Supporting Regulatory Reforms in Southeast Asia

2. Introduction

This part presents profiles for all 10 ASEAN Member States, which forms the basis for the analysis in Chapter 1. The information presented in this chapter is intended to be factual - an overview of the current de jure requirements to use the institutions, tools and processes of regulatory governance and, where possible, how these have been implemented in practice.

The universe of regulatory governance is vast, with many different institutions, tools and processes having been developed to support regulators design and delivery better regulation. Moreover, as countries, their governance arrangements, and markets evolve, so too does regulatory governance to support policy makers in constantly modernising their approaches to regulation.

Collecting full case studies on all these aspects of regulatory governance would require a significant investment of time, analysis and publication space to cover fully, which is outside the scope of this current work. For these reasons, the country profiles focus on three main aspects of regulatory governance pertinent to the past, current and near future of regulatory reforms in the ASEAN region:

• Whole of governance approaches to regulatory policy making, which is intended to highlight both national and international commitments to better regulation that are driving domestic reform processes.

• Use of good regulatory practices, including regulatory impact assessments (RIAs), stakeholder engagement and ex post review, which are the foundation for better regulation reforms in both ASEAN and OECD communities.

• Approaches to digitalisation, which highlights how countries are using digital tools to respond to regulatory challenges and represents the newest frontier for better regulation reforms in both ASEAN and OECD communities.

These three topics thus represent both foundational and forward looking elements of better regulation, providing a thorough but precise set of profiles. To support these profiles, this introduction intends to give an introduction into the horizontal concepts that bridge across all profiles to avoid repetition of these concepts in the profiles themselves. In addition, this introduction provides an overview of the methodology and limitations of the country profiles.

Horizontal concepts

Profiles in general cover very similar topics, with specific details from each country. Below is an overview of the key horizontal concepts present in most profiles as definitions to guide the reader:

1. International regulatory co-operation: is the consideration of the international environment – including international evidence, expertise, rules, and standards – in domestic regulatory frameworks and decisions to help support alignment between countries. IRC is often equated with regulatory harmonisation i.e. the complete alignment of regulation across countries. This view on IRC is, however, incomplete. Policy makers can draw from a wide range of approaches, from unilateral action to multilateral co-operation, from informal dialogues among regulators to supranational rule-making in international organisations. An increasingly common method for conducting IRC is through trade agreement, which can contain good regulatory practice (GRP) provisions to promote the effectiveness and efficiency of regulations (Kauffmann and Saffirio, 2021[1]). Two such trade agreements highlighted in the profiles are:

a. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Is a trade agreement between 11 countries, including four ASEAN Member States: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore and Viet Nam. The CPTPP includes a chapter on GRPs. Article 25.5 of the CPTPP in particular suggests that parties should encourage relevant regulatory agencies to conduct regulatory impact assessments when developing regulatory measures that exceed a threshold of economic or other regulatory impact.

b. Regional Comprehensive Economic Partnership (RCEP): Is a trade agreement amongst Asia-Pacific nations, including all 10 ASEAN Member States and Australia, China, Japan, South Korea, and New Zealand. RCEP contains a chapter on standards, technical regulations and conformity assessment procedures and various sub-sections on regulation.

2. ASEAN Single Window (ASW): Is a regional initiative that connects and integrates National Single Window (NSW) of ASEAN Member States via an electronic platform, with the objective of expediting cargo clearance and promote ASEAN economic integration by enabling the electronic exchange of border trade-related documents among ASEAN Member States. As of December 2019, all ASEAN Member States have joined the ASW Live Operation (ASEAN, 2022[2]).

3. Good regulatory practices (GRPs): Also known as regulatory management tools, these are internationally recognised processes, systems, tools and methods for improving the quality of regulations (OECD, 2018[3]). While the number and type of GRPs has expanded in recent years, the core three are (OECD, 2021[4]):

a. Regulatory impact assessments (RIAs): Is a central aid to decision making, helping to provide as much as possible objective information about the likely benefits and costs of particular regulatory approaches, as well as critically assessing alternative options – including non-regulatory ones. A well-functioning RIA system can assist in promoting policy effectiveness, efficiency, and coherence by clearly illustrating the inherent trade-offs within regulatory proposals.

b. Stakeholder engagement: Is granting members of the public sufficient opportunity to help shape, challenge, and reform the regulations that they encounter in their daily lives. Citizens can offer valuable inputs on the feasibility and practical implications of regulations. Meaningful stakeholder engagement can lead to higher compliance with regulations, in particular when stakeholders feel that their views have been considered.

c. Ex post review: Is the periodic review of regulations, acknowledging that the original environment justifying the regulation may have changed and serves as an opportunity to see how regulations have actually worked in practice. This is especially important considering that not all regulations have been rigorously assessed ex ante, such as through RIA, and even when they have, not all effects can be known with certainty in advance.

