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OUTREACH APEC-OECD CO-OPERATIVE INITIATIVE ON REGULATORY REFORM CopyrigMadm FIRSTWORKSHOPOFTHEAPEC-OECD CO-OPERATIVEINITIATIVEON REGULATORYREFORM I. Preface 3 II. Agenda 4 III. Summaryofdiscussions II IV. Reportoftherapporteurs IS V. Summaryofpresentations 25 VI. AppendixI:Fulltextpresentations 53 VII. AppendixII:Listofparticipants 174 1 2 I ProceedingsoetheFirstWorkshopoetheAPEC-OECD Co-operativeInitiativeonRegulatoryReform 19-20September2001,Beijing,China eoeofxnmpbeP1orr2dii-ien1enc3cidpeNlsTioenhvsoetfehmtgeoAbo1PeoE9rdEn9Ch2r7ae-0ngR0Ouec0lEpeaoCitnroDCtrBoyrmtCupoponer-MetaioiicnpttieDiisrcaotaernesturisasavsnneaoddlnaIcnmRoRi.enetcgigTeauutphllitaeavstet.oAorgroTyyrnheeRReReemceffeogoonurmrtlmmma.boteoInattrnywawdegaeRestnenheedftnaohdOeriomEstrwdsCproeDridovovearptnigraditbnenhyiscesiatpAahtlePieofsEAnoCsProunEsMemCitrnseif1ogso9uutrtle9ra9etitxhaodeclrehycsMalteanrrregueactefttioiunrorogmenf andorganisationoftheco-operativeframework,withtheaimtosupporttheimplementationofasimilarsetof principlesonregulatoryreformintherespectivemembercountries. Atthelaunchingconference,heldinSingaporeon22—23February2001,aseriesofthreeworkshops wereagreeduponandthegovernmentsofChina,MexicoandKoreaagreedtohostoneofthem.Animportant decisionoftheconferencewastoensurewidedisseminationoftheworkoftheCo-operativeInitiativethrough publishingtheproceedingsoftheworkshopsandestablishingawebpage. SeptemberTh20e0F1irsitnWBoerikjisnhgo.pDoefputhteyASPeEcrCe-taOrEyCGDenCeor-aolpeSraaltliyveShIenilttioanti-vCeoolbnyRefgruolmattohreyOReEfCoDrmawnadsVhiecledoMnin1i9s-t2e0r ZhenyuSunfromtheChineseForeignTradeandEconomicCo-operationMinistryopenedtheWorkshop. Representativesfromover25countries,business,labour,andseveralinternationalorganisations,includingtheWorld BankandtheEuropeanCommission,discussedthetopicsof(1)Thedesignandoperationofabroadandsustainable regulatoryreformprogrammethatproducesconcreteresultsforconsumersandbusinessesand(2)Theimportanceof buildingcompetitionprinciplesintoregulatoryregimes.Thesuccessoftheworkshop,toalargeextent,wasdueto themeticulousplanningofandstrongsupportfromtheChinesesponsors. Thisreportprovidesacomprehensiveaccountofthepresentationsanddiscussionsattheworkshop.Itis organisedalongtheagendaofthemeeting,andincludesthetwostatementsoftherapporteurs,thoseofMr.Luigi CarboneandMr.FredericJenny.Thepresentationsarereproducedinfulllengthintheappendixofthepublication. Thereportwillbemadeavailabletotheparticipantsofthemeeting,tointerestedexpertsandtothepublicatlargein ordertoraiseawarenessfortheRegulatoryReformagendaglobally. TheSecondWorkshop,whichwilltakeplaceinApril2002,hostedbytheGovernmentofMexico,is goingtoconcentrateon(1)BuildingInstitutionsforaSuccessfulRegulatoryImpactAssessmentProgrammeand(2) IntegratingMarketOpennessintoRegulatorySystems. A-i-ur RolfAlter MargaritaTrillo HeadofPrograOmEmeCDonRegulatoryReform ConvHeenaodrooffTtehcehAniPcEalCCCooomppeertaittiioonnaPnodliIcnytearnnadtDioenraelguRlealtaitioonnGsroup 3 II. AGENDAOFTHEBEIJINGWORKSHOP 8:45-9:30 Registration 9:30-10:30 Welcomeandopeningremarks - ZhenyuSun,ViceMinister,MinistryofForeignTradeandEconomicCooperation,China - SallyShelton-Colby,DeputySecretary-General,OECD - MargaritaTrillo,ConvenoroftheCompetitionPolicyandDeregulationGroup,APECand PleadofInternationalRelationsandTechnicalCooperation,INDECOPI(NationalInstitute fortheDefenseofCompetitionandProtectionofIntellectualProperty),Peru.Ms.Trillowill reviewsomeoftheimportantmessagesfromtheopeningconferenceinSingaporein February2001. • 10:30-18:00 Session1: Designingandsustainingabroadregulatoryreformprogramme - Chair:RolfAlter,PleadofProgrammeonRegulatoryReformOECD. - Rapporteur:LuigiCarbone,ChairoftheOECDWorkingPartyonRegulatory ManagementandReform,and,fortheItaliangovernment.CounsellorofStateandDeputy DirectoroftheRegulatorySimplificationUnit. Economiesfacebasictasksinreformingtheirregulatorysystems:establishingcapacitiesto promotereform,initiatingchangeandco-ordinatingcross-cuttingissues;reformtheprocessesfor developingnewregulationstoensurethatregulationisusedonlywhennecessaryandthatthe continuingstreamofneededregulationsmeethighqualitystandards;andupgradethequalityof theenormousinventoriesofmlesandformalitiesthathavesurvivedwithoutseriousexamination foryearsorevendecades.Thissessionwillbedividedintothreepanelsthatwillexaminehow economieshaveaddressedbasictasks,including; - Implementinggoodregulationprinciplestospeedupresults.Awell-organisedand monitoredreformprocess,drivenby“enginesofreform”withaccountabilityforresults,is importantforthesuccessoftheregulatoryreformpolicy. - Communicatingwithaffectedinterests. - Simplifyingbusinessregulationstoreduceformalitiesandredtapeinhibitingbusinessstart- ups,marketentry,andgrowth. 4 10:30-12:30 Panel1:Implementinggoodregulationprinciples Frameworkprinciplescanprovideguidancetoreformers,buttheimplementationstrategyand driversofreformareoftentooweaktoovercomevestedinterestsandcreategenuinechangein theregulatorybodies.Skilfulpoliticalleadershipanddedicateddriversofreforminside governments are neededto promote andco-ordinate reformprogrammes. Toimprove implementation,manygovernmentshaveestablishedcentralregulatoryco-ordinationand managementcapacitiesandinstitutions.Thesebodiescarryoutacontinuingreformprogramme thathelpsnationalregulatoryregimesadjustmorequickly.Thispaneladdressestheinstitutions andmechanismsestablishedbygovernmentstoimplementpoliciesofregulatoryreform. Amongtheinvitedspeakersare: - PhongthepThepkajana,Minister,MinistryofJustice,Thailand - LingLi,Inspector,DepartmentofTreatyandLaw,MOFTEC,China - AkiraKawamoto, Director,ElectricityMarketDivision,ElectricityandGasIndustry Department,AgencyforNaturalResourcesandEnergy,MinistryofEconomy,Tradeand Industry,Japan - NguyenDinhCung,DirectorofMacroEconomicPolicyDepartment,CIEM,Vietnam 12:30-13:30 Lunchandvisitstodocumenttables 13:30-15:30 Panel2:Communicatingwithaffectedinterests Taprpalniscpaatrioennscyheilspkteoyctuoreremgaunlaytoorfytqhuealrietya.soInsmpfroorvreedgutlraatnosrpyarfaeinlcuyreisn—rceagputluarteoraynddecbiiassiotnsowaanrdd concentratedbenefits,inadequateinformationinthepublicsector,rigidity,marketuncertainty vainrdtuionuasbilciirtcylet—oucnodnesrusmtearndsptorulsitcycormipske,tiatnidonlamcokroefbaecccaouunsteabsipleictiya.lTirntaenrsepstasrehnacvyehleelspsspcorweeartetoa mtohraegnaiwnpaiuzrlaaattgieaoingnsostv(ecNroGnrOmmsep)tnit—onah.nadsAmnpauritknecatrseh.aisgTehreianrnstvhpaealrauecenticovynitiysgooavflsecorivncimloensnsoitcdieterrteaynd—stpsoaurbceehnctayhs.enNsohena-rwgpoeisvntefrosnrwmmoearntdtiaoilnn