Comments of the United States Government

on the

European Commission’s Better Regulation Package


The United States welcomes the opportunity to provide comments on the European Commission’s Better Regulations Package.  The Commission’s Action Plan for simplifying and improving its regulatory environment, along with its companion communications on the establishment of minimum standards for consultations and the definition of a consolidated impact assessment, represents a constructive and noteworthy step.  We support the Commission’s objective of improving the quality of its regulations and making its regulatory process more transparent.  As a major economic and political partner of the European Union (EU), the United States has a substantial interest in EU regulatory activities.  We are encouraged that the Commission is seeking public comments on its draft Better Regulation Package and are pleased that all interested parties have an opportunity to provide comments.


U.S. comments focus on the companion documents to the Action Plan, which address public consultations (Section I) and a consolidated impact assessment (Section II).  Before outlining our detailed comments on the companion documents, we briefly wish to note our support for two additional constructive elements of the Action Plan: 1) the creation of an internal network under the Secretary General; and 2) the consideration of alternative regulatory models. 


·        The creation of an internal network under the Secretary General for better regulation is a constructive step.  If effectively implemented, this action could help facilitate a more consistent Commission-wide approach to implementation and monitoring of the Action Plan, and in particular, the implementation of Commission consultation procedures and conduct of its impact assessments.   


·        Promoting the consideration of alternatives to legislation on a case-by-case basis (e.g., co-regulation, voluntary agreements) is an important step in achieving better regulation.  It is not clear, however, how the Commission intends to provide guidance across the various parts of the Commission for how alternative regulatory models are to be reviewed and considered.  Common criteria for assessing the suitability of alternative regulatory tools would be helpful in promoting a more uniform Commission-wide approach.


Additionally, we support the Action Plan’s focus on “Developing a Common Legislative Culture within the Union,” which addresses important improvements in transparency and information sharing currently under consideration by the Commission, especially from the perspective of third countries.  The Action Plan lays out steps for “creating a legislative network between the institutions and the Member States,” to make it easier to follow the progress of an act from its drafting by the Commission to its adoption and application by the Member States.   The stated purpose is to improve coordination and exchange of this information between the Commission and national authorities. 


·        The status of Community legislation and regulation in relation to Member State legislation/regulation, and which controls at a given point in time, is of interest to all stakeholders.  Once the Commission and Member States have developed a joint approach to monitoring and applying Community legislation, this information should be made publicly available on the Internet.


I.  Communication on Consultations


We strongly support the effort by the European Commission to make its consultation procedures more transparent and consistent. The Commission’s document proposing general principles and minimum standards for consultation (COM (2002) 277) is a particularly positive step.  Efforts to promote transparency result in better quality regulations and greater public acceptance of the resulting regulations.  We welcome the opportunity to provide comments on these draft principles and minimum standards, and are encouraged that the Commission is seeking public comments. 


As noted in the initial U.S. Government comments on the Commission’s White Paper on EU Governance, we support the five key principles referenced in the Consultation document: participation, openness, accountability, effectiveness, and coherence.  These principles are consistent with U.S. efforts in bilateral and multilateral discussions to promote good regulatory practices.  They are also consistent with U.S. regulatory practice.[1] 


We view the Commission consultation document as a potentially significant contribution to a more transparent and accountable EU regulatory process.  In fact, it is key to meeting the goal of developing better regulations that would have greater public acceptance.  If fully implemented, these principles and standards could promote a more transparent, more inclusive, and more accountable process.  That said, this paper is clearly one part of an ongoing process within the EU and is also consistent with the Commission's White Paper on EU Governance.  While the document contains many positive elements, from our perspective it also raises a number of important questions and concerns that we would like to note. 


Oversight of Consultations: 


We note that the Commission’s principles and minimum standards for consultations are not legally binding.  Absent a legal commitment, we question the following: 1) how the Commission will ensure that common procedures for conducting consultations will be comprehensively and consistently implemented across the Commission, 2) who will oversee application of these minimum standards, and 3) how will problems of inadequate or improper application be addressed?


