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Environmental Compliance Assurance

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Practice Advice on Environment Policy

Environmental Compliance Assurance (OECD)

Description: The advises that governments should have well designed environmental compliance assurance mechanisms in order to conduct efficient and effective environmental policy. Cross-country exchange of information and experiences, as well as ongoing policy analysis can also help governments achieve effective environmental policy implementation.

Commentary: Compliance assurance is a crucial element of a government’s environmental policy, as it links the legislative requirements of environmental policy to the actual policy implementation process. Environmental compliance assurance involves a broad array of stakeholders, from government and non-government actors, and is highly time and resource sensitive. The key considerations in ensuring enrivonmental compliance are: 

  • Compliance promotion. Governments should promote compliance by disseminating information, introducing good environmental management practices, providing financial incentives to those who comply with the regulatory standards and, finally, use public pressure and accountability to increase compliance.
  • Compliance monitoring. Governmental inspections, audits and other data gathering and monitoring efforts should be conducted on a regular basis, compliance monitoring equipment and procedures should be modernized, monitoring activities should be emphasized as part of policy, and finally, self-monitoring should be encouraged. 
  • Optimize policies to the institutional framework in place. The institutional framework for compliance assurance depends on the extent to which the government wants to centralize responsibilities for enforcement at the national level or decentralize them to the sub-national and local levels. The choice is between vertical organizations and decentralized organizations. The OECD also points out that governments may benefit from better cooperation and coordination between government and non-government actors.
  • Compliance enforcement. Considering that actors in regulated environments act rationally when making compliance decisions if the expected cost of compliance does not exceed the non-compliance costs that may arise in the form of monetary penalties, civic liability etc., the OECD suggests governments to raise the costs of non-compliance through tougher controls, fair and well-publicized non-compliance penalties, and increased awareness of possible enforcement actions by the government. In cases where compliance does not occur, the OECD recommends creating an “enforcement pyramid”, which consists of administrative, civil-judicial, criminal, penalty assessment and citizen-led enforcement options. Administrative sanctions could include monetary penaltiees, cost recovery for remedial actions and suspensions or closure of operations and other removal or operating rights. Civic-judicial enforcement encompasses private party recourse through civil law  (via class action private party suits) for instances where strict liability for environmental damage requires proof of negligence and/or violation of regulatory standards. Criminal enforcement, perceived to be an action of last resport, should be applied in severe cases which could not be resolved through administrative sanctions or civil-judicial enforcement. Governments should resport to criminal enforcement if wilful or negligent unlawful behavior is present, and if non-compliance with administrative enforcement is considered as a crime under law. Penalty assessment. The amount of administrative monetary penalty can be determined by an agency (courts, tribunals) or through a detailed list of guidelines and penalties formulated by a competent authority tasked with compliance enforcement. Citizen enforcement may take the form of pressure exerted by citizens on government agencies, and actors which fail to comply with regulations.
  • Performance assessment of enforcement authorities. Governments must evaluate the performance of enforcement authorities on a regular basis to determine whether the strategies used to achieve compliance are working, to hold inspectors accountable for the implementation and effictiveness of the policy and to improve transparency and accountability of inspectors vis a vis other stakeholders.

 Based on a comparative analysis of country practices, the OECD identifies several policy trends in compliance assurance:

  • Environmental authorities have demonstrated increased focus of strategic planning and performance assessment. There is a shift towards developing a common definition of compliance rates
  • Integration of compliance and regulatory authorities into single-medium regulatory regimes
  • Growing importance of compliance promotion to SMEs, increased self-monitoring options
  • Compliance monitoring efforts are targeted on facilities where potential environmental risks are greatest and where operator performance suggests a higher likelyhood of non-compliance.
  • Monitoring responsibility shifting from competent authorities to regulated entitites, with appropriate oversight safeguards.
  • Enforcement is more proportionate to the extent of non-compliance
  • Improvement in stakeholder cooperation, transparency, and public disclosure of information
  • Use of information technology to improve regulatory efficiency

Source:  OECD (2009). Ensuring Environmental Compliance, Trends and Good Practices, at: http://www.oecd-ilibrary.org/environment/ensuring-environmental-compliance_9789264059597-en (accessed 28 October 2012).

Page Created By: Khilola B. Zakhidova on 1 December 2012. Updated by Ian Clark on 2 January 2013. The content presented on this page is drawn directly from the source(s) named above, and consists of direct quotations or close paraphrases of material drawn from it. The opinions expressed in the source and presented on this page do not necessarily reflect the official institutional positions of the organization responsible for the source’s publication.

 

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