Control and supervision reform: what entrepreneurs should expect?

The way the «Public Government» seeks to relieve the administrative pressure on business, keeping safety in mind.

The necessity of reform on control and supervisory activity was for the first time emphasized as early as in 2009. Why hasn’t it been finished yet? What will the state and business community receive from its implementation?

«Stop nightmarize the business». The question concerning the necessity of control and supervisory activity (CSA) reforming arose in 2009. The famous aphorism concerning redundant number of inspections, by which the authorities «nightmarize» the entrepreneurs appeared during that particular period. However the business community scrutiny, department disputes and some other reasons caused the postponing of problem solution in terms of legislation. Two years ago when the discussion was reestablished the President Vladimir Putin ordered the Government of Dmitry Medvedev to develop the «road map», which offers a possibility to overcome disagreements of different departments, taking part in the reform, to accommodate the interests of business to the full and to prepare a state control bill. The Government affirmed the «road map» on improvement of CSA in Russia as a part of executing of the President’s instruction as of April 1st, 2016. It became the first integrated document which systematized the most important directions of the reform. The main burden during the creation of the new legislative initiatives was laid on the «Public Government» headed by Mikhail Abyzov. He holds as well the position of the head of the government subcommission for improvement of control (supervisory) and permitting functions. The Ministry of Economic Development of the Russian Federation prepares the framework law «On the basics of the state and municipal control (supervision) in the Russian Federation», being the fundamental of control and supervisory reform.

Priority project. The recent up to date results of «Public Government» work concerning CSA reforming were represented within the Sochi International Investment Forum 2016 on September 30th. The project being developed under the leadership of Mikhail Abyzov was included by Vladimir Putin and Dmitry Medvedev to the list of priority ones. Its implementation is divided into three steps up to 2024. 3 main goals of the reform are defined in the project:

• ensuring safety of human life and health by reducing deaths, as well as diseases, poisonings, victims and injured by 10% in 2018, by 30% in 2021 and by 50% in 2024;
• reducing the level of threats and material damage by 10% in 2018 г., by 20% in 2021 and by 30% in 2024;
• increasing the level of maturity and efficiency of CSA by 10% in 2018, by 30% in 2021 and by 50% in 2024.

The reduction of the administrative pressure on business by 20% in 2018, by 30% in 2021 and by 50% in 2024 is designated separately.

It is planned to achieve the defined goals by implementing 8 projects, among the main of them are: change to risk-oriented approach in control and supervision, introduction of the new assessment system of control authorities’ work, preventing of violations in enterprises, reducing the level of corruption and improvement of control and supervisory authorities personnel. Within implementation of the stated projects it is planned to eliminate out-of-date, redundant, controversial and duplicate requirements under carrying out inspections, which relate to 90% of ineffective business expenses from execution of the state requirements.

Risk-oriented approach. Special attention is paid to the implementation of the risk-oriented approach, providing dependence of inspection frequency on the potential risks degree (for example, damage to life and health of citizens, environment, property and safety) on the object. According to this model, the continuous inspections will take place only on the objects of heightened danger. Objects constituting no potential essential threat can be released from them. According to the worldwide experience, using of this approach significantly decreases the total number of inspections. The «Public Government» plans that by 2018 the risk-oriented approach is to be implemented by 90%.

Between business freedom and citizens’ well-being. Annually 44 departments in Russia carry out 130 kinds of the state control; as a result there are more than 2 million inspections. According to Mikhail Abyzov, the expenses from redundant control and supervisory activities amount to from 1,5% to 7,5% of GDP. At the same time during inspections only 60% of real violations are revealed. One of the strategic goals of CSA reform is an annual reduction of inspections by 15%, which will give a possibility to reduce the business expenses by half by 2024 under their carrying out. Except for the quantity parameters, much stress is placed on quality improvement of the system under reform. Significant efforts are directed to increase the inspection efficiency and its results together with the simultaneous reduction of administrative pressure on business. It is important to build a new system which on the one hand could be economically less burdensome for entrepreneurs, and on the other – provide real protection for life and health of citizens, as well as the safety of state.