The strengths and weaknesses of self regulation

The strengths and weaknesses of self regulation

Dr Jon Bell Formerly Chief Executive UK Food Standards Agency

The case for and against command and control regulation (1) • Define required behaviour • Set standards

• Clearly set out offences and penalties

The case for and against command and control regulation (2) • Blunt instrument • Can be costly and act as a brake on innovation • Always follows new activities, never precedes them • Only sets minimum standards

Aims of self regulation • Ensure a properly functioning market • Ensure a responsible industry

• Ensure a commitment to published standards • Effective action in the event of a breach • Easy and low cost to administer • Responsive to change

Advantages and disadvantages • Possible advantages: – – – –

Driven by those being regulated Embeds responsibility for compliance Flexible Low cost

Advantages and disadvantages • Possible disadvantages – – – – –

Conflicts of interest Lack of confidence in the process Weak sanctions Lack of transparency Narrowness of interpretation of the rules

Drivers (1) • Industry: – – – –

Threat of command and control regulation Name and shame by the authorities Desire to raise standards and confidence Desire to prevent damage by rogue operators

Drivers (2) • Government: – – – –

Desire to keep costs down Enables minimal government interference Maximises flexibility Strengthens corporate responsibility

Suitability for different sectors • Required standards of behaviour are well understood • No risk of serious or widespread harm • Industry cohesiveness and maturity • Competitive market

Ways of avoiding or reducing the disadvantages (1) • Involve outside parties • External policing

• External auditing

Ways of avoiding or reducing disadvantages (2) • Clear and transparent rules • Allow group action by consumer bodies

• Clear appeals procedures

Examples of sectors in the UK which have tried self regulation • Successfully – Advertising – The medical profession – The press

• Unsuccessfully – The police – Lawyers – Gas safety

Perceptions about self regulation • The public

• Politicians • Industry

Issues requiring particular attention • • • • • •

Funding Expertise and background of independants Transparency Speed of response Appeals system Mandatory participation?

Conclusions • Workable alternative to command and control regulations in appropriate circumstances • Not suitable for all sectors

• Perceptions are all important