ISSUE : 02/2019 - MPC … · emerging technologies especially RegTech to enable a more efficient and effective ... drivers of adoption of RegTech by regulators are the desire for

ISSUE : 02/2019

HIGHLIGHTS In this issue :

REGULATING IN THE DIGITAL ECONOMY Keeping pace with emerging technology

REGULATING IN THE DIGITAL ECONOMY

Keeping pace with emerging technology

DRIVING PRODUCTIVITY OF THE NATION 1

GOOD REGULATORY PRACTICE (GRP)

Key Enabler of Sustainable Growth and Productivity

TWGDCP BEST PRACTICES STUDY MISSION: IMPLEMENTATION OF RISK-BASED CONSENTING AND INSPECTION IN CONSTRUCTION

8 April 2019 – 11 April 2019 | Auckland Council, New Zealand

1. National Convention on Good Regulatory Practice (GRP), 8 - 10 October 2019, Marriott Putrajaya

PUBLISHER: Smart Regulation, Productivity and Competitiveness

Development Division Malaysia Productivity Corporation (MPC) , Lorong Produktiviti, Off Jalan Sultan,

46200 Petaling Jaya , Selangor Darul Ehsan Tel : 603- 79557266 Fax : 603- 79540795

GRP Portal : grp.mpc.gov.my Email: regulatoryreview.mpc.gov.my

Advisor : Dato' Mohd Razali Hussain Chairman : Dato' Abdul Latif Hj. Abu Seman

Editorial Team : Mr Mohamad Muzaffar Abdul Hamid, Ms. Nik Nur Atiqah Saidi, Ms. Noor Iddeanna Idris, Ms. Nurrul Nur Aisyah Hamran

MPC Associate : Mdm Lok Lee Lee

1ST REGULATORY CONNECTIVITY CLUSTER MEETING OF THE COMMONWEALTH CONNECTIVITY AGENDA, 15 – 16 May 2019, London, United Kingdom

The dynamism and complexity of digital ecosystem poses a challenge to policymakers and regulators. Innovations arising from increasing liberalisation, globalisation and the Fourth Industrial Revolution have raised legal and regulatory concerns around the world. Among the digital innovations include Artificial Intelligence (AI), drones, Internet of Things (IoT), blockchain and distributed ledger technology that includes cryptocurrencies and smart contracts; Fintech, RegTech and Big Data. These technological disruptions raise the concerns on the relevancy of regulations and the efficacy of the current legal and regulatory framework. The challenge is to implement reforms to ensure that consumers can continue to enjoy the benefits of technological progress and be protected by well-designed regulation while at the same time create enough regulatory confidence for companies to take risks, innovate and be competitive. Regulators are increasingly being challenged to ensure the desired social, eco-nomic and environmental outcomes while reducing the costs on businesses.

Lawmaking and regulatory delivery need to keep pace with advances in technology and address the new regulatory frontiers as governments cannot allow tomorrow’s technologies to be stifled by yesterday’s regulations. Reforming the regulatory framework to address increasing and growing regulatory concerns associated with disruptive technologies becomes more pertinent.

REGTECH FOR REGULATORS RE-ARCHITECT THE SYSTEM FOR BETTER REGULATION (Source: World Government Summit in collaboration with Accenture, February 2018) www.worldgovernmentsummits.org

This report shares on how regulators can use emerging technologies especially RegTech to enable a more efficient and effective regulatory environment. RegTech is defined as the innovative application of emerging technologies by organizations to adapt to changing compliance requirements more effectively and efficiently, mitigate risks due to non-compliance and gain competitive advantage. The potential benefits for regulators include bringing in systemic changes to redesign regulatory processes, enabling real-time at data-driven decisions that will ensure mission effectiveness and promoting innovation. As regulators attempt to reduce the cost of compliance and become catalysts for innovation and business growth, they are increasingly looking at digitally trans-forming their operations. For example, the Australian Securities and Investments Commissions set up an innovation hub in 2015, while the UK Budget mandated regulators to support RegTech. The challenge for regulators is to figure out the steps that they need to take to implement these digital solutions.

RegTech opens a treasure chest of opportunities for regulators to use analytics and anticipatory interventions at an unprecedented scale. However, it also pushes them to build trust in regulations needed for new business innovations and efficiencies. In the words of Prof. Joyce O’Connor, Chair, Digital Future Group, the Institute of International and European Affairs: “The key drivers of adoption of RegTech by regulators are the desire for increased trust and security in digital services, and the opportunities that flow from this, particularly in terms of new business opportunities and increased efficiencies. Being able to provide certainty is another factor, of which the European Union’s abolition of roaming charges is a good example.”


Innovative applications of emerging technologies—including AI, Automation, Big Data, Cloud, Smart contracts, Blockchain—have the potential to offer new and advanced solutions to regulators. These may include Robo handbooks that allow machine-readable access to regulation helping reduce the cost of regulatory change, AI for real-time compliance monitoring of trades and transactions, and utilization of Blockchain for increased transparency in fund utilization. The emergence of combinatorial technologies is rapidly changing the nature of industries and business models. New technologies and platforms are spurring innovations and channels, which necessitates supporting rules and regulations.

This necessity to innovate needs to be balanced with the interests of the protected. Regulators need to orchestrate an ecosystem to promote the adoption of RegTech solutions as an enabler to drive down the cost of compliance requirements and promote innovations, while ensuring that the regulatory objectives are not compromised or are met more effectively.

