Clearly, absolute independence of regulatory bodies is neither possible nor desirable. A regulator should not set and implement its own agenda. “Independent” regulators are expected to be subject to government oversight and a system of checks and balances.
Effective regulation that supports sustainable investment requires some independence of the regulator from political influences, especially on a day-to-day or decision-by-decision basis. The body must be an impartial, transparent, objective, non-political enforcer of government-determined policies by means set out in controlling statutes of the regulator, free of transitory political influences. The regulator should also be independent from the industry that supplies ICT services.
The regulator should implement the policy of the government and only make decisions that are within its legal authority. However, regulators need insulation from political intervention, so that the regulatory process is not politicized, its decisions are not discredited, and the policy of the government is implemented. As discussed in Module 6, a balance is needed to ensure that the regulator is both independent and responsive to the broad policies of the government. Several formal safeguards have been employed to achieve such a balance, such as:
- providing the regulator with a distinct statutory authority, free of ministerial control;
- prescribing well-defined professional criteria for appointments;
- involving both the executive and the legislative branches of government in the appointment process;
- appointing regulators (the Director General or Board/Commission members) for a fixed period and prohibiting their removal (subject to formal review), except for clearly defined due cause;
- where a collegiate (Board/Commission) structure has been chosen, staggering the terms of members so that they can be replaced only gradually by each successive government;
- providing the agency with a reliable and adequate source of funding. Optimally, charges for specific services or levies on the sector can be used to fund the regulator to insulate it from political interference through the budget process;
- exempting the regulator from civil service salary limits to attract and retain the best qualified staff and to ensure adequate good governance incentives; and
- prohibiting the executive from overturning the agency’s decisions, except through carefully designed channels such as new legislation or appeals to the courts based on existing law.