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The relationship between the regulator and the regulated

Over time, a relationship forms between supervisory authorities and companies that manage risky activities. This relationship makes an important contribution to safety, and helps to ensure the effective management of industrial risks. It also plays a critical role in the social acceptability of these activities, and the development of trust in on-site governance and activities where there is a risk of a major accident.

After leading a working group from 2017 to 2019, the FonCSI conducted a strategic analysis on “Relations between supervisory authorities and industrialists” from 2020 to 2023.

publication

> The Regulator–Regulatee Relationship
in High-Hazard Industry Sectors
(open access)

Context & scope

The importance of effective controls over safety become most apparent when it is absent. The point is clearly illustrated by the recent case of the failures regarding the Boeing 737 Max certification process, which has been widely criticized for its lack of rigor and insufficient decoupling of financial and safety considerations.

Recent decades have seen the development of an extensive academic literature on risk regulation and governance. The latter has analyzed the impact of different forms of control (ranging from highly prescriptive approaches to self-regulation), and the institutional form of the regulator, and its effects on its independence and its expertise.

The issues to be explored

  • What are the potential similarities, differences and complementarities between external controls, exercised by an authority, and internal controls implemented by companies? Authorities could require operators to ‘become auditable’ in order to reduce the number of direct inspections. What are the conditions that could make this partially delegated control effective in the long term?
  • What other regulator–regulated relationships and regulatory practices have been implemented internationally, and in different industrial sectors?
  • What is the role of third parties such as notification bodies, third-party certifiers, insurers, and professional associations in the relationship between regulators and operators, and in overall risk governance?
  • What is the impact of the way in which the regulator is financed (by the taxpayer, by the consumer, by the companies that are regulated) on the regulator–regulated relationship, and on the level of trust that society has in the governance system?
  • How can we inspect and control the impact of operators’ decision-making practices on safety, and organizational culture, while respecting the need for internal confidentiality?

The strategic analysis

The Scientific Group for Strategic Analysis

  • Benoît Journé, University of Nantes
  • Jean-Christophe Le Coze, Ineris

Together with experts from companies and other organizations:

  • Guilhem Nicolas & Cécile du Cluzel, DGAC
  • Cécile Laugier & Olivier Guillaume, EDF
  • Olivier At & Jean-Philippe Daniel, EPSF
  • Olivier Chanton, IRSN
  • Jean-François Lechaudel, TotalEnergies
  • Frédéric Hénon, UIC

The working group

As a preamble to this strategic analysis, the FonCSI led a working group on the theme. The members met a dozen times in 2017 and 2018, and completed their work in 2019.

The members

The European Union Agency for Railways, ASN, CFDT,
Association RES, DGAC, EDF, EPSF, Ineris, Inra, IRSN,
SNCF, Total, University of Nantes.

Contact & coordination

Eric Marsden
Email: eric.marsden@foncsi.org