In the process, regulators will also need to take a call on open source versus proprietary technology and custom-built versus off-the-shelf products based on their specific objectives. In the longer term, regulators can look at Regulation as a Platform by providing free and open access to legislation and regulation, making it easier for businesses to understand and comply with regulation. It can lead to a host of innovative applications, such as smart advisors, that can be of great value to both regulators and businesses. The benefits, as well as risks, of using RegTech solutions are well understood. But, these will need to be monitored continuously, using key metrics to evaluate the progress and address the challenges. Regulators can take a step by-step approach, as opposed to a big-bang change, to continuously evolve the system in pace with the changing technology landscape. Source : www.worldgovernmentsummits.org

THE PACING PROBLEM

With each technological innovation raises the question of how are the laws keeping up with it. Keeping regulation effective gets more difficult as technology development often runs ahead of the law, and new applications are constrained by regulations. Regulation is not keeping pace with digital and technology disruption resulting in profound impact on existing industry structures and value chains. The World Economic Forum describes this transformation as the “Fourth Industrial Revolution,” because the speed and extent of disruption is unprecedented.

PRINCIPLES FOR REGULATING EMERGING TECHNOLOGIES

As regulators move forward in their work, they should consider five basic principles to help them answer the “when to regulate” and “how to regulate” questions, and to set a foundation for rethinking regulation in an era of rapid technological change.

The 5 basic principles for regulating emerging technologies are: 1. Adaptive regulation 2. Regulatory sandboxes 3. Outcome-based regulation 4. Risk-weighted regulation 5. Collaborative regulation. For more details, refer to “The Future of Regulation: Principles for regulating emerging technologies.” by William D. Eggers, Mike Turley and Pankaj Kishnani, Deloitte Insights.

THE REGULATOR’S NEW TOOLKIT: TECHNOLOGIES AND TACTICS FOR TOMORROW’S REGULATOR (DELOITTE INSIGHTS)

For more details, refer to “The Regulator’s New Toolkit: Technologies and tactics for tomorrow’s regulator “ by William D. Eggers, Mike Turley and Pankaj Kishnani, Deloitte Insights.

- Using Business & Technology tools


https://www2.deloitte.com/insights/us/en/industry/public-sector/future-of-regulation/regulating-emerging-technology.html




https://www2.deloitte.com/insights/us/en/authors/e/william-d-eggers.html


https://www2.deloitte.com/insights/us/en/authors/t/mike-turley.html

https://www2.deloitte.com/insights/us/en/authors/k/pankaj-kishnani.html







https://www2.deloitte.com/insights/us/en/authors/t/mike-turley.html



10 WAYS GOVERNMENTS CAN BETTER KEEP UP WITH FAST-CHANGING INDUSTRIES

How should law and regulation cope with fast changing technologies and industries? How should they balance the risks that come with new ideas and the risks of crushing them? And how should they help to ensure that the benefits of new technologies are widely spread? From stable to iterative regulation and the rise of anticipatory regulation. Ten elements together make up the emerging toolkit for governments and regulators : 1. Open dialogue with innovators as well as incumbents. The

first shift is towards more explicit and open dialogue with innovators and entrepreneurs to ensure that regulations are not blocking them in ways that offer little public benefit

2. Iterative not definitive rules. The benefits from

continuous adaptation may outweigh the benefits of stability and predictability (though of course there will be trade-offs).

3. Testbeds and sandboxes (Regulators then try to help

innovators try out their ideas and think through the regulatory implications).

4. Risk management rather than risk avoidance- using data,

and predictive tools to better map where problems are likely to arise so as to economise on scarce regulatory resources.

5. Regulators driving innovation directly .The regulator

requires the incumbents to fund open processes for innovation that could threaten their market share, amplifying competition and accelerating the development of new technologies and business models. This kind of approach may spread to other similar industries. Energy and housing are obvious examples.


6. Joined up regulation - Many of the challenges come from changes that cut across sectoral boundaries. These trends are potentially going much further with the Internet of Things, and the further integration of the data economy and material networks in transport, energy and buildings.

7. Public engagement - try to involve more

people, who can be engaged in shaping regulations around emerging industries.

8. Explicit politics - it is not just technical- here will

often need to be some political or ministerial engage-ment in the big choices that arise out of the various methods described above – addressing winners and losers, potential risks and harms as well as gains.

9. Proportionate complexity - The UK Better Regulation

Executive adopted a ‘one in two out’ rule for similar reasons. But the anticipatory regulation logic may point in the opposite direction, towards more complexity - ideally with simple principles but flexibility to devise sufficiently detailed regulations to enable new models to emerge.

10. New skills for regulators - To fulfil these new tasks,

regulators need new skills – more in depth understanding of new technologies and business models - perhaps more than the theoretical economic and legal knowledge which was prioritised in a previous era. Another shift is to go further in moving from a primary focus on process compliance towards a greater focus on outcomes. More than ever, too, regulators need communication skills – but now not just the skills of handling coverage in specialist media, but also the ability to engage with large communities of stakeholders.

Source : https://www.weforum.org/agenda/2017/10/


GOOD REGULATORY PRACTICE (GRP) Key Enabler of Sustainable Growth and Productivity

EXTRACTS FROM THE PRODUCTIVITY REPORT 2018/2019, PART 3: ENHANCING PRODUCTIVITY THROUGH BETTER GOVERNANCE, MPC,

JUNE 2019

The Eleventh Malaysia Plan (11MP) drew out a blueprint that further focuses on productivity as a game changer for economic growth. Under the Mid-Term Review (MTR) of 11MP for 2018-2020, productivity remains a key economic driver of the country’s vision to become a developed and high-income nation. The Government is able to facilitate a conducive environment through policies and reforms that allow for economic dynamism and productivity growth across all sectors. With this, Malaysia’s national productivity and global competitiveness can reach greater heights. By promoting good regulatory practices from the public sector, the private sector can facilitate the way they conduct business and accelerate sectoral productivity and also national productivity performance. Regulatory policy has already made a significant contribution to economic development and societal well-being. Economic growth and development is promoted through the contribution of regulatory policies towards structural reforms, the liberalisation of product markets, international market openness and a less-restricted business environment for innovation and entrepreneurship.

