Managing Risks and Incentivising Growth: Draft OECD Best Practice Principles for Licensing and Permitting

Licensing and permitting (L&P) are the keys to unlocking safe activities, but not every door needs to be locked to begin with-especially if there is no significant threat behind it.

L&P are essential regulatory tools for achieving public policy goals. They can support the reduction and prevention of risks created by businesses and individuals in their operations before they start their activities. If properly designed, L&P can also foster trust and confidence by ensuring that only qualified and compliant entities are allowed to operate. L&P can also incentivise innovation, market development and growth.

If badly designed or implemented, L&P can create significant barriers to market entry, hinder innovation, distort competition, waste public resources, causing negative economic and social impact while failing to build citizen trust and secure public safety. Therefore, they need to be used sparingly and correctly.

For L&P to be effective, governments and licensing authorities need to balance the protection of public goods with market development and innovation when designing and implementing L&P. Governments and licensing authorities need to ensure L&P are used only when needed, and avoid unnecessary, complex, and bureaucratic processes and requirements. L&P should also seek to be consistent across jurisdictions or domestically in different regions and municipalities. Licensing authorities should ensure that individuals and businesses are sufficiently informed about processes to request L&P and be compliant to reduce risks for the people and the environment.

Interested parties are invited to provide written comments in English or French to bppconsultation@oecd.org until 12 February 2025. If you have a comment on a specific part within the draft, please indicate this along with the page number (e.g. Principle 1, paragraph 20, p. 8).

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