Executive summary
International regulatory co-operation (IRC) has become essential for regulatory quality, as governments face challenges that extend beyond borders. In particular, the OECD recommendation on international regulatory co-operation, recommends for a systematised and whole-of-government strategy on IRC, to be reflected throughout the policy-making cycle, from the design up to the enforcement and ex post evaluation of regulation. Evidence across OECD countries shows that IRC practices remain far from systematic. In fact, the 2021 OECD Regulatory Policy Outlook shows that only a minority of OECD countries have in place a cross-sectoral policy and an institutional framework to conduct IRC. As a result, the use of IRC practices remains uneven, across government and policy areas.
Most notably, IRC is only seldom used in the “downstream” part of the rulemaking cycle (that is, implementation and enforcement). This gap is significant as co-operation in these areas can help lower administrative costs and increase the effectiveness of regulations, even when there is no harmonisation in the regulations themselves. This report presents two cases that show tangible benefits from co-operating beyond the design, or development phase of regulation. The competition case study provides an example how international co-operation can improve enforcement. The chemicals safety case study provides an example of IRC in testing, i.e. assessment of conformity with a standard or regulation.
These case studies offer insights from different policy areas and valuable illustrations of findings from the application of the OECD recommendation on IRC. They demonstrate the variety of forms IRC can take, as well as their complementarity: they both rely on binding international instruments complemented by more looser forms of co-operation, with more or less institutional support provided by international organisations (namely, the OECD) to facilitate the exchange of information that is essential for co-operation to bear fruit.
The lessons also help promote the adoption of IRC in the downstream part of the regulatory cycle. While both case studies are related to regulatory enforcement, they highlight different types of benefits. The case study on competition shows the benefit of adopting IRC to improve the efficacy of competition law – in this case, IRC has helped to increase compliance. While the chemical safety case study shows how IRC can help increase the efficiency of regulatory enforcement. In this case, authorities were able to ensure compliance while reducing its costs.
Regulators and policy makers undertaking or overseeing international regulatory co-operation practices can no doubt learn from the success factors, challenges, costs and benefits outlined in these case studies on competition enforcement and chemicals safety.
A globalised economy with multi-national enterprises has led to a larger number of competition enforcement cases with international dimensions. The digitalisation of the economy has also created new challenges for all competition authorities. This makes international co-operation between competition authorities imperative for domestic enforcement to be truly effective. To successfully discover and prosecute anti-competitive practices, competition authorities need to improve significantly their ability to co-operate. International co-operation in competition enforcement is a widely discussed topic in many fora and is of considerable interest to both competition enforcers and the private sector. This case study presents how the OECD has contributed to these discussions and has fostered co-operation through its own instruments and reports.
OECD countries have comprehensive regulatory frameworks for preventing and/or minimising health and environmental risks posed by chemicals. These frameworks ensure that chemical products on the market are handled in a safe way, and that new chemicals are properly assessed before being placed on the market. However, different national chemical control policies can lead to duplication in testing and government assessments. They may also create non-tariff or technical barriers to trade in chemicals; discourage research, innovation and growth; and increase the time it takes to introduce new products on the market. This case study shows how the development and implementation of the Mutual Acceptance of Data system – under which chemical safety data developed in one adhering country using the OECD Test Guidelines and OECD principles of Good Laboratory Practice must be accepted by all adhering countries – is helping minimise unnecessary divergences across regulatory frameworks and facilitating work-sharing by governments. The case study provides updated data on a cost-benefit analysis of the MAD system, resulting in an overwhelming net positive benefit for government and industry, estimated to be around EUR 309 035 000.