DRIVING MALAYSIA’S BUSINESS EFFICIENCY NATIONAL POLICY ON GOOD REGULATORY PRACTICES (GRP)

The National Policy on GRP aims to promote a regulatory framework that is effective, efficient and accountable in support of greater policy coherence. The principles and processes apply to the amendment of existing regulations and the development of new regulations by all Federal Government ministries, departments, statutory bodies and regulatory commissions in Malaysia. Efficiency and effectiveness are important because there are limits to the amount and types of regulations that are able to be absorbed by economies and enforced effectively by the Government. While regulations can bring benefits, any unnecessary costs and inappropriate regulation can stifle economic growth by putting obstacles in the way of doing business and creating negative environments. Enforcing regulations also places heavy demands on the Government administration, which is why it is crucial that they are well thought out and formulated. To accelerate economic growth, the Government places precedence on facilitating GRP. With regards to this, the initiatives undertaken include Regulatory Impact Analysis (RIA), Cutting Red Tape (MyCURE), Reducing Unnecessary Regulatory Burden (RURB), Modernising Business Licensing (MBL) and Non-Tariff Measures (NTMs).

Malaysia’s regulatory reform has journeyed from privatisation, deregulation and ad-hoc initiatives, to a systematic whole-of- government application for regulatory governance practices. Coming so far and having this integrated platform builds a foundation for further improvements and indicates a strong commitment to better regulatory regimes.

HOUSE OF GRP

As per the public sector productivity framework, regulatory reform is one of the focal points to consider for the creation of a better regulatory environment for both businesses and citizens. This leads to lower costs and higher productivity for businesses, thereby attracting both domestic and international investments as well as innovations. As a result, the private sector is able to expand and this creates more jobs. This would increase competition in terms of pricing as well, leading to better prices, better quality and wider choices. On the other hand, inefficient regulations can limit the ability of domestic firms to diversify and compete abroad as well as at home. Improving the regulatory environment for businesses, implementing good regulatory practices is seen as necessity. With that, a framework on Good Regulatory Practices (GRP) has been developed that is known as The House of GRP. Through this framework, initiatives, programmes and activities are implemented at the national and state levels.



HOUSE OF GRP

To steer strategic alignment to achieve the objectives of quality regulatory policy and coherence for the nation, the House of GRP can be conceptualised and operationalised with having a strong foundation and supporting pillars. These pillars focus to meet the challenges of technological advancement to accommodate evolving business conditions, adopting strategic approach with a portfolio of regulatory action programmes through various GRP tools and using the relevant platforms to enhance engagement and transparency. The ultimate objective is to ensure quality of new regulations through the adoption of RIA elements and reviewing existing regulations aimed at more efficient delivery and less burdensome. The outcome will be the development of Quality Policy and Regulations that will nurture a conducive environment for enterprise competitiveness and boost national productivity. Regulatory reform has the potential to bring a better quality of life to all Malaysians through higher productivity, greater global competitiveness and higher income.

Studies have shown strong correlations between regulatory quality and economic growth, better governance quality and higher incomes per capita. The efficiency of Government has a significant bearing on a country’s competitiveness and economic growth. Excessive bureaucracy and regulation, lack of transparency, and inadequate legal frameworks all impose additional costs on business and sustainable and inclusive growth. Policies seeking to improve productivity and efficiency should focus on a strong rule of law, removing burdensome regulation and red tape.

STRONG CORRELATION BETWEEN REGULATORY QUALITY AND ECONOMIC GROWTH

WORLD BANK WORKING PAPER:

BUSINESS REGULATIONS AND GROWTH

This paper analyses whether regulatory changes are linked to economic outcomes. With panel data for 10 years across more than 180 countries, the paper establishes the link between business regulations, firm creation, and growth. It is found that an improvement of 10 points in the overall measure of business regulations is linked to an increase of around 0.5 new businesses per 1,000 adults. Moreover, the results show that although small changes in the overall level of business regulations may have a negligible link to growth, moving from the lowest quartile of improvement in business regulations to the highest quartile is associated with a significant increase in annual per capita growth of around 0.8 percentage points. In addition, the results highlight the importance of sound entry and exit regulations and sound credit market regulations and court enforcement for growth.

Source: Divanbeigi, Raian; Ramalho, Rita. 2015. Business Regulations and Growth. Policy Research Working Paper; No. 7299.World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/22172 License: CC BY 3.0 IGO.”

OECD REGULATORY POLICY OUTLOOK 2018 Shares good regulatory practices and innovative approaches

to better regulation:

Laws and regulations govern the everyday life of businesses and citizens, and are important tools of public policy. Regulating has never been easy, but the overwhelming pace of technological change and unprecedented interconnectedness of economies has made it a daunting task. The 2018 Regulatory Policy Outlook, the second in the series, maps country efforts to improve regulatory quality in line with the 2012 OECD Recommendation on Regulatory Policy and Governance, and shares good regulatory practices. It provides unique insights into the organisation and institutional settings in countries for designing, enforcing and revising regulations. It also highlights areas of the regulatory cycle that re-ceive too little attention from policy makers. Finally, it identifies areas where countries can invest to improve the quality of laws and regulations and presents innovative approaches to better regulation.

Source: OECD (2018), OECD Regulatory Policy Outlook 2018 (Summary), OECD Publishing, Paris,https://doi.org/10.1787/37d8e8f3-en.

https://doi.org/10.1787/37d8e8f3-en



2016 FINAL REPORT ON GOOD REGULATORY PRACTICES IN APEC ECONOMIES

The 2016 Final Report on Good Regulatory Practices in APEC Economies reports on the use of selected GRPs and comparison with APEC’s 2011 GRP Baseline Report confirms that APEC economies continue to invest substantial political and financial resources in improving the quality of their domestic regulatory regimes.

