Better Regulation’s Enforcer – the RSB

The incentives for politicians to follow the strictures of Better Regulation are low. They’ll always be lured away by the opportunities for quick and easy victories. There is little to no regard to second or third-order consequences.

The prospect that a well-placed news piece leads to quickly drafted and often ill-thought-out legislation used to be all too common. Commissioners would come back from a weekend away and demand new legislation on something that had caught their eye.

Most people involved will have moved on when elation moves to disappointment when the legislation does not live up to the press slogans when the law got signed.

Better regulation helps filter out proposals with no real foundation.

The challenge is that Commissioners are not modern-day Ciceros. They may find the urge to table poor regulation too alluring.

Brussels found a good check in the system. They created a regulatory scrutiny board to force officials and Commissioners to look again.

The work of the Regulatory Scrutiny Board

The Regulatory Scrutiny Board (RSB) is an independent body within the Commission which scrutinises the quality of impact assessments, evaluations and fitness checks.

The membership is 6 people plus the chair. They serve for a three-year term. It is not renewable. Three of the members and the chair come from the Commission, and the other three are recruited externally. The members are here.

They are independent of the Commission. They take no instructions from outside.

The RSB Rules of Procedure are here. They benefit from a small secretariat drawn from the Secretariat-General.

As a general rule, they review all impact assessments, all fitness checks and selected evaluations. You can find the opinions on the impact assessments here and the evaluations on the evaluations and  fitness checks here. They are used for the important “Commission initiatives that are likely to have significant economic, environmental or social impacts”.

The phrase “significant … impacts” lacks granuality. You get a get a good sense of the what it covers by looking at the proposals that have been called in for an impact assesssment. That said, there is an inherent flexibility provided to the Commission’s Secretariat-General to make that determination. The final determiniation does not sit with the lead DG. There are many files that the lead DG were instructed to perform an Impact Asseessment, despite their vocal protestations.

In my experience, calling a file in for an Impact Assessment strenghens the final proposal. The extra 12 months of work is re-paid by dealing with many of the issues that would have come up during the legislative perioid. It airs and answers those questions in advance.

As Cass Sunstein argues in Risk and Reason, impact assessments ( he talks about cost benefit analysis) in fact benefits most environmental proposals.. Most of the time, the economic benefits of the proposals trump any associated costs.

They are used for both legislative and non-legislative initiatives,  as well as delegated acts,  implementing measures and RPS measures.

The 2018 Stocking Report (link) provides a good idea of the work load:

Stock taking report 2018, p.26. Link.

It is a mix of ordinary (Regulations and Directives) and secondary legislation (delegated acts, implementing acts and RPS measures).

What do the RSB need and  when  do they need it?

For Impact Assessments, the toolbox  spells out what is needed, from whom and by when:

“What

• Note signed by the Director General of the lead DG addressed to the chair of the RSB.
• Draft IA report (SWD).
• IA summary sheet accompanying the IA report (SWD).
• Minutes of the meeting of interservice group that has been preparing the IA report immediately prior to submission of the IA report to the RSB.
• Links to where important underlying reports or studies can be found which underpin the IA report.
• Underlying evaluation SWD, if this evaluation has not been scrutinised separately by the RSB.

When

• The lead DG should reserve a slot at a future meeting of the RSB at which the IA report will be discussed. In general,the slot should be reserved at least 3 months before the RSB meeting.
• This slot should reflect the envisaged timing of the political initiative, the time needed to adapt the IA report in light of the Board’s opinion(s) and the time needed to complete a formal interservice consultation and formal adoption by the College.
• The draft IA report should be submitted to the RSB at least 4 weeks before the RSB meeting where the draft IA report will be discussed.
• In a few exceptional cases, the RSB may decide that the draft impact assessment report does not need to be discussed at a formal meeting of the Board but can be dealt with via written procedure. This can only be decided on a case-by-case basis once the draft IA report has been submitted to the RSB and will depend on the quality and lack of complexity of the case at hand.”

The chart below shows you when the RSB steps into the adoption process.

 

 

A screening mechanism

 

The RSB provides an important screening device.  It helps filter out poor and sloppy thinking. The RSB can be merciless in highlighting flaws in the thinking. For one proposal I know, the RSB highlighted out that the preferred solution of the lead DG was not provided for in the legislation, not asked for, and not supported by any evidence presented in the public consultation.

Poor thinking is often exposed when services decide to prepare the impact assessment (and proposal). Even if a Commissioner and Vice-President pre-decide an outcome in advance, they may find that there is no real facts or evidence to support their preferred outcome.

The RSB are experienced at filtering out poor thinking and pre-determined political decisions. A proposal can not usually go forward if there is a negative opinion.

 

Exceptions to the general rule

As a general rule, a proposal can only proceed to inter-service consultation after approval from RSB. From time to time, the RSB has issued two negative decisions. In those rare cases, the decision to take the proposal forward lays with the President. One such proposal is the taxonomy on sustainable finance. These exceptions are provided for in the rules.

The Regulatory Scrutiny Board does not look at every proposal.  Most, although not all Commission proposals in the Work Programme need an Impact Assessment. From 2015 to 2018, 28% of Commission proposals did not have an Impact Assessment. The Commission’s assessment is that for 19.5%, their own rules did not require them.

The Commission state that between 2015 and 2018, 8,5% of Commission proposals linked to the Commission Work Programme were not accompanied by an impact assessment when one would have expected it.

Between the period 2015-2018 there were 3 instances when  the Commission took the political decision to go forward with an initiative despite the absence of a positive Board opinion vouching for the adequateness of the underlying impact assessment. As mentioned, this is is foreseen in the guidelines.

