Developments in Regulatory Reform

Key features of regulatory reform in Singapore

Regulatory reform is an ongoing process, in which Singapore constantly seeks to fine-tune its regulatory policies to better serve stakeholders. In 2000, the Cut Red Tape movement was launched to remove regulations that are no longer needed and to reduce the burden on the customer while making public services more convenient and effective.

The Pro-Enterprise Panel (PEP) was also set up in 2000 to actively solicit and act on public feedback and suggestions on rules and regulations that hinder businesses and stifle entrepreneurship.

Two years later, the Rules Review Panel (RRP) was set up to oversee the rules review process within the public sector. It stipulated that all existing rules enforced by public sector agencies had to be reviewed every three to five years. With a mandate to establish effective and responsive regulatory regimes throughout the public service, the RRP adopted a proactive approach to the reviewing of rules through examining the rationale behind the existence of these rules. A total of 19,400 rules were reviewed between 2002 and 2007.

In 2005, the RRP was reconstituted as the Smart Regulation Committee (SRC) with a broader mandate to shift the mindset of the Public Service from being merely a regulator to that of a facilitator, so as to develop a regulatory regime that is friendly to business and investment.

Legislation, policy and principles

The main principle behind regulatory reform is to ensure that both new and existing regulations serve stakeholders, and respond to stakeholders’ feedback. Indeed, the work of the SRC is mainly driven by the following principles:

• Agencies should foster self regulation and market discipline as far as possible.
• New regulations should take into account the views of relevant stakeholders, and potential implications for existing regulations.
• The cost of regulation should not exceed its intended benefit.
• Regulations should adopt a risk-management approach instead of a zero-tolerance approach.
• Regulations should facilitate a competitive and innovative climate.

Objectives of regulatory reform

The main objectives of regulatory reform are to reduce the cost and burden of regulation on stakeholders, such as citizens and businesses, while safeguarding and maximising public interest. For businesses, this helps allow market forces to operate, creating a competitive and innovative business environment. To achieve this goal, regulatory reform aims to improve the quality of government  regulations and remove outdated or unnecessary regulations.

Mechanisms and institutions to oversee regulatory reform Institutions

Under the Cut Red Tape movement, there are several initiatives that support regulatory reform. These are the SRC, Pro-Enterprise Panel and Zero-In-Process. Broadly, all these bodies perform advisory, gatekeeper and advocacy roles. They promote the broad principles of regulatory reform, challenge the quality of existing and new regulations, and provide advice and support to regulation makers.

Through these channels and through regular public consultations, the Singapore Public Service finds many ways to improve its regulations. Some of these involve simplifying, dropping or relaxing rules. Others are about giving the general public or industries sufficient information to regulate themselves, adopting a risk-managed and self-policing approach by the stakeholders, so that restrictive regulations do not have to be enacted.

Smart Regulation Committee

Comprising senior government officials from various regulatory agencies, the SRC oversees the regulatory review process through a sustained and effective approach which ensures that rules and regulations remain relevant in a changing environment. To this end, the Committee is driven by the following terms of reference:

• To promote good and responsive regulatory practices
• To oversee a sustainable system to proactively review rules and regulations
• To catalyse a change in regulatory mindset from control to facilitation, and
• To build competencies and capabilities in smart regulation

To achieve these ends, the Committee is guided by a Smart Regulation framework consisting of two components: “Regulatory review” and “Development of mindset, culture and competency”. Singapore’s performance in the World Bank’s Ease of Doing Business index is tracked and agencies are encouraged to carry out regular regulatory reviews to continually improve the quality of our regulations. Agencies which did well in regulatory reforms are invited to share their best practices with other government agencies, thereby creating a positive reinforcing loop between regulatory review and increasing smart regulation mindshare among public officers.

Pro-Enterprise Panel

To ensure that regulations are more responsive to the needs of businesses and to promote entrepreneurship in Singapore, the Pro-Enterprise Panel (PEP) was formed in August 2000 to actively solicit feedback from stakeholders on rules and regulations governing businesses. Suggestions from stakeholders are reviewed with the intention of simplifying or eliminating rules.

The PEP ensures that there is a full review of each suggestion from commencement to closure. If any agency rejects a suggestion, the PEP will examine the agency’s rationale and may ask the agency to explain its position. The PEP also ensures that the reasons behind the agency’s decision are explained clearly to the suggestor, and alternative solutions are provided where possible.