..Within this diversity, there is wide agreement that the core GRPs contained in the APEC-OECD Checklist are, if applied, likely to yield significant benefits across the APEC region. These practices have been correlated with better economic outcomes over many years in many economies, and represent an important collective asset of APEC. This agenda is still highly relevant to the economic and social goals of APEC economies. Evidence on the benefits of adopting these GRPs broadly in a domestic regulatory system is accumulating. It is clear that GRPs are directly relevant to the most pressing economic priorities facing APEC economies – investment, jobs, productivity, competitiveness, and more productive use of domestic resources, increasing overall wealth.

This evidence was reviewed and summarized in 2010 (Jacobs and Ladegaard 2010) and presented in the 2011 baseline report. Those economy-wide benefits will not be gained from isolated, episodic, ad hoc reforms. They will be gained only through sustained, multi-year reforms that institutionalize better means of regulating into the machinery of government, which is the purpose of the GRPs reviewed here. Reform mechanisms should be sustainable over time, meaning that each step is institutionalized, supported, assessed and corrected as needed, and is the foundation for the next step. In other words, GRPs should be mainstreamed into the daily practice of government. Every government will design its own reform path. Governments should start and move forward as they can and as opportunities arise. Step by step reforms that work are better than overly ambitious reforms that fail. A successful regulatory reform program in economic terms probably includes, over time, a mix of the GRPs assessed in this report: cost-cutting aimed at one-time reductions in existing costs, and regulatory governance tools such as regular reviews of existing regulations, regulatory quality principles and oversight, better forms of RIA and consultation, which are aimed at sustaining lower costs, reducing policy risks, improving resource allocation, and building a regulatory framework for socially beneficial and trade

CONCLUSIONS AND KEY RESULT AREAS FOR APEC ECONOMIES

Source: https://www.apec.org/-/...Good-Regulatory-Practices. .Economies/217_CTI_2016 The author of this report is Mr. Scott Jacobs of Jacobs, Cordova & Associates. The report was prepared for the Asia-Pacific Economic Cooperation (APEC) as part of the US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI) activity. US-ATAARI is co-managed by USAID’s Regional Development Mission for Asia (RDMA) and the Washington-based Bureau for Economic Growth, Education, and Environment’s Office of Trade and Regulatory Reform (E3/TRR) with funding and strategic direction from the U.S. Department of State. August 2017- This publication was produced by Nathan Associates Inc. for review by the United States Agency for International Development.

TWGDCP BEST PRACTICES STUDY MISSION: IMPLEMENTATION OF RISK-BASED CONSENTING

AND INSPECTION IN CONSTRUCTION 8 APRIL 2019 – 11 APRIL 2019 | AUCKLAND COUNCIL, NEW ZEALAND


On 8-11 April 2019, Technical Working Group on Dealing with Construction Permits (TWGDCP) conducted a study mission to Auckland Council to learn about New Zealand’s best practices in risk-based inspection (also known as Third-Party Inspection). New Zealand was recommended by the Word Bank because they manage to retain the top 10 economies in DCP for several years. One of the critical success factors is their successful implementation of risk-based inspection.

Malaysia achieved outstanding performance, being ranked 3rd in DCP, after decades of learning and innovating. In order to sustain its top three position, Malaysia must embark on and fully integrate risk-based inspection in current process. This improvement will significantly reduce procedures and time taken to obtain construction permits.

The delegation comprises technical officers from local authorities (Dewan Bandaraya Kuala Lumpur and Dewan Bandaraya Kota Kinabalu) as well as other officers from external technical agencies and Principal Submitting Persons (PSP) such as:

1. National Water Commission (SPAN) 2. Fire and Rescue Department of Malaysia (JPBM) 3. Air Selangor Sdn. Bhd. (AiS) 4. Malaysian Institute of Architects 5. Nadi Consult Era Sdn. Bhd.

KEY TAKEWAYS

AUCKLAND COUNCIL WATERCARE SERVICES LIMITED (WATER AND SEWERAGE)

FIRE AND EMERGENCY (ENGINEERING UNIT) - FENZ

BUILDING OFFICIALS INSTITUTE OF NEW ZEALAND

1. Auckland Council is the biggest local council in New Zealand. It comprises of 190 local councils amalgamated into one local council. This idea was initiated by the then Minister of Local Government, Mr. Rodney Hyde.

2. The level of government in New Zealand allows agility in changing law. Transparency and sharing of data publicly are mandatory and legislated in the Federal Law.

3. The construction permitting in New Zealand focuses on transferring the responsibility to the applicant. Pre-construction briefing (or pre-consultation) with the council and external technical agencies is part of the process to ensure applicant “do-it-right the first time” and avoid discrepancies in the later stage of construction.

4. Technical agencies (Fire, Water and Sewerage Services are Council Controlled Organization (CCO) and obliged to Auckland Council requirement.

5. Auckland Council is a “one-stop-centre” and collaboration is their mantra.

1. Liability of assets (or infrastructure build by developer) lies with the developer for 7 years after completion of work. Any damages in the first 7 years will be paid by developer.

2. Every information for submission process (guidelines, forms and tapping point) are available online.

3. Pre-construction briefing is compulsory in which Watercare officers will visit the proposed construction site to assess water and sewerage requirements with applicant.

4. Any payment involved during connection will be handled by Auckland Council.

1. Applicant is required to send evacuation plan once building is ready to be occupied.

2. FENZ utilises PALISADE (a software system) to simulate risk to develop fire brigade intervention model.

3. In risk-based consenting process, FENZ offers advice and the ultimate decision lies with Fire Engineering Unit in Auckland Council.

4. Owner of the building must renew Warrant of Fitness (like Fire Certificate) yearly and failure to do so will result in heavy penalty or shutdown.

1. Their vision is to improve the quality of professionalisme of the built environment. It offers advice on fire, plumbing, building policy, building quality, sector performance and capability as well as training.

2. The institute provides a balance between practical experience and academic qualification in ensuring sustainability and quality of building officials in New Zealand.

ENGINEERING NEW ZEALAND

(SIMILAR TO INSTITUTION OF ENGINEERING MALAYSIA)

1. Their vision is to “bring engineer to life”. They focus on connection, recognition and credibility.

2. Challenges faced by engineers (similar to Malaysian engineers) are lack of communication and cohesiveness between parties involved in a project.

