Jornadas da Regulação Responsiva - Parte 1: princípios e boas práticas internacionais

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um
good morning uh good day to everybody um
as i just said uh start with two
apologies one for not being able to be
with you in person and the second
uh for doing this presentation in
english but as i think you just heard um
there's a very good reason for that
um
i'm really grateful to um
and to
all of you for your time today um as
danny said in his uh openly remarks
dialogue is really important
for effective regulation
um and an effective dynamic regulation
which is a theme we also heard from the
director
i'm just going to share my
my screen to get the slides going
hopefully now you're seeing the full
screen
excellent getting the nod from marcelo
um
this is the as the first of three
webinars we really wanted to
set the scene with some of the the
concepts
and the
the different
terms and
phrases that are used to describe
different dynamic regulatory
uh approaches whether that be smart or
better regulation
and responsive regulation
and how they fit together as part of the
whole
and that gives a more dynamic uh
regulation framework so i will talk
about
um the particular concept of responsive
regulation and enforcement
but i thought it was also important to
to put that in a wider context of
regulatory design
and how that fits with other regulatory
theories to be uh complementary
which uh i i do believe they are
and i'm not going to talk in great
detail about aviation um in this session
uh we'll use the future sessions
um earlier next year
to get more into how some of these
apply and practice and to look at the um
the experience of different countries
applying these principles to aviation
i'm also not going to talk in huge
detail about brazil we'll touch on on
brazil in a little bit of time but again
we can come back to the specific policy
issues and how they play out in the
local context
um
uh in the future webinars today is
really about um going through the the
concepts and the theories and the
principles
in terms of um the the outline um
i'm giving
the overview now and i'll start with
some of the objectives of the rate of
the regulation and why it's important to
improve it
or
obviously for the governments and
regulators for citizens and consumers
and also for industry
talk about the regulatory cycle talk
about regulatory design particularly
through the
language of better regulation
and then
we'll uh
make some clue concluding remarks about
uh the enforcement side of regulation um
and the theory of responsive regulation
starting with the the objectives and why
we are uh why this is important for all
of us um you know what
what do we achieve if we can improve
uh the efficiency and the effectiveness
of the regulation
the first is um
improve
society
welfare as a society level
for all citizens
by having policies in place which are
more effective achieve their objectives
more efficiently
from an economic perspective
by encouraging
competition and greater competitiveness
which you heard marcelo
talk about is something that i think is
very important
um
that can improve economic outcomes by
honesty the potential of the
uh the private sector
obviously while um
imposing
a regulatory check on that as well so
keeping that in balance that right
balance between
uh promoting economic development
and uh ensuring good societal outcomes
one of the key trade-offs obviously
to to control regulatory costs and make
sure that um regulation doesn't become a
burden in itself
minimize the burden of regulation
to
stop that being a barrier to to
achieving outcomes the very regulation
designed to improve
outcomes
the risk obviously always is that um it
gets in the way
um and and thirdly
a more general outcome that the more um
regulation is seen as efficient and
effective that's going to improve
general societal competence um in
in the regulatory framework in the rule
of law
there's transparency there's general
support for um the regulatory framework
and that's and trust in it and that is
also going to improve outcomes so
sometimes that's not necessarily best
achieved with commanded control as as we
heard from uh the opening remarks of our
director
so those are you know some of the
objectives that's why that's important
and i think you know what i take away
from this slide talking to you from a
private sector trade association
obviously i'm very conscious of that um
and talking to you as regulators is
amongst these these four big um
objectives these four big benefits of
improving regulation there's somebody
something for everybody
something for a wider society there's
something for the governments
and there's something for um for the
industry and
if we can achieve um a more effective
and dynamic regulatory framework
then we uh we have a good chance of um
creating a virtual circle which
obviously is the objective and everybody
benefits from that
so
if we move on
let's talk about the regulatory cycle
and hopefully it'll become clear
as we go through this why i think this
is important
but the first um and this is this is
like a number of my slides is borrowed
from
um material from the oecd
afterwards very closely with the oecd as
a non-um
non-state actor we have um official
relations as an uh international
organization as part of the oecd's
international organization partnership
um initiative
um
and we'll see that when we talk about uh
what i article smarter regulation or iko
calls with regulatory practices it's
really very much the same framework well
i really like this diagram for a number
of reasons one because it shows
that regulation
isn't um a particular action it isn't
all about enforcement or it isn't about
policy design
it's about a series of factors
and they all need to work together
and they are also a continuous process
so
i think that's that's really
the first
thing to start with
we begin at the top uh top left where we
have policy issues for government action
so this is really at the very beginning
where
at a government level
there's identified that there may be a
problem that needs solving
and and whatever that might be that
the political
masters
decide that
they want to
resolve an issue
the first step moving from that then is
to start exploring that issue
to understand the nature of the problem
to understand the causes
um not just the symptoms
why what is causing the problem what are
the
the drivers of that of the particular
behavior or outcome
that the government wants to influence
and then
let's do a rigorous process and we'll
talk about this in more detail
of considering the different options
and approaches which could be applied to
address that problem
and and this is this is really important
and this is one of the things that is
often left out uh when implementing
better regulations to really be be
rigorous around doing that option
