Protecting social values through Better Regulation? Florence Berteletti-Kemp, Tamsin Rose

1. Protecting social values through Better Regulation? Florence Berteletti-Kemp, Tamsin Rose European Public Health Alliance Social Platform Conference, Brussels, 5 December 2006

2. What is Better Regulation? • BR is a mechanism to explore different ways of governance and particularly the role of government legislation. • “Regulating only when necessary and doing so in a light-touch way that is proportionate to risk; • setting exacting targets for reducing the cost of administering regulations; • rationalising the inspection and enforcement arrangements for both business and the public sector. • Better regulation promotes efficiency, productivity and value for money. Proportionate regulation and inspection arrangements can help drive up standards and deliver better outcomes on the ground whether that be in the form of improving public services, a better environment for business, or driving forward economic reform in Europe “ • UK Cabinet Office, Better Regulation Executive

3. Tests for a proposed regulation • Proportionality: Regulators should intervene only when necessary. Remedies should be appropriate to the risk posed, and costs identified and minimised. • Accountability: Regulators should be able to justify decisions and be subject to public scrutiny. • Consistency: Government rules and standards must be joined up and implemented fairly. • Transparency: Regulators should be open, and keep regulations simple and user-friendly. • Targeting: Regulation should be focused on the problem and minimise side-effects. (UK government)

4. What arguments were made for BR? • Not all EU laws are implemented equally across the EU. • Not all EU laws are monitored or enforced adequately. • Not all EU laws are clear, workable or meet their objectives. Therefore a new approach was needed: • Solutions proposed must be realistic, achievable and technically sound. • Policy must be based on evidence, science and risk. • Deliver appropriate conditions under which citizens and businesses can maximise their potential. • Tackle failures in implementation and compliance. • Designed for the complex and interpendent policy environment.

5. The Lisbon link to BR • 2000, Lisbon agenda to make “the EU the world's most dynamic, competitive knowledge-based economy by 2010” • The Council asked the Commission "to set out a strategy for further co-ordinated action to simplify the regulatory environment". It stressed that "the speed of technological change may require new and more flexible regulatory approaches in the future”. • 2001, Commission Communication on “Simplifying and Improving the Regulatory Environment." Calls for at least a 25 % reduction in the overall volume of European regulation (measured via number of printed pages of laws) and the withdrawal of legislative proposals that had not made progress in the Parliament/Council for some time.

6. What is the background for BR? The Mandelkern report, 11/2001 was closely based on OECD BR processes. It emphasized the economic significance of regulatory policy, suggesting that regulatory costs are 2 - 5 % of the European GDP. It proposes the 3 ‘A’s: • An appropriate regulation • Check alternatives to regulation • Permanent search for simplification • An accepted regulation • An early consultation of stakeholders • A good access to regulation • An applied regulation • Assess effects ex ante and ex post • Monitor implementation closely

7. An acceleration of BR initiatives • 2001 White paper on Governance • 2002 Commission action plan on better-lawmaking,minimum standards on consultation • 2003 Inter-Institutional Agreement on better law-making • 2004 ‘Doorn’ report (Parliament) on administrative burden • 2005 Commission Guidelines on Impact Assessment • 2005 Commission Communication on BR • 2005 Public Register of EU Expert Groups • 2006 Revision and update of Comitology procedures • 2006 Commission review of Impact Assessment • 2006 Commission Strategic Review of BR • 2006 Green paper on European Transparency Initiative

8. Has the EU got the balance right? • “We should also set out to show to our citizens that the Single Market is not more important than its people – it is their servant, and making it work is our shared investment in the future. This brings me to a second point. Replies to the public consultation show a general appreciation for what the Single Market has achieved. But some say we have been too focused on the market and not enough on people. There is also a feeling that the high level achievements haven't always trickled down to benefit citizens.” • Commissioner Charlie McCreevy, 29/11/2006

9. Basic components of BR • Identification of policy goals and needs • Stakeholder identification and consultation at all stages • Transparency and access to documents • Impact assessment • Evaluation culture and strategies to enhance it • Use of scientific evidence, risk assessment • Clear incentives for actors • Capacity building (training, systems & resources) • Solution must be proportionate to the problem and to the administrative cost to implement and administer