3. Only chartered engineers are allowed to do building works. 4. Engineers are encouraged to have insurance (even though it is not

mandated by law), because they are liable for their works for 6 years after completion of project.

NEW ZEALAND INSTITUTE OF ARCHITECTS

1. Contrary to Malaysia, Architect in New Zealand only involved in design stage. In other construction stage, they observe and some may administer the project. Their focus is helping the client build good scope.

2. The greatest challenges are lack of apprenticeship, fewer skilled people as well as aging population.

3. Licensed building practitioners will sign off plan on behalf of client and not architect.

4. In New Zealand every party involved in a project is jointly responsible (or called as proportionate liability).


TWGDCP BEST PRACTICES STUDY MISSION: IMPLEMENTATION OF RISK-BASED CONSENTING

AND INSPECTION IN CONSTRUCTION 8 APRIL 2019 – 11 APRIL 2019 | AUCKLAND COUNCIL, NEW ZEALAND

IMPORTANT LESSON

An important lesson from Auckland Council is how they try their best to facilitate stakeholders involved in a construction and doing it right from the first time. Another key success is less bureaucracy and uniform legislation throughout local councils, with the amalgamation practice. Mr. Andrew Minturn from Auckland Council shares three enablers for successful amalgamation:

1. Mandate from Act of Parliament

2. Heaps of consultation exercises (mayor, councillors, staffs); as well as

3. Establishment of Auckland Transition Authority (to facilitate transition and changes).

Visit to Property Information Centre of Auckland Council whereby consultants will obtain necessary information from Auckland

Council and external technical agencies to start a development

Mr. Mohamad Azrol Mohamad Dali, head of delegation with Mr. Andrew Minturn, programme coordinator and Her Excellency Ms

Nur Izzah Wong Mee Choo, High Commissioner of Malaysia in New Zealand

Visit to New Zealand Institute of Architects (NZIA). Delegations were seen here with Elizabeth Aston,

General Counsel – Practice Services.

CONCLUSION

The most interesting learning points from this study mission are New Zealand’s evolution of regulation from a sector-based regulatory review and its effective policy making and better regulations towards regulatory coherence. Its emphasis on policy coherence through the use of Regulatory Impact Analysis, supported by good regulatory practice principles (‘flow’ policy tools) forms the core of its regulatory management system and various models of regulatory co-operation which aims to bring together regulators from both sides. Coherence and consistency for both processes and organisational structures will enhance certainty in relation to the rules, requirements, and processes of regulation. This will lead to operational efficiencies across sectors and jurisdictions for more consistent decisions, stability and coherence. New Zealand’s experience is that regulatory coherence can best be achieved through direct dialogue between the responsible regulatory agencies under the umbrella of a wider process established in the context of mutual agreements and on the basis of agreed principles. In these instances, technical experts are able to share their thinking on, and experiences with, risk management approaches.

Thus New Zealand’s regulatory coherence and risk-based consenting/inspection approaches have provided good insights. Although what works in New Zealand may not work in Malaysia as each country can adapt according to its ecosystem and culture. However we acknowledge that the more aligned regulations are, the greater the prospect of not only reducing economic and transaction costs, but also minimising current and future technical barriers to trade and cost of doing business. This calls for cooperation and a flexible framework of practical options for consideration by regulators, which can be applied unilaterally, bilaterally, regionally or multilaterally.There is scope to identify innovative new approaches to reducing compliance costs consistent with high-quality approaches to risk management which could lead to more convergent regulatory approaches.

1ST REGULATORY CONNECTIVITY CLUSTER MEETING OF THE COMMONWEALTH CONNECTIVITY AGENDA

15 – 16 MAY 2019 | LONDON, UNITED KINGDOM


Members of the Commonwealth Connectivity Agenda’s (CCA) working group on regulatory connectivity held their first meeting on 15-16 May at The Grosvenor Hotel in London. The cluster meeting discussed good regulatory practices, creating enabling environments for micro, small and medium enterprises (MSMEs), and enhancing the ease of doing business in Commonwealth countries. The Malaysian delegation was represented by Dato’ Abdul Latif Hj. Abu Seman,Deputy Director General of MPC and Mohd Zulkifly Che Mohd Rawawi, Assistant Manager, MPC. The Working Group on Regulatory Connectivity, chaired by Barbados, is one of five “clusters” driving the various focus areas of the CCA, a flagship initiative aimed at boosting trade amongst Commonwealth countries to at least $2 trillion by 2030.In pursuing the Agenda, member countries structured dialogues around the five following clusters: 1. Physical Connectivity, engaging on trade facilitation,

identifying and facilitating implementation issues, infrastructure development including multi-sectoral connectivity and the sharing of trade information, to reduce the physical barriers to trade;

2. Digital Connectivity, assisting member countries in expanding

ICT capabilities, identifying areas for developing their national digital economies, improving their regulatory framework and building digital infrastructure, inter alia through capacity building and promoting investments, to enable all members to take advantage of the opportunities presented by digital trade;

3. Regulatory Connectivity, improving understanding of various

regulatory regimes, increasing the ease of doing business, promoting good regulatory practice including regulatory coop-eration among member countries to reduce non-tariff barriers, improving services data collection, and mutual recognition, in order to reduce regulatory barriers, address the capacity deficit and improve the regulatory environment for business, especially micro, small and medium enterprises and consumers;

4. Business-to-Business Connectivity, supporting dialogue between the public and private sectors and between businesses, assisting member countries to attract investment through capacity building, facilitating the needs of the micro, small and medium enterprises to access finance, and reflecting on how domestic regimes could facilitate business-to-business connectivity, particularly with the aim of enhancing the private sector’s role in promoting the blue and green economy;

5. Supply Side Connectivity, encouraging the participation of all

members in global value chains, fostering global value chains (GVC) linkages and sharing knowledge among members and harnessing them for economic growth, as well as the creation of export diversification opportunities for micro, small and medium enterprises, and exploring possibilities to collaborate on national trade portals.