assessment
early on
that gets you to a decision and the
decision point is whether um at that
point you decide that you're going to
regulate
or whether there's some other
policy tool that can be applied whether
that be incentives
um direct incentives which annie talked
about
or
self-regulation voluntary agreements or
code of practice
guidance um different solutions which
could be put forward um
that aren't necessarily involve
regulation
but obviously today we are talking about
regulations so let's assume that at this
point the decision has taken that this
particular policy issue that we might be
discussing
and
warrants and merits a regulatory
solution
the next
phase
is to design
that regulation to
having out of the different options that
have been chosen to work that out and to
design that and we'll talk about that in
more detail
when we talk about the regular better
regulation
approach that's going to be roughly the
first half of this webinar
only once you've got that regulation in
place or that piece of legislation based
do we then get to the discussion around
enforcement so how do you enforce the
regulatory framework that does exist
this is the point that which we start to
talk about responsive regulation so
firstly hopefully the first thing i
would have achieved is to see how
what we're going to talk about policy
design is really important when we come
to enforcement and responsive regulation
and enforcement is obviously much easier
if the regulations that you have in
place
are sensible and themselves effective
once you have the regulation in place
and you're
implementing it and enforcing it
that the fourth step of the process
which is really important
and almost
universally um the one that gets missed
out the most is to go back and to
monitor
and evaluate
how effectively um it's working
is it achieving the objectives is it
solving those initial policy
problems that the government had
that inspired them to regulate in the
first place
is it causing unintended consequences
there's something that
haven't been thought of at the policy
design stage
that um
it might be achieving its primary
objective but it's having some negative
side effects
um that are undesirable or it's
more burdensome to enforce
than um had been expected
but whatever this may be or is it in
fact the case that it turned out that um
the regulation wasn't required after all
and that the problem goes away and is no
longer needed
so
the
the monitoring and the evaluation is
really important
both for the policy itself and of those
i guess the regulatory um body and other
stakeholders
um
to then go back and do a review process
and start over again if needed and say
well okay now we need to
review or update the regulation itself
and so it goes on
and in the middle you will see that
there are four c's
consultation
coordination cooperation and
communication
and these are all really important and
that's you know comes back to the
importance of the dialogue that danny
talked about
and it's really important as well that
these take place
at all stages
and we'll talk about it in detail around
um the design
of regulation and it's clearly also as
you will see
um at the heart of
the responsive regulation framework as
well particularly the consultation and
the communication
um
but these are um
these are all really important
they can't happen
um too often
and
they don't just relate to one particular
phase of the process of the cycle
but to all of them
so
that i think set some very very high
level context
now i want to move on as i've described
to discuss um
the policy design side
and as i've said to do this i'm going to
use the
adjustments
i'm going to use the oecds
better regulation framework um as i said
that was adopted after the 39th iko
assembly in 2016
by iko
and they call it good regulatory
practices
but it's built on the same principles as
what i'm going to describe here um
and from an iata perspective when we
discuss policy making again we use the
same framework and i support it smarter
regulation but they're all very much um
the same
the same idea the same set of core
principles the same set of
process points as well
and
in terms of where we see this regulatory
regulatory design principles being
adopted
and i've put some
flags on there on the screen which are
particularly um relevant case studies of
active proponents
of
a better regulation
and
unsurprisingly many of them are um oecd
member states
um
but you've got the us australia and the
european union and the uk
who all in their different ways are very
active
in promoting
the um these principles and the
different elements underneath them and
really
the
the whole
um
ethos
and the whole
res on debt
of better regulation
is what it says at the bottom here it's
about delivering clearly defined
measurable policy objectives in the
least burdensome way
um and that
obviously is beneficial to all of the
different stakeholder groups that i set
out at the start of my uh remarks
um
better regulation or smarter regulation
is really built off a series of
policy principles and a series of
process principles so what what does
good regulatory policy look like and
then the process principles is how do
you go about um putting processes in
place that means that when you're
designing policies you're likely to
achieve a good outcome
so let's take those in turn i'll talk
through the five principles that
underpin each of those and then i'll
dive into a couple of them in a bit more
detail because i think they weren't
further
examination
so
moving to the um the policy principles
uh and
really i've put plenty of text up here
not because i want to go through um and
read out the slides but um when these
are shared as takeaways hopefully uh
this gives a good summary of what was
discussed
first policy principle is um consistency
and coherence
um which sounds um
very intuitive um consistent with
existing rules and um
either within an entity within a
geographical territory
um or across territories and obviously
in an aviation perspective that's that's
really important
not just how you're regulating brazil
for example but also how that relates to
international instruments that that may
uh have effect um
around the world um and multilateral
agreements that brazil may be subject to
it's also of course the case um
that there may be within a territory um
city where there's a federal structure
in place there may be um
a need to ensure consistency between uh
state and national levels as well um
so
that's where the importance of
consistency comes in um that's important
for all users it's very hard to um
enforce regulation where there are
multiple different overlapping
regulations that would apply
clearly is very difficult to comply with
uh from a um
user operator perspective
especially in an international
network system like aviation
and it's also really confusing for the
