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One of the main arguments against setting up such bodies, assuming the
constitutional obstacle is removed, is the doubt about realistic and effective
possibilities for ensuring that they are accountable and subject to review.
Their independence is also sometimes perceived as running counter to these two
principles. Many scholars conclude that delegation to agencies results in a
legislative abdication. In practice, the chain of delegations is far from
perfect, but the accountability approach is a very useful starting point for
identifying deviations between ideal type and political practice.
We will
therefore now turn to a consideration of the substantive and procedural limits
on the operation of agencies, which can restrict their independence and thus
ensure democratic accountability and control.
The range of control measures is very wide, and classifying them is not easy.175 However, all the authors agree that the two determining factors ensuring that agencies are democratically accountable are the limits on their independence and the extent to which they are supervised. The ultimate goal is to ensure that their decisions are in accordance with the will of the people, which is presumed to be the same as that of their elected representatives, thus making review essentially political.176 However, limiting agencies' independence raises the question "to whom are they answerable?" while the various review measures, whether administrative, budgetary, procedural or judicial, raise the question of "how and to what extent can they be held accountable?". We will therefore consider the problem of agencies' accountability under the two headings: autonomy and control.
The limit of agencies' political autonomy remains a difficult issue. Too little independence would undermine the comparative advantage these bodies have over the ordinary administration, while absolute autonomy places them beyond control. Determining the golden rule is not an easy task.
The Community executive must be independent for its regulation to be
credible. The authors of the Treaty were aware of this, stipulating in
Article 213 that Members of the Commission "...shall neither seek nor take
instructions from any government or from any other body," and that each Member
State "undertakes to respect this principle and not to seek to influence the
Members of the Commission in the performance of their tasks." By analogy, we
clearly derive from this provision an obligation on both the legislative and
executive authorities not to interfere in the tasks of the agencies as laid
down in the national systems. But how far should this independence stretch?
To go some way towards answering this question, we must consider three
aspects: the creation of agencies, their relationship to the three arms of
power and the appointment of their managers.
The question whether agencies are attributed powers by the legislative or the executive branch,178 which arises in US law, is not relevant in Community law. The specific nature of the separation of powers within the EU, and the fact that even executive agencies are created by the legislator, removes this preliminary difficulty. Regulatory agencies will require an instrument adopted by the European Parliament and the Council by codecision on a proposal from the Commission. Whether this is on the basis of a new provision of the Treaty, revised for the purpose, or of the sectoral provisions, perhaps combined with Article 308, is of little importance. What matters is that the instrument setting up the agencies is the fruit of cooperation, according to the Community method, between the executive and legislative arms, with the result that the terms of their remits and the scope of their actions are already limited in accordance with the requirements of the Community's institutional balance.179
The definition of their remit is of prime importance in this connection. No one doubts that it must be clearly defined. However, it cannot and must not be defined in such a way as to deprive agencies of any discretionary power, to the point of reducing their role once again to that of mere executor. The situations requiring regulation are so varied and the science of regulation is changing so rapidly that any attempt to formulate exhaustive remits will itself undermine the effectiveness of the decisions to be taken. Nonetheless, the remit must contain clear and intelligible principles that can be subjected to judicial review if an agency exceeds its powers or acts clearly outside its margin of discretion.
In any event, as the areas covered by the remit develop, it may need to be amended on a regular basis and by the same procedure, with a view to keeping up with these developments and building on the experience gained. The legislator may in any case amend the remit at any time.
This system not only respects institutional balance, it can also give it a new lease onlife by eliminating regular conflicts of influence and encouraging the Institutions to cooperate on the choices and basic policies to adopt, while leaving the agencies to handle the day-to-day management of the regulatory machine. We cannot, however, rule out the possibility of the legislature capturing in the wake of normal procedures certain subjects or isolated cases which are politically very sensitive, while turning to the agencies as the preferred advisors in such cases. This retention power/right to revoke180 may be exercised at the principal's initiative or at the initiative of the agency, when particularly delicate questions are at stake.
All of this is especially useful to the Commission as well, which would see its political image strengthened. For, despite the Treaty provision, the Members of the Commission always have been and always will be (fortunately, as it happens) politicians with very close links to their respective countries, if not their electoral constituencies. Consequently, immunity to political pressure from the capitals and regions is not guaranteed. If such pressure is felt within the Commission, which decides, theoretically, by majority but in practice by consensus,181 this can only undermine the quality and consistency of regulatory decision-making. This is also valid, mutatis mutandis, for the national experts in the framework of the comitology procedures.
In sum, the Commission would have greater status and a more important political role if it were to design the general framework within which certain regulatory decisions can be taken, have them adopted by the Council and the Parliament, and participate in monitoring their application, rather than taking these same decisions itself, often formally.
Agencies are thus not created in a vacuum, but neither do they work in one. Their interaction with all the arms of Community power, as well as with the Member States and the citizens, is visible and can be improved in the general interest. We have just seen that they depend on the Institutions for their establishment and their remit; the same applies therefore to their continued existence. It is obvious that, by the same procedures, they can be demoted to executive bodies or Commission departments if the added value of their activity justifies it, they can be merged with other agencies if duplication is identified, and they can ultimately be disbanded, if evaluation of their activities shows that the reasons for their establishment no longer exist or that their objectives can usefully be achieved by other means.
This fact generates an attitude within agencies of responsibility for their own actions and of self-restraint with regard to the performance of their tasks. The initiative for taking any of the above steps will fall to the Commission, which will thus develop the useful and important role of monitoring and evaluating the agencies in order to propose any necessary measures.182 With a view to its growing political role as the single genuine European executive, whose President would have greater powers, it could be given the prerogative of initiating the procedure for dismissing senior agency staff for serious misconduct in the performance of their duties, on the US model.183
Apart from the power of life and death they have over agencies, the Council and Parliament, in their capacity as budgetary authority, have the last word on the agencys' finances, which they can change according to their policy priorities and performances by recipient bodies.184 Financial control over the agencies in any event constitutes an important control instrument shared between several institutions.185 And, as we shall see, this substantive legal limit on the action of agencies can be supplemented by procedural rules that are generally applicable and subject to judicial review.