Dato’ Abdul Latif Abu Seman at the Panel discussion with other panelists from Commonwealth Secretariat, OECD and New Zealand.


1ST REGULATORY CONNECTIVITY CLUSTER MEETING OF THE COMMONWEALTH CONNECTIVITY AGENDA

15 – 16 MAY 2019 | LONDON, UNITED KINGDOM

HIGHLIGHTS OF THE MEETING

FIRST SESSION: PRINCIPLES OF GOOD REGULATORY PRINCIPLES SECOND SESSION

1. The OECD presented the Recommendation of the Council on Regulatory Policy and Governance [C(2012)37] which was adopted on 22 March 2012 as guidelines and principles to be implemented by OECD member countries for systematic improvement to regulatory quality and performance. It focused on three recommendations: Regulatory Impact Assessments, Ex-post Assessment and Stakeholder Engagement and the ways in which these three elements functioned were reviewed.

2. Canada shared its experience on Canada’s regulatory policy

framework and provided an overview of its approach to GRPs. Canada noted that its GRPs were supported by strong political backing through a Cabinet Directive on Regulation (CDR 2018). Key lessons from Canada’s experience - the importance of evidence - based regulation, transparency, engagement and building trust for quality regulations.

3. Malaysia highlighted on its GRP journey since 2010 with the main-

streaming of GRPs into Malaysia’s national 5-year development plan; how a public-private taskforce called PEMUDAH has been established for GRP initiative; GRP as a critical component of the Malaysia Productivity Blueprint. Malaysia also shared various tools and accountability mechanisms to support regulators to use GRP tools and Malaysia emphasised that there was value in starting small by focusing on quick wins and to reach out to other members and to learn from those organisations which may have done it before.

1. The second session of this agenda item focussed on regulatory environments and micro, small and medium enterprises.

2. The United Kingdom presented on better regulation for small and micro businesses and noted that approximately half of the concerns of UK’s SMEs relate to regulatory issues imposed by governments. The United Kingdom recognises the burden of regulation for SMEs and is placing emphasis on mitigating impacts and making compliance with regulations less burdensome. It is a requirement for new regulations to specifically consider the impact of regulation (RIA) on SMEs and what regulators’ mitigation options to address SMEs needs are.

3. The United Kingdom highlighted on the Commonwealth

Standards Network (CSN) which aims to facilitate trade within the Commonwealth by encouraging the adoption of international standards. Includes a focus on building capacity at the national level in Overseas Development Assistance (ODA) eligible countries to increase the participation of developing countries in international standardisation activities.

4. Jamaica shared experience on the regulatory environment for

MSMEs. The introduction of a simplified ‘superform’ for business registration had brought down registration to one day and resulted in Jamaica doing well on the starting a business element of the Doing Business ranking. Border reforms were also highlighted with a view to reducing burden for exporters and importers. It was noted that a simplified regulatory guillotine process was undertaken where steps involving ‘rubber stamping’ by agencies were removed from the licensing process.

This session was chaired by New Zealand who shared its experiences bringing SMEs to market. Key lessons from New Zealand’s experience: 1. The importance of a robust disclosure policy to instill confidence

for business to share information with government. 2. Leveraging on existing established network – where New

Zealand citizens abroad as an agent to obtain knowledge and information about the new market for government to assist SMEs.

Samoa, Mauritius, United Kingdom, and New Zealand exchange of experiences on ease of doing business reforms and ways to address the challenges of regulatory practices for MSME development. Areas of interest for Malaysia to learn and benchmark are: 1. Digital transformation project and trade portal to facilitate

investment (Samoa) 2. Silent-is-consent principle, and InfoHighway programme

(Mauritius) 3. Better Regulatory Practices - evidence based policy making

(United Kingdom) 4. Better for Business (b4b) - cross-agency programme developed

to champion New Zealand businesses (New Zealand)

ENABLING ENVIRONMENT FOR MSME EXPORTS

ENABLING ENVIRONMENT FOR MSME EXPORTS

NEWS: GRP

19-21 April 2019, Tamu Hotel & Suites, Kuala Lumpur: UPC Admin Training to develop capability among SR, DMO & MIT officers to

administer UPC Portal & build up stakeholders’ capability on portal utilisation.

15 May 2019, Dewan Theatrette, Energy Commission,Putrajaya : Briefing on Good Regulatory Practice (GRP) to Energy Commission ,

attended by YBhg. Datuk Ir Ahmad Fauzi bin Hasan ,Chairman of Ener-gy Commission and Management Team and officers of EC . The out-

come will be the preparation of a Proposal Paper on Consultancy Ser-vices of RIA.

15-18 May 2019, Hotel Concorde, Shah Alam: Workshop on Preparation of Regulatory Impact Statement (RIS) for

GRP Pilot Project of Pahang ( 2nd series)

24 – 26 May 2019, Tamu Hotel & Suites, Kuala Lumpur : Workshop 2nd Series : Pilot GRP Project for the State Government of

Perak 31 participants from various departments- State Economic Planning Unit (UPEN), Forestry Department, Wildlife Department,

Department of Environment, State Fire & Rescue Department (Bomba), Perak Water Board and TNB.


17 June 2019, Bilik Mesyuarat Lazuli, KPKT, Putrajaya: Briefing Session on Regulatory Impact Analysis (RIA) for the Ministry

of Housing & Local Government (KPKT) regarding Amendments to Strata Management Act 2013 (Act 757). Subsequently a Hands-on

training for RIA will be held in July 2019.

21-22 June 2019, Concorde Hotel, Shah Alam : Workshop on National Policy on Good Regulatory Practice (NPGRP). The objective of this workshop is to finalise the policy and handbook

to be presented to the Board of Management of MPC in July.

