specific expertise and influence.

Regulatory Impact Assessment (RIA)

In order to fulfil the requirements of Good Regulatory Practice a regulatory impact assessment should be carried out, a Regulatory Impact Assessment (RIA) is a document created before a new government regulation is introduced.

The process of regulatory impact assessment

This section outlines a process for gathering and analysing evidence to support the development of a regulatory proposal. The process describes the problem, identifies the underlying causes, assesses whether government action is needed, and analyses the advantages and disadvantages of available solutions. While not exhaustive, the steps of the impact assessment process are not intended to be a step-by-step recipe but rather an aid to policy development and decision-making.

In general, the process for developing/reviewing new or existing regulation is:

  • Step 1: Identify the problem and its context;
  • Step 2: Analyse the problem and identify objectives;
  • Step 3: Develop and analyse options;
  • Step 4: Analyse the benefits, risks and costs;
  • Step 5: Select/recommend an option;
  • Step 6: Develop strategies for implementation;
  • Step 7: Develop strategies for monitoring and evaluation.

NQI Mission 1 Initial Situation Analysis

International Expert:  Mr K. Jonkheer

Local Expert:           Ms A. Gajadhar       

Mission Dates:        28 January to 01 February 2019

Project Expected Outputs

  • Review and revise the Standards Act and Regulations with relevant stakeholders e.g. SLBS, DoC, Attorney General and others;
  • Issue revised agreed Standards Act (NQI Bill) and Regulation together with relevant RIAs for parliamentary consideration;
  • Develop a model ‘Good Regulatory Practice’ (GRP) policy document;
  • Develop a model ‘Regulatory Impact Assessment’ (RIA) document to be used for technical regulations;
  • Develop a model Technical Regulation document (TRD);
  • Develop all training material based on the GRP, RIA and TRD documents;
  • Provide capacity building to Government officials, SLBS relevant staff and appointed ‘Train the Trainer’ persons for sustainability purposes.

The purpose of the first, one-week, Mission has been to assert the activities and deliverables (expected output) of Component 2 Legal Approximation. Also, a Work Plan has been drafted with a breakdown of activities and deliverables over time, and within the provided capacity.

The first mission of Component 2 Legal Approximation has been a successful one.

Integration and Coordination with other Components is secured, in particular with regard to Component 1 National Quality Infrastructure.

The outset and workplan of Component 2 is worked out, as well as communicated with the main beneficiary SLBS. The dates for the second Mission are set for 25 March – 5 April 2019. During this mission also a meeting with the Attorney General should take place.

Important part of this ‘inception’ mission was to coordinate the activities with Component 1 the National Quality Infrastructure, that works on a draft National Quality Policy. Part of this is that a joint Work Plan is developed, where the activities reflecting the work required to address the Legal Approximation component of the project, are included.

In the revision of the Standards Act into a new draft as much as possible the current text should be maintained, but it needs to be restructured in such a way that the text of the new draft will not be a too great a ‘shock’ for the beneficiaries, with a completely different act.

Review of the adjacent regulatory framework should be included, such as the Consumer Protection Act.

As part of this Component, one Regulatory Impact Assessment (RIA) will be prepared to support proposal for revised Standards Act (there will be no RIA conducted on the new draft Metrology Act). The activity of developing and establishing a ‘technical Regulation’ means that a Technical Regulation Model will be developed.

Part of the developing and delivering of capacity building to government officials in Saint Lucia is to include other Overseas Development Assistance (ODA) eligible countries via video conference call, during the planned training on Good Regulatory Practise and RIA. The local SLBS officials of the NQP Task Group, Ms. Tzarmhalla Joseph, and Ms. Virnet Fontenelle, will populate the list of interviewees concerning NQI and Legal Approximation components.


[1] Source of text: http://www.oecd.org/gov/regulatory-policy/governance-regulators.htm

[2] Source of Text: https://www.who.int/medicines/areas/quality_safety/quality_assurance/GoodRegulatory_PracticesPublicConsult.pdf