Regulation should have consumer protection at its centre

Posted on Friday, 7 June 2019

According to the OECD, how accountability is translated into practice can be closely related to the independence of the regulator and its functions and powers. Regulation in Ireland has been lacking for decades, primarily because of this lack of independence, where ‘regulators’ were used as an instrument of the State to effect Government policies at the time, rather than to regulate their respective sectors and ensure accountability from participant entities. The area most associated with ‘light touch’ regulatory policy in Ireland is the financial sector, with thousands of families continuing to feel the effects of the economic crash, but this issue is not confined to that sector alone. Lack of robust regulation of the planning processes have left Ireland with urban sprawl across towns and cities, and inaccessible one-off properties in remote areas, widening the ‘urban/rural’ divide by making essential services (many discussed earlier in this chapter) inaccessible and ineffective. 

A lack of vision and direction in the areas of energy, communications and healthcare has created a position whereby regulation is used to protect competitiveness in an increasingly privatised marketplace, rather than as a method of consumer protection. The Register of Lobbying was introduced in 2015 to increase transparency and accountability, making information available to the public on the identity of those lobbying designated public officials and the nature of those lobbying activities. In 2017, 9,828 returns were received by the Commission in Regulating Lobbying, an increase of 18 per cent on the previous year. While this increased transparency is to be welcomed the question of what, if any, effect it is having on effecting a cultural shift from vested to public interest remains. Greater attention must be drawn to the information available on the Lobbying Register. Social Justice Ireland calls for the inclusion in the Commission’s Annual Reports of policy areas with the greatest lobbying activity, the lobbying organisations and the designated public officials engaged so as to highlight to the general public those influencing the political decision-making process.

Creating Regulatory Policy

Reactionary regulation, introduced after a crisis, can also serve to further exclude those who it should serve to protect, by placing barriers to goods and services in the way of those without the resources to engage with increasing bureaucracy. Social Justice Ireland believes that regulation has a place in protecting the rights of the vulnerable by addressing the balance of power when engaging with corporations and political structures, but not be so involved as to create a barrier rather than a safety net.

The OECD recommends that the governance of regulators follow seven principles to ensure the implementation of proper policy: 

  • Role Clarity
  • Preventing Undue Influence and Maintaining Trust
  • Decision Making and Governing Body Structure
  • Accountability and Transparency
  • Engagement
  • Funding
  • Performance Evaluation

These principles work together as a continuum with clarity from the start and performance evaluation informing governance policy, thereby creating greater levels of clarity as learning from the evaluation is utilised. If these principles were ingrained in the process for development of regulation and governance of regulators, consumer protection and independence would naturally follow from regulation developed in line with these central tenets.

Social Justice Ireland believes that regulation should have consumer protection at its centre rather than the aim of increasing market participation. Before engaging in any new regulatory processes, the Government should ensure that the rights of its citizens are protected, including the right to a reasonable standard of living with access to basic services at a reasonable cost.