Stewards – Part 2

Elizabeth Thomas, The Treasury, Simon Mapp, Compliance and Enforcement Special Interest Group, Fiona Hutchinson, Ministry of Business, Innovation and Employment, Grant Pink, University of Tasmania

Ian Caplin: Kia ora and welcome to the programme. You’re watching G-Reg, the Government Regulatory Practice Initiative.

My name is Ian Caplin, and if you’ve joined us for the first time, this is episode six of 10 webinars, which, taken together over the months of October and November form the 2020 G-Reg conference, our sixth Annual Conference, but the first time that we’ve done it this way.

G-Reg is the world’s first and indeed only cross government professional user network for those who exercise the powers of the state, the business of government, whether it’s coercive, facilitative, or as I always say, and I make no apology for it, anything else-ive, right from education through to enforcement.

It’s based here in New Zealand, but our audience today is worldwide, both live and recorded. I’m recording this now at 11 o’clock in the morning, New Zealand Daylight Time, which is morning tea. I do hope, members of the audience, that this webinar and the series is very much your cup of tea. Wherever and whenever you are, you’re very welcome here.

You are quite okay if you start watching this series at episode six because you can come on and off at any time, because all 10 webinars are separate yet interconnected and can be viewed in any order.

The conference theme overall is that of the modern regulator and within that, this episode and the previous one have focused together on regulatory stewardship, the idea that, rather like perhaps this series of webinars, government is interconnected, and the idea that agencies looking at government whole, work better together.

The idea also of maintaining a regulatory estate and really looking at the soft infrastructure that regulation is. It’s very much part of the case of this conference that regulatory stewardship is not a nice to have, but an essential to have, and I did allude last week to the Beatles, that regulatory stewardship is very much – ‘I get by with a little help from my friends’ – in order to avoid being in the civilian division as an agency of Sergeant Pepper’s Lonely Hearts Club Band.

But I go further than that and I think our panellists might as well. We’ll hear from them in a minute. I think I channel my inner Barry Manilow. It’s not just a nice to have with a little help from your friends. It’s part of the case of this conference that without regulatory stewardship, as Barry Manilow said, obviously commenting implicitly on the nature of regulatory stewardship – I can’t smile without you.

We’ll be asking our panel whether it’s the Beatles or Barry Manilow. We’ve got some super qualified people to help us with that inquiry to talk about what regulatory stewardship means to them and what it means to be a good regulatory steward. I’m joined by Elizabeth Thomas from the Treasury, by Simon Mapp from the Compliance Enforcement Special Interest Group.

Fiona Hutchinson joins us from the Ministry of Business, Innovation and Employment and last but not least, Professor Grant Pink from the University of Tasmania. They’ll each give a little bit of a presentation to start with and then, members of the audience as it always is, it’s over to you.

Don’t be shy. I know telepathically that you’re not. There’s a Q and A function at the bottom of the screen and even while our panellists are on foot, as it were, please do pop down any questions or comments and as soon as they’ve finished, we’ll go straight to you.

So I’m very, very pleased to welcome our panellists. I’m very pleased to introduce first of all Elizabeth Thomas from the Treasury who will tell you a bit more about herself and the Treasury thinking of the general kind of position on regulatory stewardship. Uniquely placed, as Elizabeth is, in the Treasury, by virtue of its office, seeing the world very much whole. Elizabeth, a very warm welcome and over to you.

Elizabeth Thomas: Kia ora and thank you, Ian. I’m just going to share my screen with you. So I’m going to talk about what regulatory stewardship looks like from the perspective of the Treasury, which is the whole of government perspective.

Now, the Treasury developed the concept of regulatory stewardship. Sorry, I’m just having a little problem there with my slide. Sorry. The Treasury developed the concept of regulatory stewardship and has the role of promoting and supporting regulatory stewardship across government.

And I’m going to look at the definition of regulatory stewardship to talk about what regulatory stewardship means for me. So for me, being a great regulatory stewardship means starting to think differently about our role in the public service.

