EN Official Journal of the European Union C 434/11

Opinion of the European Economic and Social Committee on ‘Analysis of transparency, methodology and resources of impact assessments and evaluations that the European Commission is launching to improve the quality of European legislation’

(own-initiative opinion)

(2017/C 434/02)

Rapporteur: Denis MEYNENT

Plenary Assembly decision 26.1.2017 Legal basis: Rule 29(2) of the Rules of Procedure Own-initiative opinion Section responsible Section for the Single Market, Production and Consumption Adopted in section 5.9.2017 Adopted at plenary 20.9.2017 Plenary session No 528 Outcome of vote (for/against/abstentions) 142/0/5

1. Conclusions and recommendations

1.1 The Committee notes that the REFIT (1) programme’s primary aim is to improve the quality and effectiveness of EU legislation and to draft simple, understandable and coherent rules, without calling into question the already-established strategic aims of the EU’s policies or becoming detrimental to the protection of citizens, consumers, workers, social dialogue or the environment (2). European legislation is an essential factor in integration. When proportionate it constitutes an important guarantee of protection, promotion of European legislation and legal certainty for all European stakeholders and citizens (3).

1.2 Despite the progress achieved so far, in particular as a result of the work of the Regulatory Scrutiny Board (RSB), the Committee would like the European impact assessment ecosystem to continue to evolve, so as to strengthen its quality and encourage the involvement of organised civil society in designing and implementing legislation.

1.3 It is therefore particularly necessary that: — the specifications for preliminary and further studies are transparent, accessible and pluralistic, and lead to the formulation of alternative scenarios that clearly demonstrate the real consequences of all the possible options, — a European register of impact assessments, as well as all relevant data (scientific, statistical, etc.), including stakeholders’ views, is easily available and accessible in the other EU languages, particularly executive summaries of impact assessments, — the balanced nature of the impact assessments of any legislative proposals is guaranteed and due importance given to economic, social and environmental aspects, including for SMEs and micro-enterprises.

1.4 The Committee advocates a qualitative approach which operates on an equal footing with quantitative analysis, taking into account research into the expected benefits of the legislation.

1.5 The Committee calls on the Commission to remain vigilant so as to ensure that the reduction of administrative and regulatory burdens does not have a negative effect on the effectiveness and overall quality of EU policies, especially in the social, environmental and consumer protection spheres and with regard to SMEs and micro-enterprises.

1.6 Finally, with regard to the impact assessment, the EESC hopes: — that a converging methodological approach to impact assessments will be followed by the European Parliament (EP), the Council and the Commission, which can be shared with the consultative bodies in order to facilitate the work of each of the institutions and enable amendments and opinions to be formulated, — that the Committee’s involvement in monitoring quality will be strengthened, allowing it to evaluate certain impact assessments, both from a methodological point of view and taking into account social, environmental or territorial aspects. With this in mind, the Committee stresses that Article 9 TFEU should be systematically taken into account, — that regular interactions will take place with the ERC on methods with regard to impact assessment (IA) and good practices, especially those in relation to employment or territorial cohesion or which have an impact on SMEs and micro-enterprises.

2. Introduction

2.1 The IA takes the form of an ongoing and critical analysis of the effects, both positive and negative, of planned EU regulation on the economy, society and the environment. Fifteen years after its introduction, the IA has become one of the cornerstones of the EU’s Better Regulation Agenda.

2.2 The IA system comes into play at a very early stage in the political cycle. An IA is carried out ahead of any new initiative that is likely to have economic, environmental and social impacts. An evaluation and fitness check of existing EU legislation and policies are also carried out regularly. The ‘inception impact assessment’ outlines the main thrust of the impact analysis, surveying the different types of option (from status quo to full harmonisation). The impact assessment itself then takes place. The draft assessment is reviewed by the RSB. Once legislation has been implemented, an evaluation assesses its effectiveness, efficiency, relevance and European added value. The RSB then reviews the main evaluations of the EU legislation. ‘Better law-making’ is therefore present at every stage of the procedure. It is increasingly open to stakeholders at every stage, via various consultation mechanisms.

2.3 The Interinstitutional Agreement on Better Law-Making (IIA) of May 2015 (4) reflects the common position of the three institutions with regard to the IA. In the light of the progress made, the Committee has identified two key lessons: — there is no common methodology: each institution is responsible for defining its own evaluation method, although they must use the Commission’s IA as a basis for their own work in order to ensure convergence between their approaches, — the Council and the Parliament must promise to carry out an impact assessment before tabling ‘substantial’ amendments, where this is deemed necessary.

