Business Impact Assessment

Another work focus of business facilitation is to encourage bureaux and departments (B/Ds) to assess the business impact before introducing new regulatory/licensing requirements so as to better take into consideration the operational circumstances and capacity of the trades and understand the costs associated with compliance of the regulatory requirements.
Through conducting business impact assessments (BIAs), B/Ds can grasp the concerns and compliance difficulties of the affected trades in complying with the regulatory proposals which will facilitate the B/Ds to enhance or fine-tune their regulatory proposals so as to avoid the introduction of unreasonable regulatory or licensing requirements and reduce the compliance cost without compromising public interests.

The Government has developed a BIA framework to provide general guidelines to B/Ds to facilitate their systematic assessment of the business impact of their regulatory proposals on the business environment.
The different tasks under the different stages of the BIA Framework are depicted below -

Stages	Tasks
Stage 1 Review of Government Intervention & Options	Understand problem, desired outcome and regulatory proposal Review rationale for government intervention Conduct research on overseas best practices and international standards Identify options (e.g. non-regulatory option)
Stage 2 Assessment of Business Environment	Analyse industry / business structure and value chain Assess affected business segments Identify major business stakeholders groups Design business consultation
Stage 3 Business Impact Assessment	Conduct business consultation Assess benefits to business, compliance difficulties, cost of compliance and administrative burden Assess impact on competition and small and medium-sized firms Identify important issues from an industry perspective that the Government needs to consider or address Identify key challenges faced by the industry on compliance issues and any unintended consequences
Stage 4 Consolidation of Assessment Results / Recommendations	Consolidate analysis of impact assessment findings Propose changes to regulatory proposal (including recommendations on mitigation measures, enforcement strategy and approach, and monitoring and evaluation mechanism)

In addition, the Government has developed the Business Compliance Cost (BCC) Framework for assessing the additional compliance cost to be incurred from the regulatory proposals to facilitate B/Ds to estimate the BCC in a systematic and consistent manner.
An overview of the BCC Framework is as follows -

Business Compliance Cost
1. Administrative costs	2. Substantive costs	3. Financial costs
Additional internal staff costs associated with submission of paperwork to the Government Additional cost associated with fees or expenses payable to third parties other than Government (e.g. engaging external consultant in the application process) Additional cost associated with fees or expenses payable to the Government (e.g. licence fees)

Business Impact Assessment on Proposed Construction Industry Security of Payment Legislation (BFAC Paper 5/23)

Business Impact Assessment on Amendment of Section 15 of Waterworks Ordinance (Cap. 102) (BFAC Paper 1/17)
Business Impact Assessment on Mandatory Use of Designated Products registered under Water Efficiency Labelling Scheme (WELS) (BFAC Paper 7/16)
Business Impact Assessment on a Producer Responsibility Scheme on Glass Beverage Containers (BFAC Paper 5/15)
Business Impact Assessment on Proposed Measures for Compliance with Fire Safety Requirements by Food Premises (BFAC Paper 5/14)

Last revision date: March 2024

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