REGULATORY IMPACT ASSESSMENT
Regulatory Impact Assessment is a detailed systematic appraisal of the potential impacts of a proposed policy or law in order to assess whether the policy or law is likely to achieve the desired objective and the costs of regulation are justified. It is a process that looks into the effectiveness and efficiency of different options and enables the most effective and efficient option to be systematically chosen. Regulatory Impact Assessment helps to improve the business environment by ensuring that policy and regulatory decisions are based on sound analysis supported by evidence.Specifically, it is an evidence-based process of informing policy decision makers of the likely consequences of their actions as it involves a detailed analysis to ascertain whether different options, including regulatory ones, would have the desired impact.
PRINCIPLES OF REGULATORY IMPACT ASSESSMENT
A good RIA should include relevant information on the proposed policy or, or legislation. It also explains how issues being proposed for regulation could cause specific problems if not addressed. Therefore, a good RIA should:
- clearly outline the objectives of the proposed policy or law;
- provide an in-depth analysis of the problem that is being addressed;
- provide different options being considered and why the preferred option is the best approach;
- provide details of who is affected by the problem and who is likely to be affected by the solution;
- analyse whether the benefits justify the costs and what the likely costs for business and consumers are.
Conducting RIA with respect to a proposed policy or law is important in that it:
- helps assess and bring out all potential impacts (social, economic and environmental), irrespective of whether positive or negative that can result from a proposed policy/ regulatory intervention;
- helps examine the likely impacts on consumers, businesses and government that would arise from a proposed policy/ regulatory intervention, and communicate its findings and recommendations to decision makers;
- helps determine whether the benefits justify the costs;
- ensures that regulations are as effective and efficient as possible;
- requires extensive stakeholder consultation in order to identify possible options and discuss benefits and costs associated with a proposed policy/ regulatory intervention;
- helps consider non-regulatory options;
- helps to assess if a proposed regulation impedes growth of businesses by being burdensome, overly bureaucratic or costly in terms of meeting compliance requirements; and
- helps assess if the regulatory intervention overly adds to costs of a regulatory agency that would enforce it..
RIA should be conducted by public bodies s and regulatory agencies proposing, amending or repealing a policy or regulatory framework.
A RIA must be prepared when introducing, amending and repealing:
- a policy or law (including statutory instruments) that have an impact on the business environment;
- a fee, charge or levy collected pursuant to the issuance of a licence, permit, certificate or authorisation as prescribed by any given law.
The RIA process should start as early as possible when considering to introduce an intervention, amend or repeal a regulatory framework. RIA must be conducted before a new intervention is introduced