In cooperation with the administrative courts in the Member States, the European Court of Justice and Court of First Instance will remain the ultimate guarantors of compliance by the agencies with the entire legal framework.186
Last, but not least, by working in a network with national administrations, parallel bodies in the Member States and the relevant professional associations, agencies will not be strangers to the concerns of Europe's citizens. On the contrary, they will become more responsible to them by the visibility of their activities and, in any event, considerably more responsible than the anonymous experts meeting in the corridors of the committee system, who are answerable only to their respective governments.
Agencies are bound to take account of the policy choices of the executive and legislative arms, with the sword of Damocles (judicial review) hanging over them. It is vital that they retain autonomy of judgment and choice, once they have weighed up all these conditions. The independence of agencies is not a myth. Their alleged irresponsibility of action is.
Greater responsibility, an additional guarantee of a limit on the autonomy of agencies, can be stimulated by the procedures for appointing and dismissing agencies' executive boards. This is another means of linking them to all the Institutions and to civil society in such a way as to make them more legitimate and representative, thus maintaining the institutional balance within the Community.
In the present situation, despite the fact that the existence of an administrative board is a common and central element of all agencies, composition and voting rights vary and reflect the degree of autonomy and control that the legislative power wishes to delegate to each particular agency. Member States are always represented, but in some cases they are balanced by representatives of the social partners, in others by independent experts appointed by the European Parliament. The Commission is also always represented, but with quite different degrees of influence and control, ranging from powerful positions with several members and permanent seats to representation without a vote.
The above illustrates the extreme diversity of these bodies and the range of available solutions for achieving the right mix of conditions so that their tasks can be performed more effectively. This is a positive and flexible aspect, which should be retained. In the case of regulatory agencies, this diversity should even be increased, but reshaped: increased, in order to involve all interested parties, and reshaped in order to provide a better reflection of the position of the agencies within the Community's institutional balance. Greater diversity does not of course mean administrative boards that are overpopulated, cumbersome and inefficient. An average of twenty people at most (which is already a lot) should be the rule, even after the next enlargements. To achieve this, new rules for appointing members need to be drawn up. A plausible procedure would involve the Commission and Parliament choosing from a list submitted by the Council, containing three times the number of names as posts to be filled. The Court of Justice (and/or Court of First Instance) would be able to appoint one member, when the agency concerned would also have a quasi-judicial function. The Economic and Social Committee (ESC) would appoint representatives of the economic and social interests concerned, when appropriate, and the same would apply to the Committee of the Regions, if the agency's activities affected important regional concerns. Only the Commission, as the executive, would automatically be represented in all cases by appointees of its choice. In all these procedures, there should be an attempt to achieve maximum representation of the Member States, without each of them having the right to a seat.
It should also be a possibile to dismiss the agencies' managers before the end of their contract (three years, renewable twice), but only for serious misconduct in the performance of their duties. The decision would be the responsibility of the President of the Commission, subject to review by the Court.
We have thus described a network of multiple relationships between the agencies and all the powers acting at Community level. In practice, the operation of this structure guarantees and limits the autonomy of the agencies, these limits being basically political in nature.187 With specific regulatory, executive and quasi-judicial functions delegated by the legislature, and connected to all the powers that primarily perform these functions, agencies constitute a condensed form of governance, uniting in a given field the extreme diversity and segmentation from which contemporary societies suffer. Their actions are therefore more effective than central executive action, while at the same time, regulated and monitored.
Within the European Community agencies are likely better to reflect and respect the balance between the institutions and better to take account of citizens' interests, thus partly closing the democratic gap in the EU.
These political limits on the relative autonomy of the agencies are also the ex ante conditions for their accountability, in that they provide in advance the means of ensuring that they operate as closely as possible in accordance with the wishes of the delegating authorities and the expectations of the citizens. However, these preconditions are not sufficient in themselves. Once created, the agencies, like any social entity, acquire a dynamic of their own, which can have undesirable results both for the Institutions that created them and for the individuals they are intended to serve. Hence the need for ex post control, a subject to which we will now turn.
The delicate and difficult balance to be struck between autonomy and control was succinctly summarised by T. Moe, who argued that the mechanisms linking the agencies to all the other branches of power are so numerous and complex that they ultimately result in a situation where "no one controls the agency, and yet the agency is under control".188 This paradox is easy to explain.
Modern administration does not easily tolerate restrictive mandates worded so precisely that they remove any scope for discretion. It is thus in a position of constant interaction between rulemaking and enforcement.189 Consequently, judicial review is never easy, especially when scientific issues are at stake.190 At the same time, individual citizens or groups may contest agencies' actions before the courts and possibly win their cases. Such proceedings remain limited however, and cannot ensure that all of society benefits from the agencies' activities. This is particularly true of the EU, where, owing to the very limited possibilities for individuals (natural and legal persons) to bring direct action for annulment before the European courts, decisions can be usefully contested only once they have been implemented in national law.191 As a result, we need a diversified battery of interconnected mechanisms to ensure the right balance between autonomy and control.192
This variety of mechanisms is also required by the operating costs that agencies may generate, which may be administrative or financial. If, by administrative cost, we understand the potential gap between the objectives of the delegator and the work of the agency, a gap which is likely to widen the broader the remit is, and by financial cost, the higher or lower expenditure that might be generated by the intensity and/or scope of the agency's regulatory activity, it is clear that these costs are closely interlinked. A broad remit may reduce the delegator's costs in terms of regulatory production, but will certainly increase the costs of monitoring the agency to ensure that it complies with the terms of its remit, while a very restricted remit will probably have the opposite effect. Hence, the need for an intelligent balance between the degree of independence and appropriate control measures, as illustrated by the great variety both of types of agency and of control mechanisms.