Scope of Consultations:


We suggest that the general principles and minimum standards should apply to all Commission regulatory initiatives.  In our experience, we have found that rulemaking is improved by broadly applying public notice and comment procedures since it helps ensure that all relevant viewpoints and information are considered, resulting in more effective and practical regulations.  Towards these ends, the Commission should consider the following questions: 1) what is the regulatory scope for application of these principles and minimum standards, 2) are all regulatory activities to be subject to these standards or only “major policy initiatives”, 3) if the scope of application is limited in some manner, how is such a determination made, and 4) what is meant by consultation requirements under international agreements being excluded, e.g., how does the Commission define such requirements and what if such requirements overlap? 


We suggest that objective criteria be provided to guide determinations of whether an initiative is “major.”


We note that comitology procedures are exempt from these principles and minimum standards.  What is the rationale for exempting this decision-making process from these standards?  We suggest that the comitology process could significantly benefit from more transparent input from outside experts and the public.


Who is Consulted and How:


The Commission states that it is “committed to consult as widely as possible.”  The document also notes different types of public consultations, such as “open”, “focused” or “restricted”.  These references suggest that in some instances the Commission will continue to utilize a consultation process that is not fully open to all parties.  Clarification should be made of the scope of the consultations.  


We note that references in the document to “relevant parties” or “target groups” also appear to suggest that the Commission’s consultation process may not always be open to all interested parties.  How does the Commission determine what is a “relevant party” or a “target group”?  What are the criteria used to determine such parties?


We also note that the Commission states that the “method and extent of consultations performed must therefore always be proportionate to the impact of the proposal.”  What are the criteria that the Commission would utilize for determining which procedures to use?  How does the Commission gauge the proportionality of the impact of the proposal for the purposes of determining the extent of consultation?  What is the rationale for not always using an “open” consultations process, and then supplementing an open consultation process with “focused” procedures as the Commission views necessary? 


The Commission notes concern about the equitable treatment of all parties (and “proper balance”) in a consultation process.  To address that concern, we suggest that the Commission simply let interested parties identify themselves instead of the Commission pre-selecting the “relevant” parties or “target groups” to consult.


What recourse is available for those who feel excluded from the process?  It is important to clearly identify the recourse of stakeholders that feel their right to consult has not been upheld.  For example, if a party feels a particular DG has not offered opportunity to comment on a regulation or legislation, what is the central authority to which it would complain or seek redress?  Since the “internal network for better lawmaking” described in the Action Plan will be coordinated by the Secretary General, the Secretary General could possibly be the best place for stakeholders to lodge complaints and seek redress.  If not the Secretary General, some other specific point of redress should be made explicit within the final minimum standards that are drawn up.


In our view, a meaningful consultation process requires full transparency and openness to the participation of all interested stakeholders, EU and non-EU alike.


Timeframe for Consultations:


The document’s six-week timeframe for public comments on regulatory proposals provides a useful minimum threshold.  We note, however, that for effective consultation with a variety of stakeholders, more time is often necessary.  For significant proposals in the United States, Executive Order 12866, Regulatory Planning and Review, specifies a comment period of at least 60 days.  For less important proposals, a shorter comment period may be provided.  Furthermore, we note that under the WTO Agreements on Technical Barriers to Trade, 60 days is recommended for comment on draft regulations.  We urge the Commission to consider extending the comment period from 6 weeks to 60 days.


Timing of Opportunity to Submit Written Comments:


We support Commission statements that “effective consultation requires consultations to start as early as possible.  Interested parties should therefore be involved in the development of a policy at a stage where they can still have an impact on the formulation of the main aims, methods of delivery, performance indicators, and, where appropriate, the initial outlines of that policy.” 


Furthermore, as the communication observes, consultation at more than one stage may be required.  Likewise, providing opportunity for written comment at more than one stage may be equally necessary. 


The value of the opportunity to submit written comments depends on the stage in the decision-making process at which it is provided.


U.S. regulatory agencies informally consult with interested parties and the public at large in the development of proposals and sometimes publish advance notices of proposed rulemaking requesting written submissions of information to aid in defining a problem and identifying potential regulatory solutions.  Once the agencies develop a proposal, they issue notices of proposed rulemaking, except in emergencies and other limited situations, typically setting forth the details of the proposal, explaining the need for the proposal, the rationale for the particular provisions of the proposal, including why the agency believes that its proposal effectively addresses that need, why the agency is proposing as much as it is, and why it is not proposing more, or less, and why the agency believes that its proposal meets the applicable statutory criteria, e.g., practicability, and the impacts of the proposal. 


The opportunity to comment serves several purposes.  One is simply to educate the policymaker and inform the public.  A second is to critique the basis for a proposal, challenging the agency’s interpretation of data and research, analytical assumptions, analytical methodologies, factual findings, policy judgments, and assessment of the impacts of the proposal.  A third is to suggest specific changes to the proposal and/or to provide supplementary and/or alternative data and research.


Similar to the sequence of rulemaking conducted by almost all U.S. regulatory agencies, an opportunity for written comment  would be most advantageously timed if it were provided after what is believed to be the best option is tentatively selected.  If only one opportunity to comment is provided during policy development and if it comes before the narrowing of options actively considered down to a single best option (and made tentative judgments about the coverage and level of stringency of the requirements included in that option), commenters would face a difficult choice about the most effective strategy in preparing their comments. For instance, they may decide to guess which option might ultimately be selected in the future and guess what supporting data, analyses, and policy arguments it might give for favoring that option.  They could then focus their available resources on analyzing and commenting in detail on that one option, but in doing so they would risk having focused on the wrong option.  Alternatively, they may decide to spread their resources out over multiple possible options and provide general comments on each.  If the Commission were to provide an opportunity to comment at the stage of decision-making which it has made tentative decisions, this would enable interested parties and the public at large to focus their comments to the best effect.


Information Available to Aid Interested Parties and Public at Large in Preparing Written Comments:


Interested parties and the public at large should be provided with the following at the beginning of the period of preparing and submitting written comments so they can prepare relevant and effective comments:


·        The full text of the draft regulation for comment, rather than simply a summary of the issue.


·        An explanation of the reasoning underlying the draft regulation.  The elements of this explanation would ideally include the need for the regulation, its aims, its anticipated impacts (quantified where possible), its economic and technical feasibility, and alternative regulatory options.  It would also include the Directorate General’s interpretation of the supporting information and its resulting tentative findings of fact and policy judgments. 


·        The relevant research, data, and analysis relied upon in developing the draft regulation. 


Comment Process:


The establishment of a single Commission access point for obtaining information on all consultations and for making public comments is an especially useful step.  Such an effort could contribute significantly to wider public participation in consultation proceedings. 


It would be useful if the Commission could clarify how it intends to manage public comments received.  Will there be a public docket so that interested parties can review the public comments the Commission receives on draft regulations?  If so, would this be the Commission’s “single access point” on the Internet?  To the extent possible, all the materials made available to the public should be placed on the internet/world wide web so that all interested parties can have access to the documents.


Disclosure of oral as well as written communications:


A broad disclosure policy would aid the Commission in its policy making.  If interested parties know each other’s submissions to the Commission, they can aid the Commission in sifting through and assessing the merits of competing or uncertain studies, analyses and recommendations.   


In addition, a broad disclosure policy would increase credibility and perceptions of fairness.  So that interested parties and the public at large can assess whether all participants are adequately and equitably treated in the development of Commission proposals, the public should be given access to all non-trade secret information and views from all non-governmental parties and persons, regardless of whether submitted during oral consultations or during a written comment period.  This would address the concern that some parties and members of the public at large might have that there might be “secret” channels of communication.  As the Commission observes:  “the processes of administration and policy-making must be visible to the outside world if they are to be understood and have credibility.”  To that end, the Commission should memorialize in writing and make publicly available the non-trade secret portions of all views, facts and arguments orally submitted by interested parties and others.


Explanatory Memorandum:


The inclusion of the results of consultations in the explanatory memorandum is a useful step.  We have often found that the Commission’s explanatory memorandum accompanying draft regulations are not considered by the Commission to be public documents.  We urge that the Commission ensure that all explanatory memorandum be made public documents.


