Regulatory Capture – What is it? (CAEPLA)

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What is Regulatory Capture?

“Regulatory capture” are two words that describe what happens when an industry that is supposed to be regulated by an impartial government body, is able to exert so much influence over that body, that the regulator is literally taken captive. When this happens, rather than giving appropriate consideration to the legitimate interests of all stakeholders, the regulator becomes an extension of the industry or businesses it is supposed to monitor and impartially judge or discipline.

Regulatory capture is not the same as what happens when a group of businesses resist some intrusive government action. Resisting an enemy is very different from capturing an enemy, and then using his resources to do your bidding.

When regulatory capture occurs, the industry that does the capturing can use the regulator as a tool—backed by the force and power of government—to impose burdens and obligations on other stakeholders, even to the extent of overriding or ignoring the public interest. This was the case in the United States recently, as it has been repeatedly asserted how the US energy regulator, known as the Minerals Management Service (MMS), maintained such an inappropriate relationship with energy companies, that it didn’t protect the public interest. (Recent scandals at the MMS have revealed regulatory capture so pervasive that government regulators were accepting free gifts from industry, going on all expense paid trips, partaking of sexual favours, etc.)

Read the full article here.

Canadian Association Of Energy And Pipeline Landowner Associations (CAEPLA).

 

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