Tan Sukhera 00:03
Hello, everybody and welcome to Canadian regulatory fireside chats. Now, before the pandemic, gr folks used to get together on Fridays at lunch and network, and they would learn from their peers and troubleshoot different issues and brush up on different tips and things like that. But unfortunately, with the pandemic, now, it’s kind of a thing of the past and it but it is in the spirit that we started Canadian regulatory fireside chats. Now, there’s been a massive lack of information out there, especially in our social media feeds about the fantastic work that people in the space are really up to. So we’re really proud to be part of the solution. Now, the series is meant to be a platform for champions of industry, from government relations, policy regulatory teams, to share their take on best practices, overcoming challenges and educating others. Now, if you’re a fan of the chat, please feel free to like, share and join into the conversation. And now it’s time to take a look at some of the housekeeping rules. So it’s a 30 minute session with a q&a that’s in the chat. So you can take a moment to locate that in zoom right now. The recording will be shared after the event and if you like to live tweet, you can always do so the hashtag is hashtag fireside chats. And our handle is at no at g n o w it. Now if you’re interested in becoming a speaker, you can always send us an email at Hello at No att.com There’s always different topics, industries, and really the goal is to try and share as much insights as possible. On that note, I’m your host Hansa Cara, I’m the VP of insights for know at Inc. and always a quick little note here that we’re looking to always improve and eager to learn and always welcome your feedback. Now, this talk is powered by Noah Inc. For people who don’t know, we’re a media regulatory and business intelligence company. We use AI and machine learning to actively search federal, provincial and municipal government sources of information online. This includes the hand Sard parliament, because that’s committees debates, things like requests for consultations, regulatory bodies, government agencies live video feed in more and you can visit www.no att.com for more details. Now it’s my favorite time. My favorite part of the call where I get to, you know, introduce our speaker for today on episode 16 is public private partnerships and regulatory modernization. I’ve got Mark for Duke with us. So he’s an international trade facilitation advocate for with over 20 years of experience in international trade of agri food commodities. As Director of Risk Management and Regulatory Affairs at auto VLM. Mark is responsible for the regulatory affairs files of a leading international supplier of plant based frozen foods. In addition to his role at aarto VLM. Mark is a steering committee member of the Global Alliance for trade facilitation, a public private partnership for trade led growth. With funding from USAID and Global Affairs Canada, among other donor partners, the Alliance helps developing countries implement the WTO trade facilitation agreement. Without any further ado, take it away wanna
Mark FeDuke 02:57
thank you, Tim. And thank you to the team at know it for allowing me the opportunity to participate in today’s call, looking forward to discussing something that is near and dear to my heart. And that is the opportunity to leverage partnerships and trade facilitation to advance trade facilitation as a means of being a driver for economic growth and development. Tan was very kind and sharing my introduction, or my background with you as part of his introduction today. But maybe cutting to the chase a little bit, it may be more appropriate to look at describing myself the way that I described myself. And that is as a regulatory trade nerd. I’m very interested in seeing how we can, as a community of interested subject matter experts in the area of Regulatory Affairs and regulation to leverage that, not as merely seeing it as a must do, but how we can leverage it towards creating shared value. And that’s something that I’m also very keen to discuss and open a dialogue on. But more specifically for our conversation today, I’m hoping that this would really be an opportunity and a platform really to start a conversation in support of the art of the possible. And by that I mean, the art of the possible of looking at regulator and regulated party in another partnership dynamic. Certainly, there’s a great deal of consultation and stakeholder engagement when it comes to the regulatory process, the publication of regulations. But in the context of international trade facilitation and some successes that we’ve seen in that space, are there any learnings that I can share with you today or at least plan to seed with you is regulatory subject matter experts in how we may be able to further leverage a concept around looking at stakeholders in a different way more specifically, looking at regulators as common stakeholders to Ward’s our looking at achieving greater value and optimal outcomes in all the various business lines that we have. So just within that context, let’s take a little look at what we’ve seen the United States I know the good People know it are heavily involved in the candidate because that process many people in this call will be closely monitoring