Accountability and transparency

Accountability and transparency to the minister and legislature

Setting expectations for the regulator

Clarity and transparency on government expectations over the work of the regulator can be achieved through different modalities - a formal government statement for the ACCC and the AER and legislation for the ORR. The choice of modality may to some extent depend on the institution to which the regulator is formally accountable. Whatever the modality chosen, the regulator takes a proactive role in making clear what its role and duties are and in identifying the practical steps that will be taken to meet these expectations through publicly-available plans that detail operational modalities and resources deployed.

The ACCC and AER are formally accountable to parliament through the responsible ministers. The government sets expectations in formal Statements of Expectations (SoE) that are publicly available on the Australian Treasury website.2 These SoE are relatively short - approximately three pages each for the ACCC and the AER - and lay out government expectations on process (e.g. use of better regulation tools and attention for administrative burden reduction) rather than on specific regulatory issues. The regulators respond through a Statement of Intent (SoI) - also available on the Australian Treasury website (Box 2.2).3 The ACCC also lays out its role, functions, accountability structure and procedures in a relatively short and yet comprehensive brochure available on its website (ACCC, n.d.).

The ORR is solely accountable to Parliament. While members of the ORR Board are appointed by the executive, they are not accountable to the appointing minister, who can only provide “advice” through a published letter (which rarely happens). In the absence of any SE from the executive, the ORR’s functions, duties and powers are stated in its current legislation

and are accessible via the ORR’s website, which provides a clear statement

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Box 2.2. The Australian government’s Statement of Expectations and the regulators’ Statement of Intent

The Australian government’s Statement of Expectations (SoE) outlines its expectations about the role and responsibilities of the ACCC, its relationship with the government, issues of transparency and accountability and operational matters. It forms part of the government’s commitment to good corporate governance of agencies and reducing the regulatory burden on business and the community. The SoE states that it is imperative that the ACCC act independently and objectively in performing its functions and exercising its powers as set out in the CCA and that the government expects that the ACCC will take into account the government’s broad policy framework, in performing its role and meeting its responsibilities. The ACCC in turn provides a Statement of Intent (SoI) outlining how it proposes to meet these expectations.

The AER has a similar SoE with the Council of Australian Governments Energy Council (COAG EC) in which COAG EC outlines its expectations that the AER will perform its legislative functions and implement a work program that supports the objectives set out in the national energy legislation. The AER’s SoI sets out the AER’s work program in regulating energy networks and markets, and the benchmarks that will measure the AER’s performance. The Statement also sets out how it aims to achieve principles of accountability and transparency, efficient regulation and effective engagement with stakeholders and other energy markets.

Source: Chapter 3 of the current report.

Actions to meet expectations are detailed in annual plans that are published on the regulators’ websites. The ACCC and AER prepare a Corporate Plan that identifies the specific strategies, measures and resources that the regulator will deploy to meet expectations and achieve goals and also includes specific performance indicators to track progress. The ORR publishes an Annual Business Plan as a response to the expectations set in the legislation. The Annual Business Plan provides the strategic objectives and a number of measures, both quantitative and qualitative in order to reach these objectives. It identifies medium and long term outcomes under each strategic objective, and matches it with the annual activities that will help achieve these outcomes (Box 2.3). ERSAR also prepares an activity plan that is submitted for opinion to an Advisory Council composed of key stakeholders, before its submission to the executive and parliament.

Box 2.3. Planning ahead to meet expectations at the ACCC,

AER and the ORR

The ACCC and AER Corporate Plan for 2015-16 identifies four strategic objectives. Better regulation is addressed through specific performance indicators developed by the Australian government for all major regulators (the Regulator Performance Framework). For each strategic objective, the Corporate Plan lays out:

  • • Financial resources and staffing
  • • Priorities/programmes
  • • Performance indicators for each of the priorities/programmes

The ORR Business Plan for 2015-16 is structured around 6 strategic objectives. Organisational performance and better regulation is one of the strategic objectives (“Be a high-performing regulator”). For each of the 6 strategic objectives, the Business Plan outlines:

  • • Long-term outcome
  • • Medium-term outcomes and outputs
  • • Activities

Source: ACCC and AER (2015), “Corporate Plan and Priorities 2015-16”, https://www.accc.gov.au/publications/corporate-plan-priorities/corporate-plan-priorities- 2015-16 (accessed 24 July 2015); ORR (2015), “Business Plan 2015-16” March 2015, http://orr.gov.uk/ data/assets/pdf file/0018/17622/business-plan-2015-16.pdf (accessed 24 July 2015).

 
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