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Can We Better the European Union Better Regulation Agenda?

Published online by Cambridge University Press:  09 September 2021

Felice SIMONELLI Open the ORCID record for Felice SIMONELLI [Opens in a new window]  and
Nadina IACOB
Felice SIMONELLI
Affiliation:
Centre for European Policy Studies (CEPS), Brussels, Belgium; email: felice.simonelli@ceps.eu.
Nadina IACOB
Affiliation:
Centre for European Policy Studies (CEPS), Brussels, Belgium; email: nadina.iacob@ceps.eu.
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Abstract

The European Commission published a new Communication on better regulation on 29 April 2021, with the aim of improving the European Union’s (EU) policymaking process. By updating the better regulation agenda to mainstream sustainable development goals and the digital and green transition and by ensuring more foresight-based policymaking, this Communication shows that the Commission is moving in the right direction. Several proposals also have great potential to simplify the better regulation process and make it more transparent. By contrast, the envisaged simplification of the public consultation process may jeopardise its effectiveness and should be carefully reconsidered. In addition, a more cautious, stepwise approach to introducing, testing and adjusting the new EU one-in, one-out system is certainly needed. This article aims to identify and assess the key changes proposed by the new Communication and to share ideas for the preparation of the new Better Regulation Guidelines and Toolbox, which are expected to translate the Communication into practice.

Type
Reports
Information
European Journal of Risk Regulation , Volume 12 , Issue 4 , December 2021 , pp. 849 - 860
Copyright
© The Author(s), 2021. Published by Cambridge University Press

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Footnotes

The authors would like to thank Alberto Alemanno, Andrea Renda and the anonymous reviewers for taking the time and effort necessary to review the article and for providing valuable comments and suggestions. The views expressed in this article are, however, those of the authors only. The authors declare no competing interests.

References

1 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Better regulation: Joining forces to make better laws, COM/2021/219 final <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52021DC0219> (last accessed 25 June 2021).

2 OECD, “OECD Regulatory Policy Outlook 2018” (2018) <https://www.oecd-ilibrary.org/governance/oecd-regulatory-policy-outlook-2018_9789264303072-en> (last accessed 25 June 2021).

3 European Commission, “Commission Staff Working Document. Better Regulation Guidelines”, SWD(2017) 350 <https://ec.europa.eu/info/sites/default/files/better-regulation-guidelines.pdf> (last accessed 25 June 2021).

4 European Commission, “Better regulation Toolbox” (2017), Document complementing the Better Regulation Guidelines (supra, note 3) <https://ec.europa.eu/info/sites/default/files/better-regulation-toolbox_2.pdf> (last accessed 25 June 2021).

5 Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making, OJ L 123/1.

6 For instance, already in the 2015 Communication on better regulation the Commission was asking the European Parliament and the Council to carry out an impact assessment on any substantial amendment proposed during the legislative process. See: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Better regulation for better results – an EU agenda, COM(2015) 215 final <https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015DC0215&from=EN> (last accessed 25 June 2021).

7 In the 2019 Communication on better regulation, the Commission stated that: “The [Interinstitutional] Agreement is still quite new, but has delivered some notable successes”. See: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Better regulation: taking stock and sustaining our commitment, COM(2019) 178 final, p 12 <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2019:178:FIN> (last accessed 25 June 2021).

8 “The European Parliament and the Council will, when they consider this to be appropriate and necessary for the legislative process, carry out impact assessments in relation to their substantial amendments to the Commission’s proposal”. Art 15 of the Interinstitutional Agreement, supra, note 5.

9 W Hiller, “European Parliament work in the fields of Impact Assessment and European Added Value. Activity Report for July 2019 to December 2020” (2021) European Parliamentary Research Service <https://www.europarl.europa.eu/RegData/etudes/STUD/2021/662616/EPRS_STU(2021)662616_EN.pdf> (last accessed 25 June 2021).

10 The Council did not carry out impact assessments, in spite of an attempt to create a capacity to carry out this analytical work by launching a tender for a framework contract (with a quite limited budget). See: Note from the General Secretariat of the Council to the Permanent Representatives Committee, Follow-up to the IIA on Better-Law Making – Impact assessment within the Council (3 April 2017) 7582/17 <https://data.consilium.europa.eu/doc/document/ST-7582-2017-INIT/en/pdf> (last accessed 25 June 2021).

