# IMMC.EESC-2019-01847-AC.ENG.xhtml.EESC-2019-01847-00-01-AC-TRA-EN.docx

EN
European Economic and Social Committee INT/886 Better regulation/taking stock OPINION
European Economic and Social Committee
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Better regulation: taking stock and sustaining our commitment
[COM(2019) 178 final] Rapporteur: Denis MEYNENT Referral
European Commission, 03/06/2019 Legal basis
Article 304 of the Treaty on the Functioning of the European Union Section responsible
Single Market, Production and Consumption Adopted in section
03/09/2019 Adopted at plenary
25/09/2019 Plenary session No
546 Outcome of vote
(for/against/abstentions)
99/0/0 1. Conclusions and recommendations 1.1 European regulation is an essential factor in integration. Proportionate regulation guarantees legal protection and certainty for all European stakeholders and citizens 1 . 1.2 The Committee calls for the continuation of the Better Regulation programme to be conditional on certain substantive improvements (see the recommendations below). It suggests that responsibility for the programme could be entrusted to a vice-president of the new College of Commissioners.
1.3 The EESC points out that better regulation is not a substitute for political decisions and must on no account lead to deregulation or reduce the level of social, environmental and consumer protection and protection of fundamental rights 2 . 1.4 The use of Better Regulation tools must be a means of ensuring that the sustainability of measures taken is effectively built into EU policy frameworks. 1.5 The EESC calls on the Commission to review the guidelines and criteria in its Better Regulation toolbox, with a view to incorporating into evaluation processes the sustainable development goals (SDGs) set out in the Horizon 2030 programme. A "sustainability check" should be explicitly included in the Better Regulation toolbox. 1.6 The EESC again calls for the European impact assessment and evaluation ecosystem to keep evolving in order to strengthen its quality and encourage the active participation of organised civil society in designing and implementing legislation 3 . 1.7 Impact assessments must always give priority to a cost-benefit approach based on reliable and verifiable data as well as to a qualitative approach, in the interest of the stakeholders. 1.8 The EESC calls on the Commission to establish a smart evaluation matrix which will allow dynamic modelling of the impact of substantial amendments by the co-legislators and stakeholders, illustrating the impact of certain parameters such as emission rates, percentages and quantitative thresholds or ceilings, along with qualitative data. The EESC calls for a pilot project on smart modelling to be rolled out. 1.9 Impact assessments must be integrated, taking account of all criteria. Top of the list of criteria are social protection, consumer protection and employment, along with the SDGs, health, the environment, climate, regional impact, SMEs and micro-enterprises. 1.10 The EESC would like a vigorous SME-friendly initiative (Act Small First) to be implemented with a view to achieving this objective, and calls for the Think small first principle and the SME test to be evaluated. The goal here will be to make these tools more effective and to design SME-compatible legislation so that SMEs can develop within the single market on the basis of complete legal certainty. 1.11 The impact assessment methodology must be transparent and shared with the other institutions and consultative bodies so that they can formulate amendments and opinions which are considered in advance. 1.12 Impact assessments must be carried out independently and objectively and must analyse and, where appropriate, propose alternatives, highlighting the pros and cons of the various scenarios.