Because it’s about getting a whole of system view. So it’s about going beyond our particular roles or teams or agencies to think about the regulatory system or systems that we work in. That might be, for instance, food safety or financial markets regulation.

And we need to think about what is that system intended to achieve and who else within our agency, but perhaps more importantly, who else outside our agency is involved in the system.

And they’ll often be a range of government departments, Crown entities, local regional government and third party regulators. We need to think about how do all these parties relate to each other in the system and how do we know what the system looks like from their perspective.

And not forgetting also the regulated parties and the key stakeholders. What do we know about their views. And because there’s more than one agency in any one system, our behaviour has to be collaborative.

This means that the agencies in any given system are coming together to discuss and agree, how they’ll jointly steward the system, and especially what information we need to collect and share with each other and how we’re going to work both together and in our individual areas of responsibility to keep the system delivering for New Zealanders.

And crucially also, it’s about being proactive. It’s not waiting for this to be a ministerial priority but recognising that we have a duty of care for what already exists.

And we have a duty to make sure the system is working in the way it should be, and can be adjusted to keep it fit for purpose. Why did the Treasury introduce regulatory stewardship? There’s a very practical reason, and that was to get more attention to the actual impacts that regulation is having on the ground.

And with that, to open up the opportunity for more feedback from the front line and, of course, from the stakeholders and regulated parties,
so that we can improve the ways that regulation is designed and delivered. It’s about moving away from the set and forget mentality.

So that hopefully regulatory failures will become less likely – if they do happen, they’ll be less severe and also crucially, to address ongoing regulatory underperformance, which can be a real drag on our economy and our well-being.

Now, what’s the Treasury doing to help. As I mentioned, we promote and support the growth of regulatory stewardship practice, and since 2016 we’ve been doing that through working with major regulatory agencies with the help of some reporting requirements.

And because of regulatory stewardship is new as the first place in the world that’s developed it, and there’s no playbook to work from, we’ve developed a very deliberately deliberate strategy of providing for flexibility within frameworks and that means that we set out some parameters and within those, departments are free to develop their approaches and the tools and systems they’ll use to address those most desired outcomes.

And we’ve done this very deliberately also to allow for the growth of innovation and to minimize the sense that this is a compliance exercise. And what’s been achieved? Well the people that we work with have embraced this enthusiastically. The departments have developed tools and practices, in particular, in relation to system assessments, and increasingly they’re also developing operating models which are looking to build regulatory stewardship into ongoing practice and to make sure that results of system assessments are getting used.

And increasingly, also, the agencies are going outside of their organizations to ask others what it looks like from their perspective. What do these systems look like from the view of others?

And there’s also a growing community of experts who are very willing to share their expertise and to help others who are newer to this. And there’s still a long way to go. We started from a low base, we’re not used to doing this kind of system assessment and ongoing care and agencies have mostly found they didn’t have much in the way of good quality information.

And despite all the improvements and the progress made within agencies, we’re still, in most instances, quite a long way away from a situation where we have all the main agencies in each regulatory system actively collaborating together in ongoing system governance, planning, management and maintenance.

10mins

For me, it’s very apposite that the topic of the seminar is how we can help each other to be good regulatory stewards. For me it’s about embracing the idea of shared stewardship in any given system and moving beyond our particular silos, to think about how we engage with, learn from, and share stewardship with others.

Most systems have more than one agency involved so no one agency is
the steward. Several agencies will be stewards together. Regulatory stewardship is a shared responsibility. Over to you Ian.

Ian Caplin: Thanks, Elizabeth, a lovely intro there and very much a collection of things that we can all I think take away and reflect on. Members of the audience don’t be shy in popping any observations or questions and answers, even at this stage, down.

We’ll go straight to Simon Mapp, who will talk about how very much the networks on the ground, as Elizabeth pointed to, are being formed in the area in which he deals. Simon over to you.