Over the past twenty years, particular authors, drawing essentially on US practice, have developed an impressive series of supervision mechanisms, the typology of which varies greatly according to the relative importance each attributes to one or other of them.193 I have chosen to present these mechanisms in five categories, which seem to me to better reflect the state of thought on the subject: (a) executive oversight, (b) budgetary evaluation, (c) procedural control, (d) judicial review and (e) network coordination. Let us now consider each of these in turn.
The proliferation of supervision mechanisms is a recent phenomenon, even in the United States. It dates from the 1970s, when a series of agencies were set up in the health, safety and environment fields. It was in these fields in particular that it became urgent to determine whether the agencies were effectively meeting the social needs for which they were set up and whether their operating costs were in line with the results achieved. The trend became particularly marked under the Reagan administration and resulted in 1981 in the enactment of a first Executive Order 12291,194 reflecting the President's determination to take control of these overactive administrative bodies on the pretext of curbing measures that were economically unjustified. What is more interesting is the adoption of a second Executive Order 12498, in January 1985, establishing the powerful Office of Management and Budget (OMB) under the President and giving it responsibility for the executive oversight of the agencies. Its tasks also include supervision and coordination of the entire regulatory work of the agencies. It is worth giving a brief description of the OMB's modus operandi.195
The OMB intervenes at three stages:
First, it has the right to review the regulatory programme of the agencies for information purposes and in order to identify any duplication in the work of different agencies, as well as to assess which regulatory projects are particularly contested or contain potentially dangerous elements.
Next, the OMB receives the Regulatory Impact Analysis (RIA), in which the agency has to assess the costs of each regulation proposed (including the indirect costs of regulatory activity), demonstrating that they are less than the expected direct and indirect benefits. The OMB has sixty days in which to respond. In the vast majority of cases, the plans are accepted without amendment; in some cases, the OMB negotiates improvements to the proposed regulation with the agency; in very exceptional cases, the plan is rejected as being particularly undesirable, and the agency has to review the proposal and either re-submit or withdraw it. It can also refer the matter to the President or Vice-President if the latter has express authority to deal with it, but appeals of this type are rare. It should be pointed out that, at this stage, proceedings are not public, the OMB and the agency negotiating behind closed doors.
Finally, having received the go-ahead from the OMB, the agency has to send the Notice of Proposed Rulemaking (NPRM) to the Federal Register.196 The proposal is published there with all the supporting material and is opened to public debate. During a period of between 30 and 90 days, depending on the circumstances, any interested party may submit comments. The agency decides at its discretion what response to make to these comments, but it must take express account of them in its final decision, or face action before the courts for procedural defect. Once the deadline has passed, the agency must finalise its proposal and submit it again to the OMB thirty days prior to its publication as a final regulation in the Official Gazette. The OMB has only one month in which to carry out the final examination of the texts and the underlying economic analysis. It is extremely rare for it to raise objections at this late stage in the procedure. In general, the OMB first endeavours to and does obtain from the agency a very detailed explanation of the reasons for the instrument and the specific improvements to certain points, and more frequently, involving alternative and less costly ways of ensuring compliance with the rules enacted.
It is tempting to think that a similar office with the same powers as the OMB could very easily operate within the Central Audit Service already attached directly to the Commission's President.
Executive oversight is an overall monitoring process, which includes budgetary evaluation aspects. However, the budgets of the agencies deserve particular attention. As we have seen, regulatory activity generates indirect costs, which are much higher than the direct expense of running regulatory bodies. The costs of applying the regulations cannot be taken into account within ordinary budget procedures and require particular budgetary discipline.
Consequently, the real budgetary cost of the agencies is not represented by their operational expenditures, but primarily by the costs of the public and private sectors' and consumers' applying the regulations enacted. It is difficult to estimate these costs, but there are now very sophisticated and sufficiently reliable methods (Compliance Cost Assessment) of doing so.197
In this context, the Commission should prepare the Regulatory Budget (RB) separately from the budgetary procedure, essentially on the basis of the RIA; it should establish total costs per agency and propose a maximum ceiling on European regulatory expenditure, adopting an operational budget for each agency on the basis of these two factors.198 The final decision would of course be taken by the budgetary authority (Parliament and Council) in accordance with the ordinary budget procedure. The RB may prove to be a very useful tool for controlling and improving agency activity, since, by placing a ceiling on the indirect costs of regulatory activity and setting the operational budget in accordance with that ceiling, it will encourage the agencies to allocate resources in the most efficient manner for achieving their objectives.
This task could also be entrusted to a "regulatory clearing house" within the central audit service in cooperation with the Budget Directorate-General. This way of working could and should eventually lead to the creation of a real Community OMB.199
This method of estimating total Community regulatory expenditures and fixing the operational budgets of the agencies could also indirectly ease the budgetary process. All are familiar with the animosity that develops each year between Parliament and the Council over budgetary choices, reflecting their different policy orientations, and with the Commission's frustration at increasingly finding itself in the awkward position of having to implement policies without sufficient funds. The method proposed here involves objective data, in figures, being used for estimating regulatory expenditure, which should allow that part of the budget to be agreed with less conflict. It also provides a more realistic estimate, which should reduce the instances of frustration in the Commission and in the agencies themselves in their capacity as budget implementation bodies. In this context, it is not excluded that the Member States could directly finance a part of the overall European regulatory expenditure, in cases of lack of sufficient amounts inscribed in the annual budget under the ceiling of the financial perspectives.