Exceptions were granted for the remaining 8.5% cases. These were time sensitive files linked to the migration, security and economic crisis.  In 7% of all cases, the formal reasons for invoking the exception was never given.

 

When is the proposal written?

Good practice is that the same interservice group that prepared the IA will also look informally at the legal text before the formal interservice consultation is launched.

When can you read the  RSB’s Opinion

The RSB’s Opinion is published once the ‘initiative has been decided by the Commission’ (see page 16, Toolbox 3).

All impact assessments and the related opinions of the Board are published online once the Commission has adopted the relevant proposal. These documents are invaluable for legislators and the public. They point out the strengths and weaknesses behind the proposal. The opinions of the Regulatory Scrutiny Board (RSB) are good to review. They highlight fuzzy thinking and weak analysis.

The basic problem is the Commission only makes the Impact Assessment and Opinion of the RSB publish them online ‘once the Commission has adopted the relevant proposal’.

For Ordinary Legislative Proposal, the Impact Assessment and Opinion are released at the start of the legislative journey. They are published along with the legislative proposal sent to European Parliament and Council.

For secondary legislation, the impact assessment is made public at the end of the legislative journey, and only when the Commission adopts the draft measure.

This means the intellectual foundation, or the lack of,  behind the Commission’s proposal is kept away from public scrutiny until it is too late. Any errors in the impact assessment can’t be raised at the right time.

As secondary legislation is around 97% of the Commission legislative output, you can understand why  some officials may want to keep the public in the dark. If you can’t see the impact assessment until after it is sent to the EP and Council for ‘scrutiny’, your life is going to be a lot easier.

Any fuzzy thinking or weak analysis only faces getting past colleagues during  inter-service consultation. Indeed, I am sure there are ways to run a public consultation that by-passes those whose opinion you may prefer to ignore.

As you can see below, the Commission release the key documents to support their case at very different times.

Secondary v Ordinary

Example 1: Eco-design requirement for air heating products – Secondary Procedure: RPS

June 2009: Commission launch preparatory study

20 September 2010 : Commission to Propose Eco-design Criteria for Central Heating

19 April 2011 : First Stakeholder meeting

27 September 2011: Second stakeholder meeting

5 March 2012: Draft Report of preparatory study

17 April 2012: Third stakeholder meeting

9 July 2012: Final Report of preparatory study

25 September 2013: Consultation Forum meets
19 February 2014: Impact Assessment Board Opinion (link)
13 August 2015: WTO Notification

15 September 2015: WTO Notification period ends

8 December 2015: Committee on the Ecodesign and Energy Labelling of Energy-using Products approve

23 April 2016: Scrutiny Deadline for EP and Council

30 November 2016: Commission adopt draft measure

30 November 2016: Impact Assessment published

20 December 2016: Commission Regulation published in Official Journal

Example 2: Electricity Market Design (Electricity Regulation) – procedure: ordinary

October 2015: Inception Impact Assessment launched

16 September 2016: RSB issue negative opinion

7 November 2016: RSB issue revised positive opinion

30 November 2016: Proposal on the Internal Market for electricity

30 November 2016: Impact Assessment published

18 January 2019: Council endorses compromise agreement

Case C 57/61 P – Client Earth v Commission

In case C 57/61 P, ClientEarth v. Commission,  the European Court of Juctice’s Grand Chamber dealt with access to impact assessments. The Commission had rejected ClientEath’s application for the impact assessment. The Grand Chamber rejected the Commission’s secretive approach.

The judgement deserves reading in full.

I highlight three paragraphs:

• ‘… the exercise of those rights presupposes not only that those citizens have access to the information at issue so that they may understand the choices made by the EU institutions within the framework of the legislative process, but also that they may have access to that information in good time, at a point that enables them effectively to make their views known regarding those choices. (para 84)’
• ‘that not only acts adopted by the EU legislature, but also, more generally, documents drawn up or received in the course of procedures for the adoption of acts which are legally binding in or for the Member States, fall to be described as ‘legislative documents’ (Para 85)’
• impact assessment reports and the accompanying opinions of the Impact Assessment Board contain, in such a context, information constituting important elements of the EU legislative process, forming part of the basis for the legislative action of the European Union. (Para 91)

There is no reason for the European Commission to continue their practice of issuing impact assessments for ordinary and secondary legislation at different times. Based on the case above, the Commission should put on the line (link) when they provide their opinion.

The current Commission’s practice on releasing these vital documents for  secondary legislation appears to be at odds with the (1) ideas behind Better Regulation and (2)  the ruling of the  European Court of Justice.

 

How you can influence the RSB

A good lobbyist knows when to lobby and, more importantly, when not to lobby Just as you would not lobby judges ruling on your case, it stands to reasons you would not try and lobby the RSB.

The Board’s own rules of procedure make it really clear they should not be approached and their work is confidential.

There is a very easy way to positively influence them. Better Regulation’s Public Consultations needs lots of good data and information to prove a case. So, the best way you can influence the RSB is to make an excellent submission.

You should focus on proving your case by reference to the Commission’s very own Guidelines and Tool Box and sending up a crystal clear case, full of data and evidence, to support your case.

That said, too often, the quality of the submissions from 3rd Parties is too weak to be taken too seriously or asks for things that are outside the remit of Better Regulation.

Fail-Safe Mechanisms?

If a poor proposal gets through what can you do? The First Vice-President and President always have the discretion for not letting a poor proposal get adopted. I am unaware of this discretion being used for some time.