Enforcement strategies: inspection, targeting and escalation

Abstract

All regulators must confront the question as to how best to achieve compliance and enforcement within their resource constraints. This challenge comprises four issues, namely the where, how, who and why of regulatory enforcement. First is where to allocate regulatory resources? In most circumstances, agencies will not be able to inspect and target all regulated firms or sites due to limited resources. As such, regulators inevitably have to make a choice between potential inspection targets, and about the frequency and length of inspections. The second question confronting regulators is how to intervene in the affairs of regulated firms in instances of non-compliance? This encompasses both the range and nature of enforcement tools available to inspectors, and the way in which those tools are employed (or not) individually, in combination or sequentially. It is the interplay of the available tools and their application that determine an agency's regulatory enforcement strategy. Two subsidiary issues are who should intervene (government or other parties beyond government regulators that are willing and able to assume a surrogate enforcement role) and why they should intervene (eg is the enforcement action rationale for education, retribution or deterrence purposes). This chapter explores the where, how, who and why of five key regulatory enforcement strategies. It also highlights how context influences the application of these strategies, particularly relating to inspection, targeting and escalation.