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Key considerations on international regulatory cooperation

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Presentation by Céline Kauffmann, Deputy Head, OECD Regulatory Policy Division
Workshop on Regulatory Framework and Enforcement to Address Air Pollution, Beijing June 26-27 2019

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Key considerations on international regulatory cooperation

  1. 1. KEY CONSIDERATIONS ON INTERNATIONAL REGULATORY COOPERATION Céline Kauffmann, Deputy Head, OECD Regulatory Policy Division Beijing, 26-27 June 2019
  2. 2. The world is increasingly interconnected. How does regulation keep up? • Global trade intensity doubled between 1990 and 2015 • In 2015, 13% of total population living in OECD countries were foreign-born (9.5% in 2000). • Passenger air traffic will grow by 3% to 6% /yr in next 15 years • Internet enables massive cross- border transfers of data. Users increasingly access content outside their own country 2
  3. 3. IRC allows countries to tackle regulatory challenges at the level where they occur and avoid regulatory “arbitrages” IRC can help address the unnecessary costs of regulatory divergence on businesses and consumers IRC is an efficient administrative strategy: it improves the capacities of domestic regulators through peer learning and sharing of resources The benefits of regulatory cooperation 3
  4. 4. • The eradication of smallpox was achieved through collective action led by the World Health Organization (WHO). • The Montreal Protocol on Substances that Deplete the Ozone Layer led to the reduction of over 97% of all global consumption of controlled ozone depleting substances. • The OECD Mutual Acceptance of Data system helps governments and industry save some EUR 309 million per year through co-operation on chemical testing and the harmonisation of chemical safety tools and policies across jurisdictions. 4 Examples of regulatory cooperation
  5. 5. In practice, regulatory cooperation can and does take many forms 5
  6. 6. Good regulatory practices remain the corner stone of regulatory quality in an interconnected world Recommendation of the council on Regulatory Policy and Governance 1. Explicit policy on regulatory quality 2. Communicati on Consultation and Engagement 3. Regulatory Oversight 4. Integrated RIA 5. Reviews of Regulatory Stock – ex post evaluation6. Review performance of regulatory reform programmes and regulatory policy 7. The organisation of regulatory agencies 8. Administrativ e and judicial review 9. Risk and Regulation 10. Regulatory coherence across levels of government 11. Regulatory management capacity at sub-national level 12. International regulatory co-operation
  7. 7. How to foster IRC in domestic rule-making? 7 Unilaterally, countries can foster the consideration of the international environment in the development and revision of laws and regulations • Consider international “standards” in regulatory development and ex post evaluation • Use regulatory impact assessment processes to collect evidence of foreign practices and assess « international » impacts • Engage foreign parties to identify frictions & inconsistencies • Enforce – laws and regulations are only as good as their implementation. This is the cornerstone of trust.
  8. 8. Regulatory Impact Assessment: an opportunity to gather further evidence & assess impacts beyond own jurisdiction 19 23 21 24 26 27 29 28 28 29 28 23 33 32 32 31 32 21 25 24 27 28 29 31 30 30 31 30 29 33 34 33 33 35 0 5 10 15 20 25 30 35 Foreign jurisdictions Specific regional areas Other groups (non-profit sector including charities) Poverty Income inequality Trade Market openness Specific social groups Gender equality Social goals Sustainable development Innovation The budget Small businesses The public sector (e.g. costs to central or local government) Environment Competition Number of jurisdictions 2014 2017 Note: Data is based on 34 OECD member countries and the European Union. Source: 2018 Regulatory Policy Outlook (10 October 2018)
  9. 9. Limited understanding may limit consideration of international standards in regulatory development Note: Based on the 35 OECD member countries, the European Union, and three accession countries. Source: 2018 Regulatory Policy Outlook (10 October 2018) All Binding instrum. Standards Two thirds
  10. 10. Evolution of international landscape over the years: it is complex! Source: OECD (2016), International Regulatory Co-operation: The Role of International Organisations in Fostering the Rules of Globalisation.
  11. 11. The variety of IO instruments – an ecosystem of mostly soft law but not only 11
  12. 12. Implementation is the members’ responsibility - mostly encouraged through voluntary peer reviews 8 2 4 10 18 19 6 13 12 12 12 13 36 35 34 28 20 18 0 10 20 30 40 50 Mandatory peer review of individual members Dispute settlement procedure Sanctions Positive incentives for implementation Voluntary peer review of individual members Benchmarking progress of individual members Yes Occasionally Never The stronger the mechanism to encourage implementation … … the less it is done by international organisations Source: OECD (2016), International Regulatory Co-operation: The Role of International Organisations in Fostering the Rules of Globalisation.
  13. 13. Ensuring the quality of international instruments: Regulators need assurance that they can trust them 23 9 8 11 7 14 4 8 13 13 10 10 15 9 13 3 27 19 17 17 0 5 10 15 20 25 30 35 40 45 50 Opportunity for stakeholder groups to comment on proposed actions Opportunity for the general public to comment on proposed actions Ex ante regulatory impact assessment (including cost-benefit analysis) Ex post evaluation of implementation and impacts Review of the overall stock of regulatory norms in the organisation Systematically Frequently Occasionally Never Source: OECD (2016), International Regulatory Co-operation: The Role of International Organisations in Fostering the Rules of Globalisation.
  14. 14. 14 Reconnect the national and international level! Yes, always, 1 Yes, frequently, 3 Yes, sometimes, 9 Never, 26 Number of jurisdictions that review the implementation of the international instruments to which they adhere For all international instruments, 9 For major international instruments, 11 For some international instruments, 9 Never, 10 Number of jurisdictions with RIA requirements when adopting or transposing international instruments in domestic legislation Note: Based on the 35 OECD member countries, the European Union, and three accession countries. Source: 2018 Regulatory Policy Outlook / Indicators of Regulatory Policy and Governance 2018, http://oe.cd/ireg.
  15. 15. Thank you Background information: The Regulatory Policy Committee was created by the OECD Council on 22 October 2009 to assist countries in implementing government-wide policies to promote regulatory policy and governance. Our work on regulatory policy is available at: www.oecd.org/gov/regulatory-policy Our work on international regulatory co-operation is available at: www.oecd.org/gov/regulatory-policy/IRC

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