Evaluating Enforcement Decisions – Maintaining regulatory credibility Wellington, November 2014

Regulatory values All regulatory regimes, designed and implemented well, can deliver economic, cultural, social and environmental benefits as well as protecting communities from harm

What does it take? It requires: Robust and sound policy settings Executing delivery of regulatory services effectively Systematic re-evaluation of the regulatory landscape and activities

Key risks regulators face with enforcement Decide to take action but perception that: –Inappropriate/misuse use of powers –Bureaucratic –Over the top/knee-jerk reaction –Wasting tax/rate payers’ money Decide not to take action but perception that: –Regulator asleep at the wheel –Not doing enough to protect community –Targeting the wrong things

The need to exercise discretion properly To intervene, or not to intervene? –Judicial criticism –Public scrutiny (appropriate use of public funds) –Reputational credibility –Financial cost (for little/no value) –Employee engagement

KCDC case example Otaki residents engaged contractor to cut some native trees on property in August 2013 Decision to prosecute made following independent legal advice Charges filed in December 2013 Judge observes prosecution effectively trivial and prosecution has been overkill

KCDC case example Independent review recommendations: –Defendants should be provided with an opportunity to explain/respond during investigation –Clear and distinct assessment should be made on whether it is in the public interest Alternative to prosecution More than one person involved (not CEO/Councillors) and should meet –Councillors should be advised of persons charged and nature of charges (and nothing more) –Council should adopt strict policy of miminising public comment

Getting it right Effective policy –Linked to regulatory framework, policies and objectives Robust processes Right capability Systematic review and evaluation process

Regulatory Principles Organisational Objectives Governance Principles Regulatory Policy Strategic Regulatory Plan Annual Regulatory Plan Operational Policy ToolsCapability Intelligence & Risk Analysis Treatment/ Response Sector/Stakeholder Engagement Procedures & Guidelines Benchmarks Strategy and Direction Delivery Controls Model Regulatory Framework* *Model Regulatory Framework we use to assess regulatory maturity and performance of regulatory institutions

Evaluating Regulatory Enforcement Decisions In relation to a regulatory agency, its a decision to engage a statutory/legal process to compel a person(s) to act/abstain from something for the purposes of achieving regulatory objectives Complaints management Regulatory Enforcement Decision Investigate Implement Outcome Information and intelligence –Systematic evaluation of the process used at this critical decision point

Evaluation criteria Assessment of available evidence Relevant policy factors considered Irrelevant policy factors disregarded Consideration of regulatory purpose Follows procedural requirements Can we? Should we? How we get there?

Benefit of evaluation Provide independent quality assurance –Demonstrate robustness and integrity of decision making –Demonstrate consistency and continuity of decision-making Educative tool for continuous improvement –Future focused evaluation - it’s about how we can be better regulators –Prompts regulators to survey the regulatory landscape, which inevitably changes over time (particularly if combined with strategic evaluation and planning cycles) Shift towards best practice

Kane Patena Partner Compliance Advisory and Assurance DDI: For further information contact: