Bid to simplify regulatory environment welcomed

Date: 22/02/01

By Renée Cordes

WHEN the EU adopts tough new regulations, it is often too late for businesses to convince policymakers to change their minds.

But a plan foreseen by Enterprise Commissioner Erkki Liikanen would give industry greater power to police itself - whether through entirely voluntary agreements or pacts negotiated with public authorities.

The move comes in response to EU governments' request for the European Commission to simplify the regulatory environment, especially in the new economy, where laws may be obsolete before they are ever enacted.

The Commission plans to unveil a detailed strategy in Stockholm next month. But Liikanen is already testing the water for a series of new policy tools, prompting a lively debate among consumer and industry groups.

Self-regulation generally refers to voluntary rules adopted by one or more companies or industry groups. In some cases, it can pave the way for what one Commission official described as "light and unbureaucratic legislation".

'Co-regulation', the other new buzzword, takes the idea a step further. It might, for example, include automatic sanctions for failure to abide by agreed rules.

While definitions on these new approaches are still emerging, EU car lobby ACEA is wasting no time in jumping on board. It has suggested a voluntary agreement on pedestrian-friendly car design, an option that Liikanen strongly favours.

The Finnish Commissioner says such an agreement could be considerably more effective - and easier to implement - than traditional regulation. Only if industry fails to produce a satisfactory agreement by June will the Commission propose a binding directive.

On the whole, industry and consumer groups have welcomed the attempts to introduce alternatives to traditional legislation. The difficult part will be figuring out how these should work in practice.

"In some fields there is definitely too much regulation," said Jérôme Chauvin, director of company affairs for EU employers' organisation UNICE, adding that this posed a problem especially for small and medium-sized enterprises. "We need alternative regulatory models to simplify the legislative environment."