Difficulty of Compliance in Self-Regulation system: example of the Summer 2020 meetings of OPEC about the "conformity"​ for Oil Market Stability​

Full reference: Frison-Roche, M.-A., Difficulty of Compliance in Self-Regulation system: example of the Summer 2020 meetings of OPEC about the "conformity"​ for Oil Market Stability​, Newsletter MAFR - Law, Compliance, Regulation, 26th of August 2020

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Summary of the news

The world production of oil is largely coordinated by the Organization of the Petroleum Exporting Countries (OPEC) and especially by its Joint Ministerial Monitoring Committee (JMMC). On 15th of July 2020, this Committee decides to reduce the world production of oil in order to maintain a certain price stability in a context of restricted demand because of the COVID-19 pandemic. 

However, such a stability can be maintained only if each member respects this decision and effectively reduce its production level. This meeting of 15th of July also aimed to get member's conformity. In order to get this conformity, the JMMC declared that it will use "name and shame", shaming countries which do not respect the Committee's declaration and naming those which respect it. A second meeting, on 19th of August 2020, reminded to non-compliant countries their obligation and urged them to comply before the 28th of August. 

We can observe two things: 

• The term used by the Committee is "conformity" and not "compliance", which implies less adherence to "monumental goals than the mechanical respect of formal rules.
• In an self-regulation system where there is not supposed to be a need for "conformity", the need for it is a clue that this self-regulation is malfunctioning.