consumers if they don't know what rules
apply
um
and we're certainly
stepping up slightly outside of better
regulation just
to talk about um the emergency situation
we find ourselves in with kodi 19 around
the world
but there's a really good example of the
lack of consistency and how much of a
challenge that that provides for
um for consumers in understanding which
set of travel measures apply to their
journey depending on whether they're
coming or going
or which market they're traveling to
and traveling from market a to market b
it may be enough to be vaccinated but if
you're traveling from market a to marcus
c
you need to take a number of tests or
and you need to self-isolate for a
period or fill in different forms
so
um not really um a better regulation
example but i think a quite
powerful illustration of how important
these principles of consistency
coherence are for of all actors
involved
next thing is around proportionality um
again i think we'll talk about
some of the the tools that can ensure
things like um proportionality and
risk focus and
and non-distortion uh in a minute but
um
you should only uh regulate to the
extent that the problem you're trying to
solve justifies it
um and again we talked with the the
regulatory cycle that you may decide
that a formal regulatory solution
isn't justified in all scenarios
um
or if that's a relatively light touch
um approach maybe may be relevant if the
scale of the challenge or the scope and
the extent of the challenge uh or the
impact of the channel isn't that great
in other scenarios clearly when you have
a
risk that you're addressing that um
applies to
a large number of stakeholders
and would have a high impact
then
a a more formal regulatory intervention
would be considered disproportionate
um
and i was thinking about this in
preparing uh today's discussion
um back to an example that we had um
when i was at the uk civil aviation
authority around um regulation of use of
airspace um for general aviation
the geography of the uk is rather
different to that of brazil because it
was obviously much much bigger with um
much more empty space uh whereas the the
uk is small and and very congested
um both on the ground and in the air
but the complaint that we received from
general aviation was that um va was
being forced to comply with uh being
regulated from a safety perspective in a
very similar manner to how commercial
air transport was being regulated
um and that this made it very costly to
um operate fiber aircraft either
uh
for business purposes or for
private use
and um
that you know it was disproportionate
um and so at that time
uh
we did actually use uh better regulation
principles and a risk-based approach as
well
and and actually adapted the regulatory
approach that we applied to
uh general aviation
to say essentially as long as general
aviation
was
in outside of the airspace being used by
commercial air transport and wasn't
going to conflict
with um commercial operators
then
actually
a higher level of risk tolerance could
be accepted because
um the general aviation users were
perhaps going to
incur a risk themselves
but they weren't going to endanger
others and so
that might be a more proportionate
approach and than to regulate those
users as if they were um commercial air
transport operators
clearly um
and thinking of my aviation history and
you know about 15 years years or so i i
know this is a case that's relevant to
you to brazil's history
but if you um
uh
very different rules apply
where
general aviation can um engage with
commercial air transport and they're
obviously
a much less tolerant approach was taken
uh and and very very strict regulation
of that airspace use
so i i just want to i thought that was
maybe relevant to to highlight a
practical example of proportionality
um
very much thinking about uh being
targeted at risk and understanding the
risk that you're trying to address um
that really gets down to that
root cause analysis i talked about when
you're
starting with the policy design process
what is it you're trying to achieve
what's the problem that we are trying to
solve
and then continually going back and
asking ourselves whether the regulatory
policy tool that we're using
will fix that problem
um
effectively so um
that's um
that's really the key about being
targeted is at risk and it also has an
element of that same um
that same example also applies here that
i just talked to uh are giving
potentially giving flexi flexibility to
certain users depending on the specific
circumstances and if that's appropriate
and and if it achieves the um the
overall objective of keeping the system
safe
the fourth objective is that um policy
should be fair and non-distorted
so
regulatory policy should apply to all
equally
uh
shouldn't create energy burdens for
certain groups
now in a in an industry context that
could be um
smaller medium
enterprises and potentially um
general aviation again
that that example would apply here again
if
um having to
have a certain piece of equipment or a
certain transponder on board to operate
in
unclassified airspace
and would create a real cost burden for
uh general aviation
and they
there was no danger of them conflicting
with promotional transport then
you might say well actually that's
distortive um
it's fine for for commercial and
military uh users to to buy that
equipment but for a general user that's
not going to be the case
with
different types of regulation moving
away from safety and perhaps thinking
about
consumer regulation
or accessibility regulation
if uh if a regulatory outcome um
affected a certain ethnic group or
disabled community
in a way that's different from from
other users then again that would be
considered distorted
and not fair so
you really have a very
um
careful consideration of how the
regulatory intervention will apply in
france and what
unintended consequences it might have
um
and it is one of the things that
regulation it almost does have always
always has a some form of consequences
so it's important to think those through
early
and
not just find them out as the
regulations being
implemented
and finally um clarity and certainty in
this in a way looks back to the
first points i made around consistency
and computer coherence
for there to be um trust for it to be
easy and simple to comply with
regulations and be very clear
you have to know
what's allowed and what isn't under what
circumstances and perhaps what
exemptions or exceptions apply
um and there's certainty but if i do
this on one day
and i'm fine but then if i do it on on
the next day it's also going to be fine
or vice versa
and it's not um
not um good where there's surprises
that well i did it yesterday and that
was okay so i assumed it'd be okay to do
it today um
and but it's it's
absolutely a different regulator
um enforcing that and
coming to a different conclusion that
