No policy maker is an island: The international regulatory co-operation response to the COVID-19 crisis

 COVID-19 and its consequences highlight the need for international co-operation and a co-ordinated approach

The COVID-19 crisis has highlighted the many consequences that globalisation has on our daily lives. The rapid spread of the virus across the world in the course of 3 months,3 has highlighted more than any other event the huge interdependencies of our world economy, and the risks that come with it. While billions of citizens worldwide are in a lockdown, unable to leave their homes and let alone travel, globalisation that has been taken for granted by so many until now is suddenly facing a “short circuit” (Gomart, 2020[1]).

While necessary, domestic solutions will be insufficient on their own to address the global health crisis. All countries are affected by the same reality: needing to face a public health crisis and drastic containment and mitigation measures, with immense consequences on employment, income, wellbeing and more broadly on economic growth (OECD, 2020[2]) (OECD, 2020[3]). Both short and long-term responses urgently require global co-ordinated action, whether to contain the epidemic, develop a vaccine or ensure appropriate healthcare to populations throughout the world. Infectious diseases know no borders, and neither should government responses to face them. Most importantly, even if a country manages to completely contain or even eradicate the disease on its territory, these efforts risk failing if not followed by other countries:

Looking towards the longer-term, once lockdown measures start to be eased, economic recovery will depend on the effectiveness of the policy actions taken to support workers and companies in a post-COVID world (OECD, 2020[3]).

A number of heads of government, political leaders, international organisations and experts have made strong calls for international co-operation to develop policy responses that address both the short and long term challenges raised by this crisis. Some focus on the need of financial co-operation to increase funding towards international institutions, whether to allow for these institutions to better deliver on their mandate, to increase the global production and procurement of medical supplies, to contribute to the rapid development of a vaccine, or to support countries with weaker health systems and especially vulnerable populations, among others (Berglöf, Brown and Farrar, 2020[4]). In late March 2020, G20 Leaders issued an emergency statement on COVID-19, highlighting the intrinsically international nature of the causes of the current crisis and therefore the importance of international solutions to it:

The United Nations General Assembly adopted a resolution on 2 April 2020 on “Global solidarity to fight the coronavirus disease 2019 (COVID-19)”, reaffirming its commitment to international co-operation and multilateralism:

Similarly, Foreign Ministers from 54 jurisdictions issued a joint declaration in favour of global co-operation and solidarity to fight COVID-19:

Calls for an international response have also centred on co-ordination of regulatory and policy actions to tackle the immediate public health emergency, buffer the economic shock and develop a path towards recovery. As highlighted by the OECD Secretary-General:

International co-operation can also help prevent unintended consequences of hasty national regulations. In particular, heads of the UN Food and Agriculture Organization (FAO), the World Health Organization (WHO) and the World Trade Organisation (WTO) called on governments to remain cautious when adopting national measures that these do not disrupt the food chain and lead to food shortages, particularly risky for most vulnerable and food insecure populations:

 What can we expect from international regulatory co-operation?

The calls for action in times of COVID-19 insist on the importance of international co-operation, in particular in the regulatory field. Indeed, solving the health and ensuing economic and social crisis involves regulatory issues at nearly every stage and in most areas. Regulation6 affects the availability of tools and products to identify and fight the disease in all countries (tests, products and devices). Regulation frames the ability of public utilities to maintain critical services, of food and other vital products to be produced and delivered, of essential services to continue functioning – even in a lockdown situation where much of the economy and of both private and public sectors stop functioning normally.

In a globalised context, regulations adopted will have significant effects for all those within a same country, but also well beyond its borders: to be able to trade products, import inputs and contribute to global value chains, companies have to adapt to the regulations of a wide range of countries of origin and destination. Particularly when production chains are fragmented across various countries, as many regulations as there are jurisdictions can apply to one same product (OECD, 2017[9]). Adapting to multiple regulatory requirements can be especially challenging in times of crisis and slow down access to essential foodstuff, medical products and devices among others. One can hardly imagine any situation in which the need for trusted, evidence-based, internationally co-ordinated and well enforced regulation is more obvious than now (OECD, 2020[10]).

International regulatory co-operation is fundamental to ensure countries achieve an adequate regulatory response to this global crisis, and ensure resilience of their regulations for the longer term. Regulations are adopted by each country following their national processes. However, given the global nature of the current crisis, the potential impact of the regulations designed to address it will have a global reach. OECD research over the past decade highlights a variety of benefits from IRC and its contribution to countries in achieving their policy objectives in a globalised context (OECD, 2013[11]), many of which are instrumental in the context of the current crisis.

First, IRC is essential to manage cross-border risks and externalities that regulators will not be able to address from a purely domestic angle. The spread of the virus throughout the world and its escalation from an epidemic to a pandemic7 presents inherently transboundary risks that cannot be prevented by national regulators alone. Indeed, the constant travel, trade and connectivity which characterise our world today are the first factor in causing an increase in global disease outbreaks (WEF, 2019[12]). Regulations designed without considering the impacts beyond their jurisdiction are suboptimal, potentially ineffective if they overlook transboundary regulatory benefits and overly burdensome if they disregard transboundary regulatory costs (OECD, 2013[11]; Esty and Geradin, 2000[13]). In this sense, unless they account for their transboundary impact, regulations aiming to address the pandemic risk being too weak to achieve their primary public health objectives of containing and mitigating the disease, and generating excessive costs, including for businesses in other jurisdictions. More broadly, in the context of COVID-19, a co-ordinated, multisector approach among relevant national and international actors is essential to address the multifaceted challenges that a zoonotic virus (that spreads between animals and people) has to human, animal and environmental health as a whole. This approach is particularly highlighted by the “One-health” concept developed by the FAO, the World Organization for Animal Health (OIE) and the WHO.8