These two means by which agencies are controlled quasi-directly by the established powers (legislative and executive) have been criticised by US writers: first, because the cost of these systems is not negligible; second, because the result is not absolutely guaranteed; and third, because the necessary data is essentially obtained from the agencies themselves, which very often flood the supervisory bodies with extensive documentation that is not always very clear, and which, worse still, may manipulate the information in order to influence the final decisions.200 Critics usually suggest that a more effective means of control is ensured by procedural requirements set in advance, that the agencies must respect both in rulemaking and in adjudication decisions. Clear and binding procedures are also likely to counterbalance the information lag of the controlling bodies.
US administrative law has taken the initiative in this respect too. The Administrative Procedure Act (APA) adopted in 1946 represents a statutory recognition of existing judicial precedents and lays down a uniform framework for fair conduct of agency activities and minimum standards of openness and transparency.
The main points of the APA can be summarised as follows: no new policy or change of existing policy without public notification of content and reasons; obligation to obtain comments from all interested parties; direct participation by interested parties in decision-making, or, if this is not possible, publication of all the constituent elements of each case; explicit account taken of all relevant comments made, and obligation to give reasons for decisions concerning them.201
It follows that the agencies cannot present their work as a fait accompli, but must actively seek to obtain all valid data, that the entire decision-making process is conducted openly, providing a number of opportunities to public and private actors to make their voices heard and to call for changes in policy, and lastly that the entire process has a major civic effect on all of society.202
Starting from these very high standards, the APA has, over half a
century of application, undergone changes and extensions that have helped to
give it greater impact and which illustrate the pragmatic US approach based on
a desire always to adapt law to experience and not to introduce even new
elements into old law that is unsuitable for them.203
Among the descendants of the APA are the
Freedom of Information Act (FOIA), adopted in 1966 and amended in 1974, 1976,
1986 and 1996, which grants citizens extensive access to all agency documents
and files except in ten specific cases, listed exhaustively (public disclosure
requirements),204 the
Government in the Sunshine Act (GITSA), adopted in 1976, which applies some
transparency aspects of the FOIA to the operation of government, and the
Federal Advisory Committee Act (FACA), adopted in 1972 and amended in 1976,
which lays down further requirements for open sessions of the various
committees operating within the agencies.205
In addition to these acts, there are others, which lay down procedural requirements for taking account of specific factors in the regulatory activity of agencies. The most important examples are the National Environment Policy Act (NEPA), which requires an environmental impact assessment, and the Regulatory Flexibility Act (RFA), adopted in 1980, which requires all agencies to take account of the consequences that their regulatory proposals may have for small businesses.206
All these procedural requirements are open to judicial review, which can lead to the measure concerned being cancelled for omission of an essential procedural requirement or to a right to appropriate compensation being granted, or both.
Control via binding procedures has a number of advantages: it helps the
agencies to stick to their remit, against which their actions are constantly
being measured by public authorities and individuals. The APA, as amended and
interpreted by the Courts, establishes several provisions for third-party
participation (the so-called fire alarm oversight) that plays a conciliatory
role in the relations between the agencies and their principals that in the EU
are the Council, the Parliament and the Commission.207 Consequently, the costs inherent in direct
supervision tend to fall, as do legal costs, since the procedures prevent
potential litigation. They also have two major indirect effects: by involving
interested professional groups and the administration in the decision-making
process they both ensure synergy in setting and checking the agenda for
regulatory action, thus increasing its legitimacy, and allowing consensual
changes of direction without brutal amendments of the status quo ante
(autopilot effect).208
At the same time, they even help to make the sometimes very vague remits of
some agencies more specific.
Last but not least, the procedural
requirements often help to identify and to put the basic question of the
conflict of values between the effects of various regulatory processes.
Balancing interests in such cases is a highly political task that cannot be
delegated to any agency.
Community law already has legislative instruments formalising certain essential procedural requirements.209 The importance of the legal basis requirement for the administrative procedure is recognised.210 While it is not necessary to determine all administrative procedures by legislative instrument, this is desirable for certain procedures of particular political and practical importance. The decision-making processes of the agencies, with a view to their development in the EU, is an obvious example. A European APA is perfectly imaginable in the context of existing provisions of the Treaty and of secondary legislation. The Commission must propose a regulation on the basis of Article 308 on the administrative procedures to be followed in the regulatory process, that the Council and Parliament will confirm by co-decision.211
While most of the mechanisms considered so far are forms of ex ante control, judicial review is the ex post control mechanism par excellence.
In the United States, no one disputes the fact that the courts must examine both the substantive legality requirements applicable to agency decisions (in particular, compliance with the remit) and procedural requirements (primarily, compliance with the provisions of the APA and related legislation). However, this judicial review is not always easy. Remits are often worded in evasive terms, without intelligible criteria and sufficiently clear objectives to decide in court whether they have been exceeded, and an examination of compliance with procedures can easily drift into a judicialisation of agency activity, which itself is a major drawback as regards the efficiency of their work.212
However, it is not possible either for the remit to be worded in such a watertight and exhaustive manner as to constrain excessively the work of the agencies, or for procedures to be so clear and simple that they freeze any scope for initiative in the management of the decision-making process. The tension between the tightness of the provisions and the flexibility of action is the fundamental problem that the courts ultimately have to solve.
The Supreme Court has resolved this tension realistically by giving agencies a degree of flexibility to interpret their own statutes according to principles inherent in the execution of their remit. In the Chevron judgment, agencies were given a considerable degree of discretion in this respect.213 Although this judgment was criticised as being very lax and although some courts, after Chevron, showed a clear determination to step backwards by interpreting agency statutes literally,214 it is now widely accepted that legislative instruments setting up agencies can provide the basic framework only, and necessarily allow teleological interpretation of their provisions.215 By analogy, agencies can also extensively interpret and apply procedural rules in order to perform their functions.216
Evidence of the need for and usefulness of this wide interpretation is the fact that agencies are very often required to implement choices in the public interest in areas where it is not obvious from a policy point of view which is the best choice.