certainty and that predictability um is
really important again
for all stakeholders for for consumers
and citizens as well as for um operators
and producers
and
lastly what's um
what's really important here is where um
a regulatory intervention
requires for preparatory action to be
taken and this obviously more affects um
user groups
and producer groups sorry um that there
should be uh sufficient time to be able
to
uh
to
to
comply sorry with the uh with the
regulation
um that's really important and that's
not something that is always the case
the the more the time the less
disruption that implementation
period will take and and actually the
better it's likely to go for everybody
i'm going to see the implementation will
be
so those are the five um
policy principles
moving now to think about the process
principles
how do we go about designing policy that
meets those objectives
the first thing is um
again you'll see that some of these
relate to each other is to be really um
clear about the need and the problem
identification
and
what is it you're trying to achieve so
want to be really clear on that the
outset
as far as possible support that with
really good evidence
um
once you've identified that problem
and understand
the different alternatives
are there non-regulatory solutions that
could apply are there
can you do this with guidance as i
talked about previously can you do it
with a code of practice
with a voluntary
agreement
um between
producers in the regulator or through
constructive engagement
and you do these things as an
alternative to
regulation so that when you start to to
go through the process of implementing
and
buying a regulation you know that that's
an effective tool
regulation does come out as the best
option
to support that um impact assessment is
really important i'm going to talk about
impact assessment in a little bit more
detail
because uh it really i think it provides
a structure and rigor um to regulatory
implementation that supports many of the
other points and such that i think it's
it's key to delve into a bit more detail
and transparency and consultation are
really important and i actually take
transparency and opportunity to respond
and review um
together and i will talk about
consultation um
after i talked about impact assessment
but it's really important to be open to
have the dialogue that we talked about
at the very beginning of the session
um
throughout the design process
so
it's a
regulating entity to be clear that
it's considering in uh regulation
to involve stakeholders in the evidence
gathering process around the need
identification around the impact
assessment
um
and and to
genuinely take on board and stakeholder
feedback the producers users
add and review proposals
as they're being implemented
and finally
um
again part of the same process
reducing
burdens and
implementing regular reviews this is the
part that's probably most often left out
once the regulation regulation is played
in base to then go back and see whether
it's working and whether there's a way
of doing it better and so that
monitoring evaluation is critical
so those are the um the principles uh
both the policy principles and the
process principles and then if you
follow these you stand a good chance of
designing a good uh a good regulation
that will be active to enforce
let's just go through uh impact
assessment um
in a bit more detail and i say this
because
it's not always
understood what an impact assessment is
and how to do one and how important it
is
you should do it
um
so
it's a tool um it's not a decision
making um software in itself it doesn't
come up with an answer
there's not some hard and fast rule that
if the impact assessment says something
it shouldn't be done it's there to
inform and advise um decision makers and
regulators in in terms of
the action that they're taking
by assessing
the costs and the benefits and how those
accrue to different groups and that's
also really important i talked about the
fair and non-distortive
the impact assessment can really help
you
by delving into
whether there are particular
impacts on
environment on specific user groups and
on the
of society or on specific um categories
of firm and producer that mean that
some amendment might be
required or some way of compensating for
those specific groups or the impact of
the
regulation
um it can help
in identifying and codifying the problem
and indeed
your first impact assessment um
should uh do a very high level impact
assessment of all the different options
that have been identified
um
this is where it comes into one of the
the misunderstandings of impact
assessment by those people that do a lot
of it uh final impact assessment of a
regulation can be
quite detailed
quite quantitative
and
quite technical uh in terms of
analysis or some other kind of
multi-criteria assessment
and
that doesn't need to be the case at all
stages so when you're doing very much
the inception of a policy design
and it's appropriate for the impact
assessment to be much more high level
um
but it should still look to um address
all of these questions at the early
stages and and one of the
one of the mistakes that it gets made
and
when uh when countries are implementing
impact assessment is
they either come too late in the process
or they are shared with stakeholders too
late in the process um such that uh it
then becomes a very
uh rigid tool rather than something that
can actually help the design process
um because really what it's trying to do
is to provide an objective
framework for looking at like policy and
assessing whether it meets those
policy and process objectives
and
what you can see
um
from the the schema at the bottom
is that from moving through uh
understanding the problem
two objectives then identifying options
you see that feedback feedback
at the bottom when you're assessing
a preferred option or two idle preferred
options against each other you then
feedback and you check whether it's
going to meet those objectives
in the best possible way and whether
it's going to
solve the problem you're looking to fix
i'm also going to talk about
consultation here
uh because again it's also important
it's like dialogue element um
and it's something that uh really um
often gets um
uh
either again
done too late
or seen as a formality and not seen as
something that can help it's in there's
a
step that has to be done through and not
to something that's genuinely helpful in
terms of
improving the regulation
um
first
[Music]
it can help the regulator in the design
phase
where
industry stakeholders or consumer
stakeholders can inform that there's a
particular
particular need
if they just agree it might say we
understand the need to to regulate
understand the problem you're trying to
solve
may even agree that that's a problem to
be solved
but we're concerned that it will have