and regular basis through know it. issues that crop up under Canada Gazette one Canada gives it to and reviewing how that may impact various businesses and stakeholders in various industries. I’m a little more anchored on the American side when it comes to publications, notices that are in the Federal Register Notice that is updated on a daily basis in the United States. And what I’ve shared with you here on the screen is just a tiny, tiny fraction of the various agencies that publish in the FRN. It’s by no means an exhaustive list may be exhausting, but it’s by no means an exhaustive list of the various agencies that are constantly or nearly constantly engaged in providing notices, consultation opportunities, proposed rules, notices of rulemaking, final rules, etc. And with that, as some background, think for a moment, that something that would seem to be as simple as regulations around food, I know that anyone on the call today that’s in the food industry will be chuckling at the concept of something as easy to regulate as food, but to those who are not quite as familiar. In the United States, broadly speaking, meat, dairy, poultry, and eggs, as well as catfish are regulated by the USDA. The US Food and Drug Administration is responsible for regulation of all other foods, including seafood, but not catfish. And we’re not going to talk about catfish today, because that would take up the entire day to explain why that is. And then of course, there’s also an interesting interplay amongst different regulators and who regulated parties are. And I’m singling out the United States for this discussion only because I’m so familiar with it. But this is the same types of issues that arise in many different jurisdictions around the world. Specifically with respect to goods that are being imported into the United States and sticking with our very exciting food theme, to import goods into the United States foodstuffs. That is, there is need of an importer of record. That’s the customs importer regulated under 19 CFR, the FDA by way of the US Food Safety Modernization Act has its own importer definition. And unlike the customs importer, which can be a foreign entity, it can be a customs broker, well, the FDA importer must and can only be a US person. And despite the fact that Canadian food companies have long operated as non resident importers for purposes of customs clearance under NAFTA and under Koosman, or US MCA as Americans like to refer to it. Well, US companies are the only entities that are eligible to be the FDA importer that adds a certain new complexity. And in the new year, we’re likely to see regulations that will be finalized, as the United States updates its organic food regulations, the strengthening organic Enforcement Act, which will create a wonderful array of new regulatory matters, including the creation of yet another new importer definition, with that party being the US operation or rather, the operation within the United States that’s responsible for receiving organic food. It’s also described in the proposed rule as the operation within the United States that’s responsible for accepting organic food. But the terms accepting and receiving are not defined. So that adds yet another complexity. My point here is that looking at various different regulators that have oversight of any particular product, commodity service, etc. There’s an interplay between different regulators, and obviously a tremendous number of different regulators all striving to achieve a goal that we would like to assume as in the common good, but sometimes without meaning to the unintended consequence of new regulations can be to add complexity. And so speaking of complexity, let’s consider the concept of normal accidents. Normal accidents is a term that I believe was first coined in this context by Gale sociologist Charles perot. His work looks to see how systems can end up having cascading failures that can go across a system with these failures all but being baked in when you’ve got a system that is both complex and made up of tightly coupled systems or steps. work he did, for example, on the basis for the accident, a Three Mile Island indicated that an intervention in the process that was meant to make the facility safer actually was the cause of the accident of Three Mile Island and he goes into tremendous detail in this concept of normal accidents, where very complex systems made up of conjoined or inter woven or highly coupled systems can spread a domino effect like risk across the supply chain and occur across businesses and so there is a complexity within the regulatory arena that may by its very complexity and the fact that things are so coupled provide yet unintended right Risk for outcomes that we want to avoid. And within the concept of looking at regulations, regulators and stakeholder value, well, we’ve already discussed complexity and the need for an optimal path forward is an optimal path forward one where we continue to add complexity to the system. Many of you will be familiar with these concepts in the customs world have a single window, a platform by which industry can provide data and transmit data to regulators to a common regulator to then be fed to various other regulators that have admissibility authority, depending on which jurisdiction that one may be looking