1.13 The Regulatory Scrutiny Board (RSB), which is responsible for quality control, is a valuable body that has proven its worth in the impact assessment system. It should play a greater role in developing an integrated approach. 1.14 The review clauses should be drafted so as to enable the Commission and Member States to oversee implementation of the legislation concerned and carry out an integrated assessment of the impact of that legislation on stakeholders. 1.15 The EESC has ensured that it is closely informed about the situation on the ground and has access to a vast network of contacts and to its members' expertise. It would prioritise ex-post and qualitative assessments so as to determine the impact of legislative action or of a European policy and to pass on the grassroots experience of European economic and social partners 4 . 1.16 The EESC is of the opinion that the consultations should more closely involve civil society organisations, by establishing some form of collaborative partnership. 1.17 Questionnaires should be open-ended, enabling respondents to give more detailed replies. The Committee asks the Commission to take a qualitative approach to responses, allowing more room for a nuanced evaluation of the results. 1.18 The Committee considers that the innovation principle has no legal basis and is particularly vague, it therefore follows that its use should be envisaged only in very specific circumstances where this will yield added value, except in relation to the efficient operation of the single market and social, environmental, consumer and health protection. The Committee reiterates its commitment to applying the precautionary principle (Article 191 TFEU), and considers that an own-initiative opinion should be drawn up on the content and use of the innovation principle and the compatibility of these two principles. 1.19 The method for reducing unnecessary costs must be based on a case-by-base evaluation of the existing legislation aimed at identifying what can be simplified, streamlined or abolished, rather than on ex-ante targets set at political level. 1.20 The Committee therefore calls on the Commission to specify the criteria used to determine whether a regulatory or administrative burden is helpful or unnecessary, with due regard for the principle of proportionality. 1.21 The EESC calls for a balanced, clear assessment of the REFIT platform. It considers that the platform needs to be provided with rules and resources which will enable it to respond to submissions more rapidly, while clarifying its working methods. 1.22 The platform's mandate must be reviewed so that REFIT becomes a two-way street, in other words an exercise that does not conclude in advance what course regulation should take: extending, complementing, amending or repealing legislation 5 .
2. Gist of the communication 2.1 The Commission believes that better regulation has improved the way policy is made and should remain at the heart of its working methods. It points out that this is not a hidden deregulatory agenda. Despite the encouraging results, the Commission has produced a critical assessment of its action. 2.2 The positive elements include higher participation of citizens, stakeholders and civil society in Commission consultations. 2.3 As regards impact assessments, the Commission considers that the economic, social and environmental impacts of its initiatives are now systematically discussed. 2.4 As far as evaluations of EU legislation are concerned, the Commission welcomes the fact that three quarters of the impact assessments carried out are now accompanied by an evaluation of the policy or sector concerned. 2.5 The Commission gives a positive assessment of the REFIT programme. The Commission presented 150 measures to simplify EU legislation between 2015 and 2018. 2.6 Notwithstanding this positive assessment, the Commission identifies a number of possible improvements and sets out various specific commitments, including stepping up collaboration with the EESC and the CoR, enhancing quality control of public consultations, and assessing subsidiarity and proportionality in greater detail, e.g. using the common "grid" proposed by the subsidiarity and proportionality task force. 3. Committee evaluation 3.1 A large number of projects have been led by the Commission and other bodies (Coreper, RSB, OECD) to assess the EU's progress in three areas: - impact assessments;
- consultation of stakeholders, civil society and citizens; - simplification and reduction of the regulatory burden. However, despite the Commission's continual efforts, some difficulties remain. 3.2 Impact assessments 3.2.1 Proliferation of economic criteria: over the years, a series of economic evaluation criteria have been added (competitiveness test, digital test, SME test, future-proof legislation, innovation principle). This increase in criteria creates three difficulties: prioritising them, positioning them in relation to social and environmental criteria (what, ultimately, is the decisive criterion?), and making the exercise essentially more bureaucratic. 