A Simple Solution to “Legislative Spam” Problem

November 7, 2018
A Simple Solution to “Legislative Spam” Problem

Nataliya Prongue, Director of Global Regulatory Strategy JTI (Geneva)

Verkhovna Rada is swamped in a huge number of bills. How to solve this problem?

Ukrainian business has a lot in common. I was convinced of this during the roundtable organized by the Union of Ukrainian Entrepreneurs (UUE). Last week business and government representatives gathered to discuss the pressing issue of regulation: what simplifies business processes and what, conversely, creates unnecessary problems.

We — the tobacco industry — one of the most strictly regulated in the world. We have obstacles like excise taxes, regulative marketing, pricing, the composition of the product and even its packaging. But in no country did we encounter such an avalanche of bills as in Ukraine. During the last convocation of the Verkhovna Rada there have been registered about 90 bills, designed to regulate our work or products. Last month alone, 12 new draft laws have appeared. And the problem is not only in their quantity, but also in quality.

Since the products bear health risks, we understand that industry regulation is necessary and important. But it should be based on the principles of “quality regulation”. This is not an abstract concept, it is clearly formulated by international organizations, including the European Union and the Organization for Economic Cooperation and Development (OECD), with which Ukraine, by the way, cooperates. According to the OECD guidelines, quality regulation assumes that:

  • decision making is open and transparent
  • all interested parties — government, administrations, expert organizations, and business — can participate in the legislative process
  • government actions are based on evidence and a clear understanding of the potential consequences of the proposed regulation
  • the regulatory burden on business, citizens or public administrations is minimized

What does this mean in practice? Before you create another bill, you must:

  • Analyze existing legislation to evaluate its effectiveness and determine why it does not work
  • Clearly identify regulatory issues and objectives
  • Use reliable data and research
  • Hold broad public consultations involving all interested parties
  • Assess regulatory exposure to determine possible risks
  • Take steps to ensure proper implementation of the law

This is a simple sequence of actions that guide OECD and EU member countries. And I would very much like to work in Ukraine on the basis of these principles in the decision-making process on regulation in Ukraine. Business, in its turn, is always open to dialogue and is ready to share all the knowledge, expertise, research, risk predictions, so that the era of “legislative spam” is finally over, and the regulation becomes effective.

Just one example. Verkhovna Rada plans to consider a project to ban the display of cigarettes in the windows. According to the authors, this will reduce the level of smoking in the country. Although there is no reliable evidence of a link between the prohibition of display of cigarettes and the reduction in the level of smoking. According to the Eurobarometer 385 social survey, the most common reason why people started smoking was the influence of the social environment. 79 % of smokers and ex-smokers began to smoke because their friends smoke. 21 % of respondents answered that the reason was that their parents smoked. And only 3 % of respondents were attracted by a pack of cigarettes.

In addition, the authors of the bill ignore possible economic consequences. According to estimates of the Ministry of Finance of Ukraine, the result of the adoption of this initiative will be the shortfall of state and local budgets up to 3.9 billion UAH. And the Association of Cities of Ukraine predicts non-receipt of 858.3 million UAH for local communities. Such losses will cause consumers to switch to cheaper brands and increase the illegal trade in cigarettes.

In other words, the document will not reach the goal and will cause economic damage to the country’s budget. Nevertheless, the parliament is forced to consider it, like many other ineffective and uncalculated draft laws that have no chance to be passed.

The principles of “quality regulation” as a filter to combat “legislative spam” will not only do a service to Ukrainian business, but also greatly ease the work of legislators. Domestic regulation should be based on European practices, proven by time and confirmed by facts.

The original article was published on Novoe Vremya.

Photo credits - UNN.

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