ElectronicjournalofcomparativELaww,vol.9.1(jAnuary2005),<http://www.ejcl.org/> SOFT LAW. SELF-REGULATION AND CO-REGULATION IN EUROPEAN LAW Where Do They Meet? Linda sende Readers are reminded that this work is protected by copyright. While they are free to use the ideas expressed in it, they may not copy, distribute or publish the work or part of it, in any form, printed, electronic or othenvise, except for reasonable quoting clearly indicating th source. Readers are permitted to make copies, electronically or printed, for personal and Classroom use Abstract Over the past decade, the eU has been developing a new regulatory policy, which increasingly puts emphasis on the use of alternative instruments or on instruments that are complementary to trad itional command-and-control legislation. This aim of diversification of the Union's regulatory instruments is fundamentally inspired by the concern to enhance the effectiveness, legitimacy and transparency of EU action. These alternative instruments including inter alia recommendations and voluntary agreements- are often labelled with the general terms of 'soft law,'self-regulation'and/or co-regulation. This article is aimed at providing a general insight into the meaning which these concepts currently have within the context of the EU; it discusses the legal framework for the use thereof and touches upon some possible effects in terms of legitimacy. Furthermore, it addresses the interconnectedness of the phenomenon of soft law on the one hand and of self-regulation and co-regulation on the other. In this respect, particular attention is given to the course taken within the framework of the White Paper on European Governance 2001, the 2002 Commission Action plan Simplify ing and improving the regulatory environment, the Interinstitutional agreement on better law-making of 2003 and the Treaty establishing a Constitution for europe adopted by the member States in 2004 Contents 1 Introduction 2. The two pillars of the Unions legislative policy 2. 1 The development of a new legislative culture 2. 2 The first pillar: Do less in order to do better 2.3 The second pillar: Diversification of modes of governance 2. 4 The underlying aim of enhancing the Unmion's legitimacy This article partly draws on the research done for my doctoral thesis, Soft Law in European Community Law(Oxford [etc. Hart Publishing, 2004) The author is Professor of European Law, Faculty of Law, Tilburg University, the Netherlands
Electronic Journal of Comparative Law, vol. 9.1 (January 2005), <http://www.ejcl.org/> 1 SOFT LAW, SELF-REGULATION AND CO-REGULATION IN EUROPEAN LAW: Where Do They Meet?1 Linda Senden2 Readers are reminded that this work is protected by copyright. While they are free to use the ideas expressed in it, they may not copy, distribute or publish the work or part of it, in any form, printed, electronic or otherwise, except for reasonable quoting, clearly indicating the source. Readers are permitted to make copies, electronically or printed, for personal and classroom use. Abstract Over the past decade, the EU has been developing a new regulatory policy, which increasingly puts emphasis on the use of alternative instruments or on instruments that are complementary to traditional command-and-control legislation. This aim of diversification of the Union’s regulatory instruments is fundamentally inspired by the concern to enhance the effectiveness, legitimacy and transparency of EU action. These alternative instruments - including inter alia recommendations and voluntary agreements - are often labelled with the general terms of ‘soft law’, ‘self-regulation’ and/or ‘co-regulation’. This article is aimed at providing a general insight into the meaning which these concepts currently have within the context of the EU; it discusses the legal framework for the use thereof and touches upon some possible effects in terms of legitimacy. Furthermore, it addresses the interconnectedness of the phenomenon of soft law on the one hand and of self-regulation and co-regulation on the other. In this respect, particular attention is given to the course taken within the framework of the White Paper on European Governance 2001, the 2002 Commission Action plan ‘Simplifying and improving the regulatory environment, the Interinstitutional Agreement on better law-making of 2003 and the Treaty establishing a Constitution for Europe adopted by the Member States in 2004. Contents 1. Introduction 2. The two pillars of the Union’s legislative policy 2.1 The development of a ‘new legislative culture’ 2.2 The first pillar: ‘Do less in order to do better’ 2.3 The second pillar: Diversification of modes of governance 2.4 The underlying aim of enhancing the Union’s legitimacy 1 This article partly draws on the research done for my doctoral thesis, Soft Law in European Community Law (Oxford [etc.]: Hart Publishing, 2004). 2 The author is Professor of European Law, Faculty of Law, Tilburg University, the Netherlands