This kind of consideration, coupled with the need for fast, effective regulation, led some US writers to reject the unacceptable constraints introduced into the regulatory process by the cumbersome checks by President and Congress217 and by the rigid intervention of the courts.218 Proponents of such arguments end up proposing to allow agencies to deviate from the conditions set, when common sense and good policy so dictate.219
We do not endorse these arguments. They are bound to give agencies carte blanche in the regulatory process, removing any legitimacy they have and, if serious errors were made, could end up discrediting the entire system of mechanisms for delegating discretionary power. On the contrary, we think that the solution remains in balancing the substantive and procedural requirements, which must be subject to political and judicial review.
I consider procedural requirements to be more easily subjected to judicial review. Reviewing substantive requirements is equivalent to assessing their appropriateness (Does the disputed measure best meet the agency's objectives? Is it more suited to attaining the desired goal? Is there another more effective means of meeting the same objectives in accordance with the remit?). All are unusual questions for a court. In constitutional law, the situation is different, since a ruling must be given on the validity of measures that violate basic rights, making plausible a tough approach (hard-look test) to these basic freedoms which are often mishandled by political majorities.220 In administrative law on the other hand, the protected property, even where it is affected, does not require such an approach, especially since intervention can take several forms and be more or less intense, and since the most appropriate solution is not necessarily obvious from the outset. In such cases, checks on legality can be only minimal, based on the manifest incompatibility of the measure with the objectives and operating rules set for the agency.221
For these reasons, a number of authors conclude that, ultimately, political review of agency activity is a better means of ensuring their accountability.222
One thing is certain: for the judicial review process to be as effective as possible, it must not become commonplace. This would accentuate all the problems inherent in the exercise of judicial review, such that in the long term it might hinder agencies' smooth operation. To avoid such a situation, two lines of action should be followed: first, internalising part of judicial review by introducing quasi-judicial procedures within the agencies, helping to solve problems before they become disputes; and second, managing the decision-making process via networks of professional interests. We will consider the contribution of networks to the regulatory process separately.223
As regards keeping judicial procedures to a minimum, existing Community law already contains provisions along these lines. For example, the technical decisions of the Community Plant Variety Office (CPVO) are subject to appeal before a Board of Appeal acting like a court of first instance prior to appeal to the Court of Justice.224 In addition, Articles 44 and 118 of the CPVO and OHIM establishing regulations respectively provide that the Commission shall control (by requiring the alteration or annulment of any unlawful act) the legality of those acts of the President, in respect of which Community law does not provide for any control on legality by another body, and of the acts of the administrative council relating to the budget of the Offices. Member States, any member of the administrative board or simply any person directly and personally involved may refer any such act to the Commission for examination of its legality.
The Commission thus plays a quasi-judicial role. Its intervention is governed by a formal procedure resembling that of the APA, in particular as regards deadlines. The Commission can conclude that the contested act is unlawful and require its withdrawal. It has important power, making it the guardian of the legality of acts of the Offices. The Commission has to check the same factors as set out in Article 230 of the Treaty (lack of competence, infringement of an essential procedural requirement, infringement of Community law or misuse of powers), which are some of the grounds for actions for annulment before the ECJ. The independence of the Offices remains intact, since the checks are carried out ex post and cannot question the appropriateness of the decisions concerned. This form of control is thus preventive, encouraging the Offices' managers to take care to comply with the substantive and procedural requirements, and prompting them to cooperate closely with the Community executive.
The European Agency for the Evaluation of Medicinal Products (EMEA), on the other hand, does not take autonomous decisions, owing to the fact that the decision-making process is always subject to a final decision by the Commission via committee procedure, and sees all relevant decisions end up before the European courts.225
So we see that Community law contains the seeds of a system of judicial review equivalent to that which prevails in the United States. This system may develop and improve with the emergence of regulatory agencies at Community level.
This optimism is based on the fact that the ECJ, following its law-making period, is already starting to conduct judicial review of the administration, as regards not only the contractual and non-contractual liability of its servants,226 but the requirements of genuine openness of the Community's decision-making system to society as well, on the basis of ensuring compliance with a number of principles relating to transparency, equal access and giving reasons for decisions.227
We have already seen that a European APA may accelerate these tendencies. We will now see why the creation and direction of networks could be another positive factor in the same direction.
To avoid overloading the ECJ, except for proceedings for a preliminary ruling within the agencies,228 provision could be made for cooperation with the administrative courts in the Member States229 and with a European Constitutional Council, responsible, among other things, for the delicate task of ruling on the extent of agencies' powers and the legality of their founding statutes in the light of the Treaty.230
In the meantime, judicial review of regulatory activity in the EU remains very unsatisfactory. The almost total absence of procedural requirements and the quasi impossible access of the Court by private persons are evidence of this. It is not surprising that as regards, for example, the framework directives on environmental protection, no implementing measure has been contested before the Court of Justice since 1991. In the related field of pesticide regulation (Council Directive 94/43/EC, OJ L 227, 27.7.1994, p.31), only one implementing measure has been cancelled, and it was for having ignored the European Parliament's right to be consulted.231
There is no doubt that the emergence of complex problems highlights the limits of the Commission's policymaking and executive abilities. This situation underlines the need to seek ways of coordinating the resources and skills of actors at lower levels, both for the generation of information and for the implementation of policies where it has been found that the Commission's existing tools under the Treaty are inadequate.233
In more normative terms, with the emergence of a new mode of democratic regulation based on proceduralisation of the production and the application of norms234 and on the coordination of collective action, providing collective actors with a structure is a very important factor. This mode of regulation does not substitute the foregoing substantive modes of policymaking, but rather represents an attempt to increase their potential by achieving a better and tidier linkage between the bureaucratic, the expert and the social systems of knowledge.235 It is also true that nongovernmental organizations and civil societys associations in general, substitute the State in areas it is unable or unwilling to act. Under this viewpoint, collective action is an extension of the state activity in areas where its advocacy or representative functions are difficult or undesirable.236
Consequently, public authorities must seek to encourage both reflexivity (by putting in place evaluation and revision mechanisms) and collective participation. The latter principally entails guaranteeing the cooperation of the various (possibly all) stakeholders. It is a very positive, inclusive approach, but, if legitimacy is to be enhanced, stronger and better organized actors must not be given undue advantages. If collective learning is a main condition for modern governance, the role of the public authorities is to organise it. The control aims of government action must be partially re-oriented from exclusively substantive outcomes to the establishment and support of participative mechanisms. This implies neither a change in the location of ultimate responsibility for decision-making nor a diminution of the responsibility of the public authorities. On the contrary, decisions are now taken on the basis of processes that are open and inclusive. Under this system, the public authorities have increased responsibility to ensure the adequacy of the procedures by which collective learning and coordinated action can be achieved.