Second, IRC enables work-sharing across governments and public authorities, thus reducing the “learning curve” when facing new policy challenges. As such, the peer learning gained through IRC allows governments to develop regulatory action faster and more effectively, resulting in administrative efficiencies. This is clearly demonstrated for example in the chemicals sector, where the OECD Mutual Acceptance of Data (MAD) system helps governments and industry save more than €309 million per year through reduced chemical testing and the harmonisation of chemical safety tools and policies across jurisdictions (OECD, 2019[14]). The co-operation has brought health and environmental gains from governments being able to evaluate and manage more chemicals than they would if worked independently. The pooling of know-how has helped develop new and more effective methods for assessing chemicals. In this way, not only are government resources saved, but products can also be brought to market faster (OECD, 2013[15]) (OECD, 2019[14]). Similar co-operation can be of great relevance in the health field as countries face a new virus of unprecedented form and scale. Through IRC, regulators can learn from the measures adopted in jurisdictions that were first to experience COVID-19 outbreaks and quickly disseminate best practices.

Finally, IRC can generate economic efficiency gains through reduced costs of production and increase trade and investment flows (OECD, 2013[11]) (OECD, 2017[9]). Governments are responding to the crisis with numerous regulatory measures, some of which may have significant impacts on trade and investment. Regulatory differences among the jurisdictions involved in supply chains generate a number of costs for traders, including of gathering information on various regulatory requirements, of adapting specification of goods and services to comply with these different regulatory requirements and of undertaking various conformity assessment procedures to demonstrate compliance (OECD, 2017[9]). IRC can help governments limit the unnecessary costs through the design of measures that are as coherent as possible with those of their trading partners. This starts with disclosure of and exchange of information about draft measures, to enable collaboration in the very early stages of developing new measures. In the context of COVID-19, the WTO has underscored the importance to “…pool information within a multilateral platform to avoid duplication of efforts and to increase efficient collaboration”, and set up a dedicated website and guidance tools to support its Members in this direction (WTO, 2020[16]). The WTO has also established a dedicated space on its website where all COVID-related notifications - submitted under various WTO Agreements can be found.9

 Initial countries’ policy responses to the pandemic have often not been co-ordinated internationally

Despite the strong calls for co-operation, for the most part the immediate regulatory reactions to COVID-19 have been unilateral (Grimalda, 2020[17]), including at the European level (Russack and Blockmans, 2020[18]) where strong co-operation mechanisms are in place. Many countries have sought national solutions and sometimes isolationism to protect from a threat perceived as largely coming from outside. This partly owes to the fact that countries’ regulatory practices are still very much built around mostly domestic processes, using national evidence and considering impacts at the national level (OECD, 2018[19]) (OECD, 2018[20]) (OECD, 2020[21]). There is also an element of a Prisoner’s dilemma in the current situation (OECD, 2013[11]) where countries seem to have given priority to the short-term emergency solutions that come with unilateral actions (maybe to assuage what they perceive as the concerns of their citizens) instead of choosing more co-operative solutions.

Countries have often resorted to international travel restrictions, known to delay but not prevent pandemics (OECD, 2020[22]). Though the effects of these travel restrictions are still to be seen, initial studies suggest that the unco-ordinated closure of borders in the European Union has been particularly harmful for certain countries who rely strongly on the free movement of labour and goods across Europe, such as the Baltic States, Bulgaria and Romania reliant on remittances of their nationals working in other EU countries. In the same vein, even non-EU Members within the Schengen zone have suffered from unilateral restrictions on EU external borders (Russack and Blockmans, 2020[18]).

Some unilateral approaches have had an especially visible and harmful effect on trade (OECD, 2020[23]). With regards to medical supplies alone, 24 nations have taken steps to ban or limit the export of medical equipment such as masks, medicines, and their ingredients, while certain national measures also restrict imports of medical equipment, thus limiting access to such goods for their own population (Evenett, 2020[24]). Measures such as requisitions, advanced shipment notifications, stockpiling requirements, confiscations, or export restrictions on specific products only adopted unilaterally by certain countries have created significant costs for businesses, seriously affecting the trade in medical and protective equipment and medicines - from raw materials to finished pharmaceutical forms. In April 2020, representatives of the health industry expressed their concern about such measures, and alerted the EU Trade Ministers of the harms that such measures could have, in particular to:

The effectiveness of the different policies implemented by countries to contain and mitigate the virus at varying degrees of strength can only be assessed in the longer run. However, most countries have lagged behind in their responses and mostly missed the opportunity to prepare and learn from other countries’ experience although information about the outbreak was available globally from its early stages.11 Yet domestic solutions are insufficient to address a transnational health problem. Against this background the following sections highlight the areas where international regulatory co-operation has or could help achieve a better and more effective response to address the pandemic and protect the health and safety of people, maintain trade in essential products and foodstuff, and prepare for economic and social recovery.

 IRC promotes work sharing, mutual learning and pooling of resources between governments

Dialogue between regulators and exchange of information is the bedrock of IRC. Facing the COVID-19 crisis, countries have promoted and accelerated exchange of data and information on different fronts. Typically, regulators can agree with their peers (bilaterally or internationally) by gathering in conferences, fora, or other settings to exchange information and experiences on regulatory issues, and help each other in the development of measures at home (OECD, 2013[11]).