The document notes that the “Commission will encourage practices to provide adequate feedback to responding parties and the public at large.”  We note that an “acknowledgement of receipt of contribution” may fall far short of a commitment to substantively respond to public comments.  How will parties that submit comments be informed of how and why their views were (or were not) incorporated in the final regulation?  Providing greater specificity as to how comments will be addressed would be helpful to all stakeholders.


We also suggest that the memorandum list the most important issues raised in consultations and explain how they were considered and resolved.  This explanation would impart several benefits.  It would help provide a convincing demonstration of the rationality of the decision-making process.  If done with sufficient specificity, it would enable interested parties and the public at large to “check that they are making an effective contribution to a transparent, open and accountable system.”  In order to achieve the goal of demonstrating the equitable treatment of all participants, the explanations of the response to comments and other results of consultation should explain response to oral as well as written communications, whether from open or focused consultations or other non-governmental sources.


The Action Plan section on expanding Explanatory Memoranda states that explanatory memoranda will include certain information “possibly on the basis of a standard format”.   We strongly support that the format should be standardized to make it as easy as possible for interested parties to review and understand the actions taken regarding any given legislative proposal.


Ensuring consistent compliance with the minimum standards:


We believe that a single entity, e.g., the Secretariat General, should be given the responsibility for monitoring and critiquing compliance with the standards, periodically reporting on compliance, and making recommendations for improved practices.  Given that the minimum standards would not be legally binding, assigning effective oversight responsibility would be important for fully realizing the promise of the minimum standards.  The single entity should also promote best practices in complying with the standards, e.g., identify examples of best practices in the preparation of the explanatory memoranda and post them to provide further guidance to the various Directorate Generals.


Guidelines for use of expertise:


Finally, we support the Commission’s stated intention of developing guidelines on the use of expertise, as a supplement to these consultation guidelines.  We would encourage the Commission to provide an opportunity for interested parties to provide public comments on such draft guidelines.



II.  Communication on Impact Assessment


The U.S. Government is also pleased to have the opportunity to offer comments on the European Commission's Communication on Impact Assessment (COM (2002) 276).  We believe Impact Assessment is a critical component of the EC's Better Regulation Action Plan and, if implemented carefully, promises to improve the quality of legislation and regulation throughout the European Union. 


We offer the following comments based on the U.S. Government's experience in regulatory reform.  We recognize of course that practices that have worked well in the U.S. are not necessarily appropriate in the EU context and vice versa.  However, the comments below are generally consistent with previous reports by international bodies on regulatory governance prepared by the OECD and other organizations.


Our detailed comments focus on two main issues:


·        The Communication would be strengthened by an articulation of underlying principles of good impact assessment.  Such principles provide a framework for monitoring quality of assessments while providing useful direction to analysts and policy makers.  Principles are more general than the technical guidance; and


·        The Communication should provide for a stronger role for the Secretariat General in overseeing and assuring the quality of impacts assessments, including their consideration by policy-makers.  Integrating Secretariat General oversight into the day-to-day practice of assessment and decision-making within the Commission will improve and assure high quality analysis and utility for policy-makers. 



1.  The Need to Articulate Underlying Analytic Principles


On page 7, footnote 4, the Communication indicates that the "extended Impact Assessment will follow the technical guidelines for impact assessment to be issued ... in the autumn of 2002 and the general method as described in annex 2 of this Communication."  It is thus to these upcoming technical guidelines and the annexes to the Communication one must turn for instructions on the development of an extended Impact Assessment. 

General Concern.  In large part, the annexes appear to call for descriptions, not analyses.  And, to the extent these annexes call for analyses, they do not appear to articulate the underlying analytic principles the analyst should follow to guide the recommendation of alternatives, or, in default thereof, they do not appear to direct the analyst himself or herself to articulate the underlying analytic principles upon which he or she based the recommendation for the alternative supported by the Impact Assessment.  We urge that the upcoming technical guidelines clearly state the underlying analytic principles the analyst should follow, or, in default thereof, clearly direct the analyst to articulate the underlying analytic principles he or she followed in selecting a regulatory alternative and reaching any other analytic conclusions.