For the Commission, this clearly consists in its ability to operate as a body, which can orchestrate collective action through networks of different actors involved in the regulatory process.
As Notis Lebessis and John Paterson point out, "this is of particular relevance to the broader question of the role of the Commission as an animator of networks of actors. The multitude of administrative levels and of stakeholders involved in European government action raises questions of co-ordination, which will have even greater significance in an enlarged and more diversified Union. The coherence of this action will, therefore, depend increasingly on the quality of the cooperative relations which the Commission forges with these actors and the relationships which it fosters and encourages among them."237
The United States and the EU are both deliberately and normatively multi-level systems of government. They both basically depend on coordination between multiple public authorities. In both systems, policy outcomes are the product of negotiation and mutual adjustment between different actors involved in the decision-making process. Consequently, it is not surprising that network structures have become the default mode of institutional form on both sides of the Atlantic.238
The committee procedure alone brings into play an extensive network of experts; every working day an average of 1, 000 officials and experts attend about 20 different Council working groups in Brussels. Each brings together representatives from all 15 Member States plus the Commission to negotiate executive Community measures. About 70percent of the EU's regulatory output is actually decided at this level.239
These decision-makers meet behind closed doors and are answerable to their respective national administrations, which thus also avoid scrutiny by the national parliaments. The operation of these networks is neither transparent nor democratic.240 It is true that the Commission has recently made efforts to extend its networks to include private interests affected by this mass of opaque regulation (e.g. social dialogue, new technologies, environment), but it is still far from providing this process with a reasoned structure.241
Community networks cruelly lack sufficient representativeness and decision-making capacity. They frequently favour certain powerful groups, neglecting civil society, which remains barely organised, particularly in certain Member States. Furthermore, a compromise based on the lowest common denominator is frequently found by a suspect consensus which fails to make the various approaches known or even deliberately conceals them within a system that tolerates no disagreement, itself considered to be harmful to the process of European integration.242
The Commission does not often have the necessary technical expertise for regulation that is becoming more and more specialised. The gap was filled immediately by the private sector, which sometimes manages, even directly, to have an important influence on Community regulation.243
There are numerous other examples that illustrate the necessity but also the inadequacy of the current network system at Community level.
This is another area in which agencies can play a salutary role. They are particularly suited to operating within a network involving national and Community administrations. Agencies sometimes, are not destined to work in a vacuum, or to replace national decision-makers; still less can they replace the representatives of civil society. However, they have a natural vocation to stimulate the interaction of all these players, public and private, national, international and European. They can also encourage new important interests by favouring participation in the decision-making process of emerging players.244 Agencies even develop the exceptional capacity to form national experts into an international network capable of cooperating with the private sector, while maintaining its independence and efficiency. The experience of the positive development of the scientific committees under the EMEA is an example.245
The osmosis between national and Community agencies forms a transnational network of institutions pursuing similar objectives and facing analogous problems, more motivated to defend its professional standards and policy commitments against external influence and to cooperate with other parallel organisations than a national civil service annexed to a central bureaucracy.
Consequently, as G. Majone and M. Everson point out, "there is no reason why the network model, given the right conditions, could not be extended to all areas of economic and social regulation of Community interests and indeed to all administrative activities where mutual trust and reputation are the key to greater effectiveness."246
It is obvious that the operation of agencies within a network will be all the more reliable and effective, the more representative and legitimate the participants are. However, in the current state of the decision-making process within the Community, networks appear as an additional guarantee of its legitimacy, even if the conditions for their own legitimacy are not yet fully met.
Lastly, it was noted that monitoring of the procedural requirements coupled with extensive participation by individuals in the regulatory process may raise two issues: the slowing of the process (gridlock, ossification), and the potentially growing influence of private interests on public decisions (interest capture). However, if there is a slowing down, it is largely compensated for by greater public support for the objectives pursued by the measures concerned. Regarding the second issue, it cannot be denied that the current committee system is much more vulnerable to outside influences, and especially major organised interests, while the opening of the system will be of greater benefit to small interest groups, which do not have the resources to finance permanent lobbying structures in Brussels.247
175 Authors can basically be divided into those who distinguish between ex ante and ex post control and those who distinguish between substantive and procedural control. Arthur Lupia: Delegation and accountability: a theoretical perspective, June 1999. Outline on the web: http://weber.ucsd.edu/~alupia/DA99.html.
176 Mathew D. McCubbins, Roger G. Noll, Barry R. Weingast: Administrative procedures as instruments of political control, JLEO, vol.3, no2, Fall 1987, p. 243-278.
177 We are not discussing administrative autonomy, which is self-evident, but the degree of political independence, which is controversial.
178 Peter L. Strauss: The place of agencies in government: separation of powers and the fourth branch, op. cit., note 104.
179 The possibility of involving even the Court of Justice and/or the Court of First Instance, through the appointment of certain members of their management boards, would complete this synergy.