Since its inception, the PEP has received over 1,800 suggestions. More than half of the suggestions received have resulted in pro-enterprise changes.

Through the PEP, public agencies have also acquired a better understanding of business needs. In 2006, the PEP launched a secondment programme to attach officers from various regulatory agencies within the Public Service to the PEP. The aim of this programme is to increase the public officers’ understanding of business needs, and enable them to contribute towards building a proenterprise approach in their own agencies. As part of its outreach programme, the PEP holds regular sharing sessions on best practices and participates in exhibitions to promote the pro-enterprise message to businesses and public servants.

Zero-In-Process

The Zero-In-Process (ZIP) addresses issues raised by members of the public that cut across multiple agencies or have no clear ownership by any government department. A lead agency would be appointed to drive the matter to its resolution. Since 2000, more than 110 cases have been identified, with 22 inter-agency teams formed to resolve the more complex cases.

Awareness and support

Top-level commitment

Having top-level commitment within the Singapore civil service helps emphasise the importance of cutting red tape. The Head of Civil Service is the champion for cutting red tape. This ensures that regulatory reform initiatives get the highest level of support within the public service. Regulatory reform-related institutions listed above, such as the SRC and PEP, have to report directly to the Head of the Civil Service. To ensure the involvement of various regulatory agencies, they are also chaired by top Permanent Secretary-level officials, and include senior management from the relevant regulatory agencies.

Network of partners both inside and outside the public sector

To ensure that regulations gain both the awareness and support of many parties in both the private and sector partners, government bodies involved in regulatory reform actively engage a wide range of stakeholders. For instance, the PEP collaborates with the Rules Action Crucible under the Action Community for Entrepreneurship (ACE)—a movement that involves both the private and public sectors to create a more conducive environment for entrepreneurship in Singapore. A major collaboration is the annual Pro-Enterprise Ranking (PER) of public agencies, which ranks the government agencies on their compliance cost, transparency, review of rules, customer responsiveness and pro-enterprise orientation. It also identifies key areas of improvement requiring action across the public service. The PER helps raise the bar across the board for all regulatory agencies, in a peer-pressure exercise to spur each other to make continuous improvements. The overall performance index has improved significantly from 64.7 in 2004 to 74.6 in 2008. As a form of encouragement, the top-performing and most improved agencies are also recognised with the ACE Awards.

On a broader level, the SRC’s call to agencies to carry out regulatory reviews on a regular basis is well-answered, as exemplified by the numerous best practices highlighted by agencies in their regulatory review process. Agencies share these best practices at various forums such as the Community of Practice set up to encourage and facilitate the experiential sharing of regulatory best practices across agencies. Agencies also contribute their best practices in regulatory review to an online repository accessible by public officers. In addition, the Civil Service College used the exemplary examples to develop course content for the Smart Regulation training curriculum. With the broad-based support of government agencies, an environment is fostered for mutual learning and mutual support for regulatory agencies to learn how to best apply Smart Regulation principles. Such sharing of best practices helps agencies maintain the momentum to continually review rules.

Transparency and predictability

Engaging Stakeholders

A Feedback Unit was set up in the Ministry of Community Development, Youth and Sports (MCYS) in 1985 to gather feedback from the public on government policy and services. In 2006, the Feedback Unit was renamed Reaching Everyone for Active Citizenry @Home (REACH) to reflect its strategic shift from gathering feedback to engaging citizens, and renewed its commitment to listen to the people, as well as to promote active citizenry, and work with community and grassroots organisations to reach out to and engage citizens.

In 2002, a Remaking Singapore exercise was launched to address challenges in the social, cultural and political spheres. Chaired by a Minister of State, the Remaking Singapore Committee comprised members ranging from Ministers of State and Members of Parliament to members of the public from private sector, voluntary organisations and tertiary institutions. One of the recommendations of the Remaking Singapore Committee was to have a code for public consultation.

Following that recommendation, guidelines for consultation were drawn up, which provided government agencies with a framework for public participation and outlined the principles and guidelines for conducting public consultations, to engender transparency and involve public participation in the process of policy and regulation formulation and reform.

No Wrong Door

In 2004, the No Wrong Door policy was implemented to help members of the public who do not know to which government agency or department they should direct their queries. Under this directive, should an agency or department receive feedback on an issue which is not under its charge, it must ensure that the stakeholder giving feedback is linked up with the right government agency. If the feedback involves a few agencies, the receiving agency should coordinate and provide an integrated reply.

