Regulatory hindsight, foresight and insight: NRCoP Conference debates key issues facing regulators

Regulation is a difficult craft to learn and practice, and over 500 regulators were able to explore the challenges they face and learn from their peers at the ANZSOG-auspiced National Regulator Community of Practice (NRCoP) National Regulators Conference 2023: Regulatory hindsight, foresight and insight in Melbourne.

The conference was a chance for regulators from across sectors and jurisdictions to think about the future of the profession and reflect on the stresses and rewards of regulation. It explored issues including regulatory failure, regulatory levers and tools, the role of investigative journalism, and regulating behind closed doors.

Harvard’s Professor Malcolm Sparrow delivered the keynote address and the conference also featured a session led by ABC investigative journalist Adele Ferguson.

Other speakers included former Victorian Police Commissioner Christine Nixon,  former ACCC head Graeme Samuel AC, Registrar of the Office of the Registrar of Aboriginal and Torres Strait Islander Corporations, Tricia Stroud, ASIC Commissioner Sarah Court,  Commissioner for Aboriginal Children and Young People Victoria, Meena Singh,  Dr Grant Pink, Professor Veronica Taylor, Professor Valerie Braithwaite and Professor John Braithwaite, as well as NRCoP Chair Rose Webb and former Chair Simon Corden.

The opening session on ‘What I wish I knew on my first day’ sparked a lively conversation between regulators on changes in regulation over time and the ways that regulators can deliver public value.

Tricia Stroud, Registrar of Aboriginal and Torres Strait Islander Corporations, said that she had become a regulator because she saw her work as an avenue of self-determination for Aboriginal and Torres Strait Islander Peoples and a chance to be both a regulator and a supporter and champion of a strong self-governing Indigenous community-controlled sector.

“I wish I knew how restrictive a piece of legislation could be, and how difficult it can be to administer a piece of legislation that is different to your gut feel,” she said.

“It can be tough – when you are taking actions not to people’s liking, or when you can’t take an action that the community wants. But if you come to work understanding our vision and purpose, and remind yourself that we are here for the betterment of a sector that is changing the lives of Aboriginal and Torres Strait Islander people on a daily basis it will make it easier to defend decisions and to sleep at night.”

Simon Corden, Commissioner at the Victorian Essential Services Commission, said that regulation could have a range of purposes, and that his work at the ESC helped reduce disadvantage.

“You think you are going into one area, but you can often find that there are other ways you can influence outcomes, and you have a chance to change direction from what you’ve anticipated.’

He said the usage of data by regulators was still pretty primitive and it needed to be improved if regulators were to exploit the benefits of Artificial Intelligence (AI).

“You need a good initial learning data set to do AI well. Until we get good fundamental data, the use of AI is going to be difficult for regulators. It’s coming but I think it’s a big challenge in the short term.”

Rose Webb, current Chair of the NRCoP, said she had only realised the diversity of regulators when she became NRCoP Chair, especially those doing regulation in small teams in a big non-regulatory organisations.

She said that regulation had seen many changes over the past few decades, along with the development of a range of regulatory tools and the potential of social media as a way for regulators to keep communities informed.

“We’ve had a change from police-based investigative teams, and that law enforcement culture. The idea that you are trying to solve a problem not put someone in jail, has changed over time. The idea that regulators have a common program was not as prominent as today. You learnt your speciality not regulation.

She said that it was important for new regulators to spend some time on the front line and the complaints-receiving mechanism for their organisations.

Robert Hortle, Commissioner of Wage Inspectorate Victoria, said that the use of AI was ‘a huge horizon for all of us to contemplate and cope with, some of us will be regulating the use of those tools’.

He said the for regulators to be effective they need to be trusted, and to be trusted they needed to be effective.

“To be trusted we need to take on the individual responsibility to make sure that the information we put out there is effective, direct and impactful as well as pushing back on what we know to be incorrect as well.”

How investigative journalism regulates industries

ABC investigative journalist Adele Ferguson told the conference of the importance of whistleblowers, the way regulators and media could work together and the need for stronger punishments for white collar crime.

Ms Ferguson has won a Walkley Award for her work exposing malfeasance in Australia’s banking sector and has more recently exposed unethical and dangerous behaviour in the cosmetic surgery industry.

She outlined how a phone call from a Senator putting her in touch with a whistleblower from the Commonwealth Bank began a long process of investigation that led to the exposure of the Commonwealth Bank financial planning scandal and triggered the Hayne Royal Commission into the banking sector.

“When the scandal broke it changed the thinking about the banks. Unethical, immoral and sometimes criminal behaviour had festered and some victims lost everything even their lives,” she said.

“Pursuit of short-term profit and greed, and short-term bonuses created a toxic culture that put profits before people.”

She noted that this was a general theme of investigative journalism as it shone a light on industries where wrongdoing was widespread, and where gaming regulators had become an artform.

She said that the whistleblower in the Commonwealth Bank case, Jeff Morris, had gone to the media because he felt that regulators were not taking enough action.

“Without whistleblowers, I wouldn’t be able to do the job that I do. But they’re the people who take risks, they talk about the experiences that they’ve had and you know, it takes a terrible toll on them.”

Ms Ferguson said that there needed to be tougher penalties, including jail time, for white-collar crimes including wage theft.

“With the Royal Commission there were illegal acts committed and we still haven’t seen people put in jail. Financial penalties are effectively the shareholders paying.”

“The Hayne Royal Commission had said ASIC needed to adopt ‘why not litigate?’ as a policy but when they went after Westpac and lost a case they got monstered by Senators at inquiry in a way that was really disrespectful,” she said.

“That sent the message don’t litigate – and we haven’t had a statement of intent for ASIC since 2021. Even though regulators are meant to be independent, you can sometimes see that isn’t happening.”

She said that the roles of the media and regulators were complementary and that they should be working closely together.

“Regulators work within the bounds of the law. If someone comes to them with a complaint they need to ask: ‘is that a breach of the law? will this stand up in court?’ The media can ask ‘is it unethical or immoral? does it pass the pub test?’ That is how we can find flaws in the legal system or gaps in the existing regulation and put pressure on governments to fix them,” she said.

“Media can contextualise behaviour and reflect what the community is thinking. We don’t have the power to impose fines, but we have the power to shame.”

Bringing new perspectives to regulation

Other sessions at the conference focused on the knotty issues facing regulators as they tried to work with regulated parties to improve safety, what can be learnt from regulatory failures, and the dilemmas faced when regulating sensitive areas such as mental health.

Bronwyn Weir, Managing Director, Weir Legal and Consulting Pty Ltd, said that regulatory failure often came from inadequate laws, but also from inadequate implementation of those laws, and that comes down to ineffective regulatory practice.

“There can also be a failure to act on knowledge, because acknowledging a problem means acknowledging the legacy that is building around that problem – and that can be incredibly daunting,” she said.

Simon Katterl, Mental Health Advocate and Consultant, spoke of the importance of using consumer leadership and co-design to transform services like mental health.

“We need to amplify the voices that aren’t being heard in systems, and identifying the peak lived experience bodies is a crucial starting point for regulators,” he said.

Christine Nixon, the former Victorian Police Commissioner told participants that they needed to think more deeply about their responsibilities, and about the power they had to make a difference in people’s lives who don’t have that power.

“Leadership is about responsibility, not about popularity. I hope you walk away from this conference thinking about your responsibilities.”