Annex A. What is international regulatory co-operation (IRC)?

The 2012 Recommendation (OECD, 2012[1]) recognises that in today’s globalised context, policy makers and regulators can no longer work in isolation. They have much to learn from their peers abroad, and much to benefit from aligning approaches with them. IRC has become an essential building block to ensure the quality and relevance of regulations today. Principle 12 of the 2012 Recommendation therefore encourages countries to:

“In developing regulatory measures, give consideration to all relevant international standards and frameworks for co-operation in the same field and, where appropriate, their likely effects on parties outside the jurisdiction” (OECD, 2012[1]).

Principle 12 includes the following aspects:

• Taking into account relevant international regulatory settings when formulating regulatory proposals to foster global coherence.

• Acting in accordance with international treaty obligations.

• Co-operating with other countries to promote the development and diffusion of good practices and innovations in regulatory policy and governance.

• Contributing to international fora which support greater International Regulatory Co-operation.

• Avoiding the duplication of efforts in regulatory activity in cases where recognition of existing regulations and standards would achieve the same public interest objective at lower costs.

• Opening consultation on regulatory proposals to receiving submissions from foreign interests.

Building on the Recommendation, (OECD, 2013[2]) defines IRC as any agreement or institutional arrangement, formal or informal, between countries to promote some form of coherence in the design, monitoring, enforcement or ex post evaluation of regulation. (OECD, 2013[2]) also highlights the different ways in which a country may approach regulatory co-operation. They range from the unilateral adoption of good regulatory practices that promote evidence-based rule-making to various co-operative approaches (bilateral, regional or multilateral) that provide for the development of common regulatory positions and instruments with other countries (Figure A ‎A.1. ). Examples of the selected approaches and their related benefits are listed in Box A ‎A.1.

Figure A ‎A.1. The variety of IRC approaches

Note: unilateral approaches are pictured in grey, and collaborative approaches, ranging from bilateral to multilateral are pictured in blue.

Source: Based on (OECD, 2013[2]), International Regulatory Co-operation: Addressing Global Challenges, Paris, https://doi.org/10.1787/9789264200463-en.

IRC has important implications for the activities of those who regulate and of their oversight bodies. It requires a change in the regulatory culture towards greater consideration of the international environment in the rule-making process. This involves both the more systematic review and consideration of foreign and international regulatory frameworks of relevance when regulating and the continuous assessment of how regulatory measures will impact and fit into the broader cross-border management of the issue to address. In this perspective, the regulatory management tools provide important entry points in the rule-making process to consider the international environment in the development and revision of laws and regulations. In particular, discussions in the OECD Regulatory Policy Committee1 and further analytical work (Basedow and Kauffmann, 2016[3]) identified the following four key practices in the implementation of Principle 12.

• Practice 1: In developing regulation, systematically consider international instruments and document the rationale for departing from them in the RIA process

• Practice 2: Open consultation to foreign parties

• Practice 3: Embed consistency with international instruments as a key principle driving the review process in ex post evaluation

• Practice 4: Establish a co-ordination mechanism in government on IRC activities to centralise relevant information on IRC practices and activities and to build a consensus and common language.

Box A ‎A.1. IRC in practice: examples of approaches and related benefits

Adoption of international standards on motorcycle regulation can help protect safety while saving millions of dollars

On 15 September 2014, the Australian Government removed the requirement to modify rear mudguards on new motorcycles to meet unique Australian Design Rules, which imposed a requirement above the commonly accepted international rules. Abolishing this provision meant nearly 70 000 new motorcycles per annum would no longer be required to be retro-fitted with rear mudguard extensions. This is estimated to reduce regulatory burdens by AUD 14.4 million.

Source: http://minister.infrastructure.gov.au/jb/releases/2014/September/jb096_2014.aspx.

Participation in regional organisation helped improving water quality, increasing fauna and flora and preventing floods

The International Commission for the Protection of the Rhine (ICPR) enables co operation at the level of the Rhine river basin, including its alluvial areas and the waters in the watershed. It was formed in 1950 on a diplomatic basis between Switzerland, the Netherlands, France, Germany and Luxemburg. It was given a legal basis by the Berne Convention in 1963. The EEC joined as a member in 1976. The ICPR combines political representatives and technical experts. Over the years, it has deployed several significant benefits for the Rhine river basin:

• Improved water quality.

• Increased number of animal and plant species.

• Flood prevention.

• Ecological improvements.

Source: (Black and Kauffmann, 2013[4]), “Transboundary water management”, in OECD, International Regulatory Co-operation: Case Studies, Vol. 3: Transnational Private Regulation and Water Management, Paris, https://doi.org/10.1787/9789264200524-4-en.

Participation in multilateral organisation helped enhance the effectiveness of chemical testing, with reduced costs and health and environmental gains

The OECD Mutual Acceptance of Data system helps governments and industry save some EUR 153 million per year through reduced chemical testing and the harmonisation of chemical safety tools and policies across jurisdictions. In addition, co-operation has brought less quantifiable benefits, such as the health and the environmental gains from governments being able to evaluate and manage more chemicals than they would if working independently, the avoidance of delays in marketing new products, and the increased knowledge on new and more effective methods for assessing chemicals.

Source: (OECD, 2013[5]), Chapter 1: “Chemical safety”, International Regulatory Co-operation: Case Studies, Vol. 1: Chemicals, Consumer Products, Tax and Competition, Paris, https://doi.org/10.1787/9789264200487-en.

References

[3] Basedow, R. and C. Kauffmann (2016), “International Trade and Good Regulatory Practices: Assessing The Trade Impacts of Regulation”, OECD Regulatory Policy Working Papers, No. 4, OECD Publishing, Paris, https://dx.doi.org/10.1787/5jlv59hdgtf5-en.

[4] Black, J. and C. Kauffmann (2013), “Transboundary water management”, in International Regulatory Co-operation: Case Studies, Vol. 3: Transnational Private Regulation and Water Management, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264200524-4-en.

[5] OECD (2013), International Regulatory Co-operation: Case Studies, Vol. 1: Chemicals, Consumer Products, Tax and Competition, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264200487-en.

[2] OECD (2013), International Regulatory Co-operation: Addressing Global Challenges, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264200463-en.

[1] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, http://www.oecd.org/gov/regulatory-policy/2012-recommendation.htm.

Note

← 1.  5th expert workshop on Assessing Progress in the Implementation of the 2012 Recommendation of the OECD Council on Regulatory Policy and Governance (www.oecd.org/gov/regulatory-policy/stockholm-workshop.htm) and “Key Practices for Drafting Survey Questions on the Implementation of the Recommendation: Results of Consultation With RPC Delegates”, Room Document 2, 10th meeting of the Regulatory Policy Committee.