ANZSOG/ National Regulators Community of Practice: Windows of opportunity in a crisis

an opened window
  • Published Date: 02 September 2020

COVID-19 has stretched governments and regulators but provided a rare chance to test ‘bottom drawer’ ideas in the real world.

The ANZSOG/National Regulators Community of Practice’s (NRCoP’s) first ‘facilitated conversation’ brought together a group of senior regulators from a range of sectors and jurisdictions on 25 August to discuss the challenges of the pandemic, as well as what regulators can learn from innovative approaches in volatile and unprecedented times.

The conversations are a new initiative for the NRCoP and respond to long-standing requests by NRCoP participants for the opportunity for deeper engagement with their regulatory peers on common challenges and innovations.

The first facilitated conversation focused on Windows of opportunity in a crisis and discussed the platform which regulating in a time of pandemic has provided for testing out ‘bottom drawer’ ideas, for accelerating regulators’ transition to more digital and contemporary forms of regulation, and for ceasing areas of work which have proven be low value or redundant.

Three key issues were canvassed in small groups:

  • adopting new methods of working remotely
  • prioritising resources, including re-assessing regulatory risks and refocusing compliance efforts
  • determining and ceasing low value work.

Notwithstanding the spread of regulatory sectors and the diverse circumstances facing duty holders, there was a surprising degree of commonality between the responses from participants. They needed to:

  • Rapidly gather information and intelligence to understand the implications of COVID-19 on their regulated sector, how the sector was responding and the consequences of that response for stakeholders
  • Recognise immediately that ‘business as usual’ could not continue
  • Transform their understanding of the speed at which work needs to be done, and become much more agile and focused on real-time assessment of risk and circumstances (whether or not all staff in the organisation were comfortable with this change)
  • Find new ways to get the information (data and intelligence) needed to facilitate this transformation
  • Re-assess, and in some cases transform, their relationship with their duty holders, with a noticeable shift from prescription to outcomes-based regulation as the dominant mode
  • Cease or de-emphasise routine compliance activity in favour of COVID-19 emergency responses
  • Quickly make decisions on medium to long term strategic projects. For some participants, these went onto the back burner, potentially permanently, as luxuries in a crisis; for others, the opposite was true, with projects being fast-tracked because of their immediate relevance.

The conversation format allowed participants to go into greater depth about how to do things differently. In particular, the conversation highlighted three kinds of change: new opportunities; activities that have had to be put on the backburner; and areas where things are neither better nor worse – just different.

1. New opportunities

Rapid, real time data acquisition: The rapidly unfolding consequences of the pandemic have compelled or accelerated significant change to the kinds of data regulators collect and to their collection tools, particularly digitalisation: 

  • Regulators have needed to ensure access to existing, new and emerging data to inform compliance prioritisation and monitoring; some of which they have never previously had access
  • They have been able to leverage both trust and necessity with their regulated communities to access industry, sector and site level data now and into the future; this will be transformative to some in terms of transparency and comprehensiveness of their access to duty holders’ circumstances
  • Many have been able to identify critical documentation that can be captured electronically 
  • Many have realised the value of real, or near real-time data or other intelligence to inform compliance effort and prioritise regulatory work
  • For duty holders, there have been real benefits in transforming previously paper based documentation sent by post, to digital formats. 

Partnering: The pandemic has provided a platform to expand engagement, transparency and collaboration with co-regulators and regulated sectors:

  • Regulators will look to maintain sharing of data and documentation between duty-holders and businesses to support compliance monitoring into the future
  • This also extends to greater effort to explain the circumstances and rationale behind their compliance activity
  • Relationships with co-regulators to support joint and shared activity have been strengthened
  • There has been a shift to more engagement with duty holders and consequently a shift in regulatory posture, with regulators needing to support duty holders to adapt their activity to maintain compliance and jointly problem solve difficult compliance challenges. For example, a number of regulators have been able to utilise other regulators or partners (both existing and new) to support confirmation of identity where this was no longer possible in a COVID-19 context.

Nuanced engagement with the turmoil facing the regulated sector: For many regulators, their view of their mission as protecting the community has needed to expand to include protection of the viability of their regulated sector in the face of a global pandemic. This has included:

  • Becoming much more expert in the real time threats to the functioning and viability of various parts of the economy
  • Recognising the need to take very seriously duty holders’ concerns about burdensome regulation, when sectors and businesses are fragile and vulnerable to collapse
  • Self-consciousness about how their own regulatory delivery model has shifted and forecasting what will and won’t remain in the ‘new’ normal.

Risk Tolerance: Many regulators have needed to adopt a different and more pragmatic tolerance to risk. This may assist over time in realigning the mismatch between community, political and media expectations that risk will be eliminated, and the reality of regulators’ limited resources:

  • Regulators have needed to accept high levels of uncertainty in assessing compliance remotely
  • Acknowledging reliance on duty-holder documentation in the absence of inspection observations
  • Appreciating that remote inspections may put more of a focus on system documentation and policy than actual implementation
  • Reassessing confidentiality of types of documents to enable remote management and acceptance. 

2. On to the backburner

Delaying routine compliance activity. The massive demands of responding to COVID-19 has meant that virtually all regulators have needed to delay, scale back or cease routine compliance activity:

  • This has led some to identify compliance activity that while important, can be delayed
  • Where face to face interaction with vulnerable individuals is key to delivering an appropriate regulatory outcome, regulators have been sensitive and attentive to ensuring their actions do not add further and unnecessary stress on duty-holders.

3. Not better or worse, just different

Capacity of Teams: All regulators have needed to assess and address the capability of their team members to operate remotely and under changed business conditions:

  • They have needed to continuously evaluate and adapt in response to teams’ capacity to operate remotely, independently and collaboratively (infrastructure, culture, management support)
  • Not everyone is willing and able to assess compliance remotely and/or to work with the speed and agility which has been required during the pandemic
  • Many saw innovative solutions rapidly developed, tested and implemented drawing on a wider group of collaborators, ideas and problem-solving processes.

Participants’ response

As part of the conversation, participants were surveyed to determine their views on the format. ANZSOG and the NRCoP were very pleased with participants’ responses to the evaluation survey, particularly their satisfaction with the format giving them the ability to contribute, and being able to capture insights for the benefit of the broader NRCoP membership. 

The next facilitated conversation will be on Compliance in a Crisis and will take place on 22 September from 11:00-12:30 AEST.