at. And that’s all made possible thanks to a wonderful opportunities in the world of it, and digitization of trade. The flip side of that coin, of course, is that becomes ever easier for a regulator to solve a problem by asking for more data. And we’ve seen an incredible amount of mission creep in the data space, not only in Canada, the United States and other jurisdictions, but there is a tremendous amount of data that seems to be almost never ending in order to satisfy regulatory needs. So complexity, and how do we optimize our path moving forward in this sphere? So what about fostering innovation through outcomes based regulation, this is something that we’ve certainly seen in the food space, I’m served many sure many of you have, have also come across this as a trend in various different jurisdictions. And it is a wonderful opportunity. And it’s a fantastic opportunity for regulators to point out that we’ve heard you industry, we’ve heard your comments that our prescriptive approach, our overly prescriptive approach can be limiting. It can force you quite literally into a corner, and really be a drag on your opportunity to innovate in a particular space, whether it’s in production, etc, etc. The problem with no comms based approach to regulation is that many regulated parties simply aren’t willing to versed in what they’re supposed to be achieving. It’s like having a destination being provided to you but not having a roadmap. And that can be challenging for many companies, and in many regulated fields in the food space. This is something that we’ve certainly experienced as an industry, both in Canada and the United States, where there’s a great deal of confusion among many towards how to achieve these outcomes, opportunities for interpretation and misinterpretation of how to achieve that outcome. And so that adds complexity all on its own. And, of course, it’s incredibly important for industry and regulators alike to get regulations. Right. And by that, I mean, it’s incredibly costly. If regulations are promulgated, which then prove to have been, perhaps not as well thought out as they could have been. And yes, there’s obviously a risk in the stakeholder and consultation process that perhaps not as wide a range of stakeholders have been consulted, who may have been able to provide an obvious issue for regulators to fix before they have to address issues after the fact. And of course, no one is perfect, no regulator is perfect, no system is perfect. But the need to go back and fix fumbles in the regulatory process can be incredibly costly, especially to regulators, especially to those regulators in those jurisdictions where they can be sued for such matters. And then again, industry also needs to make sure that it’s taking an approach that sees stakeholders as part of the value chain. Regulators are key stakeholders, and anyone who misses the opportunity to be at the table working with regulators towards solving problems, is just putting their own organizations at tremendous peril. So with these challenges that exist in this space, might the adoption of a more partnership oriented mindset be of help or value and with that in mind, I thought I would share some recent learnings we’ve had in the International Trade Facilitation space, that that certainly requires engagement between regulated parties and different regulators in different countries and how we can achieve optimal outcomes. But before we get right down to those specific examples, I thought it’d be prudent to share some interesting perspectives on partnerships in the international development arena. I’m a big fan of the work that Andrea stump has done. I’ve had the good fortune of being able to speak with Andrea and see her speak and engage with her in discussion around topics around partnerships. She’s a former senior counsel at the International Bank for research, reconstruction, rather and development. She’s a partnership advisor award winning author, and she was kind enough to allow me to share with you this slide and the her take on using some ancient wisdom as she puts it, in concerning partnerships in this area. She looks at partnerships as being like rock like water, and that it’s all in the balance. And I think it’s informative to share her thoughts on that with respect to being like rock and like water. Good partnerships are organic, responsive and flexible. They sit on solid foundations and go with the flow. Their design is about connections and delineations. As the water flows as the rock divides, there are patient and sustained but also quick and adaptable, their contextual, modular stable in their settings, all the while seeking new ways, evolving over time. And with respect to partnerships being all about being in the balance, nature lives in the balance, and so to partnerships, they are organic, made of people with life cycles, for all their connections and delineations. They need positioning and poise to be more diversified. They need more connections and critical mass to be more inclusive than need more core and cohesion. Balance also lies in being measured and mindful. And I think that’s a really interesting approach to looking at partnerships, whether it’s in our personal lives or in business, and certainly as it comes to the regulator regulated party partnerships that one may be able