180 It is an attempt to transfer to public law the ancient French term of "droit d'évocation", which indicated the prerogative of the monarch to withdraw a part or the entierty of some delegated powers, and still designates the right of a superior Court to recall a case from an inferior one, in order to adjudicate directly some important aspects. The "droit de rétension" also exists in French private law, indicating the right of the creditor to retain an object in his possession owned by his debtor, until the latter does not pay his debt.
181 The Commission votes only very rarely, if the President has exhausted all other means of reaching a consensus. The votes are not made public.
182 See below, p.55-59.
183 Philip J. Harter: Executive oversight of rulemaking: the President is no stranger, AULR 1987, vol. 36, p. 557-571; see also below p. 56-57.
184 Here, I revise a position I defended in the past and agree with the Committees on Budgets and Budgetary Control that the European Parliament could and should review in this connection even the budgets fed by the own resources of agencies billing services to their customers; X. Yataganas: Certains aspects..., op. cit., p. 42-43.
185 See below, p.58-59.
186 See below, p.59-62.
187 B. Dan Wood and R. W. Waterman: The dynamics of political control of the bureaucracy, APSR, vol. 85, no 3, September 1991, p. 801-828.
188 Terry M. Moe: Control and feedback in economic regulation: the case of NLRB, APSR, vol.79, 1985, p. 1094-1116.
189 P. P. Craig: Administrative Law, Sweet & Maxwell ed., 3d edition, London, 1994.
190 Kenneth R. Foster and Peter W. Huber: Judging Science: Scientific Knowledge and the Federal Courts. The MIT Press, Cambridge MA/London, 1999.
191 See below, p.62.
192 P. Croley: Theories of regulation: incorporating the administrative process, CLR, no1, 1998, p. 1-168.
193 G. Majone and M. Everson: Institutional reform: independent agencies, oversight, coordination and procedural control, in O.De Schutter, N.Lebessis & J. Paterson: Governance in the European Union. European Commission ed., Luxemburg 2001, pp.139-183.
194 46 Federal Regulation 13193.
195 Parallel, but non-formalised powers were already exercised by Congress, via the Congressional Budget Office (CBO) and the General Accounting Office (GAO); see M. Farina: Congress: Keystone of the Washington establishment, Yale University Press, New Haven, 1977. These powers closely resemble those of the European Parliament in respect of the Community agencies, see M. Tappin: The EP Budget Committee and the agencies; L. Brinkhorst: The general budget and the agencies; and S. Tillich: Remarks on the financial autonomy and accountability of the agencies, in A. Kreher: The EC agencies..., op. cit., pp. 29, 35 and 123.
196 The equivalent of the C series of the Official Journal of the European Communities.
197 In the United States, the EPA has carried out extensive analysis to estimate the cost of recent amendments to the Clean Air Act and to the Safe Drinking Water Act. In the EU, the impact assessment form that must accompany all legislative proposals by the Commission constitutes a similar exercise.
198 This would be a kind of Activity Based Budgeting (ABB), which is already applied by the Commission, but extended to include indirect cost elements generated by the application of regulations.
199 Key recommendations 2 and 3 of the Majone and Everson report, slightly modified.
200 See McCubbins, Noll and Weingast: Administrative procedures..., op. cit., pp. 250-251.
201 Ibid. pp. 257-259
202 Media specialists say that greater freedom of information contributes to more effective control of the press. This principle can be transposed to agencies via information disclosure and obligatory processing of this information.
203 See the two anniversary volumes of the ALR, vol.50, no4, Fall 1998, and the ALJAU, vol.10, no1, Spring 1996, dedicated to 50 years of the APA.
204 What is important here is that the burden of proof that the information required cannot be made public rests with the agency and not the person making the request. We can measure how far these instruments are from the timid opening of the Community institutions as regards public access to documents.
205 It is obvious that the EU, despite a degree of timid opening, is very behind in this respect; see the report by the European Ombudsman, Mr Jacob Söderman, presented at the FIDE Congress on The citizen, the administration and Community law, Stockholm, Sweden, 3-6 June 1998.
206 The EU, which now accepts the environmental dimension in all other policies, may usefully draw inspiration from these Acts.
207 A.Lupia and M.D.McCubbins: Representation or abdication? How the citizens use institutions to help delegation succeed. EJPR, vol.37, 2000, p.291-307.
208 McCubbins, Noll, Weingast: Administrative procedures..., op. cit., p. 267.
209 See especially the competition rules on controlling cartels and state aid, and Regulation 17/62.
210 D. Triantafyllou: Des compétences d'attribution..., op. cit. p. 343.
211 Majone and Everson reach the same conclusion, see Institutional Reform..., in "Governance in the EU", op. cit. p.170-175.
212 M. Seidenfeld: A Syncopated Chevron: Emphasizing reasoned decisionmaking in reviewing agency interpretations of statutes, TLR, vol.73, 1994, p.83-138 especially p. 92. Some scholars saw in this attitude of the Courts toward delegation a resuscitation of the non-delegation doctrine.
213 Chevron USA Inc. v Natural Resources Defense Council Inc., 467 US 837 (1984).
214 Th.O.McGarity: The Courts and the ossification of rulemaking: a response to professor Seidenfeld. TLR, vol.75, 1997, p. 525-569
215 Ronald M. Levin: The anatomy of Chevron: Step Two Reconsidered, CKLR, vol. 72, 1997, p. 1253-1297.
216 Douglas C. Michael: Cooperative implementation of federal regulations, Yale Journal on Regulation, vol. 13, 1996, p. 535-601.
217 As M. Seidenfeld states, "currently, to promulgate a substantive rule an agency must comport with the procedural requirements of 20 statutes and executive orders, imposing over 100 independent steps in the rulemaking process", Bending the rules..., op. cit., p. 440.