4. Digital technologies: As part of the Fourth Industrial Revolution (4IR), digital technologies are affecting societies and economies in many ways, including via new means of communication and collaboration; new products that feature a strong service component; the role of data as driver of economic growth; the automation of tasks with artificial intelligence (AI); and the emergence of new business models such as platforms (OECD, 2019[5]). Governments are not oblivious to this trend with great efforts being implemented to advance the digital transformation of public sectors across OECD countries through the trustworthy application of digital technologies and data in areas such as service design and delivery (OECD, 2020[6]; 2019[7]). Governments and regulators play a major role in encouraging digital innovation and incentivising the development of technologies, regulating them when needed and utilising the same technologies to regulate better.

Methodology

The country profiles located in this section are the result of an extensive data collection by the OECD. This started with the creation of a questionnaire to obtain the current data on the three focus areas above, the content which was informed by OECD research on better regulation, regulatory reform reviews with various OECD member and partner countries, and discussions through the GRPN. To facilitate the data collection, the OECD pre-filled the questionnaire with publicly available data, including from the last OECD collection of country profiles in OECD (2018[3]), presentations and interventions at the GRPN, and desk research into relevant OECD and non-OECD sources, including official government sources, which are reference and noted throughout.

The questionnaire was administered through the 10 Main Contact Points from the GRPN, who represent the better regulation units in each of the ASEAN Member States, in December 2021 and asked to be returned by the end of January 2022. Respondents were asked to confirm the information collected is correct, update the information where relevant, and answer any questions without entries. In February 2022, the OECD team held interviews with various Main Contact Points, based on their availability, to gain a deeper understanding of the data collected in the questionnaire.

Following the questionnaire and interview process, the OECD drafted the country profiles located below and distributed them to the Main Contact Points for initial fact checking in March 2022. In parallel, the OECD assembled a note on the initial trends identified in the profiles across three areas: recent trends in regulatory reforms, key common challenges amongst members, and what future reforms may be on the horizon. The OECD organised a special workshop of the GRPN on 24 March 2022 to discuss this initial trends note and facilitate a peer-to-peer discussion and mutual learning amongst GRPN members regarding its findings. The feedback generated from the workshop lead to a further refining of the note, which informed Chapter 1 of this report. In addition, members were asked to submit any written comments to the note following the meeting, which were also incorporated.

Finally, Chapter 1 and each country’s profile were sent for a final fact checking and comment in May 2022 to each country individually, who then provided sign off to publish their profile in this report.

Limitations

The main limitations of these profiles is that they represent a narrow set of elements of regulatory policy and governance, and from the perspective of better regulation units in ASEAN Member States. Moreover, the profiles represent data provided to the OECD either by the members or via publicly available sources; due to resource constraints, the profiles were not further fact checked or analysed. Therefore, the profiles represent a descriptive representation of the current situation in each ASEAN Member States that can inform the creation of broad trend analyses in Chapter 1, but care should be taken inferring any specific conclusions about an individual country vis-à-vis its profile and how it relates to concepts around better regulatory policy making and governance.

References

[2] ASEAN (2022), What is the ASEAN Single Window?, https://asw.asean.org/ (accessed on 12 May 2022).

[1] Kauffmann, C. and C. Saffirio (2021), “Good regulatory practices and co-operation in trade agreements: A historical perspective and stocktaking”, OECD Regulatory Policy Working Papers, No. 14, OECD Publishing, Paris, https://doi.org/10.1787/cf520646-en.

[4] OECD (2021), OECD Regulatory Policy Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/38b0fdb1-en.

[6] OECD (2020), “Digital Government Index: 2019 results”, OECD Public Governance Policy Papers, OECD Publishing, Vol. 03, https://www.oecd.org/gov/digital-government-index-4de9f5bb-en.htm (accessed on 17 August 2022).

[5] OECD (2019), Regulatory effectiveness in the era of digitalisation, https://www.oecd.org/gov/regulatory-policy/Regulatory-effectiveness-in-the-era-of-digitalisation.pdf (accessed on 7 February 2020).

[7] OECD (2019), The Path to Becoming a Data-Driven Public Sector, OECD Digital Government Studies, OECD Publishing, Paris, https://doi.org/10.1787/059814a7-en.

[3] OECD (2018), Good Regulatory Practices to Support Small and Medium Enterprises in Southeast Asia, OECD Publishing, Paris, https://doi.org/10.1787/9789264305434-en.