Exchange of scientific information and a common understanding of the virus is critical in supporting regulatory co-operation in key areas. The spread of COVID-19 has triggered unprecedented scientific collaboration among a host of state and non-state actors, including experts and researchers from different scientific communities, regulators, and policy-makers. These actors organise around platforms and networks, some of which hosted or promoted by government together with international organisations. Several of these arrangements are supported by the World Health Organisation (WHO), the leading intergovernmental organisation in the field of health (OECD/WHO, 2016[25]). Many exchanges also take place in other organisations (see last section of this paper), and co-ordination between IOs in this regard can help further foster scientific progress. For example, WHO works jointly with the World Organisation for Animal Health (OIE), the Food and Agriculture Organization of the United Nations (FAO) to identify the zoonotic source of the virus and the route of introduction to the human population (WHO, 2020[26]). Box 1 provides examples of non-state actor’s involvement in the COVID-19 response and Section 3 provides a more detailed description of initiatives by international organisations.

Exchange of scientific information can anticipate and build the ground for subsequent regulatory co-operation to enable the development and wide availability of COVID-19 diagnostic kits, therapeutics and vaccines (OECD, 2020[27]) (Patel and Salisbury, 2020[28]). The review and approval of diagnostic kits, treatments and vaccines take place at a national level. Despite the premises of a common international framework for pharmaceutical and medical device regulations as provided by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH)12 and the International Medical Device Forum (IMDRF),13 the system is far from a united regulatory framework as highlighted by a number of observers14. Unco-ordinated regulatory approaches across countries slow down and hamper the development and availability of drug products due to fragmented, contradictory and/or duplicative requirements. Scientific efforts to develop treatments, tests and vaccines should be paralleled with co-operation across regulators to ensure that these products are widely available – particularly for vaccines as the consequences of partial coverage would have a global reach. Co-ordination can include agreements to use standardised protocols, fast-track procedures to clear treatments, tests and vaccines; and expedite regulatory approval pathways for new diagnostic and immunity tests. The EU Guidelines on COVID-19 in vitro diagnostic tests are a good example of this approach (European Commission, 2020[29]).

Action on this front is already taking place, a group of global health actors15 launched the Access to COVID-19 Tools (ACT) Accelerator, a global collaboration to speed-up and harmonise processes to ensure the development, production and equitable access to new diagnostics, therapeutics and vaccines for the virus (WHO, 2020[30]). Similarly, the European Medicines Agency (EMA) has established a COVID-19 EMA pandemic Task Force (COVID-ETF) to promote quick and co-ordinated regulatory action on relevant medicinal products, including on protocols and development plans for COVID-19 medicinal products, including vaccines and therapeutics (EMA, 2020[31]). Regulatory co-operation to make a new vaccine available can also involve further transparency and sharing of information on intellectual property rights in order to foster innovation and enable equal access to the vaccine (Stiglitz, Jayadev and Prabhala, 2020[32]).

Scientific consensus is also needed to forge trust across countries around the design of effective intervention packages to control the epidemic and phase-out social-distancing and/or lockdown measures. For example, the Joint European Roadmap towards lifting COVID-19 containment measures recognises that co-ordinated action between the Member States should be based on science and includes actions to gather harmonised data and align testing methodologies to better manage the lifting of measures (European Commission, 2020[33]). Reaching this consensus and using scientific evidence to develop measures requires countries to trust each other’s data and information, and more broadly their regulatory frameworks and institutional capacities. International co-ordination and standardisation of methods can support the comparability of serological testing results, an important pre condition to monitor the virus transmission and help design targeted remedial policies (Bryant et al., 2020[34]).

When regulators pool together their experience and expertise, they reduce the risk of regulatory failure and promote good regulation. As countries face outbreaks weeks or months apart, there is a window of opportunity for governments to disseminate and exchange information on their containment and mitigation measures to curb the spread of the virus. Shared information can include analysis of the effectiveness of containment and mitigation measures, the main challenges faced around their implementation and enforcement, compliance data, and communications strategies, to name a few. Once the virus transmission is brought under control and countries gradually resume activities, exchange of information on strategies and experiences on how to relax containment measures and regulate the re-opening of business and activities can help understand and disseminate successful and less successful practices and lessons learned to countries that follow in the restart of their activities or in potential second-wave outbreaks of COVID-19.

Sharing of experiences can prove especially useful to adopt and review emergency regulations. Many governments have passed special regulations in reaction to the crisis following normal rulemaking processes or through fast-track procedures enabled by emergency laws. A number of these regulatory efforts lift, adjust or simplify existing rules and technical regulations dealing with medical products and disinfectants.16 Some of these measures are temporary in nature and include sunset clauses or review windows to ensure that they remain in effect only for the duration of the emergency. For instance, half of the COVID-19 related TBT and SPS measures notified to the WTO are reported as temporary (WTO, 2020[35]). The sharing of experience on the temporality of these emergency measures can in itself be a helpful step for other governments putting in place temporary emergency measures. In addition, once the early stage of the crisis is over, or its impacts are below a critical threshold, carrying out ex-post reviews and sharing their results across jurisdictions could usefully inform national policy makers and the international community of the effectiveness of these emergency measures for future crisis. Dissemination can be facilitated by centralising information on COVID-19 related measures. Some of these have been notified to the WTO in line with the transparency provisions of the TBT and SPS Agreements (WTO, 2020[35]). In addition, several governments and regulators list all their COVID-19 related measures in online platforms, enabling easy access to other regulators to learn from these (Box 2).

Pooling of expertise and intelligence sharing can also help countries as they adapt their usual regulatory activities to unprecedented conditions. Governments have reorganised rulemaking and regulatory delivery across policy areas. They have modified compliance requirements to allow business adjust and/or prioritise crisis-related activities; adapted a number of administrative procedures as well as inspections activities to account for new health and safety measures; and rolled out communication strategies to guide consumers and industry in understanding and complying with regulation in a crisis situation. Regulators responsible for essential services such as telecommunications, energy, water and transport, have rapidly implemented measures to adapt their operations to secure provision of services, protect customers and bolster the efficient use of resources and competition. The importance of co-ordinated action and information sharing has been highlighted, as a variety of public bodies are required to act jointly to uphold the functioning of markets. Exchange of information on these measures is key and is already taking place, mainly through existing sectoral or regional networks of regulators – this is the case, for example, of current discussions in the OECD Network of Economic Regulators highlighting the adaptation of their regulatory processes to these exceptional times in order to uphold the delivery of key public services (OECD, 2020[10]).