2.4 Established in May 2015, the RSB has taken almost two years to become fully operational. It has greater authority and wider responsibilities, including examining the quality of draft IAs, health checks and major evaluations of existing EU legislation (5). The professionalisation of the RSB has made it less likely that social and environmental impacts will be overlooked. The RSB reviewed 60 IAs in 2016, 25 of which (42 %) initially received a negative review, requiring their authors to resubmit their IAs to the committee. Currently, the EESC confines its opinions to the impact assessment. In the future, it might usefully consider how the legislative proposal reflects the IA and takes it into account.

3. Evaluation of the IA process

3.1 A multidimensional impact assessment

3.1.1 The IA is based on an array of criteria and tests, relating in particular to impacts in the following areas: — economic, social and environmental issues, — consumers, — small and micro-enterprises, — trade and international investment, — administrative and regulatory burdens, — subsidiarity and proportionality, — regional and territorial cohesion.

3.1.2 In principle, the Commission’s impact assessments are integrated in nature, covering the most significant and relevant economic, social and environmental impacts of each case.

3.1.3 Over the years, the Council and occasionally the EP have requested additional criteria: — a competitiveness proofing test, — a test on respect for fundamental rights, — a test on the compatibility of the proposals with the digital economy, — a test on respect for the innovation principle.

3.1.4 These various criteria occasionally force the Commission to strike a balance between the various aims or concerns by: listing the criteria in order of priority; deciding that such and such a criterion must take precedence over the others as the key criterion/a; arbitrating policy choices in the face of competing criteria: — subsidiarity versus harmonisation, — competitiveness versus social protection and employment quality, — the precautionary principle versus the innovation principle, etc.

3.1.5 The study on the Commission’s IA system, carried out in 2007 by The Evaluation Partnership (TEP) (6), a UK private consultant, had reported a number of shortcomings, in particular regarding social and environmental protection. According to TEP, the poor quality of the IAs was due to errors in timing, the mechanisms used to monitor the quality of assessments, and the lack of monitoring and assistance available for IAs (training, coordination, incomplete or missing data, etc.). In 2010, the Court of Auditors found that ‘in practice, the Commission’s IA work was asymmetric between the three pillars and between costs and benefits’ (7).

3.1.6 With this in mind, the Committee reiterates its request for Article 9 of the Treaty on the Functioning of the European Union (8) to be used systematically as a basis for evaluation work (9).

3.2 The Better Regulation Toolbox (10) as regards social protection and employment

3.2.1 A ‘toolbox’ was developed by the commission in its Communication (11) of 19 May 2015 on better law-making. It provides a detailed guide on the IA via 59 instruments (tools, criteria, tests, etc.) intended to help not only the Commission but also the competent authorities of the Member States.

3.2.2 Two of the 59 tools proposed are of particular interest to the EESC. These are tools 7 (requirements for social partner initiatives) and 25 (employment, working conditions, income distribution and inequality).

3.2.3 In reality, these tools seem more like a checklist of questions to be asked concerning initiatives that are likely to have an impact on social or employment issues. The questions are general, neutral and uninspiring. For example, the questions asked in tool 25 include: — does the option lead to direct job creation or job losses in specific sectors, professions, skill levels, regions, countries (or a combination thereof) with consequences for specific social and/or age groups? Which ones? — does the option affect directly or indirectly employment protection, especially the quality of work contracts, risk of undeclared work, or false self-employment? — will the option have an impact on inequalities and the distribution of incomes and wealth in the Union or in one of its parts?

3.2.4 These questions often amount to a description of a series of potential positive and negative impacts. They provide little incentive to develop more detailed analyses as regards the quality or the volume of employment in particular.

3.2.5 In addition, it would appear that in certain cases, the social and environmental criteria have not been included in a systematic and in-depth way in the Commission’s IAs for several years (12), even if the Commission, for its part, states that it considers social impacts in 70 % of its IAs and environmental impacts in 45 % of cases.

3.3 Clarifying the Commission’s methodology

3.3.1 The Directorates-General (DGs) are responsible for the analytical methods and models on which the Commission’s services are based when establishing their legislative proposals. In most cases, the Directorates-General carry out impact assessments internally on the basis of the IA guidelines (13) and toolbox. In some cases, the DG concerned has recourse to the services of an external consultant, selected on the basis of an open and transparent procedure, in order to investigate further a particular point in the IA.

