Ways to achieve compliance and enforce legislation
This is a single section from Chapter 22. Read the full chapter here.
If a regulator is required, what roles should it have?
The role, functions, and powers of a regulator should be linked to the purpose of the regime in which it operates.
Regulators are usually required to play different roles in complex regulatory regimes that use a number of regulatory options and require many actors.
Legislation establishing the role of a regulator should set out the regulator’s functions, powers and, sometimes, objectives and how it is expected to perform them. These provisions should expressly link the roles of the regulator to the purpose of the regime it operates within.
If multiple regulators operate within a regime, the legislation needs to be designed with the relationship between the regulators in mind. This includes considering what might be required in legislation to ensure that the relationship operates effectively and to determine what can be left to non-legislative mechanisms or administrative co-operation.
A regulator may need a range of powers and tools to fulfil its role within the regime it operates within. Consideration should be given to the following matters and to the extent to which the legislation needs to provide for them:
- Monitoring—A regulator needs to understand the system that it operates within. This may mean it needs the ability to gather information, monitor trends and advise on changes that might be required. See Chapter 21 on issues relating to monitoring regimes.
- Compliance and enforcement—A regulator should have available to it, and effectively deploy, a range of tools for achieving compliance in a range of situations. See the rest of the guidance in this chapter about designing enforcement systems, and Chapters 23 to 26 for guidance on specific enforcement options.
- Guidance—A regulator may need to issue guidance to those regulated by the regime. Although this can often be done without a legislative basis, there may be reasons to make it clearly part of the regulator’s role. The nature and status of guidance should be appropriate to achieve the policy objective (for example, consideration should be given to whether it is legislative or administrative, and the consequences of reliance on, or failing to comply with, guidance).
- Licensing, authorisations, or approval—It may be appropriate for a regime to include an ability for the regulator to grant licences, authorisations, or approvals. See Chapter 18 for guidance on statutory powers and decision making. Consideration should also be given to the practical, operational, and resourcing requirements of administering a licensing or approval scheme.
- Transparency—A regulator should carry out its role transparently (for example, by publishing its compliance strategy) and with regard to the costs as well as benefits of regulatory action.
- Accountability—There should be mechanisms to hold a regulator to account. A well-designed regulatory system will ensure that a regulator has the tools and powers it requires to fulfil its role and is accountable without disproportionately restricting the regulator in legislation. Consideration should be given to whether non-legislative or existing accountability mechanisms (for example, those in the Crown Entities Act 2004) can be relied on.