Improving the quality of regulation

Regulatory tools, systems and processes for improving the quality of new regulations
(Flow)

Singapore does not have a formal Regulatory Impact Analysis framework as it is a small economy with a well-connected government, making it easy to quickly evaluate policy impacts and connect with the relevant stakeholders to gather feedback. The government is extremely receptive to any feedback, and rely on stakeholders to act as its eyes and ears in identifying areas of regulation which may require further review and reform.

However, for major projects, a careful cost-benefit analysis, an evaluation of stakeholder impact and thorough public consultation are carried out.

Singapore constantly strives to improve the quality of regulations by moving from a “regulator-centric” approach to a more “customer or citizen-centric” approach towards regulation. It takes a risk management approach in designing regulation, which enables Singapore to focus its resources on high-risk areas while at the same time, reduce the administrative burden for customers in the lowerrisk areas.

Regulatory tools, systems and processes for improving the quality of existing
regulations (Stock)

Some tools have been developed to provide guidance to agencies in the area of regulatory review, to ensure that the existing sets of regulations remain relevant. For instance, a Smart Regulation Checklist provides guidance to agencies on the key areas to focus when carrying out regulatory reviews. This checklist was extracted from learning points acquired from numerous case studies. To foster a culture of learning and sharing, an online Smart Regulation repository was created to build up a body of knowledge in this area, and a Smart Regulation training curriculum for different levels of policymakers has been developed and is continually being refined.

Agencies also seek to prevent future red tape from building up in the first place, for instance by setting “sunset clauses” by which rules would automatically lapse after a certain date, or by spelling out a list of don’ts rather than only allowing a small list of do’s. Too many rules can cause confusion—both to the public, who have to follow them, and to public officers, who must apply and enforce them. By reducing the number of rules or by improving their clarity, it allows public officers to carry out their duties confidently, without uncertainty of interpretation and correspondingly, the chances for inconvenient bureaucracy and uncertainty in treatment of stakeholders to occur in the future are diminished.

Future challenges and lessons learned in promoting regulatory reform

Lessons learned in promoting regulatory reform and major progress in the past five
years

Moving from single-agency to a Whole-of-Government approach

A Whole-of-Government (WOG) approach helps in breaking down individual agency silos. No longer can agencies content themselves by operating in silos and acting in the capacity of their individual regulatory bodies. One example of savings as a consequence of taking this WOG approach is the formation of the Chemistry Taskforce in June 2005, facilitated by the Economic Development Board (EDB), to look into the concerns of the biomedical sciences industry. By striking a balance across the concerns of the various agencies for the import, storage, transport and disposal of specialty chemicals, it has led to significant benefits for the industry, public research and university laboratories.

A WOG approach is also important because today, many straightforward and single agency issues have been already addressed. For instance, the PEP has seen a rise in cross-agency feedback, from 5% of all suggestions in 2002 to 13% in 2008. The PEP helps facilitate a WOG approach to resolving complex cross-agency issues. It has also implemented a framework to systematically identify lead agencies at the onset of any issue. The lead agencies provide leadership and co-ordination among the various stakeholders, and help seek a collective solution offered by the networked government.

Importance of engagement and consultation

To best meet the needs of stakeholders, many agencies have learnt the importance of public consultation. As such, to help agencies concentrate their efforts on impactful regulatory reforms, all Ministries are now to undertake pre-policy consultation exercises. Focus groups, surveys, feedback forms, and forums via face-to-face, telephone, forms and consultation paper channels are used to help agencies focus on areas of priorities (e.g. responsiveness) and meet pro-enterprise performance targets that have been set.

Future challenges

Globalisation has increased Singapore’s connectedness with the world and created new economic opportunities. The uneven distribution of the fruits of economic growth brought about by globalisation will bring new challenges for regulatory reform, which may require increasingly sharp policy trade-offs in the future. Reforms will continue to focus on addressing the following challenges:

Engaging Stakeholders. By continuing to listen to citizens and businesses, understanding their needs, and at the same time, engaging, consulting and communicating to them the rationale of policy choices.

Dealing with complexity and chaos. The ability to thrive in an environment of greater complexity requires the public service to be able to make decisions and act with flexibility and speed, and to experiment and manage risks.

Strengthening Whole-of-Government orientation and instincts. More will be done to ensure that Whole-of-Government orientation is pervasive across the entire public service. Beyond mindsets, structural issues that hinder a Whole-of-Government approach in planning and execution will also be addressed.