Need to Articulate Underlying Analytic Principles Clearly.  Clearly articulated underlying analytic principles that reflect the wider economic, social, and environmental objectives underlying the assessment provide a framework for analysis, as well as a basis for evaluating Impact Assessments.  For example, in U.S. Executive Order 12866 (58 Federal Register. 51735, October 4, 1993), the U.S. Administration articulated the regulatory philosophy that the Federal agencies should use in selecting regulatory alternatives.  "[I]n choosing among alternative regulatory approaches, agencies should select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity), unless a statute requires another regulatory approach."  The President also directed Federal agencies, when submitting a regulation for Executive review, to include an explanation of how the regulation "avoids undue interference with State, local, and tribal governments in the exercise of their governmental functions."  These statements of underlying analytic principle direct agencies to balance social welfare and avoid undue interference on other government jurisdictions in carrying out their analysis to support a regulatory action.


More specifically, for what would be our equivalent of an extended Impact Assessment, Federal agencies were directed to assess the "benefits anticipated from the regulation action (such as, but not limited to, the promotion of the efficient functioning of the economy and private markets, the enhancement of health and safety, the protection of the natural environment, and the elimination or reduction of discrimination or bias) together with, to the extent feasible, a quantification of those benefits."  Federal agencies were also directed to assess the "costs anticipated from the regulatory action (such as, but not limited to, the direct cost both to the government in administering the regulation and to businesses and others in complying with the regulation, and any adverse effects on the efficient functioning of the economy, private markets (including productivity, employment, and competitiveness), health, safety, and the natural environment), together with, to the extent feasible, a quantification of those costs." President Bush has instructed the Federal agencies and OMB to continue to adhere to Executive Order 12866 in development of impact assessments and our oversight of their quality.


Need to Articulate Underlying Analytic Principles Supporting Underlying Policy Choices.  As the annexes are currently written, substantial discretion is given to the Directorate Generals in terms of allowing them to select the framework, the issue and policy objectives, and the bases for evaluation.  This means it is unclear how the objectives to be identified by each Directorate General will be weighed against the unstated wider economic, social, and environmental objectives that will drive the conclusions in the analysis.  Thus, the impact assessment will not serve as "an aid to decision-making" (p. 3) because the reader will have to infer the wider economic, social, and environmental objectives supported by the impact assessment.


For example, on page 12, in the "Problem Identification" for the Preliminary Assessment Statement, the Communication calls for the analyst to "indicate the potential inconsistencies between the three dimensions [of unsustainable economic, social, and environmental trends] or with other policies."  For the analyst to identify inconsistencies will require the analyst to assume an underlying analytic principle upon which to base a comparison.  But the Preliminary Assessment Statement neither states such an analytic principle, nor asks the analyst to articulate the one he or she selected in making the comparison.


On page 13, in the discussion of "Analysing the Issue," the Communication states that "the identification and analysis of the issue(s) in one or more policy areas ... will be described in economic, social and environmental terms."  At page 18, the Communication asks, "what is the issue/problem in a given policy area expressed in economic, social and environmental terms including unsustainable trends?"  While this statement and question instruct the analyst how to describe the issue, neither does this statement provide for any underlying analytic principles nor does the question call for the analyst to articulate those that he or she followed in preparing the description.


On page 19, under "Commission draft proposal and justification," the Communication poses the ultimate analytical question, "what is the final policy choice and why?"  However, annex 2 does not appear to offer any guidance on what criteria or underlying analytic principles the analyst should follow in making this "final policy choice" nor do the instructions call for the analyst to articulate the underlying analytic principles he or she used in answering the question "why."  This leaves the reader to guess what policy alternatives were considered, and what underlying policies are favored by the analyst and thus furthered by the recommendations made.


Need to Articulate Underlying Analytic Principles to Select the Analytic Tools for the Extended Impact Assessment.  This need for the Communication to provide the analyst with underlying analytic principles, or, in default thereof, to have the analyst articulate the underlying analytic principles he or she adopted in carrying out the Impact Assessment, extends to the choice of analytic tool to be selected.