Regulatory co-operation can help consolidate resources and co-ordinate regulatory delivery across borders. The health emergency challenges the normal vigilance of compliance with regulations, typically based on paperwork and physical inspections or controls of goods or facilities. Regulators may collaborate across jurisdictions through common enforcement and inspection strategies as they adapt administrative requirements to ensure additional health and safety measures for public officials. For example, the EU exceptionally authorised official controls related to food and feed law, animal health and welfare, and plant health and plant protection, to be performed by any person specifically authorised by the competent authority and conducted by electronic copy of the original of official certificates or attestations, instead of the physical original documents usually required (European Commission, 2020[36]). Co-ordination of regulatory delivery can further extend to sharing on inspections plans, and ultimately co-ordination of inspection procedures, in order to avoid unnecessary duplications and save time for companies. The EU, EMA and the national competent health authorities agrefed on measures to mitigate the impact of disruptions on inspections of manufacturing facilities or other sites relevant for medicinal products for human use. The measures include, for instance, granting certain authorisations without a pre-approval inspection (EU, 2020[37]).

Regulators can act together to face new enforcement challenges created by the COVID-19 outbreak. Markets have seen a surge of fraudulent products that claim to prevent, treat, mitigate, diagnose or cure COVID-19. To protect consumers and patients, regulators have taken measures to monitor and halt these products. By 14 May 2020, the United States Food and Drug Administrator (FDA) had issued 49 warning letters to firms for commercialising such products.17 On 6 April, the European Agency for Law Enforcement Cooperation (EUROPOL) supported an investigation that resulted in the arrest of criminals purporting to sell masks to EU Member States’ governments and helped foil another attempt to swindle millions of Euros out of authorities for medical supplies.18 For instance, exchange of information through joint rapid alert systems and a common approach to the monitoring of these products and their recall, could facilitate the response by regulators. International organisations play an important role in orchestrating the exchange of information – see Section 3 for a description of their role.

 IRC supports availability of essential goods

One of the immediate issues arising from the COVID-19 crisis has been ensuring populations worldwide access to essential goods despite travel restrictions and highly affected production capacity. These include food items and disinfectant as well as critical medical equipment and medicines needed to fight the virus, or “COVID-19 products”. Many of these goods are produced across a number of countries. Depending on their complexity, they may be the result of long value chains building on inputs and assembled in different countries; or they may also be components of a broader package of products from different countries, as illustrated by diagnostic tests, which require complementary equipment such as swabs and reactive. As a result, their availability relies heavily on trade as no single country efficiently produces all goods it needs (OECD, 2020[23]). Given the current reality of fragmentation of production throughout the globe, the free flow of trade in goods is crucial to ensure the supply of essential products and to send a signal of confidence for the global economy (OECD, 2020[38]).

To prevent shortages on medical or other essential products, some countries have imposed temporary export restrictions or prohibitions, a strong form of regulatory action, at the risk of cutting-off countries reliant on imports from accessing these goods and triggering a supply shock (WTO, 2020[39]). As of late April 2020, some 80 countries and separate customs territories had introduced export prohibitions or restrictions as a result of the COVID-19 pandemic (WTO, 2020[39]). In the short run, such restrictions and prohibitions may help increase domestic availability and reduce domestic prices, and therefore prove useful to fight the virus at the national level. However, albeit temporary, these export restrictions and requisitioning of domestic production of essential medical supplies may have unintended consequences at the international level, reducing access to critical supplies, increasing average prices, augmenting market volatility, and distort investment decisions, with adverse effects both in the short and in the long run (Fiorini, Hoekman and Yildirim, 2020[40]). The effects of numerous export restrictions will have particularly negative consequences for developing countries who lack domestic manufacturing facilities that their governments could instruct to suddenly scale up production (Bown, 2020[41]). Transparency and international co-operation is therefore essential among countries to strike a balance between the shortages in essential medical products in some exporting countries and the negative impact that such measures may have on public health of other importing countries (WTO, 2020[39]). Transparency and co-ordination on policy approaches can allow to maintain international trade in essential goods from countries where they are abundant, to those where they are lacking, all the more that the disease peaks at different times in different locations (WTO, 2020[39])

Without going to the extreme of export restrictions, unnecessary burdensome or divergent “behind the border” regulations may significantly slow down, limit or completely halt international trade of essential goods. Indeed, in most countries essential COVID-19 products tend to be heavily regulated and subject to strict certification and licence requirements to guarantee their quality. The accumulation of divergent regulatory requirements across jurisdictions may create important frictions and even barriers to their trade across countries.

IRC can enable the availability of key COVID-19 supplies by limiting export restrictions and unnecessary regulatory frictions. Co-ordinated policy responses between countries can limit incentives for export restrictions (Pauwelyn, 2020[42]). For example, the European Commission took a number of steps, including a regulation20 and related guidance21 establishing export authorisations by Member States for protective equipment outside of the European Union,22 de facto abolishing these measures among EU Members. As a result, nearly all Member States lifted their national export restrictions and the protective equipment could be delivered seamlessly across the Union to where it was most needed. Regarding the potential of IRC to help address trade frictions arising from divergent regulations, discussions in the WTO’s Technical Barriers to Trade Committee (TBT Committee) draw light on the regulatory divergence issues typically affecting trade in medical goods and a number of IRC solutions:

Governments can take a number of measures to address these challenges and ensure availability of COVID-19 products, improving trade facilitation through priority lanes, adopting international standards, among others (González, 2020[44]). These include typically transparency measures, agreements on common approaches, adoption of international standards and recognition approaches. Transparency and exchange of information on draft measures allow countries to work towards coherent action to prevent regulatory divergences from becoming unnecessarily significant. Alignment of national approaches around international standards allows to scale up production and facilitate public procurement. Unilateral or mutual recognition of test or inspection results or co-operation on enforcement can help speed up procedures and prevent excessive burdens at the border when countries have differing regulations in place – this implies some alignment in risk appraisal across jurisdictions. These measures are further elaborated in the sub-sections below.

