WRITTEN QUESTION P-2582/99

by Malcolm Harbour (PPE-DE) to the Commission

(16 December 1999)

Subject: Business Impact Assessment

Council Decision 97/15/EC(1) of 9 December 1996 requires the Commission to undertake a Business Impact Assessment (BIA) in respect of proposals that may have an impact on undertakings. There is widespread concern that BIAs are rarely carried out and that the Commission's original unpublished proposal for procedural rules has been replaced by a requirement that gives little guidance to the services involved and is consequently frequently ignored. As a result, it is possible that non-legislative options may be given insufficient consideration and that legislative requirements may impose unnecessary costs affecting business competitiveness.

Will the Commission please indicate:

1. How many proposals to impose new regulations on business have been dropped as a result of the application of the Fiche d'Impact?

2. What costs were (a) reduced and (b) avoided as a result of the use of the Fiche d'Impact for the last year for which figures are available?

3. Will the Commission report to Parliament on the possibility of establishing verifiable targets for reducing the burden of regulation, measured by (a) volume of regulatory requirements and (b) costs imposed by those requirements, both overall and by individual DG?

4. Does the Commission agree that it is important that a BIA is undertaken in respect of any proposal that could entail costs for enterprises?

5. What steps it is taking to fulfil the requirements set out in its January 1999 Guidelines on Legislative Policy to produce detailed BIA guidelines and work closely with business organisations and Member States to ensure that these guidelines reflect business needs and national best practice?

6. Will it ensure that the production of a BIA is mandatory, not discretionary?

7. The Commission is proposing to establish a unit within the Directorate-General for Enterprise to administer the BIA system. How will it ensure that the Unit will be able to take effective action against other services, both in complying with the BIA requirement and having regard to the conclusions of BIAs?

(1) OJ L 6, 10.1.1997, p. 25.

Answer given by Mr Liikanen on behalf of the Commission

(20 January 2000)

The Commission is committed to improving and strengthening its business impact assessment (BIA) system as part of its consideration of legislative proposals. These internal Commission working procedures, along with comprehensive consultation with outside interests, are part of the open and transparent Commission policy as set out in the guidelines on legislative policy announced by the Commission in January 1996.

The Commission's BIA system started in 1986 with the setting up of the small and medium-sized enterprises (SME) Task Force. At this stage an impact assessment was required for all Commission proposals for legislation. However, it soon became clear that the system was unworkable and too bureaucratic, particularly if assessments were required for legislation that had nothing to do with business. Consequently, as from 1 November 1990(1) the Commission introduced changes to the system, most importantly that impact assessments would only be required for those proposals likely to have a significant impact on business, particularly on SMEs.

The Commission has also established the business test panel project, within the single market action plan, which is a mechanism whereby proposed Community legislation can be critically reviewed directly by individual businesses in the Member States. This review process complements the BIA system, helps to see whether proposals will result in new increased compliance costs and administrative burdens for business, and gives an idea of their scale and magnitude. The business test panel is a pilot project, which will be reviewed in the year 2000.

A BIA appears as part of the documentation accompanying every legislative proposal which is likely to have a significant impact on business. This is published as part of a COM document which is submitted to the Council, the Parliament and the Economic and social committee. These documents are distributed by the Office of publications, they are available to outside interests, and scrutiny of their content is welcome.

Proposals to improve the BIA system are under active consideration within the Commission at a time of substantial changes and re-organisation of directorates-general. This review will assess the effectiveness of the current procedures against the background of the Commission's commitment to better regulation. This will also be done in close co-ordination with other Commission work and initiatives on the simplification of internal market legislation, such as simplification of legislation for the single market (SLIM), and the business test panel pilot project.

To answer the specific questions posed by the Honourable Member:

1. Due to the complexity of the decision making process, it is difficult to say how many legislative proposals have been dropped over the years directly as a result of a BIA. This would need to be considered on a case by case basis, and would take up considerable resources.

2. Up to now no quantification of the impact of BIAs on reducing or preventing costs has been carried out. However, the Commission published in 1997 a report on Improving the quality of legislation for business: The European Commission's business impact assessment system. This report outlined the history and the development of the business impact assessment system along with a comprehensive collection of business impact assessments over the last years.

3. This question will need to be evaluated in the context of the review of the system.

4. The Commission agrees that it is important that BIAs are undertaken in respect of proposals that could impose costs on enterprises, but the system in itself should not become an unnecessary burden and a purely bureaucratic exercise. For these reasons BIAs should be limited to those proposals with a significant impact on businesses.

5. More detailed guidance on BIAs is being considered and the work will be taken forward as part of the review of the system.

6. A BIA is already required for all legislative proposals with a significant impact on business.

7. The new unit on Regulatory co-ordination simplification and impact of legislation on SMEs became operational on 1st January 2000 and works in close co-operation with other directorates-general responsible for bringing forward legislative proposals.

(1) SEC(90) 2188.