SPEECH/02/477
Mr Erkki Liikanen
Member of the European Commission, responsible for Enterprise
and the Information Society
"Better Regulation"
Informal Council (Competitiveness)
Nyborg, 12 October 2002
Ladies and Gentlemen
In June this year, the Commission responded to the mandate given by the Lisbon
European Council, by presenting its so-called Better Regulation Package.
In this Action Plan, the Commission has set out a number of concrete actions for its
own internal procedures, with set timetables and objectives. However, to really
make a change, an overall strategy addressing the whole legislative life-cycle is
needed. This is why the Commission has also proposed a number of actions for the
European Parliament, the Council and the Member States. They have formed the
basis for the ongoing discussions on an inter-institutional agreement.
We now need to move into the next phase, which is implementation. Let me briefly
elaborate on some of the challenges ahead of us.
The Better Regulation challenge
Regulation is often needed in order to protect Europe's citizens and the
environment, as well as to create even and competitive conditions for businesses to
operate in.
However, regulation has a cost, which most often falls upon our economic
operators, affecting their ability to compete, to innovate and to create jobs.
The better regulation challenge is, therefore, to find the right balance between the
need for protecting the public interest, while at the same time avoiding ineffective
and excessively burdensome regulations, which damage our prospects for
competitiveness, sustainable growth and employment.
Principles and tools for Better Regulation
The Action Plan sets out the processes and tools needed to reach these objectives.
I will just briefly elaborate on some of these, which I consider to be of particular
importance.
First, Impact assessment
Impact assessment itself is nothing new to the Commission. Over the years, we
have accumulated considerable experience in "single sector type" assessments.
The best known example is probably the Business Impact Assessment system,
which was established in the late 80’s (1986), covering all Commission proposals
with a significant impact on business, in particular on small and medium-sized
enterprises.
Indeed, proper assessment of compliance costs and administrative burdens of
proposed legislation has been, and continues to be, of high importance to ensure a
business environment that is conducive to competitiveness, innovation and growth.
This particularly applies to small and medium-sized enterprises, which are
disproportionately affected by regulatory burdens. Policies need, therefore, to be
developed having the smallest entities in mind ("think small first").
Over the years, it has become widely acknowledged that the Commission's
Business Impact Assessment system has not always worked in an optimal way.
Therefore, it was reviewed in a pilot project, in order to identify major weaknesses
and make recommendations for improvements.
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During this exercise, we discovered, for example, that Business Impact
Assessments were often seen as an administrative ‘paper requirement’.
Sometimes, they were carried out on nearly finalised proposals, whereas they
should have intervened already during the early drafting process. Moreover, the
costs of the proposals for business were rarely quantified.
The Business Impact Assessment pilot project included an examination of a
selected number of proposals for which "test case" analyses and consultations were
carried out. Let us take one example of these proposals, namely the revision of
existing legislation on sizes of pre-packed consumption goods, such as wine,
coffee, flour and detergents.
In 2000, a Simpler Legislation for the Internal Market (SLIM) exercise identified a
need for simplification of the existing legislation. The "SLIM" team recommended a
Community-wide coherent and updated harmonized regulatory system.
However, we felt that a more thorough justification for compelling Community
legislation was needed and that alternative, more flexible, policy options also
needed consideration. We therefore embarked on an impact assessment process to
examine this in more detail by posing the following main questions:
- What are the underlying problems and is there evidence for an "overriding
public need" for harmonisation?
- Are there other, more flexible policy options available to address the issue? Is
regulation needed at all?
- What are the likely impacts of each policy option and how would they affect
different groups? What are their respective advantages and disadvantages?
To answer these questions, information and data is being gathered through:
- existing sources (e.g. statistics, reports, case law, etc.),
- specific studies carried out, and
- consultations with stakeholders and national experts.
The information collected so far has been analysed in a Working Paper, setting out
the policy issues. We are now examining whether there is really a need for
legislating pack sizes, except in very specific cases. An on-line survey and an online inter-active discussion forum are just about to be launched to test the idea that
such legislation is superfluous. Making use of the Commission's business test panel
is also being considered.