3.2.2 Largely cost-oriented methodology: the various tools in the toolbox 6 available to the Commission to assess the impact of an initiative are static and cost-oriented, consisting in just a series of general questions without highlighting the issue of quality or envisaging alternative scenarios. The tools are juxtaposed and do not allow for an integrated approach combining costs and benefits and geared towards territorial cohesion, sustainable development and competitiveness. Finally, there is no tool specifically dedicated to the environment and to climate. 3.2.3 Impact assessments not carried out for delegated acts and implementing acts: these acts have considerable scope and play a crucial role in EU legislation. In 2018, there were 861 implementing acts, 96 delegated acts and 72 legislative acts 7 . The Commission acknowledges that due to time and money constraints, the number of impact assessments carried out in relation to delegated acts is low. The EESC also considers that it should be consulted in the delegation procedure just as it is for legislative acts, as well as on any amendments to these acts, given their economic and social consequences 8 . 3.2.4 Impact assessments not carried out on substantial amendments by the co-legislators: despite point 15 of the Interinstitutional Agreement 9 requiring the Council and the Parliament to carry out an impact assessment when they make substantial amendments to the Commission's proposal, the Council has never carried out an impact assessment on a substantial amendment by one or more Member States. In fact, it has neither the budget nor the operational capacity to do so. 3.2.5 Outsourcing of Commission impact assessments: carrying out impact assessments systematically involves a cost and is leading to their partial privatisation. What guarantee do we have that impact assessments are carried out under independent and objective conditions when the Commission unit carrying out the impact assessment also drafts the legislative proposal? 3.2.6 The role of the Regulatory Scrutiny Board (RSB): the RSB scrutinises the quality of impact assessments. Its positive opinion is needed for the College of Commissioners to approve a proposal. In 2018, 28% of impact assessments received a negative opinion from the RSB on quality grounds. The RSB members should be praised for their professionalism, since they have demonstrated their independence. However, the general public are still not aware of how useful the RSB and its aims are. The RSB could play a greater role in developing an integrated approach to the economic, social and environmental dimensions of impact assessments. 3.2.7 The ex-post evaluation of the impact of EU legislation on the functioning of the single market is the guarantee of good governance. A review clause makes it possible to check that the legislation in question has been properly implemented and to enhance, amend or adapt given legislation in the light of scientific findings, feedback from the field or consultation of the social partners. However, several recent examples show that review clauses are not always drafted in a way that ensures that the Commission and the Member States will carry out an integrated analysis of the impact of the legislation concerned. What is more, the European Court of Auditors has pointed out that the content of review clauses is not always clear, particularly when it comes to identifying the requested output and the appropriate point at which to carry out an ex-post review
10 .
3.3 Introduction of the innovation principle 3.3.1 This principle was introduced in November 2014 on the initiative of the European Risk Forum and was approved by the Council in 2016, under the Dutch presidency. It requires any new legislative proposal to be assessed from the perspective of its (positive) impact on innovation, in order to create future-proof legislation. 3.3.2 Since then, the promoters of this principle have sought to integrate it into the EU legislative acquis. In 2019, the innovation principle crept into the Horizon Europe programme (2021-2027) in the form of a recital. 3.3.3 It should be noted, however, that the innovation principle is not clearly defined: - the innovation principle has no legal basis, unlike the precautionary principle (Article 191 TFEU) to which it is sometimes compared; - it is particularly vague: what kind of innovation does it cover – scientific, technical, organisational, social? Empirically, academic research shows that regulation is not detrimental to innovation. Quite the contrary, "it appears that regulation is in fact beneficial to innovation and that this impact is all the more pronounced the closer the sector is to the technological frontier" 11 . In its judgment in Case T-521/14 (Sweden v Commission), the Court of Justice of the EU confirmed the primacy of scientific criteria over any subjective assessment of the obligations imposed on the European legislator in the name of innovation or other requirements. 3.3.4 The Committee calls for the Commission to take these comments into account in the forthcoming communication on the innovation principle, mentioned in the Commission's Industry 2030 paper 12 . 3.3.5 The EESC believes that an own-initiative opinion on the innovation principle and in particular on its compatibility with the precautionary principle would be timely. 3.4 Public consultations
