BEST PRACTICES IN COMPLIANCE ASSURANCE

Chandra Bhushan
 Compliance Assurance
“Measures taken by a regulatory agency to ensure that regulations are adhered to, and seen
to be adhered to.”
1. Compliance promotion – Any activity that encourages compliance but does not involve
sanctions for non-compliance. Examples of compliance promotion include information
dissemination, technical assistance, and regulatory & financial incentives.
2. Compliance monitoring – Collecting, analysing and disseminating information on compliance
status. It may include regulatory inspections, audits or investigations, monitoring of ambient
environmental quality, self-monitoring and reporting by regulated entities, and citizen monitoring
3. Enforcement – A set of actions that the regulator or third parties take in response to non-
compliance to compel the offender to return to compliance and remediate the damage resulting
from the violation, as well as to impose sanctions on the offender.
Effective compliance assurance involves a combination of promotion, monitoring, and
enforcement tools which are mutually supportive.
 PRINCIPLE 1
“Environmental enforcement systems should ensure effective and efficient protection of
human health and the environment”

o Enforcement is a means to bring acceptable compliance with environmental

requirements at an affordable cost for society.
o Enforcement is poor because the rules have not considered all factors required for a
successful enforcement.
o If regulations doesn’t bring the desired environmental results then its focus is probably
misdirected.
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Strategic Planning
Develop strategic plans for areas/sectors

o Plans must be specific and actionable (micro-planning for areas, technological change
for sectors etc.)
o It should clearly specify short, medium and long-term actions.
o It should have clear enforcement schedule.
o Role of different actors and agencies should be clearly specified.
o Must be developed in a collaboration with all stakeholders, including regulated entity.
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Risk-based targeting
Focus to achieve highest gain

o Targeting of compliance monitoring on facilities where potential environmental risks

are greatest and/or where operator performance suggests a higher risk of non-
compliance.
o The targeting approach should define risk-based categories (not potential-based) of
installations and respective minimum inspection frequencies.
o The targeting approach could include technology shift in certain sector/ sub-sectors.
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Performance Benchmarks
Develop performance indicators to assess levels of compliance with regulatory requirements,
and reductions of the negative impact on the environment.

o Use modelling to model the relationship between level of compliance, cost and
environmental benefits (most environmental agencies in developed world have modelling
department)
o Set compliance level at a point that provides the best mix of cost and environmental
outcome (cost curves).
o Develop compliance assurance framework and performance indicators for regulatory
agencies.
o Develop, monitor and disseminate performance results.
 PRINCIPLE 2
“Maximise the deterrent effect of regulations”

o Regulator should establish a credible deterrence atmosphere.

o Deterrence stimulates voluntary compliance eliminating the need for a physically
omnipresent regulator, thus reducing enforcement costs.
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o High cost for non-compliance – Undertake cost analysis for deterrence; at what cost
will the regulated entity take voluntary measures. This generally higher than the
economic benefits resulting from non-compliance, but within the ability to pay.
o Providing strict and timely response to non-compliance – Set time limit for
enforcement action.
o Social disapproval of violators – Use electronic media to publicise the list of
violators.
o Publicise successful enforcement actions – Widely publicise so that the news of strict
action is widely disseminated.
 PRINCIPLE 3
“Environmental requirements should be enforceable and establish feasible compliance
objectives”

o Only economically & technically feasible requirements are enforceable in the long run.
o Sufficient time must be given for implementation of regulations.
o Compliance assistance program should be inbuilt in the new regulation.
o To reduce the costs of compliance, effective dates of new regulatory requirements
should be coordinated with investment cycles.
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o Technical, Economic and social analysis

o Transition planning – A phase-in plan should be developed for new regulation that
allocates resources between permitting, compliance assistance, compliance monitoring
& enforcement (Case Study: Coal TPPs)
o Regulatory cycle – Months in which new major regulations will be announced.
o Compliance Assistance office
o At major industrial hubs
o Especially important for SMEs – Regulatory information, Technical Assistance & Compliance
requirements
o Focus of compliance promotion should move towards pollution prevention.
 PRINCIPLE 4
“Shift responsibility for monitoring and compliance from regulators to regulated entities,
with appropriate oversight safeguards”

o To record the results & present them for regulators review.

o It also provides essential data to supplement & support compliance monitoring activities
undertaken by government agencies.

o Quality assurance program for third party monitoring.

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Set-up a self-monitoring and reporting regime

o Make self-monitoring and reporting a legal requirement

o Establish acceptable level of compliance for CEMS
o Establish self-monitoring data as basis for enforcement action
o Disseminate self-monitoring data for social assurance/oversight
o Make false data the highest level of non-compliance
 PRINCIPLE 5

“Compliance assurance is about identifying and establishing effective working relations

with other agencies and departments and non-governmental/private actors whose
activities influence/ support environmental enforcement”

o Coordination of activities & feedback, mostly where separate institutions for

environmental permitting, inspection of environmental health & safety, and construction
inspections, etc.
o Taking support of non-governmental/ private actors for knowledge support and third-
party assurance.
o Formal relations should be established through agreements or memoranda of
understanding.
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Coordination System

o Set-up area-specific coordination mechanism with different stakeholders

o Build capacity of different departments
o Set-up feedback system for continuous improvements.
o Enhancing stakeholder co-operation, transparency and public disclosure of information.
 PRACTICAL IMPLEMENTATION

o The principles and tools explained might not immediately be attainable.

o Several principles and tools may have already been adopted, but not formalized and
documented as SOP.
o Develop a roadmap to implement what is appropriate over a period of 1-3 years.
Thank You!!