1. Regulatory Policy Review of Slovenia - Defining the pRoblem and targeting reforms
Eric Thomson
Regulatory Policy Division
Public Governance and Territorial Development Directorate, OECD
14 December 2016

2. Beginning a Regulatory Reform: Identifying the Problem Well
Governments must define the problem to solve, before jumping to solutions.
Not defining the problem correctly can lead to inefficient and ineffective policy
Possibility for serious unintended side effects

3. Example: Importance of Defining the Problem
Problem Definition
There are many road accidents caused by motorbike drivers on the roads. The main reason for this is motorbike drivers who do not have the ability to control their motorbikes.

4. Consequence of no RIA
In October 2008, the Ministry of Health introduced a new regulation that stated only people who weighed over 40kg, and had a height of over 1.45m and had a chest size under 73cm would be allowed to ride motorbikes on the road with engine sizes of 50cc and above.
This automatically banned 50% of all women from being able to drive on the roads over night. 4 4

5. Correct Analysis Actual Problem Definition
At least 30 people die everyday from transportation-related incidents, and many more are seriously injured. Almost 70% of these accidents are caused by motorbike drivers. The majority of these accidents (67%) are caused by drivers either speeding or over-taking other vehicles dangerously, or driving while under influence of alcohol. And 81% of the accidents are caused by men.

6. Identifying the Problem
Brainstorm the Issues
Clarify the Problem
Decide the Problem to Solve
Analyze the Problem

7. Possible Issues Issue 1 Issue 2 Issue 3 Issue 4 Issue 5
There is a market failure...
Issue 2
There are a lack of incentives...
Issue 3
There is a deficiency in the current regulatory framework...
Issue 4
There is a lack of information or transparency...
Issue 5

8. When did the problem begin? What is the scale of the problem?
Analyze the Problem
When did the problem begin?
What is the scale of the problem?
Who is impacted by the problem?
What regulations exist?
Why is government intervention required?

9. Case study: Aquaculture in Canada
What is Aquaculture?
Aquaculture or fish farming is growing aquatic animals or plants for food. This is in contrast to capture fisheries – the wild harvest of aquatic species.
Methods: Open net pens, inland ponds, and land-based systems.
Canada has the world’s longest ocean coastline and some of the best water in the world for aquaculture. The industry produces about $1 Billion a year and employs about 5,000 people.

10. As the Industry Rapidly Expanded in Chile and Norway…
Aquaculture Production, 000s of tonnes per Year
Aquaculture production will surpass capture fisheries this year or next year. It will be the sole source of growth for aquatic products, and it is the only way forward to meet global demand.
Source: OECD.Stat, Agricultural Outlook , Aquaculture Production

11. It Shrank in Canada
Despite the strong demand for aquaculture and the
Source: Industry Canada, Aquaculture NAICS 1125, Exports (All countries), Trade Data Online, CANSIM Table

12. Problem: Canada’s Aquaculture Industry Stopped Growing
Since 2006, Canada’s aquaculture industry has stalled while other countries continue to grow rapidly. Without intervention, Canada may miss the economic benefits of a rapidly growing industry.

13. Brainstorm: Why did Canada’s Aquaculture Industry Stop Growing?
Three key issues identified by the Library of Parliament (Nguyen 2013, Library of Parliament)
Declining competiveness against low costs countries like Chile, which has lower material and labour costs.
Provincial moratorium on new production in some ocean areas as a result of worries about the environmental impact of aquaculture (e.g. effect of salmon farming on wild populations due to disease).
Regulatory failure as a result of an extremely complex regulatory environment

14. Senate Report on Aquaculture Industry Governance in Canada
“The complex regulatory framework governing aquaculture in Canada is often noted as an obstacle to further growth of the industry.” (2015 Senate Report)
Aquaculture producers must comply with over 12 pieces of legislation across 7 departments and agencies at the national and subnational level.
Duplicating layers of legislation across all of these departments, agencies and levels governments are a result of overlapping desires for environmental protection. They often conflict.
Worse yet, current legislation didn’t even recognize aquaculture as an industry!

15. Deciding the Problem: What are the key regulatory issues?
Through several different consultations starting in 2009, the industry and other stakeholders identified the priority regulatory challenges for the industry:
Use of Fish Medicines: Some medicines or treatments allowed by the Ministry of Health are not allowed by Department of Fisheries and Oceans or approval could take too long.
Water Use and Waste Licensing: Fish farming produces waste, which is released into the ocean, but the application license was long and the regulations were unclear, unevenly enforced.
Moratorium on Operations in New Ocean Areas: Production cannot grow without access to new areas for aquaculture.
Enhanced Protection of the Environment: NGOs and fisheries said that aquaculture farms should operate in a sustainable way that does not harm wild fish populations or the marine environment.

16. Clarifying the Problem to Solve: The Problem in Aquaculture
Canada’s aquaculture industry has not grown for many years because governments have created a complex network of regulation and even banned production in certain areas. The current regulatory regime is unclear about how to manage environmental risks, especially pollution and licensing.
Current regulation adequately protects the environment but puts Canada’s aquaculture industry at a significant competitive disadvantage. Without action, the industry could continue to stall or could decline, taking jobs out of rural and coastal communities and putting Canada at an international disadvantage.
Summarized from Aquaculture Activities Regulations Regulatory Impact Assessment Statement, Canada Gazette, 2014
Key point: A holistic look at the regulatory environment of the industry shows that there are costs and benefits to expanding the industry that are out of sync. Focusing only on “reducing regulatory barriers” misses that

17. Solution: A Compromise between Industry and Environment
To support the industry, the ministry made the following changes:
Eliminated duplication and delays for licenses to operate an aquaculture facility. (2013)
Encouraged provincial governments to review moratoriums now that there is available scientific evidence. (2014)
Through inter-ministerial coordination, clarified conditions under which aquaculture operators may treat fish, pollute, and operate. (2015)

18. Solution: A Compromise between Industry and Environment
To support environmental sustainability, aquaculture producers must:
Minimize impact to fish and fish habitat related aquaculture activities
Reduce the killing of fish (other than pests) from pest treatments or other activities
Report incidences of illness or mortality of wild fish during pesticide or drug treatments at their facilities
Submit annual reports on the amounts of treatments used, preventative measures taken to protect fish and fish habitat and any environmental monitoring data
New regulation will be reviewed after 5 years.
This is a risk-based approach to environmental concerns.

19. Regulatory Impact Assessment: Quantified Impact of the Reforms
Regulatory Impact Analysis
Cost to businesses: ~$3.2 million in administrative burden over 10 years
Costs to government: ~$405,000 over 10 years
Benefits to industry competitiveness: “Significant”
Not only will the new regulations be easier to follow, but the additional risk-based environmental monitoring will improve consumer confidence in the industry.

20. Industry Growth After Reforms
Source: Industry Canada, Aquaculture NAICS 1125, Exports (All countries), Trade Data Online, CANSIM Table

21. Thank You!
Contact information
Eric Thomson, Policy Analyst, OECD