11 Please note that it is not by chance that the US Regulatory Impact Analysis system applies only to federal regulation (ie secondary legislation, mostly of a technical nature). A Renda et al, “Assessing the costs and benefits of regulation” (2013) <https://ec.europa.eu/smart-regulation/impact/commission_guidelines/docs/131210_cba_study_sg_final.pdf> (last accessed 25 June 2021).

12 Indeed, the interplay between policy and political discussion is a key consideration when analysing the Interinstitutional Agreement. See CM Radaelli, “Halfway through the better regulation strategy of the Juncker commission: what does the evidence say?” (2018) 56(S1) Journal of Common Market Studies 85–95, pp 91–92 <https://onlinelibrary.wiley.com/doi/abs/10.1111/jcms.12768> (last accessed 25 June 2021). Furthermore, it is not only the impact on the degree of political freedom that is important to consider, but also broader potential implications on institutional balance. See, for instance, the discussion based on the 2015 proposal for the Interinstitutional Agreement, subsequently adopted in 2016: A Alemanno, “How much better is better regulation? Assessing the impact of the Better Regulation Package on the European Union – a research agenda” (2015) 6(3) European Journal of Risk Regulation 344–56 <https://www.cambridge.org/core/journals/european-journal-of-risk-regulation/article/abs/how-much-better-is-better-regulation/863E24306B94D7299FD2150087A5A9CA> (last accessed 25 June 2021).

13 Radaelli explains that evidence-based activities may be “grains of sand that can slow down or make it more difficult to talk ‘politically’, especially in trilogues” (Radaelli, supra, note 12, pp 91–92).

14 European Commission, “Commission Staff Working Document. Strategic dependencies and capacities”, SWD(2021) 352 final <https://ec.europa.eu/info/sites/default/files/swd-strategic-dependencies-capacities_en.pdf> (last accessed 25 June 2021).

15 A Renda and F Simonelli, “Study supporting the interim evaluation of the innovation principles” (2019) <https://www.ceps.eu/wp-content/uploads/2019/11/KI0219819ENN.en_.pdf> (last accessed 25 June 2021).

16 European Commission, “Annual Report 2020 – Regulatory Scrutiny Board” (2021) <https://ec.europa.eu/info/sites/default/files/rsb_report_2020_en_0.pdf> (last accessed 25 June 2021).

17 Communication from the Commission to the European Parliament and the Council, 2020 Strategic Foresight Report, Strategic Foresight – Charting the Course Towards a More Resilient Europe, COM(2020)493 final <https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2020)493&lang=en> (last accessed 25 June 2021).

18 “The use of the Commission’s better regulation tools is another way to ensure further mainstreaming of sustainable development in European policies”. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Next steps for a sustainable European future, European action for sustainability, COM(2016) 739 final, p 15 <https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016DC0739&from=EN> (last accessed 25 June 2021).

19 A Renda, “How can Sustainable Development Goals be ‘mainstreamed’ in the EU’s Better Regulation Agenda?” (2017) 2017/12 CEPS Policy Paper <https://www.ceps.eu/ceps-publications/how-can-sustainable-development-goals-be-mainstreamed-eus-better-regulation-agenda/> (last accessed 25 June 2021).

20 Radaelli also emphasises the need for amending the Better Regulation Guidelines and tools to integrate the perspective of sustainability and the SDGs. In particular, Radaelli proposes the Commission adopt the principle of “do no significant harm” for the SDGs when carrying out impact assessments of proposals. See: CM Radaelli, “The state of play with the Better Regulation Strategy of the European Commission” (2021) 2021/6 STG Policy Papers, p 5 <https://cadmus.eui.eu/bitstream/handle/1814/70901/PB_Radaelli_2021_06.pdf?sequence=1&isAllowed=y> (last accessed 25 June 2021).

