Alternative Regulierung[en] 

There have long been calls from both EU Member States and from policy stakeholders for the simplification and improvement of EU regulation. In 1995, a Protocol was appended the Treaty of Amsterdam concerning principles of good regulation. The Lisbon Council (March 2000) advanced the debate, with its commitment to improving cohesion and coordination between the community institutions, Member States and civil society, when 'improving' regulation and when considering alternatives to traditional EU legal instruments.

In fact, a number of alternatives to traditional regulatory instruments have been in use in the EU for some time. For example:

• the 'New Approach' (1985) to product standardisation  and the '  Global Approach' (1989) to conformity assessment  have resulted in a new legislative procedure, based on the drafting of essential health and safety requirements and the use of harmonized European standards. Alternative regulations, in this case detailed rules by which products' technical and safety characteristics, are then adopted by standards bodies approved at EU level. Products complying with these voluntary standards benefit from the presumption of conformity that all legal requirements are satisfied;
• the social dialogue process  to be found in Articles 138-139 of the Treaty, by which the European social partners have been empowered to negotiate agreements in order to regulate social policy matters governing working conditions. The success of this process depends on the existence of well established representative bodies at national and European level, ready and able to take responsibility in the negotiation process and at the implementation stage.

In the White Paper and Better Regulation action plan, the Commission suggests several policy instruments, or alternative regulations, which can be used to simplifying lawmaking activities and legislation itself:

• prescriptive regulatory actions (e.g. setting air quality standards);
• co-regulatory approaches (e.g. social dialogue);
• the Open Method of Coordination.
• market-based instruments (e.g. emission trading, taxation);
• financial interventions (e.g. taxation, subsidies, co-financing, seed or risk financing);
• action aiming at voluntary agreements or self-regulation;
• information, networking o r co-ordination activities.

This LinksDossier will cover issues related to the following types alternative regulations (others may be added in time):

• co-regulation;
• self-regulation;
• open method of coordination (OMC).

Co-regulation
Within the framework of a legislative act, co-regulation makes it possible to implement the objectives defined by the legislator through measures carried out by active and recognised parties in the field concerned. The Commission remains convinced that co-regulation is an option for focusing legislative work on essential elements and for simplifying and improving implementation - circumscribed by criteria laid down in a future inter-institutional agreement on better regulation. A co-regulation can follow either "top-down" or "bottom-up" approach:

• In a top-down approach, the legislator sets the legal framework, the stakeholders fill in the details and public authorities either monitor the outcome or sometimes validate those more detailed rules by turning them into binding regulation. The best example of top down co-regulation at EU level is the so-called "New Approach" in the area of the free movement of goods, where essential requirements are defined by law, while the stakeholders are invited to elaborate the technical harmonized standards which provide a "presumption of conformity". In this case, the self-regulatory process is used in a well-defined manner in support of public law.  
• In a bottom-up approach, it is unlikely that stakeholders will make the necessary effort to set up or activate a representative body to formulate codes or standards, unless they have been invited to do so by public authorities and have some reasonably firm assurance that the results of their work will be endorsed, provided it meets the conditions set in advance by public authorities. A good example of bottom up co-regulation is the Commission Recommendation on the reduction of CO2 emissions from passenger cars following voluntary commitments from associations of vehicle manufacturers.

In the June 2002 Better Regulation action plan, the Commission proposes that co-regulation be used more frequently provided that:

• the co-regulation is used on the basis of a legislative act. Thus, all proposals on the subject concerned will be referred to the legislator;
• the co-regulation mechanism be in the interests of the general public;
• the legislator establishes the essential aspects of the legislation: the objectives to achieve;
• the legislator determines to what extent defining and implementing the measures can be left to the parties concerned because of the experience they are acknowledged to have gained in the field;
• in cases where using the co-regulation mechanism has not produced the expected results, the Commission reserves the right to make a traditional legislative proposal to the legislator;
• the principle of the transparency of legislation applies to the co-regulation mechanism;
• the parties concerned must be considered to be representative, organised and responsible by the Commission, Council and Parliament.

The Commission maintains that even when it will propose a legislative act in which provision is made for co-regulation, the proposal must be adopted by the European Parliament and the Council

Self-regulation
Self-regulation concerns a large number of practices, common rules, codes of conduct and voluntary agreements which economic operators, social players, NGOs and organised groups establishing voluntary bases in order to regulate and organise their activities. Unlike co-regulation, self-regulation does not involve a legislative act.