Simon Mapp: Thank you Ian, I’ll share my screen now… so, look, for the past six years I’ve been the convener of the Compliance Enforcement Special Interest Group or CESIG as we’re known. I’ve now kind of stepped down from that and I’ve left it in the capable hands of Alex Miller.

I think it’s a good idea to provide some context of what CESIG actually is. It combines the expertise of 16 different regional and unitary councils from around New Zealand. Every council has its own set of plan rules and although we all subscribe to the Resource Management Act, there are differing locations, differing plans, rules and different industries that we complete our CME around.

So I’m here to talk about the CESIG development of the national CME improvement project. A cornerstone of our work is the strategic compliance framework and hopefully you’re seeing that on your screen at the moment, or the cover to it, at least, and the objectives were to look at a framework that is a foundation document.

It establishes clear and concise direction for all 16 councils, it has helped sharpen our focus and it covered risk base and best practice, sorry, risk based monitoring and best practice enforcement guidelines for all, so that it provides confidence and for our stakeholders and a guideline to compliance monitoring enforcement, no matter which Council you work for, or where you’re stationed in New Zealand.

So the four major components to this framework; they are monitoring, encouraging compliance, dealing with non-compliance, and review and report of compliance work. So, when we were building the strategic compliance framework, one of the things that we really wanted to make sure was that we built a framework that you can hang regional policies off of. So you could develop your own policy, and I believe all regional councils and unitary councils now have their own policy that basically gives effect to the compliance framework that we have.

We wanted to ensure that there was a transition between the theory and the practical. So what we did was we actually conducted 16 different peer reviews of the unitary and regional framework. Sorry, regional councils.

Every council reviewed was reviewed by their peers. They had two compliance managers from CESIG come along and ensure that the principles in the strategic compliance framework were being practiced as their business as usual.

We ensure that we collectively got together and developed a framework before we started the peer review and we had a review model in play. I suppose it’s really good to mention at this particular time, we expected to come across some issues which we certainly did in some occasions.

But what was a real delightful surprise to us was we were able to see the insights of other councils, and what innovations they had done on their particular industries. We were able then to present that to everybody and maybe pick up some really good ideas and take them back to our own home councils.

As I said before, in the strategic compliance framework we looked at a review. So what we did do is we sat down and we looked at a metrics framework so that for the first time ever we had a metrics framework that would report with context on all of the compliance work throughout New Zealand.

Obviously, in compliance monitoring and enforcement, on occasion you’ve got to use your discretion and something that can be seemingly pretty similar can result in two different outcomes, and that’s due to the discretion, the history, etc. that you look at.

So what we felt was the only way to actually report back on this was transparency and that’s what was a big driver behind the metrics framework and we are on to our third edition. Now the first two were completed and commented on by an independent party being a read all of the catalysts group.

So now we look at what’s next for us. Currently central government have introduced fresh water policies and national environment standards that are asking councils to do a lot more than they’ve done previously.

The regulation needs to be met and our communities are pretty divided on it. There are some that feel that the requirements are too draconian and others feel that they’re not going far enough and as councils, we’ve got to moderate that and make sure that we give effect to both the NPS and the NESes coming through.

This on top of a Covid hit economy and our local rate space, where there isn’t really that much of an appetite to increase, although a lot of councils are finding that there is no other option. But what we’ve got to do now is we’ve got to look at how we can use innovation to actually give effect to those new laws and requirements.

So for this, this is our next challenge and I suppose, we’ll save that for the next talk because we haven’t actually done that. So I thank you and back to you, Ian.

Ian Caplin: Thank you, Simon, and we look forward to that next talk on the challenge. Lots to take into account that we, of course, talked about – discretion, a couple of episodes ago, in terms of really looking at regulatory compassion, but also I think looking at consistency and stewardship may well involve a look at consistency in terms of how we work across and how those also in the same regulatory system as us may be working across.

Joined now by Fiona, Fiona Hutchinson, who’ll talk about it from the MBIE frame and the regulatory stewardship aspect of her work and also in particular point to the humility that perhaps an organization also needs to look at itself at the same time as looking around it when it’s looking to culture stewardship. Fiona over to you.

