Regulatory functions - Conflict of Interest Guidance

Conflict of Interest Guidance:
Regulatory Functions
The purpose of this guidance is to help you apply our Conflict of Interest Policy and
Conflict of Interest Procedures in regulatory areas or functions.
[Agency] has a regulatory role across a range of functions including: [building, health
and safety, the environment] [delete as appropriate].
For the purpose of this guidance ‘employee in a regulatory role’ includes employees or
contractors who perform inspectorial, investigative or other compliance functions.
Please read the Conflict of Interest Policy for the scope and meanings of key concepts
and definitions as these are incorporated by reference into this guidance.
Definition and management of high risk areas for conflict of
interest in regulatory functions
A key risk in regulatory areas has been identified as ‘regulatory capture’, where an
employee, manager or principal officer develops a close relationship with the industry
or person being regulated and becomes unable to provide unbiased and fair regulation
of that industry or person.
This conflict of interest may lead to the development of regulations to benefit an
industry, special interest group or person, in a reluctance to enforce regulations, or in
favoured treatment of the regulated group or person.
Ongoing relationships with those we regulate will be compromised if conflict of interest
risks are not managed. If you are involved in developing or enforcing regulations, you
must ensure that your decisions or recommendations are transparent, impartial and
free from bias.
Risks for those in regulatory roles also arise from an expectation of gifts or benefits,
pecuniary or non-pecuniary.
If you are involved in a regulatory role, you should complete a [Disclosure of Relevant
Personal Interests Form] as required.
You must also complete a [Disclosure of Conflict of Interest Form] if a conflict of
interest arises for you, and set out your strategies to manage the conflict. These must
first be discussed and agreed with your manager, or another independent person. A
variety of options are suggested in our conflicts of interest procedures.
Processes that [Agency] will use to manage the risk of conflicts of interest arising in
regulatory areas may include any one or more of the following: [add / delete as
Agency name | Conflict of Interest Guidance: Regulatory Functions
rotating employees to avoid close relationships developing with those they
regulate and affecting the impartiality of their decision making;
conducting regular internal or external audits of decision making processes;
and ensuring that application and appeal processes in relation to the
regulated decisions are well publicised.
2.1 Personal relationships
If you are involved in developing and/or enforcing regulations, consider whether you
have any conflict of interest through a close working relationship with the regulated
person or industry, through shareholdings, pecuniary, family, friendship or other
relationships with them, including any acrimonious relationships.
While there are benefits in [Agency] as regulators having a working knowledge of
regulated persons or industries, there is a risk is that we can become too close to the
industry and be overly influenced by those operating within it.
Employees should avoid social relationships with those being regulated as there is the
risk of actual, potential or perceived conflict of interest.
Managers of employees in regulatory roles should periodically assess the risk of their
staff becoming too close to regulated persons or entities and should consider
appropriate actions to reduce the risk, through avenues such as staff rotation.
If you become aware of a colleague or supervisor developing relationships that may
affect their judgment or independence, you should discuss the issue with them, and/
or report the circumstances, as set out in the Conflict of Interest Procedures.
2.2 Expectation of benefit, pecuniary or non-pecuniary
If you receive gifts or benefits from those you regulate, there is a risk of actual or
perceived bias in your decision making processes.
Benefits include in-kind incentives such as travel and other opportunities. Gifts may be
offered at during or after regulatory decision-making processes.
You must be aware of the risks and consequences of receiving gifts or benefits. These
are outlined in [Agency’s Code of Conduct and/or Gifts and Benefits policy].
If you receive an offer of a benefit in the context of a regulatory function, you must
immediately report the circumstances to your manager.
If you become aware of a colleague of supervisor receiving gifts or benefits you should
discuss the issues with them, and / or report the circumstances, as set out in the
Conflict of Interest Procedures.
Agency name | Conflict of Interest Guidance: Regulatory Functions