to achieve if we take that type of a mindset. I know that may sound a little a little naive, there’s always going to be a need for a bit of a separation between regulator and regulated party but where we can come together, as cliched as it sound, the opportunity for all of us to be in the same canoe rowing in the same direction can achieve wonderful outcomes. And with that, rather interesting and hopeful comment, how does this align with how regulated and regulated parties interact on a daily basis? are regulars consistently consulting towards addressing issues in meaningful ways? Or like many businesses? Do they also have an agenda where they got to check off certain boxes for the sake of checking off certain boxes that can be reality, at the same time, are regulated parties that is the same industry? Are we consistently offering meaningful solutions when an initiative is brought forward by consumers, by regulators through need of international agreements with our trading partners, and that may see requirements for regulation in particular space that may add a cost or speed bump in the road and how we want to operate our businesses? Is our first reaction just to pull out a template documents that says no and make sure we find expert a to refute why this initiative is of no value? Or do we look at things in a truly mindful way and see if there is merit to what’s being asked and how maybe there’s an alternate way of approaching that that is probably a little bit more meaningful in achieving a sustainable and optimal income outcome, rather than simply having a no to change mindset. So with that in mind, I thought I’d get a little more into the detail around international trade facilitation, and the opportunities that partnerships in this area could yield and are yielding in small ways in different parts of the world. Looking at a report from the World Economic Forum back in 2013, the enabling trade value, value and growth opportunities report from from 2013. Economists and other researchers at the World Economic Forum pointed out that if all duties around the world in 2013, were slashed to zero, that’s the same no one paid any duties anywhere in the world. That would have a net benefit income to global GDP, increasing global GDP by point 7%, roughly point $4 trillion, which is a very important sum of money. And if we’re looking at growth, that certainly is positive growth. At the same time, if we were to have left all duties in place in 2013, as they were in 2013, but if efforts were had been possible, if somehow, a wand could have been magically cast and all the countries in the planet, all of our various trading partners, were able to meet the halfway mark just 50% of best practices of 2013 and border administration, transportation and communications infrastructure. Well, that outcome would also increase global GDP but by 4.7%, some $2.6 trillion. The point here being that something is as terribly unsexy sounding. As advances net border administration, processing and transportation communications infrastructure technology could yield far more economic benefits than merely dropping taxes. And especially in the environment that we’re all operating in currently, where we see global supply chains that are ground to a halt in certain spaces where there were equipment shortages, freight markets are just apparently looking to be evermore out of whack. We can see the critical importance for supply chains to be working in alignment towards achieving optimal outcomes, rather than what we’re currently seeing in many parts of the world for a variety of reasons. And well, major reforms, wholesale changing of regulations in the international trade arena can yield all kinds of advantages. Sometimes, small wins can be even more powerful because it can be more sustainable and that can obviously happen a lot more readily when there is adequate buy. buy in from stakeholders who are impacted by any changes that are looking to be implemented. With that in mind, I’ll introduce you to the Global Alliance for trade facilitation. As Ken mentioned, I am on the steering committee. It’s one of the various volunteer hats that I wear. The Alliance was founded just about four years ago now, funding from USA ID, global affairs, Canada, and of course, the donor agencies of both Germany and Denmark, with day to day management by pillar organizations. In the United States, that would be the center for international private enterprise, the World Economic Forum in Geneva, and the International Chamber of Commerce chamber of commerce rather in Paris, along with various private companies like ourselves and others, who look to find pain points in supply chains in various parts of the world. And more specifically, working with developing countries that are signatories to the WTO trade facilitation agreement with Alliance projects being focused on helping developing countries achieve the goals of the TFA. A quick word about the TFA was ratified to date by 153 countries. Some markets around the world will have many of these requirements already in place, others are working in this area, I have not set out a full list of all of the various opportunities that the TFA brings or the requirements that are brings for signatories to adhere to, but system. Such matters that do come up under the TFA are looking at the