Fiona Hutchinson:
Thank you, Ian, for that lovely introduction. So my name is Fiona Hutchinson as Ian said, I’m the director of Regulatory partners, working across the building regulatory system at MBIE.

So we’ve heard a little bit today from Elizabeth about regulatory stewardship from a central agency perspective, we’ve heard from Simon about regulatory stewardship from the perspective of a particular regulatory system protection and regulatory function. And I’m going to talk a little bit about stewardship and practice across, working across, quite a big regulatory system.

So I’m part of the building regulatory system, and it’s most commonly described as complex – if you ever look at anything that’s written about the system, you’ll find that word in one of the two introductory sentences, normally.

So within that system MBIE is the central regulator and it’s the lead policy advisor. Even within MBIE, the functions are spread across 12vdifferent teams and two different groups, so there’s complexity there – the building consent authorities or territorial authorities.

So, the Council, who are the front line of the system and so they are co regulators, as well as being parties that are regulated by MBIE. And there’s also a number of regulated occupations, some of which are administered by MBIE and some of which aren’t.

So we are operating in quite a complex system with lots of different parties, and what is unique about my system; my role is that I work across the building regulatory system to try to drive a system wide view.

So far I’ve been focused largely internally within MBIE, but we are looking at how to try to roll that out to the other parts of the system, picking up on Elizabeth’s point that no system is really contained within one agency.

So with that context, I’m going to talk a little bit about what stewardship looks like in practice …

20 mins

so some of the, I’m going to talk about four different things that we’ve been doing in the building system and hope that you can find them to be interesting.

So the first one is that we are really taking a system wide approach to setting the strategic direction for the building regulatory system. And so we’ve come up with developing a strategy that actually incorporates all of the MBIE parts of the system.

Over time, we do want to roll it out so that it applies across all of the building regulatory systems, including the non MBIE parts. As it’s something that we’re really just getting off the ground now, we wanted to start with the parts that we can control.

It’s really about making sure that all the MBIE parts of the system are pulling in the same direction, and we have already seen benefits from it with the different functions, more easily able to understand how, what they do contribute to the system overall and we’re hoping and expecting to see more benefits from that as that gets rolled out more broadly and as we start to see the different functions aligning with what they do with the strategy.

The second thing I’m going to talk about is system wide governance and leadership. So we’ve had MBIE system wide governance and leadership across the building regulatory system for several years now, and that has really led to benefits in terms of improved coordination and information sharing, there’s been some coordinated decisions made around resourcing etc. for example.

But what we are trying to do is to recognise that we’re actually as a governance and as a leadership group really maturing beyond that and really trying to drive it to the next level.

So we’ve identified focusing on regulatory stewardship and focusing on system risk as being the way that we really want to try to drive a much more active and engaged approach to governance.

Ian touched on this in his opening comments, but one of the other things that we’re doing is really turning the lens on ourselves to look at how we are performing across all of the different domains of regulatory stewardship. This is still a work in progress. But what we’re really trying to do is identify the areas where we are working well.

And also identify the areas where we can do better, and where we can actually make the biggest improvements in our regulatory stewardship practices and that’s really about recognizing regulatory stewardship as a defence against regulatory failure.

We’ve already identified some opportunities to be more evidence driven and also an opportunity to really try to drive more of a regulatory stewardship culture across the whole system, but we are expecting more to come out of that process.

The final area I’m going to touch on is that we really want to improve our management of system risk. This is a key focus area for our governance structure and it’s one we’re actually really going to be looking across the G-Reg network to find out how we can better capture and manage system risk and make sure we’re doing that as well as we possibly can. And with that Ian, I will hand back to you.

Ian Caplin: Fiona, thank you very much indeed. And another really really
good look at how stewardship is a real thing and a practical thing. If you’ve got any questions for Fiona, as with all our panellists, please do start thinking about them, members of the audience and start popping them down.

