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

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 fifth of a series of brief reviews of chapters from that book. The chapter reviews outline the key themes of the chapter, with a brief commentary about them for New Zealand experience.

Chapter 20 – Intervention Choices – Intervention Choices are one of three practice 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.

Recognising the importance of intervention choices in delivering outcomes, chapter 20 discusses the significance of those choices in terms of the fundamental task of a regulatory agency which is to change the behaviour of regulated entities. The chapter suggests that having a wide range of interventions available will always be more effective than just using a narrow range of interventions such as enforcement and inspection to fix significant regulatory problems.

The concept of ‘regulatory shape’ is discussed as a way of describing the categorisation of intervention choices for pre-entry authorisation, in-service supervision and/or post-event investigation.  The chapter outlines how ‘regulatory shape’ choices impact the nature of relationships between the regulator and regulated parties and are driven by risk appetite and culture of the society from which they arise.  Those choices also drive consideration of the nature of the skills and competencies required by officers in the regulatory organisation.

In terms of the range of interventions available it is noted that there are typically some that are required through legislation (for example, licensing) or provided by discretionary powers to intervene (for example, inspection, production of documents, sanctions).  There may also be less formal interventions such as informing and educating, and working in partnership with intermediaries to change behaviour.

After considering the range of interventions available, the chapter discusses the effective designing of interventions.  It notes the importance of choosing based on how effective an intervention is (or interventions are) in addressing the risks and improving outcomes. This discussion draws on the concept of responsive regulation noting this is based on having a deep understanding of the environment and market being regulated.  It highlights the importance of understanding the reasons for non-compliance, drawing on questions regarding the knowledge and comprehension of the target group, willingness and ability to comply.  It also explores The Office of Product Safety and Standards’ Maturity Model as a way of considering the types of intervention approaches that might be useful drawing on four stages of maturity – pre-legislation, new legislation, embedding process and the mature stage. 

The chapter finishes with a focus on approaches to building compliance noting increasing recognition of the importance of selling the benefits of compliance, using a wide range of tools – used flexibly – compared to only relying on traditional enforcement models. It recognises the importance of an array of tools, ranging from punitive sanctions to the discretion to support businesses to improve, make changes, and get things right. It notes, though, that while sanctions are essential, they are not necessarily the most appropriate tool for ensuring that non-compliance is addressed. 

This chapter canvases a range of essential issues in terms of intervention choices. With its references to Professor Malcolm Sparrow’s approach ‘to pick important problems and fix them (and tell everyone)’ and Ian Ayres’ and John Braithwaite’s responsive regulation concept, it will resonate with many New Zealand regulators who are familiar with these issues.

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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