A high degree of regulatory integrity helps achieve decision-making which is objective, impartial, consistent, and avoids the risks of conflict, bias or improper influence. The nature of some regulatory decisions can at times involve higher risks to the integrity of the regulatory process, for example, due to pressures from the affected interests or the contentious and sometimes politically sensitive nature of the decisions. Establishing the regulator with a degree of independence (both from those it regulates and from government) can provide greater confidence and trust that regulatory decisions are made with integrity. A high level of integrity improves outcomes of the regulatory decisions. Regulators should have provisions for preventing undue influence of their regulatory decision making powers. Principles for the degree of independence Independence Independent regulatory decision-making, at from the political process, is likely to be appropriate arm’s length where: there is a need for the regulator to be seen as independent, to maintain public confidence in the objectivity and impartiality of decisions; both government and non-government entities are regulated under the same framework and competitive neutrality is therefore required; or the decisions of the regulator can have a significant impact on particular interests and there is a need to protect its impartiality. The autonomy of regulators (organisational, financial and decision-making) situated within a Ministry should be safeguarded by provisions in their empowering legislation. All regulators should operate within the power delegated by the legislature and remain subject to long term national policy. Maintaining trust Where legislation empowers the Minister to direct an independent regulator, the limits of the power to direct the regulator should be clearly set out. The legislation should be clear about what can be directed and when. Any direction made by the Minister or politicians should be documented and published. In the case of economic regulators, legislation should not permit powers to direct by Ministers. Any communication between the Minister, the Ministry and an independent regulator should occur in a way that does not compromise the actual or perceived independence of regulatory decisionmaking. The criteria for appointing members of a governing body, and the grounds and process for regulator’s terminating their appointments, should be explicitly stated in legislation. The process should involve the legislature or judiciary for greater transparency and accountability. Government and or the legislature (Parliament/Congress) should establish and publish for each regulator a policy (such as cool-off periods) relating to post-separation employment of senior regulatory staff and members of the governing body. regulator’s
A high degree of regulatory integrity helps achieve decision-making which is objective, impartial, consistent, and avoids the risks of conflict, bias or improper influence. The nature of some regulatory decisions can at times involve higher risks to the integrity of the regulatory process, for example, due to pressures from the affected interests or the contentious and sometimes politically sensitive nature of the decisions. Establishing the regulator with a degree of independence (both from those it regulates and from government) can provide greater confidence and trust that regulatory decisions are made with integrity. A high level of integrity improves outcomes of the regulatory decisions. Regulators should have provisions for preventing undue influence of their regulatory decision making powers. Principles for the degree of independence Independence Independent regulatory decision-making, at arm’s length from the political process, is likely to be appropriate where: there is a need for the regulator to be seen as independent, to maintain public confidence in the objectivity and impartiality of decisions; both government and non-government entities are regulated under the same framework and competitive neutrality is therefore required; or the decisions of the regulator can have a significant impact on particular interests and there is a need to protect its impartiality. The autonomy of regulators (organisational, financial and decision-making) situated within a Ministry should be safeguarded by provisions in their empowering legislation. All regulators should operate within the power delegated by the legislature and remain subject to long term national policy. Maintaining trust Where legislation empowers the Minister to direct an independent regulator, the limits of the power to direct the regulator should be clearly set out. The legislation should be clear about what can be directed and when. Any direction made by the Minister or politicians should be documented and published. In the case of economic regulators, legislation should not permit powers to direct by Ministers. Any communication between the Minister, the Ministry and an independent regulator should occur in a way that does not compromise the actual or perceived independence of regulatory decisionmaking. The criteria for appointing members of a regulator’s governing body, and the grounds and process for terminating their appointments, should be explicitly stated in legislation. The process should involve the legislature or judiciary for greater transparency and accountability. Government and or the legislature (Parliament/Congress) should establish and publish for each regulator a policy (such as cool-off periods) relating to post-separation employment of senior regulatory staff and members of the regulator’s governing body.
Governance%20of%20Regulators%20FN%202.docx