Last but not least, we go to Professor Grant Pink. Now there’s a very logical reason, as Mr. Spock might say, why Grant is the fourth panellist here. That’s because he triangulates himself in a career across regulatory practice, academia and consultancy without causing himself any physical injury at all- in fact, far from it.

He will be a returning friend to many who will recall him from the 2018 G-Reg conference as an international keynote speaker. So with Grant’s unique perspective, he also sees the world very much whole. Grant over to you.

Grant Pink: Thank you very much Ian and thank you for the introduction. And thank you G-Reg for the opportunity once again, to speak to this audience.

You know, while a diverse audience, it is an audience with interests in an across regulation, regulatory delivery, regulatory practice and regulatory professionalism.

Being the fourth speaker, of course, there’s going to be some overlap in what I say, but I think that’s a good thing, I think that shows the stickability and the consistency between what regulatory stewardship is starting to look like.

I think regularly stewardship enables us to move from problems to solutions or, as was suggested in episode five from prescription to performance. Far too often and far too long, regulators can fall into the trap of admiring and polishing a problem and then treating it like it’s some sort of impenetrable thing of beauty.

So the first thing I would say for those who haven’t started their regulatory stewardship journey is just start. More practical advice in terms of starting, my top three suggestions would be; one, take a system wide approach; 2, embrace and leverage the opportunities that come with it, and 3, Engage in effective collaboration.

On the first point, taking a system wide approach. It was very, very clear in the 2014 New Zealand Productivity Commission Report ‘Regulatory Institutions and Practices’ that it was really important for regulators to move beyond responding to various crises, towards a more strategic and system wide approach to their own development and development of others in terms of regulatory capability and capacity.

That was also reflected in the 2015 government response to that report where the New Zealand Government stated that the system as a whole needs to work more coherently and the reason for that is to secure real improvements in regulatory outcomes and finally, regulatory stewardship assists in developing an agency wide culture within and across those regulatory institutions.

Moving to the second point, the need to embrace and leverage opportunities; in her 2017 article titled ‘Regulatory Stewardship and the Voice of the Regulator’, Stephanie Winson details the core elements of regulatory stewardship and highlights that regulatory stewardship enables
a whole system view and a proactive collaborative approach to the care of the entire regulatory system.

It also has a deep commitment to continuous improvement and it reflects a shift away from crisis management into managed oversight and review. The third point, engage in effective collaboration; simply put, we’re all too busy for collaboration for collaboration’s sake. So the collaboration that we do engage in has to be conscious and considered.

What I would suggest to you is regulatory stewardship like much of your regulatory efforts is shaped around six aspects of who, what, where, when, why, and how, and those same six aspects provide a simple and effective frame for you to consider collaboration, which critically underpins your ability to understand, embrace and leverage regulatory stewardship.

That’s easy to say, but to leverage regulatory stewardship, you first have to understand it. Again, referring back to Stephanie’s article, which outlines what regulatory stewardship is, and perhaps more importantly, what the roles of regulatory staff are within it.

From my personal perspective, I liked the concept and the intent of regulatory stewardship from the first moment I heard of it back in 2016.
That said, I also need to acknowledge that I’ve benefited from hearing presentations, detailed presentations, at least six times, three times in New Zealand, I meant five times, three times in New Zealand, and twice here in Australia. And it’s not that I’m a slow learner, but it does take some time to understand it, especially in an applied sense.

So I think just reflect on that, members of the audience. It’s worth noting, and we might want to discuss this during question time, is that some regulatory agencies and some jurisdictions really struggle with regulatory stewardship as a term or a phrase, until they walk and talk through it and they can actually see how its contextualised for them.

Also, I have read Stephanie’s article at least four times, which I think is important to walk around it from the different perspective of the regulator, the regulated stakeholders and the wider community. At this point, I’ll just share my screen with you to give you my key messages.

So the key takeaways. Regulatory stewardship is everyone’s business. At its heart, regularly stewardship means that all parties involved in the regulatory system need to work together to ensure that the system remains fit for purpose today, tomorrow and into the future.

