Supporting Compliance: Effective Guidance and Advice to Business

1. Supporting Compliance: Effective Guidance and Advice to Business GiedriusKadziauskas, Consultant, Inspection Reform and Better Regulation

2. Role of communication in the compliance promotion

3. Lithuanian examples to increase compliance – through guidance and consultation • Legal framework • 1. Declaration on the First year businesses • 2. Facebook • 3. Checklists • 4. Consultation call centers

4. Legal obligation for inspectorates to provide advice • “..supervising entities cooperate with economic entities, provide consultations to economic entities on the issues of the competence of a supervising entity, implement other preventive measures which help economic entities to meet the requirements of legal acts, and apply sanctions as an ultimaratiomeasure.” Lithuania. Law on Public Administration. Article 36(2)

5. Responsibility for accurate consultation – assured advice “If an economic entity acts in compliance with the written or publicly announced consultation (approved by the head of a supervising entity, a person authorized by him or a collegial institution of the supervising entity,) where, by later consultation, consultation of a superior entity of public administration or any other individual administrative act or a court decision, the initial consultation is recognized as not complying with the requirements of legal acts (inaccurate), sanctions shall not be imposed on the economic entity for the improper fulfilment of the legal acts, determined by the inaccurate consultation” Lithuania. Law on Public Administration. Article 36(3)Providing Consultations to Economic Entities

6. Initial impressions • 90 percent of questions that businesses ask are simple questions. • 95 percent of questions can be answered by personnel with relatively low experience (but after training (for Lithuanian Tax inspectorate) 3 months) • There are more inquiries than you expect – every employee of the inspectorate has a telephone line.

7. Communication to a single business Expensive • Directly to the business – in the premise of business • Directly to the business – in the premise of inspectorate • In written • Via email • Via Facebook • Via phone • Via webpage of the inspectorate Cheap

8. Communication to a multiple businesses • Provision of access to laws, regulations, latest information on changes in the legislation, statistics and best practice information – web based • Provision of general guidance how to comply - information campaigns, leaflets, guidelines, and fact sheets • Inspection checklists as means of consultation

9. 1. Declaration on the First Year of Business Penalty for violating safety requirements • To improve the business environment • To promote job creation • To help understand that businesses, especially small ones, need advice, not sanctions, during the first year • To allow more business growth -during the first year of business, sanctions/ punishments are not applied; • To promote good behaviour instead of simply punishing Sir, it’s my first day…

10. 1. Declaration on the First Year of Business In September 2011, the Declaration on the First Year of Business was signed by the 9 largest business supervision institutions; 34 others later joined. Themain objectives of the Declaration: • To not apply sanctions/punishments during the first year of business; • To determine the appropriate time for correcting violations; • To allocate resources for advising and providing guidance during companies’ first year of operations.

11. 2. Advice on Facebook page – Labour inspectorate

12. 3. Inspection checklists A checklist is a document which consists of explicit questions that reflect the key requirements of the law. The inspector asks questions from the checklist while performing an inspection. • A business owner can download checklists from www.verslovartai.lt • Business owners can be sure that they will not receive a fine if the requirements listed on the checklist are met • Checklists approved by head of institution

13. 3. Starting with less, learning by doing December 2013 89checklists for various business activities October 2012 66 checklists for various business activities April 2012 39 checklists December 2011 7 checklists

14. 4. Lithuanian Tax inspectorate call center – 800 000 consultations per year Started in 2006. Preparation 18 months

15. 4. Call centers proved to be efficient Supervisory authorities must ensure that businesses receive the same consistent advice on issues falling within the competence of the supervising authority. Therefore, a practice of uniform telephone consultation is being established. So far, 9institutions have “call centres”: • State Tax Inspectorate (April 2006) • State Food and Veterinary Service (October 2011) • State Consumer Rights Protection Authority (December 2011) • State Labour Inspectorate (January 2012) • State Non-Food Product Inspectorate (March 2012) • Territorial Planning and Building Inspectorate (June 2012) • Fire safety department (December 2012) • Environmental protection agency – Chemical substances division ( February 2013) Only 3 people work as consultants

16. 4. Quality assurance process Subject matter: Did the consultant provide correct answers to all the questions? Does the consultant properly understands the issue in question? Did the consultant used the databases of questions and answers? Did the consultant communicate clearly to the caller? Did the consultant made reasonable decisions on redirection of the call to senior consultant? Service: Did the consultant properly greet and present themselves? Did the consultant properly „managed the silence“ – for example, enough space to ask the questions and not rush with answer and advice? Did the consultant properly say goodbye? Did the consultant properly listen to the taxpayer? Does the consultant maintain a positive attitude towards the caller? • Every month random sample of consultations are reviewed and commented on. • Consultations are reviewed by group leaders and quality assurance officer. • For example in Lithuanian tax inspection, the assessment of consultant contains 30 percent for the quality of service and 70 percent for the subject matter – correct and detailed answer and help to the caller.

17. Call centers allows to achieve – as well as any other unified consultation service • Uniform consultation; • Optimizing resources – highly qualified people do the job that requires their excellence; • Less multitasking by employees of inspectorates. • Foster compliance by simplifying the route to knowing how to comply; • Improve the image among citizens and businesses - increase trust; • Allows to objectively assess the satisfaction of businesses

18. Issues and challenges • Different needs of businesses:- for big ones. - for small businesses. • Right of discretion of inspectorates and inspectors in implementation process. • Consultation as interpretation and the original legal requirement. In case of misinterpretation? • Practicing consultation/information requires new competences/new approaches from legal/ behavioral science/marketing point of view • Are marketing campaigns really a business of the inspectorate?