publication of information relating to rules and procedures simplifying trade avenues to ensure cooperation within government agencies within an importing country, around engagement and communication with customs authorities across different countries. Looking to foster transparency and impartiality and non discrimination at border crossings. The TFA is hoped to further foster growth amongst SMEs enable women led businesses to more actively engage in benefits from international trade. And all of this is around an opportunity to see how trade facilitation can not only increase trade, but also be part of the United Nations Sustainable Development Goals. So what types of stuff does the Alliance do? And how can I give you examples of partnerships? Well, one example of that in making trade easier, faster and more cost effective is a project in Colombia, one of the early wins that the Alliance had, although it came with tremendous costs, to learn from how to achieve outcomes and partnerships and investments rather than cost, I should say, in how to engage with different stakeholders towards achieving this outcome. Most specifically, food and beverage imports in Chile are governed by other national food safety, and pharmaceutical and drug authority INVIMA. And through establishing a risk management system in partnership with INVIMA. The Alliance was able to yield an outcome such that this particular change to how imports are processed in Colombia reduced physical inspections by 30%, leading to tremendous gains in efficiency, limiting delays at the border, and at ports of entry. And in the first 18 months of operations and making use of this new risk based approach and a risk management system, there was net savings of over $8.8 million for the supply chain. So a lot of positive outcomes. And this, of course, is not a one time only operation. It’s ongoing. It’s now part of the day to day operations of INVIMA and how they look at food and beverage imports in the country. It allows INVIMA to focus resources and higher risk items, which is something that we’ve all talked about in the regulatory field for so long a risk based approach. And this is a fantastic win for all concerned. And you can appreciate that, yes, it’s an opportunity for importers in that country to ensure they get their goods in a timely fashion. But it also ensures that the regulator is able to see what’s coming into the country and take appropriate use of its resources towards the big where they should be most readily applied. It’s not just about making trade easier for importers, it’s about ensuring that there’s engagement with parties across the supply chain. And you can imagine that this required engagement not only with customs authorities and food safety authorities, Ministry of Trade and a great deal of others in this process to yield this successful outcome. There’s an alliance project currently underway in Mozambique, which is actively engaged in making sure that vaccines are getting to to those who who need them. Looking at the digitization application for the pre shipment authorization to allow vaccines into the Mozambique rather than looking at, you know, wide scale, customs reform provides huge opportunities. Instead of spending years implementing a new system, this alliance project is integrating the processes into the country’s existing single window. And as you can imagine, this requires working with quite a variety of stakeholders in country, taking advantage of an opportunity to have a common goal in mind and being willing to perhaps be flexible about certain things look at doing things differently. And, of course, as we look to get beyond the COVID world that we currently all are living in, what happens in the future with international trade? We currently see incredible problems in supply chains around the world. Is this something that an imposition should be made towards some cookie cutter approach that will have some unintended consequences? Or are there greater opportunities to begin by having a partnership approach that sees regulated parties looking to modernize trade and trade facilitation procedures in step with regulators who share that same objective? Now, I don’t have a solution for you today in this call. And I certainly welcome the opportunity to further this discussion, perhaps an opportunity for another call looking at best practices, and how to partner with with agencies and the types of issues that crop up within a partnership oriented or partnership, focused model. But my real goal for this conversation today was to at least plant the seed towards the opportunity of looking to the complexity in the system, knowing that the regulatory space is as complex as it is, yes, that probably suits some stakeholders, the very act of complexity in the system may be a way to create a gatekeeper value proposition for certain interested parties. But if we’re looking at optimizing outcomes for the benefit of all, perhaps a slightly different approach may be warranted, given the complexity that we have, and the speed with which regulations are coming at all of us in the various jurisdictions with which we do business. So with that in mind, thank you for your patience. Thank you for your time and letting me share these thoughts with you. And I hope that we can keep this this conversation going.