ElectronicjournalofcomparatiVeLa,vol.9.1(january2005),<http://www.ejcl.org 3. The legal framework for European self-regulation and co-regulation 3. 1 Conceptualising European self-regulation and co-regulation 3. 2 Some important manifestations of European self-regulation and co-regulation 3. 3 The development of a general legal framework: The Interinstitutional Agreement on better law-making 3. 4 Effects in terms of legitimacy 4. Interconnectedness with Community soft law 4. I The concept, classification and functions of Community soft la 4. 2 The case of recommendations and their link with self-regulation 5. Concluding remarks 1. Introduction In 1998, the Conclusions of the ECOFIN Council Meeting of 1 December 1997 concerning taxation policy were published, to which was attached the Resolution of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 1 December 1997 on a code of conduct for business taxation.3 In the later adopted Communication from the Commission Tax Policy in the European Union -Priorities for the years ahead, it was stated more generally that'the use of non-legislative approaches or"soft legislation"may be an additional means of making progress in the tax field. Reference is made in this respect to instruments such as communications, recommendations, guidelines nd no More recently, on 1 October 2004, the European Advertising Standards alliance (EASA)presented its new code of conduct to a group of Commission officials, consumer groups and trade associations. This code of conduct is said to provide"basic principles in ethical standards for advertising and it states that self-regulation can provide appropriate redress for consumers, a level playing field for advertisers, and a significant step towards completing the Single Market.5 The above examples raise the basic question as to how the use of such soft law and self-regulation instruments fit into the broader European legislative and regulatory framework To begin with, it can be observed that, by the end of the last decade, the European Commission started a more fundamental debate on better eU governance, which was very much inspired by the institutional crisis witnessed by the Commission in 1998. Better regulation is also a key part of the objective set at the Lisbon European Council Summit in 2000, of making the eU the world's most competitive knowledge-based economy by 2010.6 In July 2001, the debate culminated in the adoption of a White Paper on European OJ1998,C2/1 COM(2001)260 final, pp 10 and 22-24 Advertisers claim code of conduct is an example of self-regulation, available through www.Euractiv.Com(searchwordself-regulation),publishedon5October2004 Presidency Conclusions Lisbon European Council, 23 and 24 March 2000, available through
Electronic Journal of Comparative Law, vol. 9.1 (January 2005), <http://www.ejcl.org/> 2 3. The legal framework for European self-regulation and co-regulation 3.1 Conceptualising European self-regulation and co-regulation 3.2 Some important manifestations of European self-regulation and co-regulation 3.3 The development of a general legal framework: The Interinstitutional Agreement on better law-making 3.4 Effects in terms of legitimacy 4. Interconnectedness with Community soft law 4.1 The concept, classification and functions of Community soft law 4.2 The case of recommendations and their link with self-regulation 5. Concluding remarks 1. Introduction In 1998, the Conclusions of the ECOFIN Council Meeting of 1 December 1997 concerning taxation policy were published, to which was attached the ‘Resolution of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 1 December 1997 on a code of conduct for business taxation’.3 In the later adopted Communication from the Commission ‘Tax Policy in the European Union - Priorities for the years ahead’, it was stated more generally that ‘the use of non-legislative approaches or “soft legislation” may be an additional means of making progress in the tax field’. Reference is made in this respect to instruments such as communications, recommendations, guidelines and notices.4 More recently, on 1 October 2004, the European Advertising Standards Alliance (EASA) presented its new code of conduct to a group of Commission officials, consumer groups and trade associations. This code of conduct is said to provide ‘basic principles in ethical standards for advertising’ and it states that self-regulation ‘can provide appropriate redress for consumers, a level playing field for advertisers, and a significant step towards completing the Single Market’.5 The above examples raise the basic question as to how the use of such soft law and self-regulation instruments fit into the broader European legislative and regulatory framework. To begin with, it can be observed that, by the end of the last decade, the European Commission started a more fundamental debate on better EU governance, which was very much inspired by the institutional crisis witnessed by the Commission in 1998. Better regulation is also a key part of the objective set at the Lisbon European Council Summit in 2000, of making the EU the world´s most competitive knowledge-based economy by 2010.6 In July 2001, the debate culminated in the adoption of a White Paper on European 3 OJ 1998, C 2/1. 