Evidence based Regulation & Compliance: Getting it right is key to trust and the EU

I recently attended a one day debate on evidence based regulation on the occasion of the 1st year of operation of the EU Regulatory Scrutiny Board which examines and issues opinions and recommendations on all the Commission's draft impact assessments and major evaluations and fitness checks of existing legislation. It is clear that the future for compliance and responsibility will rely increasingly on providing hard evidence. Interestingly EU Commission 1st Vice-President Frans Timmermans in his opening remarks at the event challenged regulators to stand on the evidence base rather than hide behind the facts. He went on to elaborate that the Commission "does want to deliver simpler, more modern and less costly legislation because that can better deliver our shared societal objectives".

The EU Community of Practice on better self and co-regulation puts a clear onus on there being a distinct compliance function with active enforcement. That means monitoring, a complaint mechanism, a transparent adjudication process, sanctions and publication/reporting of outcomes.It is the hard data around the consultation on drafting codes with stakeholders, the degree of compliance following a compliance monitoring exercise, number of complaints, the use of sanctions, the reporting of decisions and behavioural change of individual actors will provide the evidence for the well design and functioning of the system.

This brings me to your compliance journey. 20 years ago when sectors and private actors were asked about self and co-regulatory initiatives they would often point to a piece of paper with a set of good intentions in the form of best practice, guidance or a code. However on examination many of these initiatives had no processes or procedures for compliance, sanctions, enforcement and active monitoring. Graywise recently examined for a client the EESC database of self and co-regulatory initiatives and there are still many initiatives listed there which have not journeyed beyond an initial set of rules. Although not all initiatives will take the same journey or have identical features its important that what is put in place can prove its efficiency and effectiveness. Best in class private regulation initiatives ensuring compliance and reporting seem to be those related to marketing communications and their delivery. These have responded to public and regulatory debates about marketing and advertising by adopting not only local rules but global principles backed up by clear local processes in most European countries and a number of countries across the world that are independent, enforced and monitored.

Modern day policy-making must ensure that regulation is evidence based and pursues a better regulation agenda to ensure that whatever the tools used legislative, self or co-regulation to achieve the policy goal that there is data (number of complaints, speed of resolution, published outcomes, sanctions, bench-marking ...) to back up the claims that it works. Stakeholders will need to provide this hard evidence that the private systems they have put in place are efficient and effective which will enable efficient impact assessment of the appropriate regulatory options to be advised. If this is not done private actors cannot complain their views or systems have not been taken account of as better regulation does not mean no rules or a lack of respect for consumers at all. Evidence based policy-making goes hand in hand with better regulation and building trust by citizens and consumers across the EU in all forms of regulatory systems whether legislative, self or co-regulation. Getting this wrong now would send the wrong signal to citizens already disenchanted with institutions and processes.