capacitiesarepermittingtheestablishmentofcentraliseddatabaseswithsearchengines, electronicfiling,andinstitutionalre-engineeringthroughone-stopshops. Amongtheinvitedspeakersare: 5 - DohoonKim,SeniorResearchFellow,KoreaInstituteforIndustrialEconomicsandTrade - MariaTeresaFabregasFernandez,EnterpriseDirectorate-General,UnitG/1Legislative, EuropeanCommission - RoyJones,SeniorPolicyAdvisor,OECDTradeUnionAdvisoryCommittee 15:30-16:00 Coffeeandvisittodocumenttables 16:00-17:45 Panel3:Simplifyingbusinessregulations Fewregulatoryreformsaremorepopularthanpromisestosimplifygovernmentredtape.Oneof themostcommoncomplaintsfrombusinessesandcitizensisthecomplexityandnumberof governmentformalitiesandpaperwork.Governmentformalities,so-called“redtape,”are importanttoolsusedbygovernmentstocarryoutpublicpoliciesinmanypolicyareas,including safety,health,andenvironmentalprotection.However,iftheyarepoorlydesignedorapplied, inefficient,oroutdated,theycanimpedeinnovation,entry,investment,andcreateunnecessary barrierstotrade,investment,andeconomicefficiency.Often,proceduresareusedasanti- competitivemeasuresgiving‘insiders’protectioninsomemarkets,orasavenuesforcorruption. Redtapeisalsodisproportionatelycostlierforsmallerbusinessesthanforlargerbusinesses.The resultisthatnationaleconomiesarelessabletogrow,compete,adjust,andcreatejobs.Reducing redtapeandgovernmentformalitiescanproducesubstantialpayoffs.Thispanelwillexamine strategiesforsimplifyingbusinessregulations. Amongthespeakerswillbe: - DarrellPorter,SeniorOfficer,OfficeofRegulatoryReview,Australia - DoafntiheelBuJ.siBnreosdsy,anMdaInnadgusitnrgyDAidrveicstoorr,yUCoSmmIinftotremeattiootnheTeOcEhnCoDlogyOfficeandrepresentative - AdelardoC.Abies,Economist,DepartmentofFinanceandJoyAbrenica,Professor, UniversityofthePhilippinesDiliman,Philippines - CesarCordova-Novion, DeputyHeadofProgrammeonRegulatoryReform,OECD Secretariat,Paris 17:45-18:00 - TrevorBull,ConvenorofAPECPrivatisationForum,OfficeofStateEnterprise& GovernmentSecurities,MinistryofFinance,Thailand - SummarybytheRapporteur 6 20September2001 9:30-17:00 Session2:ImprovingtheCompetitionPolicyFoundationforRegulatoryReform Chair:MargaritaTrillo,ConvenoroftheCompetitionPolicyandDeregulationGroup,APEC andHeadofInternationalRelationsandTechnicalCo-operation,INDECOPI(NationalInstitute fortheDefenseofCompetitionandProtectionofIntellectualProperty),Peru. Rapporteur:FredericJenny,ViceChairoftheOECDCompetition,LawandPolicyCommittee, Conseildelaconcurrence(FrenchCompetitionAuthority). TheAPECPrinciplestoEnhanceCompetitionandRegulatoryReformandtheOECDprinciples ofregulatoryreformplacethestrengtheningofmarketsatthecentreofsustainablegrowth.For bothgroupsofeconomies,regulatoryreformandenhancedcompetitionwereimportanttoolsas partofalargerrecoverystrategy.BoththeOECDandAPECprinciplesrecognisetheimportance ofparallelreformsincompetitionpolicy,marketopenness,publicsectorperformance,and corporategovernance. Thissessionwillexaminetheintegrationofcompetitionpolicyintothegeneralpolicyframework forregulation.Competitionpolicyiscentraltoregulatoryreform,becauseitsprinciplesand analysisprovideabenchmarkforassessingthequalityofeconomicandsocialregulations,as wellasmotivatetheapplicationofthelawsthatprotectcompetition.Moreover,asregulatory