For example, on page 15, under "Assessing the impacts ("scoping")," the Communication points out that a "number of analytical methods can be used to assess impacts ... e.g., cost-benefit analysis, cost-effectiveness analysis, compliance cost analysis, multi-criteria analysis and risk assessment.  The choice of method and the level of detail will vary with the nature of the problem and judgements about feasibility."  These different kinds of analysis call for different underlying analytic principles, the selection of which may determine which kind of analysis the Directorate General chooses to prepare.  We recommend that the Communication articulate these underlying analytic principles to assist the Directorate Generals in selecting the kind of analysis that would most fully and appropriately assess the category of issue involved.


This ambiguity on the selection of analytic tools also extends to the Commission's decision to prepare an extended Impact Assessment.  On page 15, the Communication states that this decision will be based, inter alia, on


"Whether the proposal will result in substantial economic, environmental and/or social impacts on a specific sector or several sectors, and whether the proposal will have a significant impact on major interested parties;" and


"Whether the proposal represents a major policy reform in one or several sectors."


We are concerned that the normative standards in making this decision turn on ambiguous terms (e.g., "substantial," "significant," and "major") that, like an accordion, constantly expanding and shrinking, leave wide discretion on whether or not to prepare an extended Impact Assessment.  Without an analytical framework, a decision-maker cannot determine what is significant. In other words, these decision criteria would become workable once they are embedded in an analytical framework; otherwise, they are completely unworkable.


We suggest that the upcoming technical guidelines add more objectively-based criteria to help guide the Commission and the responsible Director Generals in deciding whether or not to prepare an extended Impact Assessment.  For example, U.S. Executive Order 12866 included an objective decision criterion to direct the preparation of an impact assessment, namely whether the regulation may "have an annual effect on the economy of $100 million or more."  We have found that a designated estimated economic impact or even a range of estimated economic impacts removes much of the ambiguity that comes from more hortatory statements of general policy. 


Similarly, on page 8, the Communication states that "the impact assessment will be conducted according to the principle of proportionate analysis, i.e., varying the degree of detail to the likely [i.e., anticipated] impacts of the proposal. This means that the depth of the analysis will be proportionate to the significance of the likely [i.e., anticipated] impacts.  Thus, proposed measures that are likely to have serious negative side effects or particularly affect certain groups in society should be more thoroughly analysed than minor technical changes to regulations."  We fully support this statement of policy.  This is an implicit economic criterion -- marginal benefit justifying marginal cost.  Again, however, we would suggest that the upcoming technical guidelines provide more objectively measured criteria -- e.g., an estimated range of population, a number of social groups or member countries affected, and a range of estimated economic impacts -- to help guide the implementation of this principle of proportionate analysis.


Need to Articulate the Underlying Analytic Principles for Carrying out the Extended Impact Assessment.  Similarly, this need for the Communication to provide the analyst with underlying analytic principles, or, in default thereof, to have the analyst articulate the underlying analytic principles he or she adopted in carrying out the Impact Assessment, extends to the detailed analytic criteria the analyst should follow in carrying it out. 


On page 16, under "Assessing the impacts ("scoping")," the Communication states that "the economic, social and environmental impacts identified for the proposed option should be analysed and presented in a format that facilitates a better understanding of the trade-offs between competing economic, social and environmental objectives.  To show the different impacts, make comparisons easier and identify trade-offs and win-win situations in a transparent way, it is desirable to quantify the impacts in physical and, where appropriate, monetary terms (in addition to a qualitative appraisal)."  On the reasonable assumption that analytic issues may involve health, safety, or the environment, the Communication, on page 19, further directs the analyst to answer the question, "what are the results of any scenario, risk or sensitivity analysis undertaken?"


We support these principles of "scoping" and the questions posed, but they appear incomplete.  Given the importance of health, safety, and environmental issues and the importance and number of new ones that constantly arise, we suggest that the upcoming technical guidelines articulate criteria to provide transparency in the choice of analytic assumptions the analyst makes, the methods of analysis he or she uses, and any uncertainties that can affect the analyst's conclusions. 