3.4.1 Despite these genuine efforts, the consultation procedure is still bedevilled by critical flaws: - business federations top the list of respondents by a significant margin (42.9%) 13 . The response rate from large companies or business federations was even 60% in the case of the REFIT platform; - due to a lack of resources the social partners in general, and worker and consumer representatives in particular, are disadvantaged compared to multinationals and the big employers' federations, despite having a recognised and legitimate role in the decision-making process (see Article 154 TFEU); - the questionnaires are closed-ended, often requiring yes/no answers, which leaves little room for precise evaluation; - the culture of responding to surveys is often limited to certain Member States, resulting in a truncated picture of the situation; - the responses are processed in a standardised way, which produces a static approach to findings and makes it impossible to analyse the responses in an intelligent or nuanced manner or to weight the findings of the consultation. 3.5 Reducing unnecessary regulatory burden 3.5.1 In November 2018, the Commission published its 2018 annual burden survey 14 , which presents an overview of the EU's simplification efforts. Despite the promises, the report lists measures which are yet to materialise and results that derive more from growth of the digital economy than from advances in the fight against red tape (e.g. the Fisheries Control Regulation and the company law package). 3.5.2 The OECD's 2019 report on better regulation 15 is also partly devoted to this issue. The OECD seems to call for partial dismantling of the Community acquis and of Member States' legislation in order to reduce the regulatory burden and regulatory costs, without first answering the question of what cost savings are required and at what point protection systems (social, environmental and territorial) could be at risk. 3.5.3 The REFIT platform was set up in May 2015 to enable public authorities, citizens and stakeholders to contribute to improving European legislation. In the Committee's opinion certain issues cast a shadow over its proceedings: - a redundant process: the Member States' group in the platform partly duplicates the work of the approximately 200 Council working groups; - a slow process: it often takes several months to adopt an opinion as the two groups, which meet only once and do not engage in any real dialogue, rarely reach a common position;
- an asymmetric process: most of the submissions originate from the employers sector, i.e. business groups or chambers of commerce (as evidenced by the statistics published by the Commission itself), and few are from civil society or the social partners. While the Commission and the Member States are represented, the EP is absent; - a body with no real expertise: on what scientific basis are the members of the platform able to analyse the very different proposals received? The only real expertise is in the hands of the Commission, which has sometimes taken advantage of this fact to push through its own proposals; - a lesser role for the EESC and the CoR compared to other stakeholders, which has the effect of diluting the opinions that the Committees could deliver; - a marked imbalance between outcomes and costs: the cost of the platform seems disproportionate to the results achieved to date; - the skewed nature of the platform: the Committee calls for a two-way street – in other words, an exercise that does not conclude in advance what course regulation should take: extending, complementing, amending or repealing legislation. Brussels, 25 September 2019 Luca Jahier The president of the European Economic and Social Committee _____________
(1) See point 1.1 of
OJ C 434, 15.12.2017, p. 11.
(2) See point 1.4 of
OJ C 81.2.3.2018, p. 81
.
(3)
OJ C 434, 15.12.2017, p. 11.
(4)
OJ C 303, 19.8.2016, p.45 par. 1.9
.
(5)
OJ C 303, 19.8.2016, p. 45, par 1.11
.
(6) Better Regulation Guidelines, European Commission, SWD(2017) 350 final, 7 July 2017.
(7) Source: Statistics on legislative acts- EUR-Lex (
https://eur-Lex.europa.eu/statistics/legislative-acts-statistics.html
).
(8)
OJ C 13, 15.1.2016, p. 145
.
(9) Interinstitutional Agreement on Better Law-making of 13 April 2016,
OJ L 123/1-14, p.1, 12.5.2016.
(10) European Court of Auditors: Ex-post review of EU legislation: a well-established system, but incomplete (2018).
(11) Lilas Demmou, Bruno Amable, Ivan Ledezma. "L'impact de la réglementation sur l'innovation: une analyse des performances selon la proximité à la frontière technologique" [The impact of regulation on innovation: an analysis of performance based on proximity to the technological frontier]. Economie et prévision, 2013, p. 11. Available at:
https://hal.archives-ouvertes.fr/hal-01614139
.
(12) Page 21.
(13) SWD(2019) 156 final (accompanying the Commission communication under discussion) Taking Stock of the Commission's Better Regulation Agenda, 15.4.2019.
(14) The European Union's efforts to simplify legislation, November 2018.
(15) 2019 OECD report on Better regulation practices across the European Union.