3.3.2 Of the 59 tools that make up the toolbox, only two or three appear capable of guiding decision-making with regard to the quality of employment, social protection, levels of remuneration, etc. This is clearly an area in which the toolbox needs to be strengthened.

3.4 Gradual downward slide of the IA towards cost reduction?

3.4.1 The quantification of regulatory and administrative burdens

3.4.1.1 The REFIT programme aims to identify unnecessary burdens, inconsistencies and ineffective measures and to take the necessary steps to remedy the situation. In 2013, as part of REFIT, the entire EU legislative stock was mapped.

3.4.1.2 The EU Competitiveness Council has called on the Commission to draw up and set out reduction targets in particularly burdensome areas, especially for SMEs (14).

3.4.1.3 The Competitiveness Council of 26 May 2016 also welcomed ‘the Commission’s commitment in the IIA to further quantification of its simplification and administrative burdens reduction efforts, to present an annual burden survey and, where possible, to quantify the regulatory burden reduction or savings potential of individual proposals or legal acts’ (15).

3.4.2 The Committee calls on the Commission to remain vigilant so as to ensure that reductions in the regulatory burden do not affect the effectiveness or the overall quality of EU policies, especially as regards social, environmental, employment or territorial cohesion aspects as well as SMEs and micro-enterprises.

4. Proposals and recommendations

4.1 Despite the progress that has already been made, the European ecosystem as regards IAs needs to develop further. We propose seven areas of improvement in order to strengthen the quality of the RIA and encourage the involvement of organised civil society in designing and implementing legislation.

4.2 Specifications for studies relating to IAs that are transparent, accessible, and diverse

4.2.1 The Committee requests that the Commission indicate more clearly the methodology used to calculate the impact of its initiative, the scope of the study and its possible limitations (area, target groups, etc.).

4.2.2 If sections or significant subsections of the IA are outsourced, the Committee requests that the winning bidder’s name be published.

4.2.3 It is important that the specifications clearly describe alternative scenarios and demonstrate the consequences of all the possible options, including: — the competitiveness of the EU and its businesses, — social and environmental protection, — micro and small business development, — gender equality, — territorial cohesion, etc.

4.2.4 It is important that priority should ultimately be given to a proposal which combines these various dimensions to the best possible effect, bearing in mind the provisions of Article 3(3) TEU (16) and Article 9 TFEU (17).

4.2.5 In order to help the co-legislators draft their amendments, the IAs must provide alternative courses of action which, for example, provide for scenarios that are more favourable to employment, social and environmental protection, territorial cohesion and consumer policy.

4.3 Enlargement of the European register of IAs

4.3.1 Transparency is an essential prerequisite for good governance. A register (18) of the Commission’s documents presents the list of impact assessments and the corresponding opinions of the RSB. However, this register is little-known to the general public and is only available in English.

4.3.2 The Committee therefore calls on the Commission to take steps to raise awareness about this site in collaboration with intermediary organisations, include the views of stakeholders and any relevant studies, particularly IA summaries, and provide translations in the other EU languages.

4.4 The need for a qualitative approach

4.4.1 The EESC calls for the quantitative or monetary approach to operate on an equal footing with a qualitative approach, which focuses on the human dimension of proximity, gender equality and contact with what is happening on the ground. The reasons for investing in a qualitative approach include the following: — the difficulty of apprehending the medium and long term effects upon the EU’s general interests. Approaches based on cost have great difficulty in capturing real societal change or sustainable development, — the absence of available or reliable data. Econometric and quantitative methods are unable to calculate all possible impacts. For the most part, they are limited to generalising and to amassing data that is often partial or incomplete, leaving to one side any information that cannot be measured: the quality of social dialogue, the development of social protection, the degree of regional inclusion, the actual level of vulnerability and exclusion, etc., — the non-comparability of data. Quantitative methods differ in nature. The samples, reference years, and scientific data vary depending on the method. Therefore, it is often difficult to make comparisons between the methods and draw appropriate conclusions, — confidentiality. Confidential approaches are based on partial samples, surveys, and opinion polls. By their very nature, these approaches tend to omit certain confidential information on the social climate of a company, industry or sector.

4.4.2 IAs should always favour a cost-benefit approach. The reduction in the number of diseases and the levels of noise pollution, toxic emissions and accidents can never be determined solely on the basis of quantitative data. Fairer competition, fair trade and better working conditions cannot be determined on the basis of quantitative analyses. It is crucial that the Commission prioritises qualitative analysis, in the interest of all stakeholders.