Similarly, the upcoming technical guidelines should provide the analyst guidance on how scientific analysis should be used in any extended Impact Assessment, and, more generally, on how the analyst should assure the high quality of any data relied upon in conducting the Assessment.  For example, in 1996 amendments to the Safe Drinking Water Act (42 United States Code 300g-1(b)(3)(A)), the United States Congress articulated basic standards of quality for the use of science in decision-making by the Environmental Protection Agency (EPA) on safe drinking water activities.  EPA is directed, "to the degree that an Agency action is based on science," to use "(i) the best available, peer-reviewed science and supporting studies conducted in accordance with sound and objective scientific practices; and (ii) data collected by accepted methods or best available methods (if the reliability of the method and the nature of the decision justifies use of the data)."   Similarly, the United States Congress adopted a basic quality standard for the dissemination of public information about risks of adverse health affects.  Under 42 United States Code 300g-1(b)(3)(B), the agency is directed, "to ensure that the presentation of information [risk] effects is comprehensive, informative, and understandable."  The agency is further directed, "in a document made available to the public in support of a regulation [to] specify, to the extent practicable -- (i) each population addressed by any estimate [of applicable risk effects]; (ii) the expected risk or central estimate of risk for the specific populations [affected]; (iii) each appropriate upper-bound or lower-bound estimate of risk; (iv) each significant uncertainty identified in the process of the assessment of [risk] effects and the studies that would assist in resolving the uncertainty; and (v) peer-reviewed studies known to the [agency] that support, are directly relevant to, or fail to support any estimate of [risk] effects and the methodology used to reconcile inconsistencies in the scientific data."  More generally, we refer you to recently issued "Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies," 67 Federal Register 8452, February 22, 2002.


In the absence of underlying analytic principles, or, in default thereof, in the absence of an articulation of the underlying analytic principles relied upon by the analyst, the quality and usefulness of any extended Impact Assessment may vary widely.  And, absent the articulation of such underlying analytic principles, there will be little basis against which the Secretariat General or the public as a whole will be able evaluate the quality of any specific extended Impact Assessment --  and thus seek to maintain and improve their quality and usefulness over time.


2.  The Need in the Communication to Strengthen the Role of the  Secretariat General


On pages 8-9, under "Organisation of the extended impact assessment," the Communication describes who in the Commission will be responsible to do what.


"Normally, the responsible Directorate General will conduct the extended assessment informing the Secretariat General and involving other Directorate Generals where these may be affected by the proposal (using external expertise as appropriate)."


"In some cases, the Commission may decide that, for the proposals with the most significant crosscutting impact and the highest political importance, the DG responsible for the Impact Assessment is assisted by, and normally chairs, an inter-departmental group including the most concerned DGs and the SG. ..."


"While conducting the impact assessment is the responsibility of the services in charge, the Secretariat General will co-ordinate the basic support structure for the new impact assessment procedures through the SPP/ABM cycle and its network, in particular regarding the selection and monitoring of the proposals subject to extended impact assessment.  The Secretariat General will co-ordinate the issuance of guidance documents, organisation of training, exchange of good practice and will monitor the final quality of the impact assessments carried out."


"The results will be presented in an impact assessment report to be attached to the inter-service consultation.  This assessment will replace existing assessments carried out by DGs, such as regulatory impact assessments, business impact assessments, environmental impact assessment etc. (see 1.3), now will be covered by the requirements for this category."


We applaud the consolidation of the diverse impact assessments into a consolidated extended Impact Assessment, and the fact that the Communication gives the Secretariat General an oversight role.  But we have concerns about certain apparent weaknesses in this oversight role as it is set forth in the Communication.  With over 20 years of experience in overseeing the impact assessments prepared by the various Federal agencies, we want to suggest specific ways to assure more effective oversight.


