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Economic Commission for Europe Steering Committee on Trade Capacity and Standards Working Party on Regulatory Cooperation and Standardization Policies Twenty-fifth session Geneva, 2 (pm) - 3 December 2015 Item 5 of the provisional agenda Risk management in regulatory systems

Progress report on the activities of the Group of Experts on Managing Risks in Regulatory Systems*

Submitted by the Rapporteur1

Summary At its twenty-fourth session, the Working Party approved the priorities and plan of work for 2015 of the Group of Experts on Risk Management in Regulatory Systems (GRM). The plan focused on broadening the work of the GRM in the area of crisis management in regulatory frameworks (including participation in the Sendai Conference on Disaster Risk Reduction), as well as on the implementation of the risk management recommendations and tools developed by the Group in 2011-2014 across various fields and sectors.

This document presents the main results achieved by the Group as of September 2015, provides details of the GRM’s activities and meetings, reports on the progress in the completion of the project plan approved by the Working Party upon the establishment of the GRM, and presents priorities and a plan of work for 2016.

An annex includes the names of the individuals and organizations that have participated in the work of the Group.

* This document was submitted late due to delayed inputs. 1 At its twentieth session, the Working Party established a Group of Experts on Risk Management in

Regulatory Systems and adopted its terms of reference, and requested it to report on activities to the Working Party (ECE/TRADE/C/WP.6/2010/2 para.9).

United Nations ECE/CTCS/WP.6/2015/5

Economic and Social Council Distr.: General 29 September 2015 Original: English

ECE/CTCS/WP.6/2015/5

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I. General information on the Group

1. The Group of Experts on Risk Management in Regulatory Systems was established by the Working Party in 2010.

2. The Group of Experts aims at an improved management of hazards that have the potential to affect the quality of products and services, and/or cause harm or damage to people, the environment, property and immaterial assets. The Group will work towards this goal by developing and sharing best practice as regards the use of risk management tools in regulatory and managerial activities.

3. The Group functions on the basis of:

• A broad and diversified membership, with representation of different geographical and economic regions, as well as of different areas of competence and end-users’ interest;

• Webinars and face-to-face meetings organized by use of an e-mail listserver and an interactive website.

II. Main activities in 2015

4. The main results of the activities of the Group of Experts on Risk Management in Regulatory Systems in the year to date are as follows:

Methodology and recommendations:

(a) Development of a methodology for running field projects aimed at the implementation of the GRM recommendations within a given sector. The objectives of such projects include:

i. Building capacity by regulatory stakeholders to identify and manage the risks that confront the sector in which they operate

ii. Promoting a shared vision by all regulatory stakeholders of optimal regulatory outputs proportionate to existing risks;

iii. Developing action plans to fully implement the risk management methodology into a regulatory framework and to evaluate existing regulations against the identified risks.

(b) Developing a new work strategy for the Group – transforming the GRM into a more “on-demand” group:

i. Increasing the level of involvement of regulatory stakeholders in Group’s activities;

ii. Inviting regulatory stakeholders (e.g. risk management officers at the Ministries) to share their needs related to the application of risk management tools in regulatory frameworks;

iii. Developing specific recommendations for regulatory stakeholders based on the identified needs and demands.

Implementation of the recommendations and field projects:

(a) Running risk management projects aimed at the application of the GRM recommendations in the regulatory frameworks of Nigeria and Malawi.

Application of recommendations to disaster risk reduction:


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(b) Application of the GRM recommendations to the specifics of Disaster Risk Reduction

i. Strengthening partnership with the United Nations Office for Disaster Risk Reduction (UNISDR) and other UN agencies by forming the informal group of experts on “Standards for DRR”

ii. participation in World Conference on Disaster Risk Reduction (WCDRR) in Sendai, Japan in March 2015;

iii. Establishing a partnership with ISO TC 292 on “Security and Resilience” and contributing to its activities through a taskforce on “UN cooperation” established under the TC and aiming at contributing to the implementation of the outcome of the WCDRR and other important UN outcomes.

iv. Contribution of an article on DRR to the August-September 2015 issue of the ISO Focus magazine (http://www.iso.org/iso/isofocus_111.pdf).