this this or this impact and that would
be very damaging
um
so you know
look for a design alternative that
avoids that and they get that going to
equally apply for consumer groups
and
and that's why uh it's quite important
for it to be done at the early stages of
policy development
um and on an iterative basis um at uc i
refer to the the european commission
here
this is actually one of the things that
the commission is quite good at
is doing this regularly
at different stages of um
policy and regulation design
bit like impact assessment it doesn't
always have to be formal
um
sometimes it will be a written
uh written consultation something will
be published in their national gazette
and uh stakeholders will be given a
fixed amount of time to provide specific
written feedback
sometimes it can be uh informal and
a conversation or a dialogue
one thing it should try and do is to
gather um evidence information so
where
user groups and stakeholder groups are
providing input and obviously the more
rigorously the views that submit it can
be justified with evidence
um either a problem or evidence of a
negative consequence then that can
inform so it's very much a two-way
process
i think the more that
um
stakeholders feel that the consultation
is genuine the more they are willing to
uh to generate and to offer up
that
evidence key element of consultation
that's um not always considered
um
that i discussed in the process
principles was the response
um
ability to to respond and and to see
their revision and um when the oecd
does its policy reviews of different
member countries and partner countries
around implementation and consultation
one of the things it does look at in
some detail is whether
the regulatory entity
after a consultation period will then go
and respond to stakeholders and
submitted input and said look
thank you for your input this is what
we've heard um this is what we've done
as a consequence
and this is what we haven't done as a
consequence
either we noted that feedback
and but we felt the evidence to continue
what we were doing um was compelling
or that that alternative is not
practical or whatever
um but to give that feedback and to make
clear that it's been understood and to
to make clear that there has been a uh
has been given to you consideration
consideration um as part of the design
process so that's an important element
of
consultation
um
as i say the eu is an example of this
but i could cite other um other entities
as well um
he's talking to the new head of the
canadian uh transportation agency the
cta they're a regulator
um
about exactly this point and you know
canada are very very good at uh
publishing lots of consultations
and and the uk is as well so
there are a number of good examples here
um that we can point to on the
consultation side
and equally on the impact assessment
site um where australia would be
a really good example of a country that
does lots of impact assessment as part
of its policy design before it then goes
on to enforce that using the responsive
regulation approach come on to that in a
minute
i just wanted because we are talking
about um brazil and i mentioned the um
the oecd's uh regulatory policy reviews
just to give a sense of where um
the oecd thinks uh brazil is as a
country as a whole so i'm not talking
about um anathor aviation in particular
here talking about the country as a
whole
uh in terms of um stakeholder engagement
during um development of subordinate
risk or subordinate uh in some countries
it'd be called secondary legislation
implementing legislation or regulation
and and you see that um
brazil is
somewhere halfway between the oecd
averages as a whole plus the
37 or 38 oecd members and and the latin
american and caribbean
average so um there's a
country as a whole
um
that's very positive um and the same
review does note that
the move
within within brazil towards a more
dynamic approach with more impact
assessment and
greater consultation so again that is
very positive
and here um you see that comparator
against the rest of um the countries in
the region
or how uh how frequently
uh the stakeholder engagement is
required on the left-hand side
in the riaa which is regulatory impact
assessment under on the right hand two
bars
and you see um
comparing favorably against um of other
countries in the region again as i say
with that
um small um
still some way to go to be best of class
in terms of um the oecd average and
again as i was saying this is really
focused on on the country as a whole and
not looking at specific sectors
and
in the audience specific sectors
are oecd initiatives that go down to the
sector level um and we have been
discussions
with them about uh
how that could be
rolled out more widely uh to support
competitiveness and so on but um
i thought it'd be relevant to to share
some
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examples
so um
quite a lot in there
the whole idea of better regulation is
that um if you follow those principles
particularly the consultation and the um
the impact assessment really good
intensification of the problem
uh consideration of options
through the rigorous analysis
and um
and lots of consultation you should find
yourself with a regulatory policy
that is um
pretty smart
um
then comes obviously the task of uh of
enforcing him
and this is where we come to the idea of
responsive regulation
um
which um
is a a regulatory theory that
about
coming up to 30 years old and came out
of australia um
why i wanted to make the point about you
know sort of australia's
adherence to the better regulation
design aspects from policy design
um even if it's got a quite a strong
focus in enforcement i'm a responsive
regulation model
and the idea of responsive regulation
developed by a
guy called john greathwaite in 1983
is really to
find an alternative to
on the one hand
command and control which is seen as too
burdensome too static
um
quite constraining constraining
innovation
and
a free market they say fair approach
um
that
didn't actually
effectively constrain
um particularly um in many cases
not only providers of services or
services that have products and services
that had a um
a real societal impact whether that
might be environmental or health
many of the settings where responsive
regulations is really used
and essentially
what it is is um
it's in some ways interacted um
and it responds to
the conduct of the regulatory entity
um
so
if only as forceful as needed
essentially the uh
principle and we'll see this in a little
bit more detail as we see that the
regulatory pyramid
and
if if an entity is complying with its
obligations
voluntarily and then
there's no need to
enforce it in a very rigorous
regulate that entity in a very rigorous
way
however um
where where the entity isn't uh engaging
and isn't responding
effectively then there's a
chain of escalation or pyramid of