24 - 26 June 2019, Holiday Villa, Johor Bahru: Cutting Red Tape (MyCURE) Programme for the state of Johor

attended by Management Services Division, Johor State Secretary Office.

28 June 2019, Wisma Bapa Malaysia, Kuching Sarawak: Preliminary Discussion on GRP Pilot Project of Sarawak with State Service Modernisation Unit (UPPN) and 3 Ministries – Ministry of Urban Development and Natural Resources Sarawak, Ministry of Utilities Sarawak and Ministry of Local Government and Housing

Sarawak.

UPC TRAINING FOR AGENCY REGULATORY COORDINATORS AND AGENCY MODERATORS

REGULATORY COORDINATORS (RCS) AND MODERATORS AS FOCAL POINTS FOR THE MINISTRY AND REGULATING AGENCIES

To further enhance their capabilities and competencies in carrying out the regulatory process management requirements for better regulatory designs and delivery, Regulatory Coordinators (RCs) are appointed to act as the focal point for the Ministry/Agencies for communications with MPC. Engagement sessions with RCs are held to obtain updates and feedback on the status of GRP Implementation at ministries and agencies as well as issues and challenges faced by the Ministries and Agencies.

The Unified Public Consultation (UPC) has been established as a portal to facilitate stakeholder engagements in its rule-making process, as a new mechanism for the government to get the feed-back and involvement of the people in the process of policymaking and government policy. UPC provides members of the public easy access to regulatory consultations through a single website. UPC will also contribute in achieving the Government’s commitment to accountability, transparency and inclusiveness.

Regulatory Coordinator: is an officer appointed by a Ministry or a Regulator under the requirements of the National Policy on the Development and Implementation of Regulations (NPDIR) and has the responsibility to act as the focal point for the Ministry or Regu-lator for communications with MPC. The name of the Regulatory Coordinator shall be notified to MPC. The Regulatory Coordinator shall be a senior officer of the organisation who is additionally assigned to oversee the implementation of the National Policy on the Development and Implementation of Regulations in the Minis-try or agency concerned.

FUNCTIONS OF REGULATORY COORDINATORS (RCs) & MODERATORS

IN UPC

Capacity building programmes are conducted for RCs and modera-tors to enhance their capabilities and competencies in carrying out the regulatory process management requirements in order to deliver better policies. The RCs training programme comprise hands-on training on the system set-up, consultation and monitoring.

RCs will set up the system, update details regarding their respective ministries/agencies and creates the consultation page. Guide on how to log in as a UPC registered user, facilitates users to access consultation information relating to proposed regulations, adminis-trative measures and procedures that would impact business, en-courage their views and comments and most important to encour-age participation of public and stakeholders for their views to be heard in shaping public policies. Also monitor alerts from UPC dash-board on comments pending for verification and enquiries pending for response as well as monitor survey feedback and views from consultation and social networks.

RCs will also add/assign moderators from the same Ministry/agency to the system who will be performing most of the basic operational set-up. Training for the moderators include system set-up, provide consultation information, notify stakeholders to participate in con-sultation, set up surveys to solicit comments and feedback for con-sultation documents and monitor forum discussion among users. Moderators too will monitor from the UPC dashboard and check on the statistics and alerts of the regulations assigned.

3 May 2019, Menara PGRM, Kuala Lumpur: Unified Public Consultation (UPC) Hands - on Training for

Coordinators and Moderators for the Malaysian Timber Industry Board (MTIB)



NEWS: LAUNCHING OF THE MITI REPORT 2018 AND PRODUCTIVITY REPORT 2018/2019 25 JUNE 2019 | MITI TOWER, KUALA LUMPUR

YB Datuk Darell Leiking, the Minister of International Trade and Industry, launched the MITI Report 2018 at MITI Tower, together with the

Productivity Report 2018/2019.

With the theme ‘Driving Productivity of the Nation’, the Productivity Report for 2018/2019 will give the readers, who are mostly from the industries, ministries and Government agencies, an in-depth view on the importance of productivity in the nation’s economic growth and quality of life of the Rakyat. Whereas the sub-theme of ‘Digitalisation Leads to Innovation Through Workforce of the Future’ will focus on the role of innovation and human capital in the Industry Revolution 4.0 era.

MESSAGE FROM THE MINISTER - YB DATUK DARELL LEIKING MINISTER OF INTERNATIONAL TRADE AND INDUSTRY (MITI) MALAYSIA 2020 AND BEYOND: ELEVATING PRODUCTIVITY PERFORMANCE

….. “ The Government has invested in various measures that will continue to strengthen structural reforms and accelerate the country’s progress to be on par with global benchmarks. These include investing in the conducive ecosystem infrastructures, improving quality of education and training, enhancing innovation and adoption of technology as well as unlocking the potential of the digital economy as a driver of future growth. I have faith that by embodying a productivity-focused mindset across all sectors, we as a nation are well on track to meeting our targets beyond 2020. We are proactively working to ensure that the public and private sectors collaborate strongly in realising the vision to become a high-income economy”.

CHAIRMAN’S STATEMENT – MR.TIAN CHUA CHAIRMAN OF MALAYSIA PRODUCTIVITY CORPORATION STEPPING STONES TO REACHING PRODUCTIVITY TARGETS

“ ….. MPC has also shown unwavering support for the Government’s agendas in providing efficient business environments conducive to Good Regulatory Practice (GRP), which work to enhance transparency, predictability and accountability. Under GRP, various programmes were carried out such as Modernising Business Licensing (MBL), Regulatory Impact Analysis (RIA), Cutting Red Tape (MyCURE), Reducing Unnecessary Regulatory Burdens (RURB) and Removing Non-Tariff Measures (NTMs) that impede business growth.

