The Challenges and Obstacles in Implementation of Regulatory Impact Assessment (RIA s) in Indonesia: Case Studies From Central and Local Government

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1 The Challenges and Obstacles in Implementation of Regulatory Impact Assessment (RIA s) in Indonesia: Case Studies From Central and Local Government Teguh Kurniawan Muh. Azis Muslim Eko Sakapurnama

2 OUTLINE Introduction Overview about RIA in Indonesia Utilization conditions of RIA in the Preparation of Various Regulations/Policies in Indonesia Perceived Benefits of Using RIA Issues and Constraints in the Implementation of RIA Closing Remarks

3 INTRODUCTION SEKRETARIAT WAKIL PRESIDEN

4 Introduction RIA is a tool that can help the government to decide whether a rule/regulation is really necessary, what are the advantages and disadvantages of these regulations, as well as any alternative solutions that can be taken into consideration to the rules RIA has been widely used by about two-thirds of OECD member countries Indonesia is one country who apply RIA in limited and relatively new Limited use of RIA in OECD will make policy makers not to get detailed information on the potential impacts that may result from a policy that is made so that the policy is being unaccountable, non-transparent, inconsistent, and unable to help in the achievement of economic and social welfare

5 Goals and Objectives of the Research 1. Identifying the utilization conditions of RIA in the policy making process of various regulatory / policy by Central and Regional Government agencies 2. Identify the benefits derived from the use of RIA 3. Identify problems and constraints faced in the utilization of RIA

6 Model Analysis of the Study

7 Overview about RIA in Indonesia SEKRETARIAT WAKIL PRESIDEN

8 RIA in Indonesia 2001; Early recognition bytaf 2006; RIA began to be implemented by National Planning Agency ; Socialization & Technical Guidance in 28 RGs and Ministry of Trade RIA is used to test and measure the potential benefits, costs and effects of new or existing regulations 10 questions of RIA: 1. Is the problem correctly defined 2. Is government action is appropriate 3. Is the regulation the best for the government 4. Whether a rule has a legal basis 5. How many levels of bureaucracy involved in the coordination of relevant regulations 6. Are the regulations is useful, compared to the cost 7. Is the distribution of impact will be transparent in the community 8. Is the regulation clear, consistent, comprehensible and accessible to users 9. Are all interested parties have an equal opportunity to present their views 10. How is compliance with regulations could be achieved Partnership of TAF-Legal Bureau of National Planning Agency expire in 2011 there is no socialization on RIA in Indonesia

9 Utilization conditions of RIA in the Preparation of Various Regulations/Policies in Indonesia SEKRETARIAT WAKIL PRESIDEN

10 Utilization of RIA in Indonesia RIA is still not much and not optimally used in the preparation of various regulatory / policy in Indonesia Utilization of RIA by Central Government Ministry/Agency that using RIA From 6 agencies of the study, only 1 agency (Ministry of Trade) which is still using the RIA method, while 1 other agency (National Planning Board) had been implementing RIA since 2006 and ended in % 34% Ministry/Agency that not using RIA The 2 institutions (Ministry of Internal Affairs & Secretary General of the House of Representatives) have taken advantage of RIA, but not fully exploit 33% Ministry/Agency that implementing RIA but not optimum 2 other institutions (Ministry of Justice and Human Rights & Ministry of Finance) are not using RIA

11 Utilization of RIA in Indonesia RIA is still not much and not optimally used in the preparation of various regulatory / policy in Indonesia Utilization of RIA by Regional Governments 14% RGs that still using RIA after technical guidance from Central Government (Regency of Gorontalo) 43% 43% RGs that do not use RIA after technical guidance from Central Government (Regency of Solok, Regency of Bantul and Municipality of Pekalongan) RGs that do not use RIA and never got technical guidance from Central Government (Regency of Brebes, Regency of Bandung, and Regency of Pekalongan) For 3 regions that do not use the RIA method, 2 regions (Regency of Bandung and Regency of Pekalongan) relatively have officials with knowledge of RIA, while 1 other region (Regency of Brebes) that did not have personnel who know about RIA

12 Utilization of RIA in Indonesia The cause of unimplemented RIA is as a result of RIA that not supported by the rules that explicitly require the use of RIA. RIA in many cases it is difficult to be fully implemented in Indonesia. There needs to be a variety of adjustments to the RIA according to the context and conditions in Indonesia As a method, RIA was developed by the states that have characteristics that are in many ways different from Indonesia Resistance that emerges from the apparatus can be overcome by a strong desire of the leadership to fully support the implementation of the program and have the confidence and ability to gain support from various parties

13 Perceived Benefits of Using RIA SEKRETARIAT WAKIL PRESIDEN

14 Benefits of RIA 1. RIA generate policies that more accountable, transparent, consistent, and can assist in the achievement of economic and social welfare In practice it can be seen that the regulations generally have a lot of impact and this impact is often difficult to predict without detailed study and consultation with parties affected by such policy. The example is about policy on cocoa and cane that made by the Ministry of Trade. 2. For policy makers, RIA could help in generating policies that efficient and effective Aspects of efficiency can be seen in the benefits to be gained with the existing policy, the main purpose of RIA is to ensure that the regulations would increase the welfare of the community from the perspective of benefits that will exceed the costs While in the aspect of effectiveness is based on the involvement of all stakeholders in the preparation of the options available since from the beginning until the problem formulation stage, therefore the resistance that may occur is minimized from the beginning

15 Benefits of RIA 3. RIA can systematically assess the positive and negative effects from the policies that being proposed or are under way with respect to the analysis of costs and benefits over existing options. 4. Stakeholder involvement in the process of policy making will make more closer relevance of the problems and the needs of the community with the policy objectives that will be generated 5. The use of RIA can improve the quality of the policy. This is based on the availability of information on the potential impact of the policy so as to provide an assessment of whether a policy can achieve the desired goal

16 Issues and Constraints in the Implementation of RIA SEKRETARIAT WAKIL PRESIDEN

17 Problems and Obstacles of RIA 1. Lack of leadership commitment in implementing RIA 2. Lack of knowledge about RIA from the apparatus 3. Lack of socialization on RIA 4. Budget constraints of local governments to utilize RIA 5. The existence of formalistic view that there is no textual statements requires the use of RIA in policy 6. Mindset of apparatus related to RIA method as a complex and costly 7. The perception that RIA is suitable only for policies that regulate economic sectors

18 Closing Remarks SEKRETARIAT WAKIL PRESIDEN

19 Conclusion RIA is a policy tool that can be used to improve the quality of regulation. There are several benefits in the implementation of RIA for policy making, in general the use of RIA could help in generating policies that more efficient and effective. The use of RIA can contribute to the policy making process by promoting an efficient regulatory policies and increase social welfare

20 Suggestions 1. Inserting RIA in the curriculum of leadership education and training. Therefore, the supreme leader candidates in central and regional agencies may have the knowledge, understanding, confidence and the desire to take advantage of the RIA 2. Making RIA as mainstream in policy by providing explicit obligation for government agencies to use these methods in any decisionmaking 3. There is a need to conduct further studies to see the readiness of implementing RIA that viewed from various contexts that exist in Indonesia that can help in producing concepts of RIA that can be applied in the context of Indonesia

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