Tan Sukhera 27:20
Awesome, that was fantastic. Thank you so much for that mark. There you have it, folks, public private partnerships, and regulatory modernization. It’s time now for the last five minutes of the call where we can take a look at some of the q&a that’s been coming in through the chat. So let’s take a look at question number one. The successes sound interesting, but what about the failures? Can you tell us anything about when projects haven’t really worked?
Mark FeDuke 27:49
Yeah, sure. 10. I’m happy to do that. I apologize. My mic seems to my headsets had a bit of an issue. So I apologize for that. But
Tan Sukhera 27:56
also your camera, if you want to just turn that on?
Mark FeDuke 27:58
Yeah, sorry. I had a bit of a little bit of a glitch there. Sorry about that. Yeah, respect to the failures, failures, we’ve learned tremendously from failures, don’t we, across across all facets of our life, including in business and in the areas where the alliances had, challenges have been where the project has not moved forward, predominantly by way of events that are beyond one’s control, but may have been potentially foreseeable in certain jurisdictions, there have been engagements with government with regulators. And then over time, if there were delays in implementing a project for whatever reason, if a ministers and various government officials end up changing during the course of that, that project that can lead to an erosion of momentum towards success. So that only, you know, reminds us that partnerships are something that needs to be cultivated. The it’s a garden, they have to continue to work with, with partners to grow towards success. And if there are challenges, let’s face towards keeping on track. That’s where things can be derailed quite quite readily. Also a lack of perhaps being at the outset, really ensuring that everyone is exactly on the same page with what the deliverables are. And that they are those milestones are met because if not, then that can breed some cynicism in towards whether the project will succeed or not. That’s a quick observation, but but happy to go into greater detail. There’s interest.
Tan Sukhera 29:22
Okay, and Alright, so the next question here says, are you really just talking about businesses taking a shared value approach to their working with regulators?
Mark FeDuke 29:32
Yeah, I guess that’s, that’s part of this. You know, there’s been a lot of talk in recent years around conscious capitalism. Shared Value approach. I know that former Bank of Canada and Bank of England governor Mark Carney has a fantastic new book out about values and building a better world for all. So yeah, I guess you know, that that does influence my thinking a little bit in terms of thinking of engagement with regulators as a as a stakeholder shared value approach, right. And I think may be a great example of that creating shared value. In many instances that I’ve experienced in the food sector. Specifically, there can be occasions where professionals regulators who are asked to implement to new initiatives and look into different things in the area. Be the epidemiologists, that economists or botanist, what have you, they may not really have an understanding of supply chains function. I mean, sure, there’s they’ve been an introductory course and supply chain management 101 and the various endogenic exogenic flows of resources and capital and how supply chains function in nice linear fashion. But the reality is supply chains can be quite different. And so I’ve had occasion with others, to sit down with regulators in a very open book way and showing how supply chains work in reality, and being able to give that to the regulator and how things really work as opposed to how you think they may work can be of tremendous value to all concerned creating shared value for both parties. But that has to come by way of having an understanding of trust in partnership with a regulator. So maybe that’s a way of my addressing that question.
Tan Sukhera 31:08
Excellent. Well, if there’s no more questions, going once, going twice, okay, great. So I just want to say Have a great afternoon to everybody. Thank you so much for coming for attending as well. Friday afternoon. Thank you Mark. So much for the talk. It was super insightful. And if they want to get in touch with you, what’s your handle mark?
Mark FeDuke 31:29
Best thing to do reach me my email Mark dot FeDuke at ardo dot com
Unknown Speaker 31:37
Excellent. Thank you so much. Take care everybody.