In some EU Member States, self-regulation is long-standing in areas such as editorial (privacy, decency) and advertising standards for print, radio and broadcast media and for the advertising industry. With the expanding proliferation and use the Internet, self-regulation now considered an efficient instrument, both nationally and internationally, to address the problem of harmful and illegal content and to ensure the protection of minors. Due to cross-border developments in the Internet and information society, self-regulation is seen to have increasing importance, and there are calls for coordinated efforts at EU level. 

In the White Paper, the Commission notes that self-regulation, subject to clearly defined conditions, may also be a way of achieving the Treaty's objectives and avoiding excessive regulation. The Commission has proposed criteria and modalities for the use of self-regulation and similar alternative instruments, and these are currently the subject of negotiations on an inter-institutional agreement.

Open method of coordination
The Open Method of Coordination (OMC) was first introduced at the Lisbon Summit of March 2000, where EU leaders suggested that it be used as alternative regulation for areas such as social exclusion, enterprise policy and e-Europe, where most or all policy-making power remains with the Member States.

The design of OMC varies by policy area, but all OMC processes generally involve:

• fixing policy guidelines for the EU, combined with specific timetables for achieving the goal which they set in the short, medium and long terms;
• establishing, where appropriate, quantitative and qualitative indicators and benchmarks against the best in the world and tailoring to the needs of different Member States and sectors as a means of comparing best practice;
• translating European guidelines into national and regional policies by setting specific targets and adopting measures, taking into account national and regional differences;
• periodic monitoring, evaluation and peer review organised as mutual learning processes.

The Commission and Council may in turn use harder or softer enforcement mechanisms, require longer or shorter reporting intervals, and choose to set guidelines at the EU level or delegate responsibility to individual Member States. Whether the EC and the Council use harder enforcement mechanisms (e.g., fines under the Stability and Growth Pact) or softer mechanisms (e.g., non-binding directives and critical recommendations to Member States for violating the Broad Economic Policy and/or Employment Guidelines) depends on whether these institutions have Treaty competence for binding policy directives in a given policy area.

In the White Paper on European Governance, the Commission states that the OMC can be used to "complement" or "reinforce" Community action, in particular when there is little scope for legislative solutions.

Self-regulation and Co-regulation
The Parliament has expressed concerns that some of the new forms of regulation proposed in the White Paper, such as self-regulation and co-regulation and the creation of regulatory agencies, might weaken the role of Parliament. Commission President Prodi and others have tried to reassure MEPs by introducing principles and practices to ensure democratic control.

Among EU level environmental and consumer groups there is a general scepticism towards the ideas of co-regulation presented by the C ommission in the White Paper. One of the main concerns is that the force of law will be diminished and with it the environment and consumer interest. For example, the European Environmental Bureau (EEB), which represents eight environmental groups on governance issues, notes that voluntary agreements on regulation may lack the strength and breadth of applicability compared to regulations based on statutory law and that the pressure on governments to create strong regulatory bodies might also be reduced.

Enforcement is also a concern of the European consumers group BEUC who argue that the level of commitment to co-regulatory agreements may vary significantly and that the diminution of the statutory dimension may encourage free riders who are not party to agreements. Similar concerns about the dilution of the role of law have been expressed by the European group of consumer cooperatives, Euro Coop.

In the working groups supporting the drafting of the White Paper, concerns were expressed about the need for industry and other bodies to organize and coordinate the self-regulatory process. Self-regulation measures such as codes of conduct, standards or certification imply collaboration between industry partners at various (sectoral, national, regional etc) levels. Industry is also increasingly seeking to involve other groups, in particular consumer associations and environmental bodies. The ability to use self-regulation thus depends largely on the availability of bodies and processes to build consensus on the content or rules, to establish procedures for monitoring and enforcement etc. With the notable exception of the European standardisation bodies (CEN, CENELEC and ETSI) and a handful of others, there is a lack of EU-wide bodies capable of or interested in delivering self-regulation at the EU level.

Open Method of coordination
Advocates of this 'soft law' approach (i.e., not 'hard law' based on legal acts) argue that the OMC enables the Member States to cooperate closely, yet recognises their diversity and avoids forced harmonisation. It allows coordinated action in areas where it would be politically difficult, or even impossible, to move forward through a common policy or legal framework. It allows for a concerted EU approach while leaving legal competence and authority with the individual Member States.

Supporters of OMC highlight the fact that this method has allowed the EU to extend the concept of joint action into new policy areas. And it gives a key role to the Commission, not only in analysing best practice, but also in drafting guidelines and issuing recommendations on improving the effectiveness of policies.

Critics, however, fear that the OMC will at best create talking-shops and will at worst undermine the traditional "Community method" of decision-making and lead to more inter-governmentalism.