 IRC enables the interoperability of essential services and cross-border activities

The impact of the COVID-19 crisis is far-reaching. While domestic regulatory responses are vital to, inter alia, support the continued delivery of essential services, in areas with a strong transboundary dimension – typically in networks industries – there is a significant need for cross-country co-ordination to ensure their continued interoperability during the crisis. In these sectors, incompatible domestic solutions and lack of collaboration to address challenges may compromise the cross-border effectiveness of the network as a whole. This is the case for instance of telecommunications, air travel, maritime transport and ports, and postal services. Similarly, once countries under social–distancing measures and lockdowns gradually resume activities, co-ordinated regulatory action will be needed to restart operations in these interconnected sectors.

Telecommunications is a cross-border sector that has been put under strain during the crisis as virtual connectivity needs increased in response to social-distancing and lockdown measures. This calls for collaboration to secure that operators can cope with the increased demand on network capacity while securing network resilience, continuity of operations and access (OECD, 2020[73]). For example, as a precautionary measure the European Commission and the Body of European Regulators for Electronic Communications (BEREC) have set up a special reporting mechanism to monitor the internet traffic situation in each Member State to be able to respond to capacity issues (European Commission and BEREC, 2020[74]). Governments can also co-operate to ensure that logistical and supply chain allow network operators to access new hardware and consumables needed to repair outages or upgrade their capacity (OECD, 2020[73]).

By contrast, the spread of COVID-19 has had significant negative implications on international transportation. Travel restrictions imposed in several countries to curb the spread of the virus and the decrease in travel demand significantly impacted the operations of civilian and cargo air companies. Preliminary estimates by the International Civil Aviation Organization (ICAO), show that the COVID-19 outbreak could cause an overall reduction of 47 to 58% of seats offered by airlines during the first half of 2020, compared to originally-planned.42 Transport by sea, and particularly container shipping, has also been affected albeit in much less drastic ways than air transport, with global container trade volumes declining by 8,6% in February 2020 compared with the same month of 2019 (ITF, 2020[75]).

Aviation is a sector where regulatory co-operation is key to guarantee passengers safety and to avoid redundant administrative procedures across countries. For example, air transportation relies heavily on requirements around expiration of licences and/or certifications, and safety inspections. As performing on-site visits became increasingly difficult due to the crisis, the European Union Aviation Safety Agency (EASA) announced the use of adapted procedures to maintain the oversight level necessary for safe operations, including flexibility around the suspension or limitation of certificates.43 In line with EASA, the UK Civil Aviation Authority exempted all operators, aircrew, instructors, examiners engaged in commercial air transport, along with aircraft maintenance licence holders and air traffic controllers, from the normal validity periods for licences, certificates and ratings that expire before the 31 October 2020.44 Other domestic regulators have followed with similar measures that guarantee the continued operation of services and will facilitate the restart of air travel once restrictions are lifted and demand raises.

Air transportation operators are under particular pressure to apply strict and specific processes to limit the spread of the virus among passengers. Internationally co-ordinated approaches in this area are particularly important to ensure that aviation companies comply with the same level of protection wherever they operate. The Collaborative Arrangement for the Prevention and Management of Public Health Events in Civil Aviation (CAPSCA) brings together all international, regional, national and local civil aviation organizations in order to combine efforts and develop a co-ordinated approach to public health risks such as pandemics.45 CAPSCA has centralised country, international organisation and other stakeholders’ COVID-19 initiatives related to civil aviation to provide easy access.46 In addition, all aviation-specific guidelines relevant for the COVID-19 crisis are consolidated in a single web portal clarifying what States and stakeholders can do to guarantee safety of international air travel and to communicate effectively throughout the outbreak.47 In particular, the site clarifies that States have the obligation to base all measures restrictive of air travel on a risk assessment;48 States should designate a focal point of contact for communication with other States and with the WHO regarding the implementation of WHO International Health Regulations.49

International maritime transport also calls for a strong co-ordinated response to prevent the spread of the virus within ships. Various incidents of COVID-19 outbreaks on cruise and military ships across the world have indeed drawn attention to the high risks of contagion between passengers and staff in the confined spaces of ships at sea.50 These incidents have stressed the strong need for internationally co-ordinated responses, due to the many nationalities of people on board and the global ramifications that the disembarking of passengers with the virus may have (Nakazawa, Ino and Akabayashi, 2020[76]). To prevent such risks while maintaining essential maritime transportation, particularly to ensure the availability of shipping services to the commerce of the world, the International Maritime Organisation has worked on protecting seafarers from contracting the virus and guaranteeing all personnel on ships and airports are considered as key workers that can therefore cross borders. 51

Similarly, the interdependence of financial markets advocates for a co-ordinated response from financial regulators and supervisors to secure financial stability and minimise the risk of market fragmentation from the COVID-19 crisis. As made evident by the 2008 Global Financial Crisis, the connections between far-flung markets raise concerns for the systemic impact of failure of cross-border financial institutions, including banks. The gaps highlighted in 2008 were met with a new system for global co-ordination among domestic and international financial regulators and supervisors (Moloney et al., 2015[77]) The COVID-19 crisis has led to an array of national responses. Only for the banking sector, the Institute of International Finance (IIF) reports over 300 prudential regulatory measures implemented between March and early April 2020 (IIF, 2020[78]). To tackle the risk of fragmentation that the national responses may generate, co-ordination through international organisations has been enhanced to oversee the continued implementation of recent G20 financial reforms in response to the crisis (OECD, 2020[79]). The Financial Stability Board (FSB) has delivered principles to maximise the benefit of a co-ordinated policy response and is supporting countries providing financial stability risk assessment, co-ordinating financial policy responses and serving as a platform for information sharing between its members, the International Organization of Securities Commissions (IOSCO), the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS) (FSB, 2020[80]).

