Launch of the Chair in Regulatory Practice

On 10 September 2018, we had the formal launch of the Chair in Regulatory Practice at the Victoria University of Wellington, New Zealand. Below is a transcript of my speech. There’s also a presentation.

 

Kia ora,

Thank you, Keith (Keith Manch; Director and Chief Executive Officer of Maritime NZ), for your kind words. And many thanks to the Government Regulatory Practice community and the Victoria University of Wellington for putting your trust in me as Chair in Regulatory Practice, and allow me this unique opportunity to work with you for the next five years

It is a privilege to be speaking to all of you today at the launch of the Chair.

Regulation affects each and every aspect of our lives. Broadly defined, regulation is the whole of institutions, processes, and instruments in place to steer behaviour towards desirable societal ends. Still, we tend not to think about regulation often. Or at least, we tend not to think about regulation when it performs well. But once a regulator or a regulatory regime has problems, it makes the headlines.

The other day, for example, I had a look online for the words ‘regulatory failure’, and I found a string of articles.

Being a bit shocked by these headlines, I tried to put my mind at ease and looked for the words ‘regulatory success’. The list of headlines I found was fairly short.

This example made headlines, I think, because the Trump administration is causing so many regulatory failures that it was clearly noteworthy that for once it did not.

I believe we see too few headlines lauding regulatory success and too many pointing at regulatory failure.

It is for this reason that I was very glad to hear about G-REG some years ago. Given their work and ambition, as just explained by Keith, it goes without saying that I was immediately interested when I was approached for this Chair about a year ago now. It is not often that academics get an opportunity to directly work with governments and businesses and be able to have an impact on society at large.

Now, roughly a year after our first discussions on how to fill in this Chair, and roughly a month and a half since my partner Olga and I have arrived here in Wellington, I am pleased to present you with a broad outline of the working plan for Chair for the next five years.

Through the Chair, I seek to advance our understanding of regulation and governance, regulatory practice, and regulatory stewardship. While these are laudable academic aims, my core measure of success, however, is whether in five years from now organisations and individuals from the regulatory sector here in New Zealand consider the Chair as their first port of call if they have questions on how to improve their regulatory practice.

To achieve this, I will involve in research, engagement and education activities. Let’s have a look at these.

The research program builds around four clusters and questions:

  • [Cluster 1] What is the state-of-the-art in regulatory practice in New Zealand (by international standards) and how does it perform?
  • [Cluster 2] This cluster mirrors the previous one, and asks: What is the state-of-the-art in regulatory practice outside of New Zealand (by international standards) and how does it perform?
  • [Cluster 3] Whether and how can regulation provide the appropriate incentives and disciplines to achieve desirable societal outcomes?
  • [Cluster 4] What explains regulatory success and failure, and what stewardship roles and functions may increase the likelihood of regulatory success and reduce the risk of regulatory failure?

Let me zoom in a little more on each cluster.

In the first one, I will consider innovative regulators, regulatory instruments, and regulatory processes in New Zealand. Each year, five in-depth case studies will be carried out to explore the development, implementation, and performance of innovations that are of interest to regulatory practitioners and academics around the globe.

As I have already explained, G-REG itself is a unique example, and I expect there will be high interest in the international academic and policy communities to know how the initiative has developed and how it performs.

Another example of a unique and state-of-the-art regulatory regime is the Alternative Environmental Justice process in the Lower Waitaki. The process was designed as a bespoke regulatory response to the illegal clearing of riverside land. It gives options for achieving compliance while ensuring that the consequences of offending are accepted by the community and stakeholders.  It is a mixture of restorative justice and diversion.

In the second cluster, I will look at state-of-the-art regulatory practice elsewhere.

An example could be the Better Buildings Partnership in Sydney, Australia. This partnership brings together the City of Sydney Government and the city’s major property owners. It seeks a 70 per cent reduction of carbon emissions of their buildings as well as significant reductions in water and energy consumption and waste over a 20-year timeframe [Slide].  Participating property owners sign a letter to the Mayor of Sydney that they will make improvements to their buildings to achieve this goal. In return, the City of Sydney keeps these property owners involved in prospective policy deliberations so that they can plan their property portfolios accordingly. It further seeks to reduce the regulatory barriers these property owners face in retrofitting their buildings.

