Impact Assessments in the EU: room for improvement? - European Union Committee Contents


Memorandum by Malcolm Harbour MEP[9]

OVERVIEW

  In 2002, the European Commission launched a comprehensive programme to simplify and improve the regulatory environment. In 2003, the EU institutions agreed to an Inter-institutional Agreement on Better Law-Making, setting down how they can work together to legislate better.

  These programmes have done much to improve the quality of legislation but more needs to be done by all the EU institutions to better meet the commitment to Better Regulation. Firstly, the aims and objectives of better regulation need to be more effectively communicated. There are still many people involved in European policy-making, including MEPs and civil servants, who do not understand the value of better regulation or how to employ it in their work. Therefore, the European Commission could, for example, considering supplying all MEPs with their Better Regulation—simply explained booklet which can be found on their website but has not been widely disseminated. Secondly, with a new commission appointed, it is important that better regulation stays on their list of priorities. All the commission designates have now been sent their lettre de mission (http://ec.europa.eu/commission_designate_2009-2014/mission_letters/index_en.htm), outlining their objectives for the next term. It is concerning that the letters refer simply to the "smart regulation agenda" since this does not seem to reinforce the commitments and guidelines established in the last Commission. A lot of progress has been made in encouraging the better regulation agenda within the Commission and it would be important to seek assurances for President Barroso that he is still committed to the agenda.

THE ROLE OF THE EUROPEAN COMMISSION

Pre-legislative process:

  An important part of making better laws is having a comprehensive understanding of their impacts. However, although the Commission has extended the requirement to do impact assessment beyond initiatives in the annual Legislative and Work Programme, there is still no mandatory requirement on the Commission to carry out an Impact Assessment before the introduction of a legislative proposal.

  An impact assessment is a crucial part of the legislative process. Without one, the European Parliament, Council and stakeholders are unable to see the Commission strategy behind the proposal or the implications for legislation. It is also important in determining whether there is a need for EU legislation in the first place, if it is consistent with the principle of subsidarity and whether there is real "EU value added."

  There are also concerns with the quality of the impact assessment. An impact assessment can only add real value if it comprehensively analyses both the costs and benefits of a proposal. But, on too many occasions, an impact assessment is used as the "end" of the process rather than as a means to the end. Therefore, many impact assessments seem to be moulded to fit the commission thinking rather than the other way around. This is simply not a basis for better regulation.

  That said, since 2006, the Commission's internal Impact Assessment Board (IAB) has done much to improve the quality and methodology of Commission impact assessments. Their work should be welcomed. However it should be noted that the IAB only has a role in determining the conformity of the impact assessments, in line with the Commission's IA guidelines, rather than assessing whether the final legislative proposal properly meets the results of the impact assessment. Therefore it could be worth investigating whether value would be added by extending the remit of the IAB in this way.

  There have also been suggested proposals to make the Impact Assessment Board truly independent, operating outside the institutional structure of the European Union. This could better objectively audit the better regulation agenda. For example, the legal affairs committee in the European Parliament (JURI) have recently requested authorisation to draw up an initiative report on Guaranteeing independent impact assessments.

  Better stakeholder consultation should also be encouraged as an important principle of a good impact assessment. In the past, many DGs have stuck rigidly to the 8 week minimum consultation period but often without adequate dissemination. This means that stakeholders, particularly small and medium enterprises can not prepare themselves in time to make a formal response. The more stakeholders involved in the original consultation, the more comprehensive the impact assessment and the less need for substantive amendments to the final legislative text.

  Impact Assessments should also take account of specific impacts. This is already the case for impacts on SMEs through a so-called "SME test" but this idea could be developed in other areas. For example, the European Commission could look into new ways to eliminate remaining barriers to a complete Single Market by introducing a "Single Market Test." In this case, the smooth functioning of the Internal Market depends on the policies and legislation not just from DG Markt but for many different DGs in the European Commission and a "Single Market Test" could be a useful principle to ensure coherence and strategy from the Commission.

  Therefore, it is very clear that whilst a lot of progress has been made by the Commission to improve the pre-legislative process, a lot more can and should be done.

Post legislative process

  The European Commission also have an important part to play in the post legislative process, which forms an important piece of the Better Regulation jigsaw.