Contribution to the risk management work of other international organizations and relevant stakeholders:

(c) Strengthening cooperation with the United Nations Industrial Development Organizatiion (UNIDO) and establishing cooperation with International Federation of Red Cross and Red Crescent Societies (IFRC).

III. Important activities prior to the current period

5. The Group benefits from the activities of the Working Party – also described in document ECE/TRADE/C/WP.6/2012/5.

Since its establishment the Group’s most important accomplishments have been as follows:

Methodology and recommendations:

(a) Two recommendations, approved at the twentieth annual session of the Working Party in 2011:

i. A general recommendation on the use of risk-management tools in regulatory systems (Recommendation “R” “Managing Risk in Regulatory Frameworks”: http://goo.gl/HTMYBQ);

ii. A specific recommendation, which describes how regulatory processes can help prepare for and manage crisis including disasters (Recommendation “P” “Crisis Management within a Regulatory Framework” http://goo.gl/zePK5O); ”

(b) The publication “Risk Management in Regulatory Frameworks: Towards a Better Management of Risks”, available at: http://goo.gl/ri6D5K, and translated into Russian in 2014;

(c) Development of training materials and delivery of a training session on “Risk Management in Regulatory Frameworks: Building Quality Infrastructure” for the staff of the technical cooperation unit of the United Nations Organization for Industrial Development (UNIDO);

(d) Analysis of a number of legislative texts that regulate the electrical appliances sector in different jurisdictions from the perspective of the risk management framework (2013);

(e) Finalization of the draft of the recommendation on improving consistency of risk management legislation (2014);


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Implementation of the recommendations and field projects:

(a) Application of the GRM recommendations to regulatory practice in: Australia, Brazil (presented at the Working Party’s session in 2013), Canada, New Zealand and Mongolia.

Application of recommendations to disaster risk reduction:

(a) Organization of a workshop on “Disaster Risk Standards and Accountability for Business and Citizens” at the UNISDR Global Platform for Disaster Risk Reduction in May 2013;

(b) Application of the GRM recommendations to the specifics of Disaster Risk Reduction and publication of a background paper on “Standards and Normative Mechanisms for Disaster Risk Reduction” for the 2015 edition of the Global Assessment Report on Disaster Risk Reduction (GAR 2015), available at: http://goo.gl/O5XpGp;

Contribution to the risk management work of other international organizations and relevant stakeholders:

(a) Cooperation with ISO TC 262 (Risk management) on the use of the GRM best practice;

(b) Participation in the work on the OECD Working Party on Consumer Product Safety and participation in the Workshop on Product Risk Assessment (Tel Aviv, April 2012);

(c) Awareness-raising activities, including through social media and by participating in the “First international conference on ISO 31000” (Paris, March 2012).

(d) Establishing cooperation with FERMA (Federation of European Risk Management Associations), IFAC (International Federation of Accountants) and PRMIA (International Professional Risk Management Association), UNISDR and UNIDO.

IV. Members and representation

6. As of September 2015, thirty experts participate in the Group. Members represent the following areas of competence: planning, developing and implementing technical regulations; disaster risk reduction, business continuity and resilience management; choosing and implementing conformity-assessment procedures; cooperation among business companies and regulators; risk-management methodologies and standards and project management.

7. The work is coordinated by Messrs. Donald Macrae and Valentin Nikonov.The updated list of members is attached to the present report as an annex, and can also be found on the website.

V. Summary of webinars and meetings

8. Bi-monthly webinars and electronic data exchange are the usual means of communication in the Group. The Group held five webinars between August 2014 and September 2015.