escalation
um they get obviously more intrusive and
more constraining
of essentially through to full um
shutdown of operations at the very very
extreme end
um as you escalate through
um
and it's it's also dynamic in that um
don't just go up through the chain you
can step down as well again depending on
the behavior so
that's what it means by responsive
is it it takes into account response to
the behavior of the regulated entity
um
one interesting finding and again this
this talks to um
one of the objectives i highlighted at
the beginning of the regulations that
sort of trust and transparency and the
confidence in the rule of law is
responsive regulation works best when it
has public popular support
and here obviously that talks to the
importance of having um
regulation and policy that's designed to
be clear and certain well understood and
well supported by people well supported
by the stakeholders as well that are
going to be subject to it
so
um
in some ways you could say that
responsive regulation is not a
prescription descriptive set of tools um
and there are different ways that um the
regulatory pyramid that i'll come on to
talk to in a second can be constructed
the different layers of it so it's not
prescriptive it's not one size fits all
in fact there aren't
five process principles and five policy
principles to it
it's much more
an attitude and an approach
and behavioral
approach to regulation
and then something very fixed and uh
narrowly defined
um and as i say it was very much very
much come out of the
um
the needs to
to break the dichotomy between
um either
leaving
market actors
essentially unregulated or very very
light touch regulation and um
very burdensome command and control
regulation essentially actually
you've probably seen the extremes
of the spectrum of the pyramid are
actually both ends of that um but it's
the ability to move between them that's
quite innovative about this
um
one thing it really is worth saying um
is one of the risks of responsive
regulation
um is that there's the threat of
regulatory capture
by one or more stakeholder entity um
given how important how important
behavior and attitude is to the to the
conduct of the regulator as well as the
regulated entity then
and watching for um
uh
regulatory capture is critical and
obviously that that affects um
all actors in the in the supply chain
and all stakeholders
let's take a look at the um
the regulatory pyramid there's two
uh two versions of it here and then
we'll do one more uh at the end
uh that hopefully brings it
full circle to show
how it can actually the same
approach can be applied to its policy
design
so here on the left
we have at the base of
the um
base of the pyramid
quite supportive um
approaches
so you can imagine that a new regulation
has been implemented
then there'll be lots of education
around that
ascity building
explaining the regulation to uh to
regulated entities
enhancing their ability to to know their
obligations
and
clarity and certainty
and and to be able to know what they've
got to do
to um to comply
and even potentially helping them to do
that
with through that implementation process
so that's what's known as a learning
citizen or a learning entity
the next level up is somebody who wants
to um
wants to get it right virtual citizen
got good intentions but doesn't
necessarily
get things right every time uh and here
you know you're talking about something
with what's called a restorative
approach here but the idea is that you
advise you
you coach you correct um not necessarily
to
to punish
but to
show the entity how it can
apply properly to correct its ways
um if you if the regulator sees that
there's actually solidly good intention
to do so
um
the third layer up and as we start
getting towards the point of the uh the
um
is we now get into somebody who you know
it's less clear
and is willing to comply so-called
rational actor that may be decided you
know doing a cost-benefit analysis for
themselves about well
you know
actually maybe i'm better off taking the
punishment here than um
fulfilling the costs of complying this
regulation
um so here um
the approach the regulatory approach
would be more interventionist it would
be to deter such behavior
uh and to try and
really encourage them
and to
come into line and finally
um you have somebody that just
uh whatever has been trying um is
determined not to comply in some ways uh
direct
um
contravention uh of all the the outreach
that's been made
uh or posing you know a major risk to
society
um in which case you you become uh
obviously much more
um
and and that um
gets you much closer to your to your
believe that the more extreme end of the
command control
uh regulatory mechanisms
but there's a chain of escalation to get
um
the formula on that on on the right hand
side the the top
top part of the pyramid
is um
and sorry actually sorry the bottom part
is very similar to what i just described
and what the the formulation on the
right hand side shows is that actually
this can they can be rewarded as well as
punishment here so you can provide
positive incentives people who genuinely
want to apply in our law abiding and
for them to get a better outcome or even
some award recognition
um as well as uh using the
certainly using carrots
uh for the
the law-abiding and well-behaved
citizens
and sticks for
those who aren't uh compliant
and i'm
interested in
applying so
um in that sense it you know it has that
ability
to encourage both
positive and and negative
uh tools or
sticks as it were
so that you know in in essence is the um
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that's a responsive regulation framework
and sort of described that escalation
and the escalation
um and it's much more
dynamic again to come back to the words
that the director used
this is my my last slide because i'm
conscious of
time this is uh an example taken from
environmental regulation in australia um
i just wanted to show you how this can
actually um
parallel to some of the policy design
uh concepts that i talked about
in terms of there's actually a
regulatory pyramid for um the policy
instruments as well
you can see that the
bottom here you have um and guidance
material
and so
encouraged to educate to capacity build
some of the tools that would support uh
the responsive regulation but also in
terms of how you
implement those in practice
as you move up
um you could actually as the next layer
up before you go into a legislative or a
regulatory instrument you could think of
a code of practice on a voluntary
agreement and constructive engagement
particularly where the regulator is
regulating between two entities in the
supply chain
that's a
an airport in an airline in an aviation
setting
you could have a cooperative agreement
as your next level up and then as you go
higher you get into formal regulations