In terms of business productivity, MITI and MPC have joined forces to encourage SMEs to reach their fullest potential whilst preparing for the Industry 4.0 revolution. The ultimate aim is to enable the efficient use of data, information and smart technology and machines to build a more productive work environment. MPC has allocated resources to carry out INDUSTRY4WRD readiness assessments in collaboration with other agencies to assist up to 500 SMEs in migrating to Industry 4.0 technologies. As at 2018, 287 SMEs have registered for this assessment through various outreach programmes”.

1 April 2019: Prime Minister’s Department : Driving productivity of the nation through public-private

collaboration. Group photo post meeting and briefing to Chief Secretary to the Government (KSN) Datuk Seri Ismail bin Haji Bakar

on reviving and strengthening PEMUDAH; Special Taskforce to Facilitate Business

2 April, 2019: MPC Petaling Jaya : Visit and briefing by World Bank officials on new indicator of Doing

Business Study; Public Procurement


18 March - 8 April 2019: World Bank Office Kuala Lumpur : Series of Video-Conferencing with World Bank expert on World

Bank indicators

2 May 2019: Prime Minister’s Department : Special PEMUDAH Meeting 1/2019

13 May 2019: Ministry of Women, Family and Community Development :

Courtesy visit to YAB Dato’ Seri Dr. Wan Azizah Wan Ismail, Deputy Prime Minister

on PEMUDAH. Discussion on reducing cost of doing business which will have

impact on cost of living of citizens through good regulatory practice (GRP) and the role of the Special Taskforce to

Facilitate Business (PEMUDAH).

NEWS: PEMUDAH

NEWS: PEMUDAH


27 May 2019: Hilton Petaling Jaya : Workshop on Improving Starting a Business Series 3

18 June 2019: Prime Minister’s Department Putrajaya :

PEMUDAH Special Meeting No. 2/2019 in session. Special Meeting on

Dealing with Construction Permits chaired by YBhg. Datuk Seri Ismail

bin Haji Bakar, Chief Secretary to the Government. This meeting was a

follow -up to Economic Action Council No.3/2019 meeting and

attended by Mayors, Yang Di-Pertuas and Head of Departments of

External Technical Agencies 27 June 2019: Ministry of Finance (MOF), Putrajaya :

Pre-Council Meeting with Stakeholders for World Bank’s new indicator of Doing Business: Government Procurement. The

meeting was chaired by Under-Secretary of Government Procurement Department of MOF, YBhg. Datin Nik Roslini Raja

Ismail


NEWS: DCP

11 June 2019: Prime Minister's Department, Putrajaya Economic Action Council Meeting (EAC) chaired by YAB Prime

Minister, Tun Dr. Mahathir Bin Mohamad & Technical Working Group (TWG) DCP updating initiatives in Dealing

with Construction Permits.

Dato Abdul Latif Hj Abu Seman with Ar.Basheer Maideen briefing YAB Prime Minister Tun Dr. Mahathir bin Mohamad on regulatory issues

on ease of doing business with particular focus on dealing with construction permits.

13 June 2019: ICU, Prime Minister’s Office, Putrajaya

Meeting to discuss on strategies to reduce time taken for

construction permit approval chaired by YBhg. Datuk Seri Dr Ismail

bin Hj. Bakar, Chief Secretary to the Government

14 June 2019: Sabah State Development Office :

DCP Meeting with YBhg. Dato’ Hj Ruji bin Hj Ubi, State Development Officer

24 June 2019: MBSA Mayor Office, Shah Alam :

State DCP Champion Meeting chaired by YBhg.Dato’ Haji Haris bin Kasim, Mayor of Shah Alam City Council

25 June 2019: MPC,Petaling Jaya : Meeting to Discuss on Enhancing Efficiency in DCP chaired by En

Zahid Ismail (Director of MPC)

27-28 June 2019 , Hotel Promenade Kota

Kinabalu :

Workshop on Improvement of DCP

Approval Process chaired by YBhg. Datuk (Datu)

Rosmadi Sulai – Director of Public Services, Sabah


NEWS: NTMs

2-4 April 2019: Pulse Grande Hotel, Putrajaya Workshop on Data Collection & Verification of NTMs- Ministry of Finance (MOF) and Ministry of Communications and Multimedia

(KKMM)

19-20 April 2019: Hotel Pulse Grande, Putrajaya Workshop to Review and Amend Legislations for 4 Ministries

(Ministry of Works (KKR), Ministry of Agriculture and Agro-based Industry (MOA), Ministry of Water, Land and Natural Resources

(KATS) and Ministry of Human Resources (MOHR)

22-24 April, 2019 : Hotel Pullman, Kuala Lumpur Workshop on Data Collection & Verification of NTMs- Ministry of

Foreign Affairs (MOFA)

29 April- 1 May 2019: Thistle Port Dickson Resort, Negeri Sembilan Workshop on Data Collection & Verification of NTMs- Ministry of

International Trade & Industry (MITI)

29-30 April 2019: Thistle Port Dickson Resort, Negeri Sembilan Second Workshop on Data Collection of NTMs – Ministry of Tourism,

Arts and Culture Malaysia (MOTAC)

2-3 May 2019: Hotel Pulse Grande Putrajaya Third Workshop on Data Collection & Verification of NTMs- Ministry

of Domestic Trade and Consumer Affairs (KPDNHEP)

24 May 2019: Fellowship Room, MPC Petaling Jaya Meeting with Mr. Roberto Benetello and Mr. Shaun Adam from European Union Malaysia Chamber of Commerce and Industry

(EUMCCI) on NTMs

31 May 2019: Bilik Johor/Kedah, PWTC, Kuala Lumpur Validation Session with Agencies on the Proposal to update Fourth Schedule

of CIDB Act 520. Discussions focused on NTM Secretariat’s proposal to re-view on the possibility of removing some of the materials/products in the

Fourth Schedule for those considered intervention may not be necessary by CIDB.

Documents

ISSUE : 02/2019 - MPC … · emerging technologies especially RegTech to enable a more efficient and effective ... drivers of adoption of RegTech by regulators are the desire for