Better regulation

What is the "Better regulation" regulatory reform?

By C.RÚMPELNIK

A drastic failure to connect with the American people and sense the mood of the general public arguably cost Hillary Clinton the White House, Matteo Renzi the premiership and the United Kingdom its place in the European Union. Populist parties in EU member states frequently accuse Brussels and its political apparatus of being aloof and indifferent to the needs and desires of its citizens. Elections have been one on the promise to stand up to Brussels’ corrupt and mercenary political elite, serving as foundation for Alexis Tsipras`s successful campaign for public office in Athens and securing Viktor Orban’s grip on power in Budapest.

In this context it just seems sensible for European bureaucrats to take measures to address problem, opening the process of policymaking to the concerned individuals, stakeholders and interest groups. And, contrary to popular wisdom, European officials acted timely and decisively, clearly anticipating the tide of anti-establishment movements in its member states.

In the spirit of addressing the latent anger of the European public the European Commission implemented a novel way of policymaking, designed to increase popular participation in the legislative process, effectiveness and coherence of EU policies and a more consistent adherence to the EU’s founding principles of subsidiarity and limited action. 

These new standards should help prevent PR disasters like the Bent bananas and curved cucumbers initiative which was grist to the mills of EU critics and, even years after the legislation was dropped, among their most favorite cases in point for the Union’s ineptness and indifference to the concerns of average citizens or, even worse, it favoring the interest of big business at the expense of consumers.

The  new guidelines for policymaking, termed “Better Regulation”, were based on four basic principles: Impact Assessments, policy evaluation using “Fitness Checks”, stakeholder consultations and an increased focus on implementation and quality control.

Specific emphasis was also placed on an enhancement of transparency:

So how does Better Regulation actually work? The first vice president of the European commission wields significant power, acting as a sort of gatekeeper in the legislative process: In order to move forward each initiative has to pass the office of the first vice president who has carte blanche to either scrap the proposal or pass it on to the second stage of the legislative process, the Impact Assessment and first instances of public consultation. Once completed, the Regulatory Scrutiny Board, consisting of four representatives of the European Commission and three external experts. The RSB can either nod off the initiative or advise against it. Even a negative assessment, though, can be overridden by the First Vice President.

 

Once the initiative has passed the RSB it has to be reaffirmed by the Board of Commissioners, after which it enters the legislative processes in the European institutions (namely council and parliament). Even then however, the Commission can request another Impact Assessment, should it consider an amendment to be worthy of being scrutinized by experts.

So far so good: Better regulation increases participation of stakeholders and experts in the legislative process and facilitates implementation by including stakeholders in the making of the legislative proposal. 

Yet, at least in the eyes of some NGOs and watchdogs, Better Regulation has not been able to deliver on its promises. Particularly on the left side of the political spectrum, Better Regulation has been met with suspicion. Groups from UNI Europa, a trade union, to the left-wing Rosa Luxemburg Foundation, a self-declared part of the intellectual current of Democratic Socialism and Social Democracy in Europe are wary of the shift from parliamentary discussion to technocratic evaluation they believe erodes Europe’s democratically elected institutions. Moreover, they fret that the process of stakeholder consultation affirms and strengthens the influence of lobbying and special interest on policymaking.

Fair point well made. Yet, there are two sides to the same coin. For instance, one might ad will argue that technocratic evaluation of policies is more efficient than the ideologically fixated parliamentary discussion. Which, of course, has its merits and remains a cornerstone of the legislative process, even with Better Regulation in place. With one additional perk: Amendments to legislative proposals can be screened for their adherence to the ground principles of the European Union, subsidiarity and proportionality, which is only an additional tool to monitor the quality of EU legislation.

As far as lobbying and the influence of special interest groups are concerned, other groups too have forwarded concerns about Better Regulation. Tobacco Control, a journal owned by the British Medical associations, has documented the tobacco industry’s pushing for a regulatory reform in the European Union, dating back as far as 1990s. “BAT (British American Tobacco) approached the European Policy Center (EPC) to lobby for regulatory reform and recruit other corporations subject to regulation (i.e. those part of the pharmaceutical, chemical and petroleum industries). Using the EPC as a third party successfully concealed BAT’s involvement in the campaign for regulatory change. Meanwhile the number of organizations involved in the campaign gave the impression to EU member states that there was a great and diverse pressure for regulatory reform in the EU.”

Furthermore “Tobacco Control” argues that British American Tobacco successfully collaborated with other corporations (via the European Policy Centre Risk Assessment Forum) to influence the mechanism of the Impact Assessment part of Better Regulation. Specifically, the journal accuses BAT of imposing a cost-benefit analysis overemphasizing the business impact over the one on environmental and social issues and exploiting the importance of evidence by commissioning their own, one-sided research. For instance, “Tobacco Control” believes the EPC Risk Assessment Forum successfully used Better Regulation to restrict the use of the precautionary principle (which requires companies to demonstrate the harmlessness of products or methods in order to be able to sell or use them).

These are of course valid concerns which have to be taken into account when evaluating the success of the Better Regulation directive. Yet, one might argue that the influence of British American Tobacco and other corporations, think tanks and lobbying agencies, is not solely based on its influence on the Impact Assessment process. Quite on the contrary, the classical legislative process too is highly prone to influencing form the outside. Staying on topic this can be illustrated by another example of lobbying by the Tobacco industries: According to the Brussels-based NGO Corporate Europe Observatory American tobacco firm Philip Morris met at least once with 233 individual MEPs prior to the passage of the 2014 Tobacco Products Directive with one MEP contacted over 40 times by tobacco lobbyists in a six month period.

We therefore argue that Better Regulation does not increase the amount of lobbying a bill is exposed to and only changes the point of leverage. Better Regulation is thus a laudable albeit flawed (The dominant role of the First Vice President might, for instance, be a concern if exerted by someone less responsible than the current Commissioner Timmermans) change of policy that its originators can pride themselves on, de-ideologizing European policymaking and giving the ones concerned by it a say. Which is exactly what those who feel disenfranchised from the political process agonize.