Looking ahead, a co-ordinated regulatory approach will be needed to ease social-distancing measures and restart activities in sectors with strong cross-border interdependencies. The Joint European Roadmap towards lifting COVID-19 containment measures acknowledges this and focuses on recommendations for co-ordinated action between the Member States to restart economic and social activities (European Commission, 2020[33]).52 Furthermore, a common regulatory approach could help countries that plan to rely on mobile applications (apps) to support lifting of containment measures by tracing the spread of the virus. Beyond the debates that affect their use (see the other contributions of the Regulatory Policy Division on this topic),53 such apps would deliver better on their potential if they provided information on the spread of the virus across borders. This can only happen if countries share similar standards to operate the systems and trust in the reliability of their respective infrastructure. This notably involves that they agree on similar guarantees of privacy for citizens and businesses. The EU provides a useful example of guidance applicable throughout the EU. It issued guidance to Member States and app developers on features and requirements that apps developed to track COVID-19 should meet to ensure compliance with EU privacy and personal data protection legislation (European Commission, 2020[81]) (European Commission, 2020[82]).

 International organisations in support of information exchange and common regulatory approaches

IOs play a crucial role to bolster and complement national institutions by promoting and developing common solutions at the international level. At the regional / plurilateral and multilateral level, a number of normative organisations provide for an opportunity to co-operate on rules among their constituency and beyond national boundaries. They can be differentiated from other forms of international co-ordination by their core task, i.e. to prepare the grounds for and produce common rules, by opposition to discussion fora, financial institutions or capacity building initiatives.

Systematic evidence collected by the OECD as part of the Partnership of International Organisations for Effective International Rulemaking (IO Partnership) shows that such IOs contribute to international rulemaking by offering platforms for continuous dialogue on and anticipation of new issues; establishing a common language; facilitating the comparability of approaches and practices; developing international legal and policy instruments; and, in a few (much more limited) cases, by offering enforcement and dispute resolution mechanisms (OECD, 2016[86]). This is clearly illustrated in Figure 2., which highlights the number of IOs (from a sample of 50 interviewed by the OECD in 2015) that carry out the various activities spanning the rulemaking cycle (from data collection to crisis management).

In their everyday work, IOs first and foremost act as data hubs. They provide the framework to “orchestrate” the sharing of evidence among their constituencies in their respective policy areas in various forms (raw, compiled in databases, analysed in thematic or country reports). The current crisis is no exception. Practically all normative IOs, including the OECD, have established a COVID-19 dedicated website that serves as platform for information exchange in their respective mandate (see list in Annex). Beyond these public websites, they also provide a safe place among members to exchange on their respective measures and discuss common position.

 

Figure 2. The core rulemaking activities of IOs

Source: (OECD, 2016[20]).

The WHO is emblematic of this role. The organisation compiles and disseminates health statistics that are essential to evaluate health programmes and make recommendations with respect to international health matters. The WHO’s International Health Regulations (IHR) provide an overarching legal framework that defines countries’ obligations in handling acute public health risks that have the potential to cross borders. The IHR “are the sole binding global legal instrument dedicated to the prevention and control of the international spread of disease” (Burci, 2020[87]). Under the IHR, the WHO acts as a central co-ordinating body for addressing the pandemic, receiving notifications on outbreaks and disseminating information to help scientists address an epidemic at the global level (Box 3).

Beyond the WHO, a wide range of IOs have refocused their attention to cater for the urgent data need of their constituencies to deal with the crisis. The OECD compiles real time data and analysis on the multifaceted consequences of the global crisis, from health to education, employment and taxes.54 The OIE compiles data from Members on any outcomes of investigation in animals to detect infectious with SARS-CoV-2.55 WTO is making available notifications of COVID-related measures56 and has issued a series of information notes on COVID-19 and world trade. 57 The World Tourism Organization has carried out an impact assessment of the COVID-19 crisis on the tourism sector.58 The Council of European Energy Regulators allows energy regulators to share notes on their respective national measures to address the COVID-19 induced decrease in energy demand; as well as to share practices on how to support vulnerable customers.59 The FAO has developed a Big Data tool on food chains under the COVID-19 pandemic that gathers, organises and analyses daily information on the impact of the COVID-19 pandemic on food and agriculture, value chains, food prices, food security and undertaken measures. As stated on the FAO website, the tool ultimate aim is to provide countries with facts and information on how the pandemic is impacting the food chains to build their decisions.60 WCO’s Customs Enforcement Network Communication Platform (CENcomm) allows customs worldwide to share intelligence on fake medical supplies and medicines (WCO, 2020[88]). Examples could be multiplied and apply to the range of various international organisations that countries participate in.

Beyond data collection, the crisis has shown the responsiveness of IOs to highlight and / or adapt their normative instruments to support their constituencies in coping with the crisis. The dedicated WHO technical guidance website now includes specific Guidance for laboratories shipping specimens to WHO reference laboratories that provide confirmatory testing for COVID-19 virus61, as well as Guidance on infection prevention and control62. The WHO has also issued key considerations for repatriation and quarantine of travelers63, advice to the public on when and how to use masks64 and advice to health workers about their rights, roles and responsibility65. The OIE has highlighted the potential use of veterinary labs to address the growing need for facilities to conduct diagnostic testing of human samples for COVID-19 and made available high level guidance for veterinary laboratories working with public health services to support testing of human samples for COVID-19.66 This is an important example of how innovative cross-sectors thinking can help to address the current pandemic.