218 Richard J. Pierce Jr: The unintended effects of judicial review of agency rules: how federal Courts have contributed to the electricity crisis of the 90s,. ALR, vol. 43, 1991, p. 7-29.
219 Alfred
C. Aman Jr: Administrative equity: an analysis of exceptions to
administrative rules, DLJ, 1982, p. 277-331. Aristotle's notion of equity (
H
< N
µ <
) would apply here. He considers equity to be a
virtue that can correct in individual cases the injustices necessarily created
by the uniform application of general rules.
220 Laurence H. Tribe: American Constitutional Law, 2d ed. 1988, p. 780. In fact, judges are neither trained to evaluate the scientific evidence nor institutionally suited to make the socioeconomic trade-offs that such rulemaking entails.
221 Cas R. Sunstein: Deregulation and the hard look doctrine, SCR, 1983, p. 177-213.
222 Mark Seidenfeld: Bending the rules..., op. cit., p. 487.
223 It is worth noting also that, under the APA, only objections brought during the consultation procedure may be the subject of judicial review, see below, p.66-69. .
224 Here, we distinguish the first stages of quasi-judicial powers granted to European agencies, see also the telecommunication directives, above, note 119.
225 This cumbersome procedure leads to long delays, which are criticised by the sector, see Peter Chapman: Drugs firms demand action to speed up approvals procedure, European Voice, 12-18 October 2000, p. 6.
226 Abundant and long-established case law exists in this area, but it is relatively restrictive, based on the terms of Article 288 of the Treaty.
227 For example, the ECJ's recent willingness to use Article 253 of the Treaty to ensure that the decisions of Community institutions are well founded and taken with appropriate reference to expert advice and interested professional groups, indicate that Community law can easily encompass a scheme of judicial review which will increase the public accountability of the agencies through rights of individual review. See case C-269/90 Hauptzollamt München-Mitte v Technische Universität München [1991] ECR I-5469 and case C-212/91 Angelopharm v Freie und Hansestadt Hamburg [1994] ECR I-171.
228 See above, p.61.
229 By limiting individuals' rights of appeal to actions brought before the national courts against internal measures applying agency decisions, subject to review by the ECJ via the preliminary ruling procedure. See Francesca Bignami: The administrative State in a separation of powers Constitution: lessons for European Community rulemaking from the United States, Harvard Law School, Jean Monnet Chair working papers, 1999, www.jeanmonnetprogram.org.
230 By extending the powers already conferred on such a body by J.H. Weiler: The EU belongs to its citizens: three immodest proposals, ELR, April 1997, p. 155.
231 Case C-303/94 European Parliament v Council of the European Union [1996] ECR I-2493.
232 We will consider networks as a means by which agencies are controlled by organised civil society. It is equally justified to consider them as a limiting factor on agencies' independence via the control exercised by citizens.
233 In the EU this is particularly urgent in the field of environmental policy, where the new powers are not accompanied by an appropriate administrative scheme.
234 McCubbins, Noll and Weingast [McNollgast] points out that in a system that disperses authority by entrusting legislative and executive powers to independent government branches, administrative procedure facilitates accountability. This is all the more true for the EU, where the legislative and executive powers are shared between the three main institutions, without mentioning the other bodies provided for or not by the Treaty. [McNollgast]: The political origins of the APA, JLEO, vol.15, 1999, p. 180-221.
235 Renaud Dehousse: European institutional architecture after Amsterdam: parliamentary system or regulatory structure? European University Institute working papers No 98/11, Florence 1998.
236 Jefferey Charlie: Sub-national mobolization and European integration. JCMS, vol. 38, no 1, 2000, p.1-23.
237 Evolutions in governance: what lessons for the Commission? A first assessment, European Commission, Forward Studies Unit, 1997.
238 John Peterson and Laurence J. O'Tool Jr: Networks and governance in Europe and America: grasping the normative nettle, draft of paper presented to the Transatlantic Symposium "Rethinking federalism in the EU and US: the challenge of legitimacy". Kennedy School of Government, Harvard University, 19-21 April 1999 (forthcoming).
239 F. Hayes-Renschau and H. Wallace: The Council of Ministers, Ed. Macmillan, London, 1997; Josef Flake: Comitology and other committees: a preliminary empirical assessment in "Shaping European law and policy...", op. cit., pp. 117 and 142.
240 Christopher Lord: Democracy in the EU, Sheffield Academic Press, Sheffield 1998.
241 J. Greenwood and M. Aspinwall eds: Collective action in the EU, Routledge, London 1998. C. Demmke: The Europeanization of civil services and the role of national civil servants in the decisionmaking process, in Managing European environmental policy: the role of the Member States, C. Demmke ed., Maastricht, 1997.
242 Andrew McLaughlin and Justin Greenwood: The management of interest representation in the EU, JCMS, vol.33, no1, 1995, p. 143-156. It should be noted that the committee procedure very rarely leads to opinions not in favour of Commission proposals, which suggests that its own experts consult experts in the Member States in advance.
243 It should be pointed out in this connection that 20% of Commission staff are non-officials moving between the private sector and the European public service. See the Report of Independent Experts (Rapport des Sages), which led to the Santer Commission's collective resignation in March 1999.
244 See McCubbins, Noll and Weingast: Administrative procedures..., op. cit., p. 264-268.
245 A similar tendency is noticeable in recent Commission proposals to decentralise the conditions for applying Articles 81 and 82 of the Treaty on restrictive practices and abuse of a dominant position (Commission White Paper on modernisation of the rules implementing the Treaty provisions on competition policy, 1999).
246 Institutional reform: independent agencies, oversight, coordination and procedural control, in Governance in the EU, op. cit., p.166.
247 J.L. Mashaw: Greed, chaos and governance: using public choice to improve public law, Yale Universiy Press, New Haven 1997; T.M. Moe: The organisation of interest incentives and the internal dynamics of political interest groups, University of Chicago Press, Chicago 1980.