Business Inspection Reform in Jordan

1. Inspection Reform Conference: Approaches and New Trends for Effective Regulatory Delivery2 - 3 June 2014LubnaAqqad, Ministry of Industry & TradeAbeerShalan, International Finance Corporation Business Inspection Reform in Jordan

2. National Reform Outlooks The Royal Directive to the government on 29th March 2014 to develop a clear vision for the Jordanian economy for the next 10 years, based on several principles that include: • Improving the business environment and promoting policies that encourage innovation and sectoral development, • Supporting economic growth engines and improving competitiveness, and an investment-attractive environment to create more job opportunities for Jordanians, • Supporting productive enterprises and entrepreneurship as well as small and medium enterprises (SMEs) by promoting a competitive environment and preventing monopoly, • Improving the quality of government services provided to citizens in different areas to build on the Public Sector Reform Program.

3. National Reform Outlooks Since 2000, the government of Jordan adopted several reform and development programs particularly in the areas of investment and ease of doing business in order to provide an investment-attractive environment that contributes to the creation of new job opportunities, including: • Roadmap to improve Jordan’s ranking in competitiveness reports, • Restructuring a number of public sector organizations, particularly in the investment sector. • Enactment of a new investment law.

4. Inspection as a factor for Economic Development The existence of an integrated and effective inspection system would contribute to: • Improving the investment climate • Strengthening the government's ability to protect citizens • Reducing injuries and accidents harmful to humans and the environment • Reducing the informal economy • Facilitating access to foreign markets through compliance with quality standards

5. Why is inspection reform needed in Jordan • The Prime Minister's response to repeated requests from the private sector to improve the system of regulation and inspection, expressed in his periodic meetings with representatives of the various sectors of the economy • The average annual cost of inspectorates is JD 14,688,6oo in operating and capital expenditure * (* According to a regulatory impact assessment study evaluating proposed alternatives to reducing overlap and duplication, 2010) • The Increase in the size and number of economic establishments to be regulated, which constitutes an administrative burden on government agencies • Change in the nature of economic establishments’ work, which poses a challenge to the government's ability to monitor compliance in a systematic and sustainable manner • Conflicts of specialties and legislation leading to duplication of efforts and lack of focus in inspections of economic establishments • Overlap and conflict between the roles of the various inspectorates • Multiplicity of inspection visits and their lack of prior planning • Lack of clarity and consistency of inspection procedures • Absence of mechanisms for inspection planning, targeting, and prioritization • Insufficient communication between inspectorates and the private sector • Lack of clarity of technical requirements and the lack of information about them

6. Inspection Regime: Present and Future

7. Government Initiatives for Inspection Development • The Government adopted many initiatives for inspection reform in the concerned inspectorates • To enhance work on the national level, the Government adopted the National Strategy for Inspection Reform

8. National Inspection Reform Strategy • The National Inspection Reform Strategy was developed by the ministry of Industry & Trade in cooperation with IFC and USAID in order to upgrade inspection and address challenges • The Strategy was approved by His Excellency the Prime Minister in 2009 • It includes international best practices in inspection • It forms a comprehensive reference that can be applied in different inspectorates • A national program for implementing the strategy is currently being carried out through a partnership between the Ministry of Industry and Trade, IFC, and USAID and in cooperation with the various inspectorates

9. National Inspection Reform Strategy-Main Pillars High-Quality Inspection Systems Coordination and Cooperation Human Resource Management Risk-Based Planning Strategies and Plans Operations and Procedures • Job description • Training • Performance evaluation • Employment policies • Rewards and incentives • Code of conduct • Availability of criteria for risk assessment • Availability of the necessary information on establishments • Distribution of sectors according to risk level • Limiting frequency of inspection visits • Reducing overlap and duplication • Providing means of communication and information exchange • Awareness and guidance • Determining the duties, authorities, and rights of the inspector and business owner • Developing clear operating procedures • Determining the technical requirements needed • Developing inspection checklists • Appeals and complaints • Identifying establishments subject to inspection • Drawing action plans • Availability of resources • Monitoring performance • Legal tasks of inspectorate • Appropriate penalties