Beyond the health sector, a large number of IOs have developed guidance adapting their traditional tools to the context of the epidemics – either advising their constituencies on how to deal with the epidemics in their area or the related global social and economic crisis. The OECD provides tailored guidance to help countries during the crisis in its various policy areas, including on maintaining regulatory quality in times of crisis. The International Labour Organization (ILO) has prepared a Prevention and Mitigation of COVID-19 at Work Action Checklist that offers a collaborative approach to assess COVID-19 risks as a step to take measures to protect the safety and health of workers.67 The International Maritime Organization (IMO) provides various advice and guidance to facilitate maritime trade and preserve the health of seafarers.68 ICAO has developed a number of “quick reference guides” to provide guidance of a particular subject area in addressing COVID-19 related risks to the continuity of aviation business and operations.69 Interpol has developed guidelines on how to protect law enforcement and first responders.70 The Commonwealth has developed Guidelines on sport, exercise and physical activity71 and Sport policy during the coronavirus pandemic72. WCO has developed guidance on a number of issues to facilitate movement of essential goods across borders. BIPM is working with National Metrology Institutes on validation, calibration and verification of measurement instruments relevant for a range of COVID-19 essential products and to develop protocols for organising scientific comparisons to underpin antigen and vaccine testing.

While IGOs have embraced their advisory role to States, many non-governmental organisations, including private and non-profit, have also stepped up to service their constituency – sometimes in close co-ordination with inter-governmental processes. International private standard setting organisations, such as ISO and ASTM international, are providing free access to their standards of relevance to the production and testing of various essential protective equipment (including masks, medical gowns, gloves, and hand sanitizers) and medical devices (such as ventilators). Professional organisations collect practices across their wide membership of “operators” to consolidate good practices and voluntary guidance. Examples are manifold, some are reported in Box 4. In addition, civil society – such as Oxfam or Médecins Sans Frontières – have stepped up their action to complement the work of traditional IOs and facilitate the implementation of international guidance in developing countries.

In a more limited number of cases, the IOs have the mandate to support their members in managing crisis (Figure 2). This is actually the case of the WHO, which is mandated to undertake emergency action to face pandemics. The Organisation’s role in the area of crisis management has become more technical and operational in nature (Berman, 2020[89]). Also, WHO intervenes on international health crisis by co-ordinating with other agencies in the context of a humanitarian crisis. The Organisation’s work in emergencies is guided by the Emergency Response Framework. In 2016, responding to lessons learnt from the Ebola crisis, the WHO underwent a reform of its emergency capacities including the establishment of the Emergencies Oversight and Advisory Committee (OECD/WHO, 2016[25]). The current crisis is undoubtedly testing again the effectiveness of the international health system and providing it again an opportunity to evolve and adapt based on lessons learnt from current shortcomings.73 In March 2020, the WHO created a new structure – the new Division of Emergency Preparedness - to improve the responsiveness to emergency situations, and in particular to prevent and mitigate the impact of outbreaks and other health crises.74

Despite its support to regulatory co-operation across borders, the multilateral system is once again under heavy criticisms. It is deemed incoherent, bureaucratic, and non-transparent.75 This perception emanates largely from the complexity of the system. The multiplicity of IOs and instruments and their linkages are difficult to navigate for users, including policy makers and legislators that may have to implement them in their own jurisdictions. With a view to improve the understanding of the landscape of international normative institutions, the IO Partnership launched by the OECD in 2014 brings together some 50 secretariats of IOs to promote and discuss the conditions for greater quality, effectiveness and impact of international rules, regardless of their substantive scope. This collective effort has led to an unprecedented collection of information and exchange of practices on the rulemaking activities of IOs. The resulting 2019 Brochure on The Contribution of International Organisations to a Rule-Based International System sheds light on the functioning of the international rulemaking (OECD, 2019[83]). It acknowledges the complexity of the system – in particular, the sheer number and variety of types of international organisations and of international instruments. This system reflects the increasing complexity of policy issues that policy makers have to face and their inherent dependence.

Addressing the COVID-19 crisis requires urgent and co-ordinated action across policy fields from the global governance architecture as a whole. The current crisis involves addressing the pandemic, while dealing with the educational and social repercussions of stringent confinement policies, and maintaining heavily hit economies afloat. At the international level, as is the case nationally, these various aspects call on the competence of a wide range of different policy communities – see for example the multiplication of joint calls by heads of IOs highlighting the strong links between the pandemics and various policy areas, such as food, trade, aviation76. Both at international and national levels, more could be done to foster co-operation among policy communities, as recalled inter alia by the existence and the wording of the joint ICAO/WHO statement: “Cross-sector collaboration at the national level is also important, and in this regard, States are reminded to coordinate between aviation and health authorities and to establish National Facilitation Committees that comprise all relevant groups, in line with ICAO guidelines”. While IOs engage in a multiplicity of co-operation initiatives with other IOs, these tend to remain informal or less stringent co-operation arrangements for which effectiveness and impacts are difficult to assess (OECD, 2019[83]). Ultimately and unfortunately, IOs often reproduce the silo approaches across policy communities and stakeholders that exist at national level.

