C.H. Montin, Manama 11 Manama, 20 January 2014 Regulatory Impact Assessment for Better Standards International Best Practices from OECD Charles-Henri Montin, Senior Regulatory Expert, Ministry of economy and finance, Paris OECD RPC delegate

C.H. Montin, Manama 2 Contents  The policy-making cycle and how RIA fits into that cycle  Nature, purpose and functions of RIA  Typical methodology  Challenges for introducing RIA  The potential relevance of RIA to GCC standardisation agencies

C.H. Montin, Manama 3 3 sources for best practice United Kingdom Better Regulation Impact assessment Regulatory Policy Committee Publication One-in, one-out European Union Smart Regulation RIA Impact assessment Board France Regulatory Quality Evaluation préalable Conseil d’Etat Legistics Constitutional basis for RIA

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5 How RIA contributes to the policy cycle

C.H. Montin, Manama 6 What is impact assessment?  Investigates and measures the likely benefits, costs and effects of new and changed regulation, throughout the regulatory process – A key decision making tool for governments – Underpins regulatory reform – Used in most OECD countries – No single model fits all situations

C.H. Montin, Manama 7 Purpose of RIA  Identifies all main potential impacts arising from proposed government regulations –Articulates the problem and explains why it needs to be addressed –Broadens the range of options  Promotes balanced decisions that trade off problems against wider economic / social goals –Ensures transparency and stakeholder input –Supports informed decision on policy and regulation  Informs political debate and supports communication on policy

C.H. Montin, Manama 8 Practical functions of RIA  Provides factual data to make appropriate regulatory decisions  Exposes impacts and linkages among policies and gives decision-makers a capacity to weigh trade offs  Provides a public accounting of each regulation  Provides a clear explanation of the regulation, its purpose, the analysis substantiating it and expected impacts  Enables policy makers to understand and take personal responsibility for regulatory decisions

C.H. Montin, Manama 9 Components of RIA  Description: outlines the regulations, defines the issue and policy objectives and shows why action is necessary  Alternatives: lists options beside regulation and other types of intervention  Benefits & Costs: quantifies the impacts of each option  Consultation: lists stakeholders consulted and their feedback  Compliance and enforcement: explains the policy on conformity to the regulations and tools to ensure it is respected

C.H. Montin, Manama 10 The process of Regulatory Impact Analysis Policy objectives Definition Identification Regulatory Options Assessment Costs ConsultationInvolving Stakeholders Design Enforcement, Compliance and monitoring mechanisms After RIA is prepared: DECISION MAKING Policy context Benefits SelectionBest Option Other impacts

C.H. Montin, Manama 11 Making the best use of RIA Analytical tool  Provides a method to investigate policy and regulation  Cost-Benefits techniques to assess: – Effectiveness – Efficiency Communication tool  Provides a means of informing decision makers of alternatives in a rational manner free of ideology or bias  Enhances transparency, accountability, credibility, trust, legitimacy Learning tool  Sets a base line for ex post facto evaluations  Contributes to policy coherence

C.H. Montin, Manama 12 Common challenges for RIA Related to the tool  Problem identification (≠ objectives)  Availability of data (collection, validation, use)  “Proportionate analysis” (criteria, transparency)  Quantification (benefits)  Risk assessment  “Complex costs”

C.H. Montin, Manama 13 More challenges Related to the structure / process  Scope of application / selection of proposals  Need to fit RIA into all the stages of policy making and regulation  Governance of RIA, Quality control (oversight)  Presentation / Communication  Up-stream integration of RIA (early in decision- making)  Down-stream integration of RIA (“closing the loop”)  Administrative capacity to carry out RIAs  Multi-level requirements  Trade-off political discretion vs. technical expertise

C.H. Montin, Manama 14 OECD good practices (1)  1. Political commitment and endorsement at the highest levels –Legal basis for RIA –Clear ministerial accountability  2. Allocate responsibilities for the RIA programme –Operational responsibilities with the services –Inter-service coordination –Central quality oversight

C.H. Montin, Manama 15 OECD good practices (2)  3. Target and prioritise RIA efforts –Scope of application / thresholds for when to do RIAs –Sectoral impacts  4. Develop comprehensive guidelines –Mandatory –Both on process and on technical aspects  5. Carry out sound analysis –Strategies for data collection –Consistent but flexible methodologies

C.H. Montin, Manama 16 OECD good practices (3)  6. Consultation / Transparency / Communication  7. Training, training, training  8. Apply RIA to both new and existing regulation

C.H. Montin, Manama 17 Relevance to GCC standardisation  Better Regulation principles apply to standards: –Standards are an acknowledged “alternative” to regulation with specific advantages for certain types of issues –BR tools support more evidence based decisions in the production of standards (especially RIA) –Effective consultation of stakeholders, including co- production –Feed-back from enforcement and implementation (compliance assessment) –Can be developed internationally (IRC)

C.H. Montin, Manama 18 Developing RIA practice in GCC/Bahrain  The main steps for developing RIA practice: –Define national/regional methodology –Build capacities in regulating/standards agencies –Set up quality control mechanisms or structures –Create training programme for RIA drafters –Launch pilot studies –Monitor for continuous improvement with practice.

C.H. Montin, Manama 19 Conclusions  Impact assessment has developed over the last 20 years and is now a widely used tool; UK and EU currently have best practice models  It presents challenges to operate it meaningfully (influence on decision making) but also a lot of knowledge has been shared.  Policy-makers naturally address the costs and benefits of political choices. RIA offers rigour  Good potential for supporting the development of better standards in cooperation with regional partners

C.H. Montin, Manama 20 To learn more about RIA…  RIA methodology (UK) –BR frameworkBR framework –UK Government RIA site ; RIA templateRIA sitetemplate  RIA guidelines (EU) –European Commission RIA siteRIA site –GuidelinesGuidelines  France: Guide de LégistiqueGuide de Légistique  About applying RIA to standards: –a Strategic vision for European standards (2011)a Strategic vision for European standards (2011) –RIA on standards (academic article)RIA on standards