9. At its nineteenth webinar, held on 9 October 2014, the GRM approved its priorities and the plan of work for the year 2015. The GRM also discussed its contribution to the recently established Group of experts on Standards for Disaster Risk Reduction in view of the WCDRR.


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10. At its twentieth webinar, held on 5 February 2015, the GRM discussed its contribution to the Sendai Conference on Disaster Risk Reduction. The Chair of the GRM (Kevin Knight) would be moderating a working session at the Conference and members exchanged ideas on subjects that could be added to the agenda. The webinar also included a presentation on “Photovoltaic generation on disaster recovery”, on electricity generation technologies during crisis.

11. A UNIDO staff and the coordinator of the GRM updated the the GRM on the preliminary results of the implementation of the GRM recommendations in Nigeria (as part of the bigger project of UNIDO aimed at building national quality infrastructure in this country). Based on the results of the activities in Nigeria, the GRM approved a methodology for running field projects to implement the GRM recommendations. This included a recommendation: that the main concepts of risk management in regulatory frameworks should be referred to in the high-level policy documents, and that specific implementation plans should be developed and implemented within the existing regulatory frameworks for pilot sectors. At the webinar, the GRM also discussed issues related to management of systemic risk in regulatory frameworks.

12. At the twenty-first webinar, held on 7 May 2015, the Secretariat and the Chairperson presented the results the Sendai Conference on Disaster Risk Reduction. The event on Standards in Disaster Risk Reduction had been well attended and successful. It had strengthened the understanding of a broad audience on how standards should be applied at various stages of disaster risk management process: during disaster risk identification, at preparing for disasters stage, disaster management, recovery etc.

13. The coordinator of the GRM presented a methodology for running risk management projects and outlined the results of a field project conducted in Malawi (as part of a larger UNIDO project in the country). He explained that the risk management approach is only one of the tools available in regulatory review and reform. The GRM approach was a framework-based approach, and as such it required setting up an institutional and analytical framework. This framework would then be tasked to gather objective evidence on the need to regulate and review existing and new regulations. As such, it was different from other approaches that required expert judgment in analysing existing regulatory requirements and provide recommendations for reform. Although the GRM approach required more effort, it is fully owned by the country and self-sustainable.

14. At the webinar, the members of the Group also discussed and approved the strategy of becoming a more “on-demand” group and strengthening the involvement of regulatory stakeholders (especially from developing countries) in its activities and providing guidance on risk management implementation based on specific demands of regulators.

15. At its twenty-second webinar, held on 26 June 2015, the GRM discussed a checklist of law and disaster risk reduction – as presented by Tessa Kelly, Senior Disaster Law Officer at the International Federation of Red Cross and Red Crescent Societies (IFRC). It was noted that the checklist was based on joint pioneering work by the IFRC and the UNDP on the role of legislation in disaster risk reduction, which had led to the publication of the largest comparative study of legislation for disaster risk reduction: “Effective law and regulations for disaster risk reduction: a multi-country report” (see: https://goo.gl/697Z3w for details of that study).

16. At the twenty-third webinar, held on 13 August 2015, the members of the Group discussed its participation at the Annual Session of the Working Party 6 in December 2015. The Secretary of the WP.6 provided general information on the Annual Session.

17. The GRM also started a discussion on new trends in risk management, such as machine learning and the use of sophisticated predictive algorithms, along with their


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possible application within regulatory frameworks. The GRM agreed to continue its work on the subject.

18. The Coordinator of the GRM (Donald Macrae) updated the Group on the progress in the field projects in Mongolia and Brazil.

19. The Group decided to start gathering contact details of people carrying out risk management related functions (similar to those of risk officers in business companies) at various Ministries, in order to implement its strategy of becoming a more ‘on-demand’ group.

VI. Progress in the completion of the initial plan

20. The following table provides information on when and how each of the tasks listed in the plan of work for 2015 (contained in ECE/TRADE/C/WP.6/2014/5) was performed and what the result was.

