‘Better Regulation’ and the end of cheating?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Frans Timmermans' "Better Regulation" proposals make future Dieselgates more likely. [European Commission]

In the midst of the ongoing Dieselgate scandal, Nina Renshaw and Jos Dings write that regulators need to be given back real authority and responsibility, and that the Commission has shown significant shortcomings.

Nina Renshaw is Secretary General of the European Public Health Alliance (EPHA) and Jos Dings is Director of Transport & Environment.

The game is up. The whole world now knows what happens when a regulated industry holds the pen while regulations – and the test procedures supposed to uphold them – are being written. And when national authorities are in charge of overseeing their national champions and rely on those national champions for their paychecks.

Cheating will happen. Consumers will cry foul and launch lawsuits. Investors, pension funds and governments will lose billions. The EU loses face and in the case of air quality standards dodged by VW, probably tens of thousands of people have died earlier than they otherwise would have.

This is not only a matter of life and death for VW, or diesel carmakers, but for the whole European regulatory system. There is a dawning, terrifying realisation that VW is the tip of the iceberg: it’s not only one manufacturer, it’s not only air pollution (also fuel consumption, maybe even safety standards), it’s not even just cars. Media reports followed in quick succession about similar smart chips in other products, for example TVs recognising when they’re under test conditions and turning down energy use.

VW made a calculated gamble that it would be cheaper to cheat than to play by the rules. Above all because they were confident they wouldn’t get caught. Truth be told, in Europe that chance was zero; VW knew that the obscure Kraftfahrt Bundesamt – that approved its vehicles and under current law is the only body that can oversee them – would not re-test. And even if it would, this body falling under the German transport ministry would not take action like the US EPA did. They would have gotten away with it too, if it wasn’t for pesky US regulations and a Federal Environmental Protection Agency (EPA) with a budget and bite to match.

At a time when the EU is facing multiple crises of legitimacy, political attention risks missing this watershed moment. That would be a mistake. This is a vital opportunity to genuinely make Europe work better.

So would Mr Timmermans’ “Better Regulation” proposals have prevented all this? Emphatically, no. On the contrary, they make future #Dieselgates more likely. The Commission has already been accused, and rightly so, of taking far too long in tackling the diesel NOx issue through new ‘real world driving’ tests.

Timmermans’ proposals would hand the regulatory pen to ever-more working groups, expert committees, impact assessors, regulatory scrutineers, consultations, and even “Editorial Boards” (VW et al are helping draft truck-emissions tests right now for DG GROW) and invite infinite rounds of impact assessment and re-assessment.

We have always supported robust technical underpinning of political proposals; our support ends where industry-dominated technocracy and death-by-consultation takes over and political responsibility is abdicated. Technocratic is the antithesis of democratic.

When a scandal is finally exposed, no political heads will roll, because “the experts” were put in charge. And wasn’t this Commission supposed to become more political and less technocratic? “Self- and co-regulation” have finally been shown up to be the emperor’s (or President’s) new clothes.

The European Parliament and the Council are so far bystanders to this discreet technocratic coup. They should not buy the too-good-to-be-true spin of “Better Regulation”, without asking “Better for whom?”

To be genuinely better for consumers, investors, pensioners, children, governments, people who breathe air, use energy or spend money, a regulatory overhaul is indeed sorely necessary. But rather than abdicating responsibility to unaccountable experts, it needs to reinforce the credibility, accountability and effectiveness of the rules.

That means building up institutions to be fit for purpose. Today, they are not, so the regulations cannot be either.  This means taking real responsibility back to the regulator from the hands of the regulated that sit in the expert groups, enjoy endless rounds of public and not-so-public consultation, and relish the prospect of ever more impact re-assessments and the delays that they entail.

Better regulation means recognising that no internal market is complete without effective and independent oversight, carried out by regulators equipped with the technical expertise so as not to be hoodwinked into writing loopholes and grey zones into the rules.

These should have the mandate and authority to introduce a fit-for-purpose system of rigorous controls and, yes, the power to levy dissuasive fines against cheats.  Until that happens, “Better Regulation” is a gamble for our health, our wallets and the future of the EU.

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