Regulatory stewardship just makes sense, and it’s a real enabler. It establishes a genuine collaborative participation model at the core of the regulatory cycle and therefore collaboration is more likely to improve the policy design process and ultimately the regulatory delivery management practice.

Regulatory stewardship is a continuous and evolving topic in its own right, so therefore requires ongoing management and cooperation. I also believe regulatory stewardship is part of achieving and advancing a regulatory profession, because if we don’t see ourselves as regulatory professionals, we can’t expect others to see us as part of a regulatory profession.

And being part of profession is being committed to stewardship and improving the system in which you operate. However, there are requirements. I hope you could reflect on the fact that in terms of partnerships and relationships, it’s difficult to have the former without the latter.

So regulatory stewardship, as has been articulated by the other panellists, regulatory stewardship is a long game, so partnerships are numerous and relationships need to be strong, because they will be tested over time.

I also make a point about collective communication. That’s not about scripting each other, but it’s about being consistent. It’s about being consistent in terms of the

30 mins

rationale for, the approach towards, and the intended outcomes of, regulatory stewardship, and also a commitment to collaboration.

And when I say collaboration, I mean collaboration in its most full sense of the meaning and that is to enhance the capacity of other partners for mutual benefit and a common purpose. That’s distinct from networking, coordinating and cooperating, and these terms are sometimes used interchangeably.

So they’re my key takeaways. Ian, I’ve been watching all of your episodes as have many of the members of the audience and I too like Star Wars and the tie-in points you make. So what I would leave you with, to think about Ian, as the moderator, is, I hope this is episode six: Return of the Steward.

Ian Caplin: I do like that Grant. Thank you very, very much. There won’t be any Emperors being thrown off the bridge of the Death Star but they could well be quite an alliance that comes from stewardship of X-wings and indeed Y-wing fighters. Thanks Grant, thanks to all our panellists. We’re straight into questions, just couple of things here.

First question is to Grant and can you please give us a second reference to Stephanie’s article with Stephanie Winson in Policy Quarterly and stewardship. If you Google all those terms you’ll catch that article which is publicly available.

From memory, it’s also available on the G-Reg website and I will procure if it’s not that a link to it or the article itself will be. I’m seeing lots of lovely questions coming here and of course we can democratize this, members of the audience, because you can put thumbs up to support the questions and watch, I can watch them whizzing down the screen and you can watch me trying to chase them which bit of fun for you. But let’s go into this first question, which has narrowly been overtaken, happens in elections sometimes, but I’ll stick with it: is regulatory stewardship a statutory obligation in New Zealand, and we’ll go to Elizabeth for that one.

Elizabeth Thomas: Kia ora. Yes. So in 2013 the State Sector Act was amended to include the duty of stewardship for the legislation that a Department administers as a duty on departmental chief executives.

That was then further elaborated on by the government expectations on regulatory stewardship which were first developed in 2013 and then subsequently updated and expanded in 2017. So Cabinet Direction there around expectations. And then, earlier this year, the Public Service Act was passed, that replaces the State Sector Act.

And that includes a number of principles for the public service, and that includes the principle of stewardship for the legislation and that’s a duty that applies to Departmental Chief Executives and to crown agencies.

I think further elaboration of what stewardship means, what regulatory stewardship means, it’s useful to look at the government expectations for regulatory practice, which are available on the Treasury website.

Ian Caplin: Thank you very much Elizabeth, and do please have a look at those expectations. I think that the answer to that question is a very broad yes as particularised by Elizabeth. Right, the next question.

Lots of support for this one. What are some practical tips for ensuring regulatory stewardship remains a priority? Especially when we’re competing for resources with new incentives and needing to coordinate across multiple agencies with different priorities.

Fiona, I’m going to bring you in on this one because I think you pointed to it, if not explicitly, very implicitly. What are the practical tips that you’ve had from your experience?