rpreefvoernmtstpirmiuvlaatteesmasrtkmcetturaalbuscehsangfer,omvigroervoeurssinegnfotrhceembeennetfiotfscoomfperteiftoiromn.pAoliccyomipslneemeednetdttoo competitionenforcementiscompetitionadvocacy,thepromotionofcompetitive,market principlesinpolicyandregulatoryprocesses.Itisdividedintothreepanels: - Integratingcompetitionprinciplesintoregulatoryreformprogrammesthroughcompetition advocacyandadvice. - Pro-competitionrestructuringofpublicutilitiestocreatecompetitivemarketsofformer governmentmonopoliesandtoregulateresidualnaturalmonopolyelementswithaccess regimes. - Creatingeffectiveregulatorsforpublicutilities,includingtherelationshipbetweenthe competitionauthorityandsectoralregulators. 7 Panel1:Integratingcompetitionprinciplesintoregulatoryreformprogrammes Competitionauthoritiescanbevaluablealliesinregulatoryreform.Throughgeneraladvocacy andenforcementactions,theycanattractattentiontoproblemscreatedbypoorregulation.When reformsareimplemented,theycanuseenforcementandpublicitytoensurethattheobjectivesof reformareachieved.Tobeeffective,competitionauthoritiesmustdevelopcapacitiesfor advocacyinsidegovernments,beabletointervenewheremorecompetitionwouldbenefit consumers,andeffectivelyenforcethelaw.Adequateresourcesarenecessaryiftheyaretobe effective.Thispaneladdresseshowcompetitionauthoritiescandevelopaneffectiveadvocacy rolewithinthepublicadministration. Amongtheinvitedspeakersare: - AudreyTsyganov,DeputyMinister,MinistryforAntimonopolyPolicyandSupportof Entrepreneurship,RussianFederation - XinHiiaWei,DeputyDirector,DepartmentofPolicies,Laws,andRegulations,State EconomicandTradeCommission,China - RoryMcLeod,Manager,CompetitionPolicy,CompetitionandEnterpriseBranch,Ministry ofEconomicDevelopment,NewZealand - ArmandoCdceres,ChiefoftheSectoralReformCo-ordinationProgram,Ministryof EconomicsandFinanceandformerConvenoroftheCompetitionPolicyandDeregulation Group(CPDG),Peru. 11:15-11:30 Coffeeandvisitstodocumenttables 11:30-13:15 Panel2:Pro-competitionrestructuringofpublicutilities Liberalisationofpublicutilitiessuchastransport,energy,andcommunicationscanproduce imnannovyatibeonne,fiatsn,dilnocwleurdipnrgicecsostforefcfoicniseunmcey,rsbeatntderusseerrsv.icAe,pgrroebatleermpisrotdhuacttthvearifueltly,beennefhiatnsceodf liberalisationmaynotbeachievedorenjoyedbyconsumersiftheincumbentcontrolsa bottleneckintheproductionprocess,suchastheelectricitygridorgasstoragefacilitiesorif thereareregulatoryinconsistenciesofthedifferentlevelsofthesectorthatcauseregulatory failure.Decisionscriticaltohowthemarketwilldeveloparemadeveryearlyintheliberalization process,whenthegovernmentdecidesonhowtorestructuretheincumbentfirmanddecidethe regulatoryframework.Ifthegovernmentbreaksuptheincumbentfirmandmandatesownership separationamongessentialfacilitiesandnetworks,competitionwillemergemorequicklyand withlessregulatoryoversight.Ifaverticallyintegratedmonopolyisleftintact,manyyearsof heavyhandedanddifficultregulatoryoversightwillbeneededtodefendmarketentry. Regulationisnotasubstituteforgettingthestructurerightfromtheverybeginning.Regulationis alsosubjecttopotentialfailure.Thispanelwillexaminetheimportanceofrestructuringpublic utilitiestomaximisethebenefitsofmarketliberalisation.

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