8. FRAMEWORK FOR EUROPEAN REGULATORY AGENCIES
(24175)
5091/03
COM(02) 718
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Commission Communication on the operating framework for the European Regulatory Agencies.
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| Legal base: | —
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| Document originated: | 11 December 2002
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| Deposited in Parliament: | 15 January 2003
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| Department: | Foreign and Commonwealth Office
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| Basis of consideration: | EM of 27 January 2003
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| Previous Committee Report: | None
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| Discussed in Council: | 13 December 2002
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| Committee's assessment: | Politically important
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| Committee's decision: | Cleared
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8.1 In its White Paper on European Governance,[6]
the Commission envisaged using "regulatory agencies"
to improve the way rules and policy are applied in the Union.
In its later Communication on Better Lawmaking,[7]
it went further and envisaged redefining the responsibilities
of the institutions so as to make use of regulatory agencies to
exercise executive functions. The Commission argues that if Community
action is to be more effective, coherent, legitimate and transparent,
the respective roles of the institutions should be clearly defined
and current practices changed where necessary. The Commission
itself, it says, needs to refocus on its core functions.
8.2 These functions are shared by the Commission with
the agencies at Community level, and the Commission stresses that
it is important to ensure that the agencies' participation is
organised so as to be consistent with its responsibilities. To
achieve this, the Commission says that it would like to begin
to work with the European Parliament (EP) and the Council to define
a framework within which the regulatory agencies would operate.
Criteria would need to be drawn up for their creation, operation
and supervision under the current legal and institutional system.
8.3 Within the EU's legal system, various decentralised
organisations, which it lists, can be grouped together under the
general heading of "European agencies". These include
15 agencies created under the EC Treaty, one under the Euratom
Treaty and four under the second and third pillars.[8]
Though they have certain characteristics in common, their differences,
in terms of internal structure, relations with institutions, responsibilities
and powers, far outweigh their similarities. The Commission has
identified two broad categories which cover most but not all of
the existing agencies: executive agencies and regulatory agencies.
8.4 Executive agencies are responsible for purely
managerial tasks and the Commission 's proposal for a Regulation
to establish their general status is already at an advanced stage
of examination by the Council, having received a favourable opinion
from the EP.[9] This will
make it easier to set one up in future, for instance to run a
specific programme.
8.5 Regulatory agencies are actively involved
in enacting instruments which contribute to regulating a specific
sector. Even those agencies which can be regarded as belonging
to this fairly restricted category differ in structure, responsibilities
and powers, and in their role in relation to the Commission. For
instance, there is a distinction between:
- those whose function is primarily to provide assistance in
the form of opinions and recommendations, which provide the technical
and scientific basis for the Commission's decisions. Examples
include the European Agency for the Evaluation of Medicinal Products
and the European Food Safety Authority;
- those whose function is primarily to provide assistance in
the form of inspection reports, intended to enable the Commission
to meet its responsibilities as "guardian" of Community
law. An example is the European Maritime Safety Agency; and
- those empowered to adopt individual decisions which are legally
binding on third parties. These include the Office for Harmonisation
in the Internal Market, the Community Plant Variety Office and
the European Aviation Safety Agency.
8.6 The Commission recognises that, generally speaking,
executive responsibility for Community policies is delegated to
the Member States and their administrations. In certain cases,
however, the Treaties or other Community legislative acts require
executive tasks to be carried out centrally at Community level.
This may be to ensure coherence or fair competition or to maintain
public confidence. It is up to the Commission to ensure that these
tasks are performed correctly but this does not mean that it must
always act alone, particularly in view of its limited resources.
It may make sense for certain clearly defined executive tasks
to be delegated to regulatory agencies with the appropriate competence.
In particular, this would make the executive more effective at
European level in highly specialised technical areas requiring
advanced expertise and continuity, credibility and visibility
of public action.
8.7 The main advantage of using the agencies is that
their decisions are based on purely technical evaluations of very
high quality and are not influenced by political considerations.
It is important that they should have a certain degree of autonomy
but also be fully transparent and accountable. This must be reconciled
with the Commission's overall responsibility, which must include
the right to intervene in the event of "serious dysfunction"
which could prejudice the integrity of the Commission's work as
the executive body.
8.8 In setting out the various elements which should
be incorporated into the new framework, the Commission says that
it has drawn on the experience of the current regulatory agencies.
The proposed elements are:
- each regulatory agency must be created by a specific legal
instrument, on a proposal from the Commission;
- the legal basis for that instrument shall be the provision
of the EC Treaty which constitutes the legal basis for the policy
the agency will implement;
- each agency must have legal personality; and
- the seat of the agency should be specified in the instrument
of establishment.
8.9 Whilst the use of decision-making agencies is appropriate
in areas of highly technical specialisation, the Commission says
it should be restricted to areas where a single public interest
predominates and where agencies do not have to arbitrate on conflicting
public interests, exercise powers of political judgement or make
complex economic assessments. They may not be granted responsibilities
for which the EC Treaty confers decision-making power directly
on the Commission.
8.10 The Commission argues that the agency's budgets
should be supplemented by a subsidy from the EC's general budget
and also by revenue from interested operators, though it should
not be dependent on such revenue. It also suggests that contributions
from Member States might be envisaged.
8.11 In view of the responsibilities to be assumed by
the agencies, the Communication sets out controls to which they
should be subject. These include the relationship with the Commission;
administrative supervision by the European Ombudsman; political
supervision by the European Parliament and the Council; financial
supervision by the Court of Auditors and the European Parliament;
and investigation by OLAF. The Communication further states that
any binding acts adopted by the agencies must be subject to judicial
supervision through provision for Member States, the institutions
and interested third parties to apply for annulment. Third parties
concerned should also be able to bring an action for failure to
act against the agencies, as well as actions for damages arising
from acts attributable to them.
The Government's view
8.12 The Minister for Europe (Mr Denis MacShane) says
that improving the regulatory environment is a high priority for
the Government and it therefore supports this Commission Communication.
He adds:
"As it stated in its formal response to the White Paper on
European Governance in March 2002, the Government believes that
independent regulatory bodies have a significant role to play
in ensuring the efficient functioning of markets and guaranteeing
standards for European consumers. The Government identified the
need for clear demarcations of responsibilities for areas of work,
clearly defined objectives and an established and consistent relationship
between agencies. It welcomes the establishment of principles,
including financial principles, to guide the establishment and
functioning of [the] agencies, though would not support every
aspect of this draft framework (for instance, the request for
systematic contributions from Member States)."
8.13 The Minister says that the Government looks forward
to working with the Commission on the development of this framework
and is pressing it for a detailed timetable for an inter-institutional
dialogue on the proposals.
Conclusion
8.14 We broadly agree with the assessment made by
the Minister, both as to the advantages to be derived from the
creation of regulatory agencies and as to the matters which require
further examination, such as the concept of systematic financial
contributions from Member States.
8.15 We also emphasise that any proposal to give a
regulatory agency a legislative function will require the closest
scrutiny.
8.16 We shall look forward to receiving further information
from the Minister on the development of this policy, but we are
content to clear the present document.
6 (22702)
11574/01; see HC 152-xli (2001-02), paragraph 15 (6 November 2002). Back
7 (23556)
9809/02; see HC 152-xxxvii (2001-02), paragraph 25 (17 July 2002). Back
8 Concerning,
respectively, Common Foreign and Security Policy and police and
judicial co-operation in criminal matters. Back
9 (23389)
7644/02; see HC 152-xxxi (2001-02), paragraph 5 (22 May 2002). Back
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