  Legislation should be viewed by the European Commission as a circular process, in which ex-post audits should be an indespensible requirement. The audits will show whether the legislation meets or surpasses the original impact assessment and if not, identifying where it requires amendments or recasts to ensure that it meets it's original objectives.

  This evaluation technique would help the Commission in undertaking their ambitious simplification programme, by helping to identify where legislation is overly complex in certain areas and needs to be reviewed or repealed.

  We are pleased that the Commission President's political guidlines for the next Commission (http://ec.europa.eu/commission_barroso/president/pdf/press_20090903_EN.pdf) included an explicit reference to this post implementation audit process.

The European Parliament

  The European Parliament, like the European Council, also needs to play their part in ensuring that quality legislation emerges at the end of the legislative process.

  However, Parliament committees are still not taking their commitment to better regulation seriously. Firstly, there is no obligation under the inter-institutional agreement for the Parliament to scrutinise Commission Impact Assessments. Secondly, MEPs frequently table amendments to legislative texts without fully understanding their impact. This is against principles of better regulation laid out in the Inter-Institutional agreement.

  However, there is scope for the Parliament to take initiatives if it chooses to do so. For example, the Internal Market and Consumer Protection Committee (IMCO), chaired by Conservative MEP Malcolm Harbour, has been at the forefront of the better regulation agenda in the Parliament. IMCO has undertaken Impact Assessments, where the Commission have failed to produce one. For example, on the Consumer Credit Directive, the committee commissioned a study on the "broad economic impact" of the proposal, because the Commission had refused to provide a new impact assessment for their modified proposal. The Committee have already carried out impact assessments, where substantive amendments have been made to a Commission proposal. For example, when MEPs in the committee tabled changes to the Nominal Quantities for Pre-Packed Goods proposal, the committee commissioned an impact assessment of their amendments. In this mandate the IMCO committee have asked the Commission present the full Impact Assessment of any legislative proposal to the committee, at the meeting when the proposal is first introduced and before MEPs examine detailed proposals. This has now happened on 4 occasions, and has led to MEPs demanding more detailed information and questioning a number of issues.

  However, these techniques have not yet been adopted by all committees in the Parliament and there is still some reluctance by all Committee Chairs to examine an impact assessment. Unfortunately, some accept the Commission argument that there is sometimes not enough time to draw up an Impact Assessment. However, if the Commission cannot carry out a comprehensive costs and benefits analysis, then the Parliament shouldn't be working on the proposal. MEPs have duties as policymakers to properly understand all the implications of the legislation and not to rush into the unknown, and produce bad laws.

  Although the European Parliament is not formally involved in the enforcement of legislation, MEPs should also play a role in the post-legislative process. Committees have resources at their disposal to carry out post-implementation reviews through strategic own-initiative reports, public hearings, workshops and studies. Since the post-legislative process plays an important part of the better regulation and simplification agenda, the Parliament's committees should make better use of their resources, by providing some of the qualitative and quantitative evidence needed to review the impact of legislation.

  Therefore, although the Parliament plays a crucial role in delivering the better regulation agenda, much more can be done. MEPs still have a limited understanding of the principles of better law-making and how they can employ it in their committee work.

The European Council/Member States

  The European Council have often neglected their duty to better regulation. It seems that only a few Member States are committed to the better-law making agenda, with many others failing to see its added value. Like the European Parliament, the European Council have agreed to do impact assessments should they ask for substantial amendments to Commission proposals but are yet to fulfil on this commitment.

  With a possible renegotiation of the inter-institutional agreement in 2010, the fact that better regulation is not a priority for many Member States is worrying. Although many of the principles have not been followed by Member States, the economic crisis has shown just how important principles of better regulation have become to stakeholders. A renegotiation of the inter-institutional agreement should signal it's relaunch with more pragmatic examples of how the European institutions can see the agenda through.

  After legislation is agreed by the EU institutions, then Member States need to work in the spirit of better regulation when implementing EU legislation. This means that the Delivery of Better Regulation relies largely on their efforts.

  However, it should be noted that the recent competitiveness Council conclusions on Better regulation show some improvement and indicate that Member States are still determined to the agenda. We await the results with interest and hope the Member States meet some of the ambitious targets they set.

9 December 2009





9   This evidence is submitted by Malcolm Harbour, Chairman of the European Parliament's internal market and consumer protection committee, on behalf of the Conservatives in the European Parliament. Back


 
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