The strengths and weaknesses of self regulation

1. The strengths and weaknesses of self regulation Dr Jon Bell Formerly Chief Executive UK Food Standards Agency

2. The case for and against command and control regulation (1) • Define required behaviour • Set standards • Clearly set out offences and penalties

3. The case for and against command and control regulation (2) • Blunt instrument • Can be costly and act as a brake on innovation • Always follows new activities, never precedes them • Only sets minimum standards

4. Aims of self regulation • Ensure a properly functioning market • Ensure a responsible industry • Ensure a commitment to published standards • Effective action in the event of a breach • Easy and low cost to administer • Responsive to change

5. Advantages and disadvantages • Possible advantages: • Driven by those being regulated • Embeds responsibility for compliance • Flexible • Low cost

6. Advantages and disadvantages • Possible disadvantages • Conflicts of interest • Lack of confidence in the process • Weak sanctions • Lack of transparency • Narrowness of interpretation of the rules

7. Drivers (1) • Industry: • Threat of command and control regulation • Name and shame by the authorities • Desire to raise standards and confidence • Desire to prevent damage by rogue operators

8. Drivers (2) • Government: • Desire to keep costs down • Enables minimal government interference • Maximises flexibility • Strengthens corporate responsibility

9. Suitability for different sectors • Required standards of behaviour are well understood • No risk of serious or widespread harm • Industry cohesiveness and maturity • Competitive market

10. Ways of avoiding or reducing the disadvantages (1) • Involve outside parties • External policing • External auditing

11. Ways of avoiding or reducing disadvantages (2) • Clear and transparent rules • Allow group action by consumer bodies • Clear appeals procedures

12. Examples of sectors in the UK which have tried self regulation • Successfully • Advertising • The medical profession • The press • Unsuccessfully • The police • Lawyers • Gas safety

13. Perceptions about self regulation • The public • Politicians • Industry

14. Issues requiring particular attention • Funding • Expertise and background of independants • Transparency • Speed of response • Appeals system • Mandatory participation?

15. Conclusions • Workable alternative to command and control regulations in appropriate circumstances • Not suitable for all sectors • Perceptions are all important