The Environment Business Interview - The law man
When the Government asked Richard Macrory to lead its better-regulation review, they made a shrewd choice. Tom Idle talks to the man who's enthusiastic about challenging the legislative regime
However, as a keen environmentalist with an appreciation of political sensitivities, the Cabinet Office made a wise choice in utilising his vast experience and knowledge in the world of environmental regulation.
Macrory has been asked by the Better Regulation Executive (BRE) - set up by the Government last summer to drive the regulatory reform agenda - to follow in the footsteps of Philip Hampton, whose review threw up issues surrounding the need to reduce the administrative cost of regulation.
Due to report this autumn, Macrory has certainly enjoyed his BRE post.
You are following in Hampton's footsteps to produce a review of the UK regulation regime. What were Hampton's main findings?
Well, the Hampton review looked at regulation of business across the board. Pre-Hampton there had been a consensus that regulators should enforce and others should advise. Hampton, quite rightly, said that regulators should advise as part of their function.
His main point, however, was that a risk-based approach should be adopted.
What do you mean by that?
It's a very sensible approach where you're saying: 'I've got limited resources.' And if there's a company I inspect, which I know from its track record that the risk of non-compliance is very low, it really isn't sensible to keep inspecting them once a week.
What I should be doing is identifying companies that are perhaps located in an environmentally sensitive area, are risky businesses and have a track record. Rather than inspect them once a week, I should inspect them twice a week. I think that makes a lot of common sense.
I think there is a similar inspection regime for local government.
They should be going that way rather than simply saying we inspect everybody once a week because that's what we do. But you have to carry the public with that as well.
If you are, for instance, living next to a waste disposal site and you find out that it used to be inspected once a week, and now it's inspected just once a month, you might need to be convinced.
In this particular review, I'm hoping we can engage with some of the non-governmental organisations because they represent the public interest.
What has been the main problem with current environmental regulation?
One issue is that of inconsistency in approaches. Inconsistency in the sort of action a regulator takes and inconsistency in sentencing practice.
One of the reasons the Environment Agency was set up to take over most waste prosecutions from local authorities was because of a real worry about inconsistency.
Do you find that SMEs and multinational companies approach regulation differently?
SMEs are under their own particular pressures of complying with regulation. Often they won't have a dedicated environment or health and safety manager.
One of the tasks assigned to the Better Regulation Executive is that of simplifying regulation. Is there a danger this could lead to oversimplification?
One of Hampton's concerns was that 63 national regulators were identified and he just thought: 'This is far too many.'
There is a process of consolidation of a number of national regulators going on at the moment. But I'm assuming that the regulations we have in place are sensible and I'm looking at how we deal with ensuring best compliance with those regulations.
But you have suggested that we change the way sanctions are imposed.
The trick is to be able to distinguish between the types of people that you are regulating.
In most areas of regulation, there are real criminals, rogue traders and people who have no intention of complying with the law. We have to make sure there is proper criminal law dealing with those people.
At the other end of the spectrum, you have highly legitimate businesses who are trying to comply but sometimes make mistakes. In the middle, you have some that sometimes may underinvest or maybe have other pressures.
And what do you suggest for these companies?
In some areas of regulation, where there has been non-compliance and it's caused damage, administrative penalties are used, where you don't have to go through the courts. There isn't a criminal conviction but there is still a financial sanction.
Is there a role for this in environmental regulation?
This is one of the questions we are asking. Could it be used where, for instance,
you have a water company who pollutes a river but there isn't any real evidence of
People shouldn't be able to gain financially by non-compliance. But how do you stop this system being abused by the regulator?
I think that's what some industries are concerned about: 'Will it just allow the regulator to come and impose a fine on us, without the protection of the courts?'
So, when can we expect your review to be published?
We hope to produce an interim report in May, which will reflect on the evidence and what we've learned. We'll be looking for responses to that before a final report in the autumn.
My review is quite deliberately concerned with general approaches and principles. Whatever we recommend is unlikely to be imposed on regulators.
I don't want to impose a model that has to be adopted by everybody because that is very difficult to do. But I think it's quite legitimate to askcertain questions.
Do you think the review will be ignored in some corners?
I'm very conscious that there will be many people who'll say: 'We do have criticisms
of the current system but we know it well and we don't want to see any changes.'
I will look at the evidence because maybe they're right, and maybe they're wrong.
Of all the things you're involved with right now, what's the toughest?
It's the timescales involved. With the area of regulation, one could potentially spend five years looking at it. But that wouldn't actually help anybody if I did that. So you have to try to understand the situation and be able to come up with a vision and some principles, even though you think: 'God, I'd love to spend years working on this.' But you can't do that otherwise you're never going to get change.
Why have you been so successful in your career?
I've always adopted an open mind to things, and don't come with terrible prejudices. I'm also sensitive to the politics involved with things.
Is there anything specific you'd like to achieve before you retire?
Well, I did actually make some changes to the law on bicycles. In this country we have yet to make proper provision for cycling in urban areas, and there is fantastic potential. So that's something I'd like to achieve more on.