Exploring issues about regulation – chapter review of the book Regulatory Delivery (on accountability)

In November 2019, Professor Jeroen van der Heijden reviewed briefly the book Regulatory Delivery: Introducing the Regulatory Delivery Model, Graham Russell and Christopher Hodges, editors, (2019), Hart Publishing Oxford, 504 pages.

This article is the first of a series of brief chapter reviews from that book. The chapter reviews will outline the key themes of the chapter, with brief commentary about them in respect to New Zealand experience.

Chapter 7 – Accountability – Accountability is one of three prerequisite elements of a ‘Regulatory Delivery Model’ that the authors describe as being useful as a map, a diagnostic tool or a predictive model to guide thinking about regulatory delivery. The model overall is made up of three prerequisites: Accountability (ch 7), Culture (ch 10) and Governance Frameworks (ch 3), and three practices: Outcome Measurement (ch 13), Risk-based Prioritisation (ch 16) and Intervention Choices (ch 20). Each chapter ends with a set of ‘Key Lines of Enquiry’ that can be used to assess the current picture in a regulatory organisation.

The chapter defines accountability as ‘the obligation to account for regulatory activities to another body or person’ and suggests that regulators owe accountability to three groups:

Government – both as the owner of policy underpinning regulatory requirements and in many cases the provider of public money to fund the regulator’s activities. Government is also a proxy for the intended beneficiaries.

Beneficiaries – as the direct recipients of intended benefits, noting that while this accountability is delivered in part through accountability to government, regulators must not overlook the need to consider what accountability mechanisms might work for particular groups of beneficiaries

Regulated parties – by taking account of the impact that regulation can have on individuals and on industry sectors, especially noting that regulators are authorised to exercise the coercive power of the state. Key matters of interest to regulated parties are fairness and whether a level playing field exists in respect to how they are treated compared to others.

The chapter notes that accountability is linked inextricably to governance frameworks and culture. It also notes that there are competing forces of accountability – and if there is an imbalance of accountabilities, then the regulatory agency may find itself unduly influenced (captured) by the needs of one group or another. 

While this book draws heavily on UK and European experiences, the issue of accountability is alive and well in the New Zealand regulatory context.  There are many system wide requirements that support accountability.  These include the requirement to develop, table in Parliament and publish statements of intent, statements of performance expectations and annual reports – all of which are subject to independent scrutiny. There are  requirements to publish regulatory and prosecution strategies; requirements regarding the make-up of regulatory agency governance boards; and some agencies have service charters. The application of the Official Information Act is also an important accountability mechanism. If nothing else, the recent experience of the New Zealand Transport Agency has put the spotlight on accountability to government – of itself and as a proxy for the actual beneficiaries of regulation – suggesting that on balance too much consideration was being given to the interests of regulated parties. This is an example of the competing forces of accountability being out of balance, and something for all regulators to consider. 

Drawing on the extensive experience and knowledge of the authors[1] this chapter provides a sound basis for regulators to consider their various accountabilities and ensure they are calibrated in a way that supports good regulatory outcomes.

[1] Graeme Russell, Chief Executive of the Office of Product Safety Standards in the UK Department for Business, Energy and Industrial Strategy and Helen Kirkman, who is responsible for regulatory approaches across that Office

This post was written by Keith Manch, the Chief Executive and Director of Maritime New Zealand. He has worked in the public sector since 1977 and brings extensive leadership experience in a number of policy and operational senior leadership positions in regulation, compliance and response.

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