uh things that that are enforceable
and then um
very strict hard law so again you can
have this um
this chain of um or this pyramid of
escalation um in terms of how you
regulate and from a policy perspective
as well i regulate from an enforcement
perspective
i think the one thing
that um
it's harder to see with the
uh with this example with the previous
one
is how you um
de-escalate once you get to hard-lore
instruments so um
i think that um maybe talks to the
importance of
working these three very carefully and
only making
um
steps when they're really needed going
through that process of questioning
whether a regulation or
a more interventionist approach really
is justified
because
when you get to the legislative
stage
or the formal regulation stage um
it's harder to to remove those
than some of the softer uh regulatory
tools
um
i think it's equally a a criticism of uh
or a critique
at least of response to regulation and
enforcement but actually that that the
escalation
um is maybe harder as well as you get to
uh
sort of more uh combined control
approach de-escalation can also become
harder in terms of enforcement behaviors
but the thing certainly the theory and
the approach does genuinely um accept
that possibility
so
um i've talked far uh far long enough um
so i'm going to stop here and hand over
to marcelo in case there are questions
james
uh
thank you for sharing with us your
knowledge and insights on on these
issues of regulation
in the field of civil aviation
we assure that
this debate can contribute
consistently
to the construction
of an organizational culture in the
industry in brazil
aiming to use
diversified regulatory instruments that
encourage
positive and collaborative behavior
between regulators and regulated ones
well now i have uh selected some
questions and i'd like to address them
to you james uh is that okay
of course let's go ahead here we have we
have a very we have a very tight time
remaining but i think we can answer some
of the questions so could the first one
uh could mr james uh comment on how
regulation uh is done in brazil and the
uk any kind of comparison are there
differences in the form of participation
of the regulated agents
it's it's harder for me and perhaps and
danny can jump in here with his
brazilian experience
um i just don't have so much direct
experience of the the market
historically
um in brazil
but um
certainly in the uk there is um
a very formal um approach to um
engaging stakeholders um
throughout the regulatory process it's
it's required by law and this is not
just the case in the in the uk
um
specifically when it comes to things
like um
consultation and impact assessment to
support those those consultations i
could talk to a number of countries and
some of those whose flags i put up
where it is a formal regulatory or legal
requirement of regulators and regulating
entities and
government ministries
to go through those steps um
certainly is the case in the us uh with
oversight
um by the um
office of uh management budget
b
um in the uk it is a it's a formal
requirement and i think this is
this is something i didn't mention uh in
some of these countries also australia
also um in the eu
is there are
offices or bureau within those different
uh countries
whose job is to check
that the government entities and the
regulatory entities
are complying with their obligations in
terms of impact assessment in terms of
consultation in terms of regular review
so it really is embedded
and there's if you like
somebody who's regulating the regulator
to check that they do those
i don't have um
the experience of brazil to know whether
that's the case um where you are and
that's daddy can talk it thought to that
i do just know what the oecd said um
which is that and this was in 2019 so
just before the pandemic
that um
it didn't know that as a whole of
government approach at least these
things are becoming more common and more
consistent
okay
so
second question
could you mention some cases where the
principles of osmotic regulations or
responsive regulations have been
successfully apply it
yeah um
well i think so
um i mean it's any case where
um
you
have a dialogue uh you have a chance to
put in proposals and you
um
so picking one is is a really hard bit
here maybe i should just i'm trying to
pay for time a little bit i know that's
that's the one thing we don't have much
of
but um
i i
heard um
people talk uh there was discussion
before we started about that slots i
know this is a
topic that's live in in brazil i wasn't
going to talk about it in a brazil
context
um
this time although it might be something
we can talk about in more detail next
year
but either through the pandemic or
through how um
slots policies are are implemented
i can think of a number of occasions
where regulators have made proposals
around slot rules
that haven't
um
fully taken into account the networking
parts of
those proposals
they would um
really undermine those network benefits
and so you you get a process of
providing the evidence to support that
showing what those impacts would be
and then you get a revised solution that
that still sticks to the objectives it
doesn't alter the objectives that
government's trying to achieve
but it does so in a way that um
maintains the network benefit so it
supports the the airline
perspective
the airlines but actually it supports
the consumers because the consumers uh
continue to enjoy the the network
benefits
i would you know also cite some of those
examples i talked about from you know
airspace use regulation
where um
you know
an example i gave from the uk where
certain sectors of the um user community
uh responded to consultations around
having to um
put equipment on that on the aircraft
and that would have a you know
disproportionate burden and so
an alternative was found that that
didn't have that impact to
potentially
excluding
a set of stakeholders from the market so
um
and again in that scenario
absolutely didn't alter the the
fundamental objective of the safety
regulator which was to keep you know the
airspace uh safe and prevent aircraft
from coming into
uh
to conflict with each other so i mean
those are two
um
very quick examples what i would suggest
marcelo is that um as we move to the
sessions in 2022
um
we'll work much more on uh on the
practical examples and and in
collaboration with
some of the government regulators from
the markets that i talked about
how it's worked with them as well as
some some industry examples from around
the world to show how these things work
in practice
good good thank james
uh
well
for the sake of time i think we have
space for two more uh questions
so the third for the application of new
forms of regulations such as smart
regulation or responsive regulation
is and i would include by myself
a how
a change of culture uh is necessary
uh
both on the part of the regulated and on