10. From Impact Assessment to Better Regulation • IA was a key theme in 1990s. Highly technical, drawing on economic and environmental modelling, led by academics. Strong focus on environmental impacts of large scale infrastructure projects. • BR for 2000s. Precaution to be balanced with proportion and risk based approach. Less is more. • IA = lifecycle approach, empirical, triple bottom line • BR = Less, cheaper, more efficient, burden on business. One in, one out principle

11. CSR fits into the BR process • Two viewpoints on CSR • “Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. Social Responsibility is a guiding principle for every decision made and in every area of a business." (Business for Social Responsibility, USA) • “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” World Business Council for Sustainable Development

12. Reservations about BR • BR seems to be interpreted as less or no regulation. There is an increased reliance on self-regulation by industry to deliver public policy objectives. • BR can contribute to democracy in terms of consultation and transparency but not sufficient in itself. • Success requires leadership, continuous effort, supportive infrastructure and good organisation. • Active and engaged civil society is essential to effective regulation. • BR is heavily focused on business - costs to companies, impact on their growth and competitiveness.

13. Does the practice of BR live up to the theory? • Transparency - what is the process, what is the timeframe, what is the expected outcome, what opportunities exist to participate? • Ownership - who sets the agenda, selects the stakeholders? • Equity and redressing the balance of power • Six Presidency initiative gives business a clearer, strategic voice in the EU legislative process. • Technology Platforms, Cars 21, G10 all designed to be multi-stakeholder processes but participation by civil society is very limited. • Stakeholders required to work together but there is a lack of policy coherence across the European Commission.

14. Some key society challenges: • Getting the right balance between individual freedoms, rights and responsibilities and wider public interest. • The Social Contract - principle of shared risks among population but equal stake in society and governance. • Political and economic inequalities have grown in most European countries. Globalisation acts as an amplifier? • Changing perceptions of government (too big, interfering, self-interested politicians). Disengagement from political processes, low trust and engagement. • Growth of civil society and blurring of lines between not-for-profit concept and commercial interests.

15. The role of the NGO sector in BR • Opportunities: • Large consumer and producer of goods and services • Source of expertise and knowledge for impact assessments • Experience of OMC and other non-legislative instruments • Representative voice of community groups • Threats: • Danger of instrumentalisation and assisting in regulatory capture. • Pressure to ‘compromise’ and find consensus with bodies with different or opposing values and policy aims.

16. Results of a study on BR and the environment (IEEP, Nov 2005) • Commission Guidelines on IA are not fully respected by Commission DGs; • The assessment and quantification of economic impacts has been emphasized at the expense of environmental, social and international impacts, limiting the contribution of IA to more coherent EU policies; • costs of legislation are assessed far more than the benefits; • short-term considerations overshadow the long-term. • Most significantly, there have been attempts to re-tool the IA system as an instrument exclusively to promote competitiveness. • It needs to embrace, for example, more coherent regulation which integrates the environment into sectoral policies; better implementation of existing legislation; and, stronger, more balanced stakeholder and citizen participation.

17. Results of a study on alternatives to Regulation (BRC, Dec 2005) • EU classic prescriptive rules and regulations stipulate both the objectives and how they should be achieved. This approach can stifle innovation and impose unnecessary burdens and costs. • Alternatives to classic regulation are advantages for policy makers trying to address fast moving and complex issues. For example, alternatives are generallyquicker to implement, especially where the organisations and businesses likely to be affected are involved. • EU regulation can be a long and difficult without an effective fast-track mechanism. As alternatives tend to have less prescriptive detail written into statute, they are inherently more flexible and can be amended or simplified more easily in light of changing needs or circumstances. • Classic regulation has no guarantee of compliance outcomes.

18. Asking the right questions for BR • What is the real issue that needs to be addressed? • What are the public policy objectives for this issue? Whose evidence is used? • Who leads and therefore manages and defines the process? • Which stakeholders are involved and in whose name do they speak and who are they accountable to? • Is the process open for input by anyone and is it transparent? • Where will the benefits accrue and will they be shared equally in an unequal society? • Who pays the greatest price?

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