Better Regulation –
Rethinking the Approach for SMEs
UKCC19
October 2008
EXECUTIVE SUMMARY
Background to research
There are increasing pressures on the regulators to rethink their
approach to how they build relationships with, and regulate, small and
medium enterprises (SMEs). Increasingly, as larger point
sources are controlled, the UK agencies are required to regulate
smaller sources. However, these smaller sources and risks may be less
amenable to the permit-inspect model traditionally used. In
addition, the modernising regulation agenda and the post-Hampton review
follow up are likely to drive agencies towards modernising their
approach in this area.
The Scotland and Northern Ireland Forum for Environmental Research
(SNIFFER) commissioned this research to investigate the
regulator’s compliance assistance and good practice approach
to SMEs.
Objectives of research
- To understand the drivers for compliance or non-compliance
with environmental law amongst SMEs and to compare and contrast those
views with research conducted in other spheres such as for food safety
and health and safety law. This will require research to gain
understanding of agency staff and other stakeholder views on current
and possible compliance assistance programmes.
- To review the UK agencies’ compliance assistance
programmes, particularly those aimed at SMEs, by reviewing programmes
in an American and European context via a desk study and limited
interviews.
- To summarise the agencies’ current programmes
aimed at SMEs and in the light of feedback and best practice observed
elsewhere, make proposals for a possible SME strategy that could be
implemented by the agencies.
Abstract
The finding that environmental compliance can be improved for small and
medium enterprises when regulatory resources are aligned to the
compliance orientation and capacity of firms is both challenging and
exciting. It is challenging because it requires that we question
preconceived ideas about how we should regulate firms – and
exciting since it provides an opportunity for improved environmental
performance for all firms. A key feature of the analysis is that we can
accommodate differences in compliance orientation and capacity by
correctly aligning regulatory instruments, mechanisms for ensuring
compliance with these regulatory instruments, and when these fail,
strategies for dealing with non-compliance. Also, to ensure that the
most effective practices are used within this schema, the project
reviewed approaches in other countries and advisory and
non-environmental regulators in the UK. The suitability of these
practices was then assessed by canvassing the views of environmental
agency staff and small and medium enterprises in Scotland and Northern
Ireland. With this information in hand the practices were then
positioned against the environmental compliance orientations of firms,
producing four distinct compliance postures that are named
‘most difficult to control’, ‘most
vulnerable’, ‘most easily controlled’,
and ‘most compliant’. The report concludes by
recommending that aspects of the approach be piloted to assist future
implementation.
Key words: better regulation, compliance capacity, compliance assistance
Copies of this report are available from the Foundation, in electronic
format on CDRom at £20.00 + VAT or hard copy at
£35.00, less 20% to FWR members.
N.B. The report is available for download from the SNIFFER Website