Another example is the police force of Durham in the United Kingdom. Facing austerity measures, the Durham police force had to reduce its officer numbers by about 25 per cent. As crime levels do not tend to drop in periods of austerity politics, the Durham police have implemented a range of innovations to achieve more bang for the buck. Many of these are about embracing technologies. The one that caught my eye, however, is to offer first-time offenders the chance to sign an Acceptable Behaviour Contract [Slide]. This allows them to avoid prosecution if they stay out of trouble for an agreed period of time.

These four examples already give you some insight into the vastness of cases I could study. To ensure some coherence in these two research clusters, we have agreed that each year a specific regulatory topic has central attention [Slide].

For the first year, the focus is on nudging and behavioural economics. In a nutshell, a nudge is an indirect suggestion, positive reinforcement or change of environment to influence behaviour towards desired ends, but without coercion. It should be low-cost and easy to avoid for subjects to regulation.

A typical example is the KiwiSaver scheme. KiwiSaver is a voluntary scheme. Normally, a voluntary scheme works with an opt-in system. You as the consumer has to make a decision to join it. Yet, people tend to push the decision of joining retirement schemes into the future. Often, until it is too late.

To overcome this problem, the government has decided to automatically enrol people in KiwiSaver and allow people the freedom to opt-out of it. This way the program is still voluntary, but likely ensures that more people save for their retirement. Changing the default from opting-in to opting-out is a typical nudge.

Every year I will study some five cases to ensure that by the end of the year I have enough information to understand where, why and how the regulatory topic can make an improvement to New Zealand regulatory practice.

Other themes that I will study are:

Regulatory intermediaries. This relates to the involvement of non-government organisations and individuals in the implementation of public regulation.

Regulatory resilience, which will seek to understand how we can prepare regulatory regimes for external shock and crises.

Co-creation, which will be about involving those who are regulated in the development and implementation of regulation.

And finally, regulatory calm. This will be about the role of a good regulatory steward when it is not in crisis solving mode.

Moving on to the third cluster. Here my initial focus will be on cities and how they govern climate change action. This is a continuation of my past research work.

Over the last years, I have collected data from more than 50 cities around the globe. This involves hundreds of examples of innovative local regulatory solutions such as the Better Buildings Partnership that I have just discussed. Regulators in New Zealand can certainly learn from these examples.

Over the next years, I will particularly focus on the Asia Pacific and will add insights to my city database from cities in New Zealand and some Pacific Islands countries.

That then gets me to the final research cluster. In it, I will seek to uncover pathways towards regulatory success and regulatory failure. These pathways will inform mid-term and long-term policy development in New Zealand and elsewhere.

This will help us to understand better why some regulatory interventions are a success, such as the New Zealand regulatory regime for Outer Space and High-altitude Activities, and why others are a failure, such as the regulatory regimes resulting in the leaky building crisis.

Cases for this overarching research cluster will come from the other clusters and elsewhere. In short, this cluster ties together all Chair activities.

This then leaves me to quickly addressing the engagement programme and the education programme.

Besides research activities, I will undertake a range of engagement activities. The mission of the Regulatory Clinics, for example, is to improve the regulatory literacy of those involved in regulatory issues. To fulfil this mission, we will organise a series of weekly half-day meetings to discuss and workshop regulatory practice topics and questions with government staff involved in regulatory activities. The clinics are initially organised on a rotating basis between the agencies that sponsor the Chair.

Regarding knowledge dissemination, besides academic publications resulting from my research, I will present my finding through other platforms. For example, I have just started a blog, From the Regulatory Frontlines, to share insights and inform you about other regulatory news.

Last but not least, I will actively engage in education and teaching. While the education programme has not fully crystallised yet, one of the things I am excited about is making a contribution to the New Zealand Certificates and Diploma in Regulatory Compliance.

This qualification programme provides people employed in, or who want to go into, the regulatory compliance sector with core knowledge of regulatory compliance. It helps to build out the regulatory profession in New Zealand and serves as a world-leading (and to the best of my knowledge, world-first) example of a systematic approach to the training of staff in government and non-government organisations working in a regulatory compliance environment.

To this end, I will seek certification myself (and blog on my experiences in getting it) and assess the workings of the qualification programme as a whole.

Again, I wish to thank the G-REG community and the Victoria University of Wellington for their trust in me. And thank you for being here today.

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