Need for Ongoing, Day-by-Day Oversight.  We note that the Secretariat General "will monitor the final quality of the impact assessments carried out."  This implies that the Secretariat General will only review an extended Impact Assessment after it has been written and formally submitted by the responsible Directorate General.  We suggest that the quality of extended Impact Assessments will improve if staff to the Secretariat General have the opportunity to review draft extended Impact Assessments before they become final.  It is our experience that analysts are more willing to discuss analytic issues cooperatively -- the clarification of possible ambiguities, the consideration of additional alternatives, the articulation of underlying assumptions and resultant ambiguities -- before completion, e.g., before formal endorsement of the assessment by the analyst's institution, or before the assessment is presented to the institution's overseer and the public for official review.


The importance of such ongoing oversight of the preparation of extended Impact Assessments further suggests that the Secretariat General should designate a senior staff member to be responsible for such oversight on a day-to-day basis, and provide that senior staff member with a staff of analysts experienced in the development of impact assessments.  Only with such an ongoing staff effort will the Secretariat General be able to "co-ordinate the issuance of guidance documents, [provide for the] organisation of training, [and assure the] exchange of good practice [between the responsible Directorate Generals and others developing such extended Impact Assessments]."


Such ongoing, day-by-day oversight by the Secretariat General would build and maintain the quality of the extended Impact Assessments developed for use by the Commission.  It will ensure greater consistency in assumptions and techniques used in preparing analyses across Directorates. It will minimize possible biases in analyses that may be inherent due to the particularized perspectives of each Directorate and others preparing these extended Impact Assessments.  And it will ensure the development of "best practices" to help all of those developing extended Impact Assessments to improve and assure high quality analysis and the most utility for policy-makers.


In addition to these comments, we have provided copies of the following documents that provide useful material on the U.S. approach to regulatory oversight.


1.  Presidential Executive Order 12866 -- Regulatory Planning and Review (58 Federal Register 51735, October 4, 1993).  Reaffirmed by the Bush Administration, this Executive Order lays out the principles and procedures that govern centralized regulatory oversight in the USA.


2.  U.S. Office of Management and Budget, Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies (67 Federal Register 8452, February 22, 2002).  These recent OMB guidelines are aimed at enhancing the quality of information -- including scientific and analytic information -- which federal agencies disseminate to the public and use in policy making.


3.  The Regulatory Flexibility Act of 1980, 5 United States Code chapter 6.  The purpose of this statute is to establish a principle that Federal agencies endeavor, consistent with the objectives of applicable law, to fit regulatory and informational requirements to the scale of entities subject to a regulation.  To demonstrate this effort, Federal agencies are required to solicit and consider flexible regulatory proposals, and explain the rationale for their actions to assure that flexible regulatory proposals are given serious consideration. 


4.  U.S. Office of Management and Budget, Draft Report to Congress on the Costs and Benefits of Federal Regulations, 67 Federal Register 15014, March 28, 2002.  This draft report, now being revised in response to public comment, describes recent regulatory reform activities of the Bush Administration.  The final Report is expected to be released to Congress and the public by late summer or early fall.


5.  U.S. Office of Management and Budget, "Economic Analysis of Federal Regulations under Executive Order 12866" (January 11, 1996); "Guidelines to Standardize Measures of Costs and Benefits and the Format of Accounting Statements" (OMB Memorandum M-00-08, March 22, 2000).  These documents are the technical guidance that OMB provides federal agencies on how to perform regulatory impact analysis.  OMB is now in the process of refining these guidance documents, a process that will take a year to complete since it entails proposal, public comment, expert peer review, interagency review and final release.  Since the Commision has indicated its intention to release its technical guidance on impact assessment in the near future, we expect that these U.S. guidance documents may be particularly useful.

[1] For example, the concept of a meaningful opportunity to comment is one of the most important concepts in our rulemaking process.  This concept “means that interested persons should be provided with an opportunity to challenge the factual assumptions on which the agency is proceeding and to show in what respect such assumptions are erroneous.”  See American Bar Association “A Guide to Federal Agency Rulemaking,” p. 197.  The concept means further that: 1) comments are invited from all interested parties at an early stage, when changes or modifications can still be made; 2) timely notice and availability to commenters and the general public of the key data, analyses, assumptions and other information underlying the proposal; and 3) written, reasoned agency response to the comments.