Fiona Hutchinson: That’s a great question. And you’ve no doubt that resourcing is a challenge. I think certainly from our experience, it comes down to two things that have really helped to deliver on that. And so the first one is a serious top down commitment from the leadership of MBIE, from the Chief Executive down that this is something that MBIE’s regulatory systems are expected to deliver on and to have as a priority.

So that that top down commitment is really crucial. And the second thing though is, and since it’s something that Grant actually alluded to in his comments, is that regulatory stewardship is not kind of an add-on to something that you do – it is a way to craft your regulatory practice so that it actually works better for you, so you have more coordination, you have better informed regulatory systems, you’re taking better informed actions, you’re able to form your prioritisation with a more holistic view, you’re kind of implementing things that actually make your regulatory system work better on a day to day basis.

And so there are actual improvements that can be delivered through these, through these activities and so it can, it becomes mutually reinforcing in that way.

Ian Caplin: Thank you for that, and thank you for that point Fiona, and it actually plays in quite nicely to the next question, and I’ll bring both Grant and Simon in on this jointly, and they can have a tussle about who deals first.

Such rich input from everyone, thank you, so a very kind question here Is regulatory stewardship, and we had a little bit of this one last week as well, something that’s just exercised by leadership or do individuals have a part to play. Is it just for the board, the management?

Simon Mapp: So I might as well jump in there. I believe it’s one of those things that we’ve got to reflect right the way down to basically the first line officer or the frontline officer. Regulatory stewardship in my view is something that should be contained within BAU. It’s things like innovation, etc.

And making sure that we actually collaboratively work with the people that we check compliance on to ensure that we’re actually being a reasonable and fair regulator.

Ian Caplin: Thank you for that Simon. Grant what do you say to that?

Grant Pink: I think what I would add there is, it was one of the bullet points on my slide, it’s everyone’s business. So I’m in that camp, it’s everyone’s business and I think if we can see regulation as an asset, which is something that regulatory stewardship asks us to do, well, then it’s part of a philosophy and it’s a part of what we should be doing every day. So it’s more of a vocation, and we come into regulation to protect people to protect the economy, to make things safe. Therefore, it’s everyone’s business and it should be the spine of the regulatory agency, its strategic operational and tactical initiatives.

Ian Caplin: Thank you Grant. I think it goes to a general point that we’re all making here and indeed we made this last week as well, our contributors and do please have a look at that when it’s published on the website, which I promise you will be fairly shortly, members of the audience – episode five and its predecessors, we were looking at regulation and regulatory practice very much being a calling, a professional calling. Part of G-Reg’s own case that it is a profession in its own right. To the next question.

What are the formal incentives and disincentives to adopt a regulatory stewardship approach? What are the barriers to adoption? Elizabeth I’ll start you off on this one, if I may.

Elizabeth Thomas: Sure, thank you, that’s a great question. So I think it’s as Fiona mentioned, one of the key things is having the leadership mandate, so MBIE’s one of those organisations where there’s a clear mandate from the leadership, they recognise the value of regulatory stewardship.

And so they’ve made resources available. And I also mentioned in my talk that we’ve only worked with some regulatory agencies, major regulatory agencies, but not all. And part of that was a very deliberate choice that we basically targeted a coalition of the willing.

We knew to get this going there had to be something to, some basis to work with. So we recognise for some agencies such as MBIE and others such as LINZ have also been showing great leadership here.

They recognise the value and so they could start to build the practice. And once you’ve got that going, then it’s a bit of a snowball effect because other agencies can build off that as well. The other thing I would say, is we did institute some reporting requirements, so that does provide a little bit of an extra push, you know, so that, those are instituted following the Government’s response to the Productivity Commission Report which Grant mentioned, part of that response was that major regulatory agencies will be required to report and they come about through a letter from the Minister of Finance.

So there’s a bit of a prompt there. But also, as I said, trying to make it meaningful to agencies, but also acknowledging it is hard. It’s hard because agencies don’t get extra resources for this. Whatever stewardship work is done, is done as a result of reprioritisation within the agencies.