10. Success Factors • The Government of Jordan's adoption of reform and national development programs, especially in the areas of investment and ease of doing business • Government's commitment to the implementation of the National Inspection Reform Strategy and the Prime Minister's follow-up on achievements, and his approval to form a Higher Committee for inspection reform co-chaired by the ministers of Industry & Trade and Public Sector Development with membership of the secretary generals/general managers of the relevant agencies to oversee the program, and act as a national umbrella. • Adoption by some inspectorates of inspection reform programs • The existence of a national institution for the development of specifications, measures, and technical standards • Availability of the infrastructure for information technology in some inspectorates and the existence of the e-government program and a national center for information technology • Donors’ interest in, and support for inspection reform • Availability of international best practices and experts

11. National Program for Inspection Reform In partnership with

12. Phases of Work Second Phase First Phase Designing the program and securing funds 2010-2011 National Inspection Reform Program 2012 - 2015 National Inspection Reform Strategy 2009 Pilot Reforms at the Ministries of Environment and Labor 2007 - 2009

13. First Phase: Inspection Development Project 2007-2009 Pilot Reforms at the Ministries of Environment and Labor: • Contributing to the development of inspection policies • Inspectors’ manual, which contains operating procedures, forms, checklists, relevant legislation, authorities, and performance indicators • Training inspectors on inspection procedures and the required skills • Criteria for assessing economic establishments’ risk levels • Inspectors’ code of conduct • Brochures for business owners to raise their awareness of the rights and duties of inspectors and business owners

14. First Phase: Inspection Development Project 2007-2009 National Inspection Strategy: • Involving other inspectorates concernedandacquainting them with theachievementsof theMinistries ofLabor and Environment • Developing the national strategyin consultationwithallregulators Recommendation to develop anational program for strategy implementation and assigning the Ministry of Industry, Trade and Supply tofollow up onimplementation: • Expanding the experience of Labor and the Environment to other inspectorates • Developing mechanisms for integration and collaboration between inspectorates

15. Second Phase: National Inspection Development Program 2012 – 2015 Developing high-quality inspection systems in line with Government policy to improve the investment climate through: • Reducing unjustified burden on businesses from unregulated inspection • Enhancing transparency and clarity in regulatory activities • Organizing and clarifying procedures and technical requirements • Improving the performance of inspectors and raising their efficiency • Increasing the efficiency and effectiveness of government organizations • Enhancing the credibility of the public sector in protecting citizens

17. National Inspection Reform Program • Horizontal Reform • Vertical Reform Includes cross-cutting areas among inspectorates Includes developing areas related to each inspectorate individually • Reducing overlap and duplication • Inspection Operational Manuals • National Enterprise Registry Automation of procedures Partnership and cooperation with the private sector • Human Resources Management • Framework for the Higher Committee for Inspection Reform

18. Main Performance Indicators • Reducing the total number of inspection visits to any one facility • Reducing the average number of inspectorates who visit an facility per year • Reducing the number of violations and warnings to private sector businesses • Reducing the number of complaints from citizens about private sector facilities • Raising the private sector’s awareness level of requirements and regulatory obligations • Raising the private sector’s awareness level of their rights (such as the right to appeal and complain) • Improving the private sector’s satisfaction with the performance and conduct of inspectors

19. Progress and Achievements

20. Inspection Operational Manuals

21. National Registry and Process Automation

22. Human Resources Management

23. Reducing Overlap and Duplication

24. Framework for the Higher Committee for Inspection Reform

25. Partnership and Cooperation with the Private Sector

26. Next Steps • The practical application of inspection manuals and standard operating procedures • Deployment and implementation of the automated integrated inspection management system • Developing a HR management strategy for inspectorates • Developing and approving recommendations for the reduction of overlap and duplication • Building risk assessment criteria and tools

27. Thank you