21 W Becker et al, “Wrapping up the Europe 2020 strategy: a multidimensional indicator analysis” (2020) 8(100075) Environmental and Sustainability Indicators <https://www.sciencedirect.com/science/article/pii/S2665972720300593> (last accessed 25 June 2021).

22 M Hametner and M Kostetckaia, “Frontrunners and laggards: how fast are the EU member states progressing towards the sustainable development goals?” (2020) 177(106775) Ecological Economics <https://doi.org/10.1016/j.ecolecon.2020.106775> (last accessed 25 June 2021); SDSN and IEEP, “The 2020 Europe Sustainable Development Report: meeting the Sustainable Development Goals in the face of the COVID-19 pandemic” (2020) Sustainable Development Solutions Network and Institute for European Environmental Policy, Paris and Brussels <https://eu-dashboards.sdgindex.org/chapters/part-1-performance-of-european-countries-against-the-sdgs> (last accessed 25 June 2021).

23 C Fetting, “Impacts of the Covid-19 pandemic on sustainable development and the SDGs in Europe” (2020) ESDN Report, July 2020, ESDN Office, Vienna <https://www.esdn.eu/fileadmin/ESDN_Reports/ESDN_Report_July_2020.pdf> (last accessed 25 June 2021).

24 Such an initiative would facilitate the access to consultation activities by streamlining existing channels to contribute feedback to Commission initiatives. To stimulate citizen engagement further, Alemanno (forthcoming) argues, for instance, for a “one-stop shop to the EU participatory infrastructure” that would bring together public input from all of the participatory channels, including, for instance, petitions and European citizens’ initiatives beyond input sought as part of the Better Regulation process. See: A Alemanno, Strengthening the Role and Impact of Petitions as an Instrument of Participatory Democracy. Lessons Learnt from a Citizens’ Perspective 10 Years after the Entry into Force of the Lisbon Treaty (European Union forthcoming).

25 For further details, see: A Alemanno, “Levelling the EU participatory playing field: a legal and policy analysis of the Commission’s public consultations in light of the principle of political equality” (2020) 26(1–2) European Law Journal 114–35 <https://onlinelibrary.wiley.com/doi/10.1111/eulj.12371> (last accessed 25 June 2021).

26 The obligation to consult is embedded in the Treaty on the European Union. According to Art 11(3), the “European Commission shall carry out broad consultations with parties concerned in order to ensure that the Union’s actions are coherent and transparent”. In addition, Protocol No. 2 to the Treaty on the Functioning of the European Union further specifies that “before proposing legislative acts, the Commission shall consult widely” (Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union [2012] 2012/C 326/01). It is worth mentioning, however, that a legal framework for EU public participation, which can be legally enforced before courts, is still missing (Alemanno, supra, note 25).

27 Indeed, a 2019 report of the European Court of Auditors noted that not all roadmaps or inception impact assessments were published at least four weeks before the twelve-week public consultation was launched, as required. European Court of Auditors, “Special Report: ‘Have your say!’: Commission’s public consultations engage citizens, but fall short of outreach activities” (2019) pp 22–23 <https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=50895> (last accessed 7 July 2021). Recent examples of overlaps between the roadmap feedback period and the public consultation include the following initiatives: “Tax avoidance – fighting the use of shell entities and arrangements for tax purposes” <https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12999-Tax-avoidance-fighting-the-use-of-shell-entities-and-arrangements-for-tax-purposes_en> (last accessed 25 June 2021); and “Data Act & amended rules on the legal protection of databases” <https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13045-Data-Act-&-amended-rules-on-the-legal-protection-of-databases_en> (last accessed 25 June 2021).