And another thing that’s difficult about it, is it’s asking us to go beyond our agencies and almost everything else about public sector structures is about agencies, and as we mentioned, it’s a journey, and it’s a long journey, but we’ve made a start.

Ian Caplin: And I think it’s worth bearing that in mind. Thanks for that one. Question specifically for Fiona. Fiona mentioned system risk. Fiona, to you: what are some examples from your area and how does stewardship play in to this?

Fiona Hutchinson: Oh geez, that’s going to be a tough one. So we are still very early on and that journey as a part of what we’re looking at is actually how do we define what is the system risk. So I don’t actually have any examples that I can kind of put to the group that would help to flesh that out.

But I would say that in the building regulatory system, there are some very recent, relatively recent examples of regulatory failure. I think almost everyone in New Zealand is familiar with the, the leaky building situation.

And so when we are we talking

40 mins

about system risk, we’re basically trying to work at how can we avoid, what steps can we be taking, to make sure that that doesn’t happen again in the future. What is that early warning system and what do we need to be putting in place to stop something like that happening again?

So we’re really looking at really stepping up our environmental scanning
so that we can try to, to be aware of, of issues when they emerge. But the other piece is working out how we respond as a system when something does get identified, so I don’t have any specific examples that I can share, but avoiding another leaky building type situation would be a good example.

Ian Caplin: Avoiding a leaky building, let’s see if we can do that. Also, I guess I’m channelling what Elizabeth said; it’s very much a marathon, not a sprint. It is a journey. Final question, and I’m going to pitch this in the seconds or handful of minutes we’ve got left to Grant.

How can we ensure the success of regulatory stewardship? How do you measure it, what types of indexes could we even begin to use in this very complex array of systems. How would we begin? Grant, to you.

Grant Pink: Well, what a question with two minutes to go. Thank you very much. I think I’m being performance punished for being the only Australian involved in the panel.

What I was thinking about, Fiona’s comments and yours about journey, Ian. So let me start with that. I think we have to recognise it is a journey. And like any journey, sometimes you are walking in front of your colleagues, sometimes you are walking behind. But what I would say, is you need to be walking alongside as much as you possibly can because that then helps you to learn by doing. So it’s a combination of art and science, as I’m giving myself time to answer this question.

Look, I don’t know that we know exactly what success looks like because it is new and New Zealand needs to be encouraged and recognised for being the first in the world to embrace this, so I think we just approach it in such a way, which is what are we trying to achieve by this regulation, what do the regulatory outcomes look like at the end? How do they affect regulators, regulated entities, stakeholders in the wider community?

So I think the success and what it looks like will become clearer to us as we move through it, but I’m a big fan of the narrative arc, and if you can explain what you’re doing and explain what it’s achieving that’s probably, you know, if it can pass the pub test or the or the, you know the man in the street test you’re well on your way.

Ian Caplin: Thank you for that, Grant. That’s a nice place to leave it, perhaps in the pub, and thank you to all our contributors on the panel today and thank you members of the audience also to you. We’re going to put out a survey which kicks in, I think, shortly towards the end, if not immediately after the end, of this webinar. Just inviting a couple of questions based on light touch Beatles and Barry Manilow themes as to how important stewardship is to you as a result of watching this webinar or indeed generally.

Do please have a look at the G-Reg website for the recordings of the previous episodes, which will come out, and also do please look at the G-Reg website generally for the array of resources that you can find on there about stewardship and about G-Reg generally.

One of the things which we do encourage people to look at, are the Regulatory Compliance Qualifications which are detailed more on the website again. It may well be that as Barry Manilow said, it’s not the Copacabana, and it may well be that it’s more not the Beatles, but the Stones, as I think was alluded to, it is a marathon, not a sprint.

You can’t always get what you want. But if you try sometimes you might always find you’ll get what you need. And with that, see you next week, members of the audience, 11 O’clock New Zealand daily time and that’s it for me. Ka Kite Ano and stay well. Thank you all very much.