Licensing and permitting (L&P) are some of our key tools in delivering regulation. They can uphold the public interest – preventing harm before it occurs and enabling businesses to make confident investment decisions. But they can also become a burden – dragging businesses through slow, costly, uncertain processes and preventing citizens from accessing innovative goods and services.
That’s why these new Best Practice Principles on Licensing and Permitting matter. They are the result of years of practical work and research on international good practice with OECD Member countries and beyond, at different levels of government across a range of regulatory domains, including food safety, environmental protection, occupational health and safety and economic regulation.
That research has shown that licensing and permitting are too often the default option; used as the result of legacies and outdated policies without accurate assessment of whether they will have a positive impact in reducing risks. But that doesn’t mean that licensing and permitting have no role in a modern system of regulatory delivery. This new, normative guidance sets out an approach based on risk-assessment and proportionality. It demonstrates that, when guided by policy outcomes, fed by evidence and introduced as part of a broad regulatory delivery system, licensing and permitting can be targeted effectively to prevent harm and increase confidence.
These Best Practice Principles provide high-impact, ready-to-use advice to ensure that approaches to L&P:
Ensure that risks are managed and mitigated, and that limited resources are used appropriately;
Serve the green and the digital transitions, the fight against climate change, and the safety and the wellbeing of the people;
Support entrepreneurship, healthy competition, innovation and growth; and
Enhance trust in the market and in public institutions.
These principles are a significant step forward in our use of risk to maximise societal outcomes. They indicate the direction for governments and regulators to follow, based on a real understanding of complex, fragmented and ever-changing societies; they will empower governments and regulators to make decisions based on evidence, science, risk and proportionality. I commend them to you.
Graham Russell,
Chair of the OECD Regulatory Policy Committee