4.5 The need for a convergent methodological approach at the level of the research matrix

4.5.1 Although the IIA concluded that each institution could develop its own methodology, the Committee proposes that the EP, the Council and the Commission should work together to carry out a thorough review of this issue, one that is also open to the Committee.

4.5.2 It is not so much a question of proposing a uniform methodology as agreeing in advance on a convergent methodological matrix, specifically with regard to the basic methodological elements, such as defining the scope of the study, the research strategy, the choice of tools, the options to prioritise, etc.

4.5.3 The long-term aim is to promote dialogue with regard to the Commission’s choices of methodology so as to provide assistance to institutions carrying out amendments.

4.5.4 As a result, the Committee’s proposals in this regard might resonate more favourably with co-legislators.

4.6 Targeted assessment of the quality of the IA by the Committee

4.6.1 The EESC has a unit dedicated to the qualitative ex-post evaluation of some targeted European legislation. In the future, this unit could support the efforts of Committee members and also provide analysis of some IAs, review methodological issues and provide an opinion on whether economic, social, environmental or territorial elements should be taken into account. It would also facilitate the development of any advisory opinions by the EESC relating to draft legislation prepared by the same impact assessments.

4.6.2 A regular dialogue between the EESC and the European Commission should be set up with regard to consultations and impact assessments.

4.7 Cooperation between the EESC and the RSB

4.7.1 Consideration should be given to informal but regular cooperation between the RSB and the Committee.

4.7.2 As well as informal exchanges of views and ad hoc cooperation, it is important to promote dynamic cooperation with the Committee in two areas: — holding regular exchanges of views on methodological approaches with regard to IAs and best practice, the issue of substantial amendments to Commission proposals, and the process of simplifying and reducing the regulatory burden, — informing the EESC where appropriate ahead of any Commission initiative that includes a substantial social, employment, environmental or territorial cohesion element at the IA level. With this in mind, the Committee should be included among the recipients of the Commission’s inception evaluations and impact assessments.

4.7.3 For its part, the Committee will, where appropriate, draw up a summary of its main recommendations on the scope of the impact assessment itself and will provide any other data or information that might be relevant to the IA work of the Commission and the associated review by the ERC.

4.7.4 The Committee will also provide an ex-post evaluation on the implementation and application of the legislation.

Brussels, 20 September 2017. The President of the European Economic and Social Committee Georges DASSIS

(1) The abbreviation stands for the Regulatory Fitness and Performance Programme.

(2) OJ C 303, 19.8.2016, p. 45.

(3) OJ C 303, 19.8.2016, p. 45.

(4) Interinstitutional agreement on Better Law-Making (OJ L 123, 12.5.2016, p. 1).

(5) In its 2016 annual report https://ec.europa.eu/info/law/law-making-process/regulatory-scrutiny-board_en#annual-reports

(6) The Evaluation Partnership Limited (2007), http://ec.europa.eu/smart-regulation/impact/key_docs_en.htm

(7) Impact Assessments in the EU Institutions: Do they support decision-making? ECA special report No 3/2010, paragraph 64, p. 36.

(8) Article 9 of the TFEU stipulates that: ‘In defining and implementing its policies and activities, the Union takes into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.’

(9) OJ C 24, 28.1.2012, p. 29.

(10) http://ec.europa.eu/smart-regulation/guidelines/toc_tool_en.htm

(11) Better Regulation Guidelines, SWD(2015) 111 of 19 May 2015.

(12) Renda A., Schrefler L., Luchetta G. and Zavatta R. (2013) Assessing the costs and benefits of regulation. A CEPS — Economisti Associati Study for the European Commission.

http://ec.europa.eu/smart-regulation/impact/commission_guidelines/docs/131210_cba_study_sg_final.pdf, cited by Isabelle Schömann in EU Refit machinery ‘cutting red tape’ at the cost of the acquis communautaire, in Policy brief 5/2015, ETUI, 2015.

(13) The Commission’s impact assessment guidelines and other related material are available at the following address: http://ec.europa.eu/smart-regulation/impact/index_en.htm

(14) Paragraph 9 of the Council conclusions on ‘Better regulation to strengthen competitiveness’, document 8849/16 of 18 May 2016.

(15) Paragraph 7 of the Council conclusions of 26 May 2016 on ‘Better regulation to strengthen competitiveness’, document 8849/16 of 18 May 2016.

(16) ‘The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, and a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.’

(17) See footnote 6.

(18) It can be consulted on the European Commission’s website at the following address: http://ec.europa.eu/transparency/regdoc/?fuseaction=ia&language=en