In the light of this process the Commission will build its opinion and may develop a
policy proposal, during the first half of 2003, which - due to the impact assessment should be well prepared and of high quality.
The final conclusions and recommendations of the pilot project have been fed into
the development of the new impact assessment system, which is one of the actions
of the Action Plan.
In the EU Sustainable Development Strategy, the new impact assessment
procedure will highlight the economic, social and environmental impacts. This will
help us to identify trade-offs in achieving competing policy objectives and to find the
right balance between the three "pillars".
However, in order to ensure a high quality of the final legislative act, we also believe
that substantial modifications introduced by the European Parliament and the
Council to Commission proposals should be assessed.
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In addition to this, we feel that Member States should analyse the impacts if
supplementary provisions are added to Community acts in the transposition phase.
These proposals are in line with the Mandelkern Group's recommendations and we
hope that an agreement can be reached on these points.
Secondly, Consultation
Openness and external consultation helps to improve the quality of our proposals
and increases the transparency and involvement of stakeholders and the public at
large. Consultation is an important part of carrying out impact assessment.
The telecoms package, which was adopted by the Commission two years ago, is an
example of how a wide and transparent consultation process can contribute to the
simplification and improvement of regulatory quality. All in all, our proposal was
subject to thorough consultation and impact analysis. Apart from preparatory
documents that were widely put to public consultation, the draft legislation was also
put on the Web in the form of working documents. The time used for this exercise
proved well spent in the subsequent decision-making process, since the legislation
was adopted by the Council and the European Parliament in only 4 months.
The Commission's upcoming general principles and minimum standards for
consultation, as announced in the Action Plan, will help to streamline and improve
our current practices as well as to make them more transparent to the outside
world. For example, they will ensure that our consultations:
- have a clear content;
- are made widely known - apart from publicity campaigns, a "single access
point" will be established for this purpose;
- provide sufficient time for responding - the Commission has set out 6 weeks
as minimum time limit in its initial proposal; and
- provide appropriate feed-back to the responding parties.
We are also working on improving our tools for consultation. The intention to set up
a representative Standing European Business Test Panel is one example of work
underway. As a complement to other consultation tools, this Panel should play a
role in the assessment of possible (business) impacts of new legislative proposals
as well as of existing legislation.
Thirdly, Choosing the appropriate instrument
In order to ensure a regulatory environment that favours competitiveness and
innovation, policy-makers should use the least disruptive and most effective policy
instrument.
If environmental and social objectives can be achieved more quickly and costeffectively through voluntary action or more flexible regulatory approaches,
compared to traditional command-and-control regulation, then we should look
positively at such solutions.
A thorough analysis of alternative policy options should be done in the impact
assessment process, weighing and comparing their respective advantages and
disadvantages.
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Conclusion
To conclude, the Action Plan is not revolutionary. However, it is ambitious because
it implies a fundamental change in culture towards co-operation, evaluation,
consultation and transparency of the regulatory process. Streamlining different
administrative traditions into a coherent approach is a major challenge.
On its side, the Commission will continue to push the better regulation agenda
forward this autumn.
- First of all, we are currently embarking on the implementation process of the
actions outlined in the Better Regulation package aimed at the Commission
itself.
- Secondly, we will present additional proposals, focussing on the quality of
policy execution, including issues such as comitology, regulatory agencies
and infringement proceedings.
- Thirdly, we will be involved in - and drive - the ongoing discussions on an
inter-institutional agreement on better lawmaking.
However, this is a shared responsibility between all EU institutions and Member
States. I am, therefore, very pleased that "better regulation" has been put high on
the agenda of the Competitiveness Council, as this should ensure high political
support and momentum for the challenges that lie ahead. The Competitiveness
Council should play a central role in this process.
The Danish Presidency has produced a very good note for this meeting, showing
that we already have a lot of common ground.
Thank you.
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