the part of the regulators so is it
something necessary uh to ch uh to to
achieve
the implementation of new forms of
regulation a change in the culture and
that that's what i
i would add
do you have any any suggestion on how we
can we can build that
so firstly yes i think it's absolutely
fundamental and um
you know i taught a few times around uh
constructive engagement um
as being something that i think is
really important um and
you know you can have
you often do have
an adversarial um relationship
if you when you have commander control
it's
it's like parody you know you tell
somebody's going to tell you off and
you know your child is always going to
behave as a child as a as a
five-year-old
if it's only ever daddy's going to tell
them off or mommy's going to tell them
off and then they get held off and they
don't like it and they don't necessarily
you have that learning process
and obviously it's a much more smarter
way of parenting to encourage
um
you know your child to learn and to see
reward of that learning
but also
did not necessarily see you know he was
a policeman police person but somebody
that was a partner and that is a
different change in mindset
and i was talking i said i was talking
with
your canadian colleagues uh last night
and a similar thing where
formal regulation can sometimes
create behaviors
um
so i'll go and complain to the regulator
because there's a regulation whereas if
there wasn't
necessarily a regulation
i would go and talk to the person so if
i'm a consumer i might go and talk to
the airline or if i'm a
an airport i might go and talk with the
airline and we talk to each other and we
fix the problem without the regulator
needing to get resolved so
but that's much more mature
right for everybody
regulator has to maybe
step back a little bit and say i'm going
to see how this works out with these two
parties
uh talking to each other and whether
they can resolve it and only then if
that's not working will i um will i
intervene
um
and the the actors the stakeholders have
to take it on themselves and say well
actually i'm responsible for the outcome
that that
is going to be achieved here if i
engage more more constructively with the
regulator
i help them and i support with evidence
and i really contribute genuinely to
that evidence gathering process and the
consultation process
then and i trust that i'm going to get
something out of that then i will do
that more genuinely and and so on and
also the attitude to to the other
stakeholders in the system rather than
everybody looking to the regulator to
fix their problems which i think
certainly um for some of my experience
when i was on the regulatory side that
that does happen a lot so i think
um
you described it very accurately myself
it requires you know culture beh change
and
frankly maturity um on everybody
and that doesn't
that that takes time it doesn't happen
overnight
and and it doesn't always work
mistakes will be made and that doesn't i
think
you know my learning point would be that
doesn't always mean it's the wrong thing
to do you just need to
get up and try harder next time
okay
so i here i put two questions that i
understand are on the same issue and on
the same direction
uh
so how to the first one is how to have a
more active participation of the
regulated
in discussions of regulatory issues
and the second one is consultation on
regulatory uh proposals could be seen as
a so-called performer
how to involve in the discussion the
actors that that should be involved
especially if they are spread
such as
pilots
for example
so i think
my first
point would be
so i'm almost taking the second point
first
where you said you know
the consultation can be seen as a pro
forma so as a ticker box
i've done my consultation therefore i've
done what uh
um
i'm meant to do
but i didn't really listen um
not sure if this translates to
portuguese but uh
at the word con which is if something is
a trick or uh it's not really real
um and that's the first three letters of
consultation so you know a consultation
shouldn't be a con it should be genuine
um
it's the first thing and i think once
you and this is why i think it takes
time as part of the culture change
there's trust that the consultation and
the dialogue is genuine then
it should be the case that the the
regulated entities see the benefit
of um
of participating and that doesn't mean
you know let's be honest and i say this
not representing iata and then you know
the producer group but
it doesn't always mean
getting what the regulated entity wants
uh
but to know that it's
really being given consideration and
given due thought
and that's why one of the things i
talked about as i went through the
slides on consultation
was um sometimes publishing
uh a summary of the consultation
responses and the thinking
that's been given to those um
is really important i think it's
important in building that trust
so
three stakeholders said that um they
didn't want the regulation to be read
unfortunately you know we only have red
ink or something and therefore we'll do
it in red we're not going to give you
what you want but um
we've listened to it
we've considered it we're not going to
go through it for this reason or
you know that was a good idea i was
taking it on board and so you know
obviously in those cases the regular the
entity really can see that
um
there has been some merit to to their
intervention
as learning as you know
people that we are as
that's more likely to make you willing
to
to engage constructively and genuinely
in future occasions if you see that that
will be taking into account so i think
you're you're right to say the two
points are related about answer the
question
okay uh thank you james uh unfortunately
we have time
uh
i'm sure we have other questions that
that came through through lidl so i will
keep them
because i'm sure that we can in the the
second and third part of his journeys we
can keep
those doubts uh and bring some answers
uh to our
foreign
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uh
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is
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uh james any closing remarks
i'm just conscious of the time myself so
i think i'll uh
i'll be sad enough so just thank you
very much um
everybody for your time i really
appreciate it i
hope it's been useful and
looking forward to the to the
uh next two webinars we certainly pick
up some of the questions that we
couldn't get to today and and work very
much in some of these practical
questions which i know are you know
really whether uh this becomes real
thank you
thank you james
is
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foreign
you
gabrielmacedoanac / sub

Jornadas da Regulação Responsiva - Parte 1: princípios e boas práticas internacionais #7

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