Regulation in the infrastructure sectors is often designed specifically to safeguard public values. This proves to be quite a challenge: regulation sometimes hampers flexibility and innovation, which threatens public values rather than protecting them. Are there better ways, from a legal perspective, to design regulation that really safeguards public values, and that still leaves room for innovation?
Theoretically, there are, according to researcher Suzan Stoter at Erasmus University Rotterdam. In fact, the Dutch government is already working on such regulation – so-called goal-based regulation, which aims to achieve certain goals without specifying in detail how this should be done.
“An example is regulation that dictates that doors on passenger ships should be fire resistant,” says Stoter. “It doesn’t define ‘fire resistant’, nor does it specify the material that the doors should be made of. Companies are free to make their own choices in this regard.”
Larger companies generally thrive on goal-based regulation, but smaller companies may experience problems. They don’t always have enough technical or legal expertise to adequately interpret regulation that is not strictly specified. As a result, they fear issues of liability in case something goes wrong. And what exactly is ‘safe’, ‘environmentally friendly’ or ‘efficient’? “It is not just small companies that are unhappy with goal-based regulation,” notes Stoter, “but also enforcement authorities, such as inspectors and the police. They prefer rules that are clear and unambiguous.”
Stoter feels that these problems can be solved, and that it is worth doing so. “It is possible to draw up legal arrangements that address these uncertainties,” she says. “Goal-based regulation may for instance prescribe optional measures, or be accompanied by elements for training of enforcement officers or protocols for enforcement. These measures give support and security without the rigidity of conventional legislation.”
She concludes, however, that there are situations where goal-directed regulation will never work, simply because people will not accept it. “Some public values are so politically sensitive that everyone, including politicians, prefers conventional legislation. Rational arguments sometimes don’t count. It is alright to accept this, as long as these issues are discussed openly, and decisions are made transparently.”
