4 Scoping the issue and planning the project: Preliminary impact and risk assessment (PIRA)

Completing a preliminary impact and risk assessment (PIRA) is the first step in the RIA process. The PIRA is a basic project plan for the RIA that the agency intends to complete before proposing recommendations to Cabinet.

4.1  What is a PIRA?

A PIRA is a document that is intended to:

• help agencies determine whether Cabinet's RIA requirements apply to a policy initiative for which they are responsible
• help agencies identify the potential range of impacts and risks that might be presented by the regulatory options for a policy initiative or review, so that they can be appropriately addressed in the regulatory impact analysis
• help Treasury policy teams determine the level and sort of policy engagement they wish to have with the lead agency on the initiative, and
• help Treasury confirm whether the nature and size of the potential impacts and risks warrant RIAT involvement in providing independent assurance on the quality of the RIS (the significance criteria).

4.2  The significance criteria

A regulatory initiative is considered to trigger the significance criteria if the option/s being considered are likely to have:

• significant direct impacts or flow-on effects on New Zealand society, the economy, or the environment or
• significant policy risks, implementation risks or uncertainty.

More detail on the types of impacts and risks to be considered is set out in the PIRA template (see Annex 1.1).

4.3  Process for completing the PIRA

Work on the PIRA should start as early as possible in the policy process. The PIRA should be signed off by the relevant policy manager with responsibility for the completion of the work or development of the proposal.

The PIRA should be provided to the relevant Treasury policy team (and copied to RIAT via ria@treasury.govt.nz) as soon there is enough information to make a call about whether the RIA requirements apply (primarily using information in the PIRA and discussion with agencies about potential impacts), significance, and whether RIAT involvement is required. This may not require definitive answers to all questions.

4.4  If RIAT involvement is required

RIAT provides independent quality assurance of RISs for regulatory proposals likely to have a significant impact or pose a significant risk. If RIAT involvement is identified as necessary through completing a PIRA, the next step is to engage with RIAT to determine the nature of their involvement in the policy development process.

RIAT has the discretion to allow an agency to retain responsibility, on a case by case basis, for providing assurance of the quality of their RIS even where the impacts or risks are viewed as significant. RIAT may decide not to formally assess the RIS for a significant proposal under the following sorts of circumstances:

• where the policy work has been planned (eg, was on the agency's regulatory plan) and the policy process is robust and has not been rushed
• where there is prior agreement between RIAT and the department on the policy frameworks, standards of evidence and types of impacts to be used
• where other relevant departments, agencies, groups or individuals who have expertise in the subject matter have been appropriately involved and consulted
• where the agency has demonstrated that it has robust in-house quality assurance arrangements.

The decision to allow an agency to undertake its own quality assurance of a significant proposal is not necessarily final. The conditions on which the decision is made will be set out and agreed with the agency. If any of the conditions change (eg, timeframes become compressed or additional policy options are included) then the agency must advise RIAT and the decision will be reviewed.