Regulatory Regimes and Organised Crime: Report (html)
4. Specifying the desired objectives
4.1 Policy makers should delineate clear policy objectives when designing a regulatory regime to help prevent organised crime infiltration of lawful occupations and industries.
4.2 Regulators need clear policy objectives to help guide them when exercising discretion, determining where to allocate resources and balancing competing priorities.
4.3 Following an inquiry into Victoria’s regulatory framework, the Victorian Competition and Efficiency Commission reported that:
the capacity of regulators to implement good regulatory practices can be constrained by the regulatory framework they are required to implement. For example, whether they can access an appropriate range of enforcement tools or whether the objectives of their regulation are clear.
4.4 Preventing all organised crime infiltration is an unrealistic expectation. It would either be impossible to achieve or likely to require so many resources and have such a negative impact on legitimate occupation/industry members that the costs of achieving that goal would outweigh the benefits.
4.5 A preferable goal may be to reduce infiltration to a tolerable level. What that means will vary according to the nature and characteristics of the occupation or industry, including:
• the harm that would result from infiltration
• the resources required to address infiltration in a particular occupation or industry
• whether actions to reduce infiltration will affect other policy goals such as ‘reducing red tape’ and encouraging competition.
4.6 It is likely to help if the policy goal is included in the objectives of the legislation that creates the regulatory regime. For example, the objectives of the Gambling Regulation Act 2003 (Vic) include to ensure that the management of gambling is free from criminal influence and exploitation. The Commission was told that the inclusion of this objective in the Act means that achieving that policy goal is part of the mission and culture of the regulator (the Victorian Commission for Gambling and Liquor Regulation) and helps determine the regulator’s activities.
4.7 Further, including the objective in the relevant legislation may also help regulators withstand pressure from stakeholders to change their activities. For example, when regulators examine licence applicants to look for any connection to organised crime, the licensing process may take a considerable time. Regulators may be pressured to reduce the time taken. Such pressures may be appropriately withstood if the prevention of infiltration is an express regulatory objective.
4.8 If the objective is included in the legislation, it should be drafted with sufficient nuance so that it can complement rather than contradict other objectives.
4.9 In addition, there should be cohesiveness in regulatory objectives across an occupation or industry, where possible. In its submission on the second-hand/separated vehicle parts industry, the National Motor Vehicle Theft Reduction Council observed that:
There is a discernible difference in emphasis between the regulatory objectives underlying the motor trader and vehicle repairer legislation (ie. consumer protection and market regulation) and those underlying the second hand dealer Acts (ie. crime prevention as well as consumer protection). That difference is potentially significant given … that the trade in separated parts is, to different degrees (depending on the jurisdiction), subject to both.
4.10 Where a regulatory regime comprises more than one piece of legislation that regulates the conduct of the same occupation/industry members, where appropriate, the regulatory objectives should be consistent across the different Acts.
Victorian Competition and Efficiency Commission, Strengthening Foundations for the Next Decade: An Inquiry into Victoria’s Regulatory Framework, Final Report (2011) xli.
Submission 17 (Darryl Annett).
Gambling Regulation Act 2003 (Vic) sub-ss 1.1(2)(c)–(d).
Consultation 4 (Roundtable 3).
Submission 3 (National Motor Vehicle Theft Reduction Council).