28 Looking at examples of consultations finalised in 2020, stakeholders did contribute to the different stages of the consultation process. In some cases where the feedback period on the roadmap/inception impact assessment did not overlap with the twelve-week public consultation, the contributions received on the roadmap/inception impact assessment were of a relatively important size, amounting to around a third of the contributions received on the public consultation. In this regard, it is important to consider that the twelve-week public consultation may be relatively easier to complete for a wide range of stakeholders not only because it lasts for more weeks, but also because it is based on an online questionnaire, mostly including closed-ended answers. By contrast, the consultation on the roadmap/inception impact assessment, which requires the submittal of open-text comments or a position paper on the topic, may attract lower numbers of contributions, but ones that are richer in ideas and positions of stakeholders. Examples include the following initiatives: “European vehicle emissions standards – Euro 7 for cars, vans, lorries and buses” <https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12313-European-vehicle-emissions-standards-Euro-7-for-cars-vans-lorries-and-buses_en> (last accessed 7 July 2021); and “Fluorinated greenhouse gases – review of EU rules (2015–20)” <https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Fluorinated-greenhouse-gases-review-of-EU-rules-2015-20-_en> (last accessed 7 July 2021).

29 European Commission, “Better Regulation Toolbox, Tool #52” (2017) <https://ec.europa.eu/info/sites/default/files/better-regulation-toolbox_2.pdf> (last accessed 25 June 2021).

30 The back-to-back approach to evaluations and impact assessments may have some potential merits, especially when the two exercises are still performed in sequence but in the context of the same service contract. In fact, having the same team of Commission officials and consultants working on both exercises can maximise synergies, increase consistency and reduce overlaps between the evaluation and the impact assessment.

31 D Trnka and Y Thuerer, “One-in, x-out: regulatory offsetting in selected OECD countries” (2019) OECD Regulatory Policy Working Papers, No. 11, OECD Publishing, Paris <https://doi.org/10.1787/67d71764-en> (last accessed 25 June 2021).

32 A Renda et al, “Feasibility study: introducing the ‘one-in-one-out’ in the European Commission” (2019) <https://www.ceps.eu/wp-content/uploads/2019/12/Feasibility-Study.pdf> (last accessed 25 June 2021).

33 Circulaire du 26 juillet 2017 relative à la maîtrise du flux des textes réglementaires et de leur impact, JORF n°0175 du 28 juillet 2017 <https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000035297602/> (last accessed 25 June 2021).

34 Donald Trump introduced the one-in, two-out approach with Executive Order 13771 on “Reducing Regulation and Controlling Regulatory Costs”. More specifically, Trump’s approach was a one-in, two-out in terms of pieces of legislation and a OIOO in terms of costs, as it required that the new legislation would not generate higher costs than the combined costs of the two repealed pieces of legislation. Executive Order 13771 was, however, revoked by Joe Biden during the very first day of his presidential mandate. See: E.O. 13771 of 30 January 2017 <https://www.federalregister.gov/documents/2017/02/03/2017-02451/reducing-regulation-and-controlling-regulatory-costs> (last accessed 25 June 2021).

35 Reportedly, the application of the OIOO approach in the UK has been suspended. See: M Stanley, “Regulatory budgets, one in/three out, etc.” (Understanding regulation) <https://www.regulation.org.uk/deregulation-regulatory_budgets.html> (last accessed 25 June 2021).

36 Hahn and Renda explain that most of the countries where the OIOO approach was applied so far failed to demonstrate improvements in the economic efficiency of regulation. R Hahn and A Renda, “Understanding regulatory innovation: the political economy of removing old regulations before adding new ones” (2017) Comparative Political Economy: Regulation eJournal <https://www.semanticscholar.org/paper/Understanding-Regulatory-Innovation%3A-The-Political-Hahn-Renda/2912383d672ea1318ee3e09769c2be0038ef41bb> (last accessed 25 June 2021). Also the UK National Audit Office confirmed that there is no evidence of effective regulatory cost reduction in the UK: National Audit Office, “The Business Impact Target: cutting the cost of regulation” (2016) <https://www.nao.org.uk/report/the-business-impact-target-cutting-the-cost-of-regulation/> (last accessed 25 June 2021).

37 For an overview of the reasons why the OIOO approach should not be applied to the EU better regulation system please see: E Golberg, “The jury is still out on one-in-one-out” (The Regulatory Review, 3 February 2020) <https://www.theregreview.org/2020/02/03/golberg-jury-still-out-one-in-out/> (last accessed 25 June 2021).