Clear, evidence-based, coherent and high quality international rules are critical for an effective global response to COVID-19. Common complaints against IOs include lack of credibility or partiality of the information collected. Indeed, as major data hubs, IOs have a key role to play to ensure the quality of the information that they collect. In this respect, one may question the control mechanisms that IOs are able / allowed to establish to ensure the quality of the information. IOs collect a mix of information related to the use of their normative instruments, both quantitative and qualitative. This information may be provided by members through voluntary or mandatory reporting mechanisms. Depending on their mandate, the IO secretariats act as “pure” repository of information provided by members, or may engage in active data gathering and carry some quality control of the information mostly through review process and internal quality checks (OECD, 2019[83]). Mostly, however, IOs depend on the information provided by members, which determines their availability and quality (Figure 3).77 This is typically the case of the WHO, whose legal authority to independently obtain information and to compel states to provide information is limited – in particular the WHO does not have the authority to undertake inspections and verify information in a member country (Berman, 2020[89]).

 

Figure 3. Mechanisms used by IOs to track implementation of their instruments

Source: (OECD, 2016[20]).

There is, therefore, a shared responsibility of the IO secretariats and their members to improve the quality and comparability of the information that is shared. While, it will always be difficult for IOs to protect against the strategic / non-cooperative use of information (especially in the short term perspective that the COVID-19 crisis imposes), the strengthening of institutional mechanisms and good regulatory practices such as stakeholder engagement, regular evaluation, evidence-based discussions can help improve the quality of the information and normative processes over time. There is also a direct link between the capacity of the IO secretariat (in a broad sense, including its qualification, resources and independence from members) and its ability to play its consensus-building, quality control role. Indeed, (OECD, 2016[86]) highlights the wide disparity across IOs in terms of size of secretariats and related roles – the bigger the size of the secretariat, the more it is able to go beyond organising meetings and serving as a repository of information. There is nevertheless also a responsibility of IOs to allocate the resources and focus on core responsibilities.

 IRC needs strong embedding in national regulatory frameworks

As already illustrated above, the roots of the multilateral system lie very much at the national level. The international level is in many instances the emanation of the national level (clearly in the case of inter-governmental organisations and via the support of their constituencies for other types of IOs). In addition, a solid regulatory policy framework domestically is a sine qua non condition for a jurisdiction to establish ambitious bridges with foreign jurisdictions and IOs. While some of the linkages between the national and international levels may have weakened – and countries raise scepticism about the effectiveness IO action – stronger national ownership of international processes (in the respect of the consensus-based approach and of the integrity of IO processes) can go a long way to regain trust in international bodies and improve the current international rulemaking system. This requires political leadership, resources and capacity.

To make the best of the multilateral system, particularly in times of crisis when rapid action is needed, there is a need for systematic consideration of international expertise and rules as part of domestic rulemaking. Currently, however, a number of countries cannot capitalise on IRC and their participation in IOs for lack of internal whole-of-government policies, frameworks or strategies that promote IRC operation and international engagement more broadly. This is illustrated by the 2018 OECD Regulatory Policy Outlook, which highlights the limited number of countries with an explicit cross-government policy on IRC (Figure 4), and the related fragmentation of oversight functions (notably between the regulatory oversight body, the institution responsible for trade policy and the ministry of foreign affairs) (OECD, 2018[19]). This often combines with a lack of standardised approaches and guidance on how ministries and regulators can deal with international instruments and their engagement in international organisations. In addition, the 2018 Regulatory Policy Outlook, as well as the Report on Better Regulation Practices across the European Union, note the need for greater sharing and use of information between the international and national levels from regulatory evaluation processes as an important avenue to strengthen the evidence base and capitalise better on the international intelligence (OECD, 2018[19]) and (OECD, 2019[90]).

 

Figure 4. Number of countries with an explicit, published policy or a legal basis on IRC

Note: Data for OECD countries is based on the 35 OECD member countries, the European Union, and three accession countries.

Source: (OECD, 2018[19]) and Indicators of Regulatory Policy and Governance Survey 2017, https://oe.cd/ireg.

During the emergency, mechanisms typically exist for information sharing between domestic authorities, WHO and other relevant international organisations. A number of countries set in place emergency bodies to co-ordinate the national response to the virus that include responsibilities for international co-ordination. While key in the immediate response to the crisis, to fully reap the benefits from IRC a stable policy and on-going mechanisms need to be established to these effects. More systematic consideration of the international environment in domestic rulemaking requires in many cases a significant change in the regulatory culture of countries. This change involves understanding and embedding a routine “beyond the border” perspective in rulemaking to avoid the automatic inward looking reaction. Such a cultural shift requires strong political will, leadership and dedicated attention to establishing a whole of government strategy for IRC.

IRC has important implications for the activities of regulators and of their oversight bodies. This involves the more systematic review and consideration of foreign and international regulatory frameworks of relevance when regulating and the assessment of how regulatory measures impact and fit within the broader cross-border management of the issue to address. Practically, as identified in the forthcoming OECD Best Practice Principles on International Regulatory Co-operation (GOV/RPC(2020)3), it requires from policy makers that they embed a stronger international lens in their regulatory management tools (such as the regulatory impact assessment processes, the ex post evaluation and stakeholder engagement processes) (Box 5).

This work highlights the importance for policy makers and regulators to embed mechanisms and process that help them gather evidence and expertise that may go beyond their own jurisdiction. In the context of the COVID-19 crisis, when time is tight, having such processes in place can ease the critical resource constraints faced by the administration and help catalyse the efficiency benefits of IRC. Not only can countries benefit from the availability of evidence and the lessons from the jurisdictions ahead of the contagion curve to refine their reaction to the crisis, having joint instruments and mechanisms in place with other jurisdictions can allow quicker reaction and international co-ordination to preserve the necessary interoperability of critical infrastructure and supply chains. The COVID-19 has showed the importance of building such IRC mechanisms; they are the critical pillars of resilient regulatory systems worldwide.