Regulating the Right Way

The US and Indonesian governments held a two-day workshop on good regulatory practice

By Gilang Ardana
Sunday, April 9, 2017

The need for clear and coherent regulations, as well as sound regulatory impact analysis (RIA), was the key highlight of the Workshop on Key Aspects of Good Regulatory Practice (GRP) held by the US Embassy, Jakarta and Indonesia’s Ministry of Trade in collaboration with American National Standards Inc and USAID.

The March 15-16 workshop, invited key regulators from the Indonesian government and local business associations to exchange knowledge on the best practices to make regulations and policies. The workshop sessions comprehensively covered all aspects of GRP, from the transparency of policy-making and coordination among government stakeholders to public consultation and regulatory impact analysis.

Iman Pambagyo, Director General of International Trade Negotiations at the Ministry of Trade said the workshop was a very good avenue for regulators to highlight the need for Indonesia to have coherent policies that also harmonize with international standards.

“We should realize that regulatory coherence is needed to ensure welfare and transparency,” he said. “Reducing the regulatory burden can also be achieved by facilitating harmonization with international standards.”

The US government, represented by Brian McFeeters, the Deputy Chief of Mission of the US Embassy in Jakarta also highlighted the need for GRP, and outlined key areas to be looked at to ensure regulators maximize the benefits of regulation for society.

“The area of importance of GRP includes having consistency of regulation from national to regional level, to make sure those affected have a chance to provide input and to take an impact analysis before releasing regulations,” he said.

The workshop started with presentations from both governments on each country’s system of GRP.  From Indonesia, the discussion was led by representatives of the Ministry of Law and Human Rights (MoLHR), the Ministry of Home Affairs and the Ministry of State Secretariat, while the US was represented by the US Trade Representative and the Office of Information and Regulatory Affairs (OIRA).  Academic and business associations from both countries also joined the workshop, sharing their experiences and views on GRP.

AmCham Indonesia Managing Director, A Lin Neumann, was one of speakers from the private sector, sharing the experience of US companies in Indonesia that sometimes struggle with regulations that are not implementable.

“It is to be noted that US companies are compliance-sensitive, if there is a regulation that is not workable, they won’t go forward or stop their investment because they do not want to be out of compliance,” he said.

In its presentation, the Indonesian government noted that it fully understood the conditions being faced by the industry sector. Prof. Enny Nurbaningsih, a key speaker from the MoLHR, spoke of how the government is currently in the process of launching regulatory reform to address the hyper-regulated environment that Indonesia currently has.

“We are currently in the process of collecting and clustering our regulations,” he said. “Our regulatory reform will include also for the country to have a centralized authority for regulatory harmonization.”

Aaron Szabo, a senior policy adviser from OIRA, led several sessions during the workshop, including on the importance of regulators to have RIAs before releasing the regulation. The RIAs, which Aaron said commonly used cost and benefit analysis, will be an effective tool for the government to be data-driven in policy-making, and also to protect itself in light of external pressures on making policies.

“The RIA basic goal is to maximize net benefits to society – or at least ensure that the benefits justify the costs,” he said. “It also promotes economic efficiency by regulating only where markets fail, and when regulating, by using cost-effective and market-based approaches”

During the workshop, Aaron led the RIA practice session for the participants, using a case study of cigarette packaging labeling.

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