38 Renda warned about the potential negative consequences of the one-in, two-out approach on the quality of regulation and social welfare in the USA. See: A Renda, “One step forward, two steps back? The new U.S. regulatory budgeting rules in light of the international experience” (2017) 8(3) Journal of Benefit–Cost Analysis 291–304 <https://doi.org/10.1017/bca.2017.18> (last accessed 25 June 2021).

39 Radaelli, supra, note 20.

40 European Commission, “The working methods of the von der Leyen Commission: striving for more at home and in the world” (4 December 2019) <https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6657> (last accessed 25 June 2021).

41 Please note that Section 5.1 of the new Communication on better regulation always refers to “burdens”; Box 2 of the Communication explains that only “administrative costs” will be offset. Supra, note 1.

42 Regulatory costs include both the direct and indirect costs of regulation. Direct costs include compliance costs (charges, substantive compliance costs and administrative burdens) and hassle costs. Renda et al, supra, note 11. By way of example, on average, administrative burdens represent less than 7% of the overall regulatory costs imposed by EU legislation on the glass sector and about 11% of the EU regulatory costs borne by the ceramics sector. CEPS, Cumulative Cost Assessment of the EU Ceramics Industry (2017) 339 <https://www.ceps.eu/wp-content/uploads/2017/08/CCA%20CERAMICS_FinalReport.pdf> (last accessed 8 July 2021); CEPS, Cumulative Cost Assessment of the EU Glass Industry (2017) 283 <https://www.ceps.eu/wp-content/uploads/2017/08/CCA%20GLASS_Final%20Report.pdf> (last accessed 8 July 2021).

43 CCAs were performed on the following industries: aluminium, ceramics, chemicals, forest-based, glass and steel. CEPS, Assessment of Cumulative Cost Impact for the Steel and the Aluminium Sectors, Final Report for Aluminium (2013) 239 <https://www.ceps.eu/wp-content/uploads/2015/04/final-report-aluminium_en.pdf>; CEPS, Cumulative Cost Assessment of the EU Ceramics Industry, supra, note 42; Technopolis, Cumulative Cost Assessment for the EU Chemical Industry (2016) 171 <https://op.europa.eu/en/publication-detail/-/publication/8eb1b47a-ee94-11e6-ad7c-01aa75ed71a1/language-en>; Technopolis, An Assessment of the Cumulative Cost Impact of Specified EU Legislation and Policies on the EU Forest-based Industries (2016) 271 <https://www.technopolis-group.com/wp-content/uploads/2020/02/An-assessment-of-the-cumulative-cost-impact-of-specified-EU-legislation-and-policies-on-the-EU-forest-based-industries.pdf>; CEPS, Cumulative Cost Assessment of the EU Glass Industry, supra, note 42; CEPS, Assessment of Cumulative Cost Impact for the Steel Industry (2013) 259 <https://www.ceps.eu/wp-content/uploads/2015/04/steel-cum-cost-imp_en.pdf>. All references in this footnote last accessed on 8 July 2021.

44 L Schrefler et al, “A new tool in the box? The cumulated cost assessment” (2015) 6(1) European Journal of Risk Regulation 68–78 <https://doi.org/10.1017/S1867299X00004293> (last accessed 25 June 2021).

45 By way of example, the CCAs on ceramics and glass lasted more than eighteen months. CEPS, Cumulative Cost Assessment of the EU Ceramics Industry, supra note 42; CEPS, Cumulative Cost Assessment of the EU Glass Industry, supra, note 42.

46 Renda et al, supra, note 32.

47 European Parliament, “Legislative Train Schedule” <https://www.europarl.europa.eu/legislative-train/> (last accessed 25 June 2021).

48 I Kiendl Krišto with V Poutouroudi, “Review clauses in EU legislation. A rolling check-list” (2018) European Parliament Research Service <https://www.europarl.europa.eu/RegData/etudes/STUD/2018/621821/EPRS_STU(2018)621821_EN.pdf> (last accessed 25 June 2021).

49 Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making, OJ L 123, 12.5.2016.

50 European Commission, “Better Regulation Toolbox. Tool #27” (2017) <https://ec.europa.eu/info/sites/default/files/better-regulation-toolbox_2.pdf> (last accessed 25 June 2021).

51 OECD, supra, note 2.