Fields and tasks Results/Comments

Disaster risk reduction and participation in World Conference on Disaster Risk Reduction (Sendai, Japan, March 2015).

The GRM participated in the conference, a working session was chaired by Kevin Knight.

Participation in the preparation and launch of a project aimed at increasing awareness of voluntary standards by the Disaster Risk Reduction community;

The GRM contributed to the work of the Group on Standards in Disaster Risk Reduction.

Conducting field projects and trainings to regulatory stakeholders;

Field project were conducted in Nigeria and Malawi (as part of UNIDO projects), Mongolia and Brazil.

Developing new recommendations;

A methodology on running risk management projects was developed and approved by the GRM.

Promotion of GRM’s work;

GRM’s work was promoted at the Sendai Conference and during the implementation of the field projects.

Establishing liaisons with other risk management organizations.

The GRM strengthened cooperation with UNISDR, FERMA, PRMIA, UNIDO, ISO and IFAC, and established cooperation with IFRC.

VII. Priorities and the plan for 2015

21. The main priorities for the GRM in the next year are as follows:

(a) Finalizing a recommendation on the implementation of the GRM best practice in sectoral projects;

(b) Becoming an “on-demand” group: identifying the needs of regulatory stakeholders related to risk management and and providing specific recommendations;

(c) Developing recommendations and methodologies on application of big data and machine learning technologies within regulatory frameworks;


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(d) Promotion of GRM’s work, also through field projects and trainings;

(e) Establishing and strengthening liaisons with other risk management organizations.

13. The main risks for the successful completion of the project include:

• insufficient funding for the organization of the work and for the field work

• insufficient involvement by member States


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Annex I

List of members (as of 30 August 2015)

Chairperson Kevin Knight (Chair, Technical Committee 262: Risk management, International Organization for Standardization)

Coordinators

Donald Macrae (Independent consultant)

Valentin Nikonov (Project Manager, Bank24.ru)

Active members

1. Alberto Alemanno (Associate Professor of Law, HEC Paris, France)

2. Lorenzo Allio (Independent Consultant on Regulatory Reform and Risk Regulation, and representative of the European Risk Forum)

3. Florentin Blanc (The World Bank Group)

4. Bo Yumin (National Accreditation Service for Conformity Assessment, China)

5. Ronald Cormier (Fisheries and Oceans Canada, Canada)

6. Alex Dali (President, Global Institute for Risk Management Standards, G31000, France)

7. A.M. Dolan (University of Toronto, Canada)

8. Graeme Drake (Committee on conformity assessment, International Organization for Standardization ISO))

9. Valery Hurevich, (Belarusian State Institute for Standardization and Certification (BelGISS), Belarus)

10. Phil Kelly (Liverpool Business School, United Kingdom)

11. Markus Krebsz (Risk Reward Limited, United Kingdom)

12. Sean MacCurtain (Secretary, Committee on conformity assessment, International Organization for Standardization (ISO))

13. Justin McCarthy (PRMIA)

14. Alpaslan Menevşe, Chairman, Mirror Technical Committee ISO 31000, Turkey

15. Peter Morfee (Ministry of Economic Development, New Zealand)

16. Greg Paoli (Risk Sciences International, Canada)

17. Christophe Renard (Cotecna, Switzerland)

18. Mikhail Rogov (RusRisk, RusHydro, Russian Federation)

19. Dan Roley (Caterpillar, United States)

20. Marc Schaedeli (Group for Risk Management, Nestlé)


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21. Paul Taylor (Federation of European Risk Management Associations (FERMA), United Kingdom)

22. Olivier Testoni (International Telecommunication Union)

23. Jan van Tol (Ministry of Interior and Kingdom Relations, Netherlands)

24. Vincent Tophoff (Senior Technical Manager, International Federation of Accountants)

25. Simon Webb (The Nicholas Group, United Kingdom)

26. Paul Hopkin (Institute of Risk Management, United Kingdom)

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