Riskbased strategies Riskbased strategies can improve regulatory outcomes by more strategically focusing on activities where the risks are the greatest. Enforcement approaches that are not targeted at or proportionate to risk may be too onerous on compliant businesses and result in insufficient enforcement activity being focused on high-risk businesses. Failure to apply riskbased regulation may result in inappropriate priority setting and inefficient allocation of scarce resources. Regulator has collected relevant data to inform a riskbased approach to regulation, and to evaluate outcomes. Regulator has an established approach to risk assessment. Requests for data from regulated parties are proportionate to risk. Riskbased approaches to compliance and enforcement are considered and adopted where appropriate (for example, regulator tailors sanctions so that they are proportionate and meaningful). Risk assessment is consistently applied across all activities. Knowledge of risk informs inspection targeting. Risk assessment processes and methodologies are transparent. Resources are concentrated in areas of greatest risk to the achievement of outcomes. Compliance related assistance and advice Effective assistance and advice reduces the risk of noncompliance. Poor or inaccessible advice may increase the time by regulated parties to understand regulatory requirements. Regulated parties should be able to access advice without fear of enforcement action. Regulator provides assistance and advice in order to secure compliance. Advice is: easily available (for example, accessible in appropriate formats); accurate; easy to understand (i.e. written in plain English); comprehensive (e.g. include illustrative examples); timely (e.g. provided in time for individuals and businesses to adjust to changes in regulation); and, regularly reviewed and updated in light of feedback. Administration and enforcement is accompanied by ongoing advice. Regulator judges the effectiveness of its assistance and advice by monitoring regulated parties’ awareness and understanding of the services. Regulator provides clarity about the status and objectives of advice (i.e. whether it is statutory or nonstatutory). Assistance and advice services the full range of regulated activities and are tailored where appropriate to different groupings of regulated parties. Recommended element of good regulatory practice Incentive-based regulation is an extension beyond risk-based regulation, and requires an understanding of regulated entities’ behaviour and motivations. Developing this understanding can take time.
Role clarity Clearly defined roles and responsibilities and a clear understanding of the objectives that regulatory interventions hope to achieve supports improvements in regulatory practices and performance over time, as well as strengthening regulatory outcomes. This is particularly important where there are multiple regulators involved in implementing, administering and enforcing a regulation. Regulator has in place a monitoring and assurance regime to ensure that their regulatory objectives are being met. There is a clearly understood and documented chain of accountability and communication between departments/agencies and their regulators. Formal instruments clarify regulator roles where there are shared accountabilities and promote cooperation amongst regulators (see below). Regulator provides assurance to the Victorian community that regulated entities are meeting their mandated requirements. Cooperation amongst regulators Sharing information and developing a common understanding of the regulatory context promotes regulatory coherence, capability development and a cooperative compliance culture. Over time, cooperation amongst regulators can strengthen the legitimacy of regulation and improve regulatory outcomes. Regulators come together to identify good practice and lessons. Regulator has considered and explored ways to facilitate data sharing. Regulator performance is benchmarked. The regulator engages and coordinates on a regular basis with other regulators whose regulated parties overlap with their own. Regulatory practices are streamlined between regulators (for example, information is only required to be provided to government once and that data is shared between regulators). Stakeholder consultation and engagement Effective communication and engagement with stakeholders can reduce regulatory burden, facilitate improved regulator performance and lead to better regulatory outcomes. Stakeholder consultation and engagement includes sharing information, providing opportunities to express views and contribute to regulatory design (where appropriate), considering views and advising on the outcome of consultation. data requests and other administrative and compliance processes are regularly reviewed with feedback sought from stakeholders (for example, forms include a short feedback section with suggestions for improvement). Regulator provides feedback on the outcome of consultation exercises to those who took part. Regulator understands the changing needs of business and the community throughout the regulatory cycle. Regulator routinely involves regulated parties and the community in identifying risk, analysis and evaluation. Consultation has a demonstrable impact on the design and administration of regulatory processes.
Self-assessment for suggested elements of good regulatory practice Good regulatory practice minimum standards (highvolume/highimpact regulators should also include best practice characteristics) Outline how current regulatory practices compare to standards, including evidence where possible Highlight areas for improvement between standards and current practice 1. Role clarity 1a. Regulator has in place a monitoring and assurance regime to ensure their regulatory objectives are being met. 1b. is a clearly understood and documented chain of accountability and communication between departments/agencies and their regulators. 1c. Formal instruments clarify regulator roles where there are shared accountabilities and promote coordination between regulators (for example, memorandums of understanding, formal agreements or contracts for service provision). 2. Cooperation amongst regulators 2a. Regulators come together to identify good practice and share lessons. 2b. Regulator has considered and explored ways to facilitate data sharing. 2c. Regulator performance is benchmarked. 3. Stakeholder consultation and engagement 3a. Forms, data requests and other administrative and compliance processes are regularly reviewed with feedback sought from stakeholders (for example, forms include a short feedback section with suggestions for improvement). 3b. Regulator provides feedback on the outcome of consultation exercises to those who took part. 3c. Regulator understands the changing needs of business and the community throughout the regulatory cycle. 4. Accountability and transparency 4a. Regulator is transparent about how they administer and enforce regulation (for example, transparent complaints and disputes mechanisms and transparency about the reasons for enforcement decisions).