4 COM(2001) 260 final, pp. 10 and 22-24. 5 ‘Advertisers claim code of conduct is an example of self-regulation’, available through www.EurActiv.com (search word: self-regulation), published on 5 October 2004. 6 Presidency Conclusions Lisbon European Council, 23 and 24 March 2000, available through www.europa.eu.int/european_council/conclusions/index_en.htm
ElectronicjournalofcomparatiVeLa,vol.9.1(january2005),<http://www.ejcl.org Governance. In essence. this debate centres on the extent to which the trad itional supranational and top-down-Community command-and-control method"is still the right way to proceed, and what new forms of European governance -intergovernmental and non- governmental-should be explored and promoted with a view to ensuring good governance the EU. More in particular, the White Paper takes as one of its starting points that[t ]he Union must renew the Community method by following a less top-down approach and complementing its policy tools more effectively with non-legislative instrumentsand that binding tools such as recommendations, guidelines, or even self-regulation withing non- legislation is often only part of a broader solution combining formal rules with other commonly agreed framework& The Lisbon European Council called on the institutions and the member States to establish a coord inated strategy for the simplification and improvement of regulation, which was subsequently put forward by the Commission in June 2002 in its Action Plan on Simplify ing and improving the regulatory environment. 9 This Action plan deals with a broad range of modes of governance, includ ing in particular the use of soft law (recommendations), co-regulation, voluntary sectoral agreements, benchmarking, peer pressure, networks and the open method of co-ordination. Next, the European Parliament, the Council and the Commission reached an agreement on the conclusion of the Interinstitutional Agreement on better law-making, which was adopted on 16 December 2003. This agreement also addresses the use of alternative methods of regulation. Of particular interest for our purpose is that it sets out, for the first time, the general framework and conditions for the of co-regulation and self-regulation mechanisms within the eU context. Finally, the issue of simplification of the Union's legal instruments was also put on the agenda of the European Convention, convened on the basis of the Declaration adopted by the European Council of Laeken. 0 Concrete proposals have been made for a redefinition of these instruments in the Treaty establishing a Constitution for Europe, on which the EU leaders reached agreement at the European Summit of 17 June 2004 and which was signed in Rome on 29 October 2004. 2 All these developments fit in with the more gradual development of a new legislative policy, set in motion already in the second half of the 1980s Taking these recent developments as the point of departure, the main aim of this rticle is to provide a general insight into the meaning of self-regulation, co-regulation and Whereby the Council and the EP decide upon a proposal from the Commission White Paper on European Govemance, COM(2001)428, pp. 4 and 20-22 in particular Communication from the Commission, Action plan "Simplifying and improvi environment, COM(2002)278 final, 5 June 2002, p 7 The Future of the European Union-Laeken Declaration, adopted on 15 Decem ber 2001, Bull See its Articles 1-33 to 1-37 CIG 87/2/04. Rev 2. 29 October 2004 The Treaty establishing a Constitution for Europe will enter into force only upon its ratification by all the parliaments of the Mem ber States within a period of two years after the Treaty has been signed. In at least ten Member States a referendum will be held on the desira bility thereof. See
Electronic Journal of Comparative Law, vol. 9.1 (January 2005), <http://www.ejcl.org/> 3 Governance. In essence, this debate centres on the extent to which the traditional - supranational and top-down - Community command-and-control method7 is still the right way to proceed, and what new forms of European governance - intergovernmental and nongovernmental - should be explored and promoted with a view to ensuring good governance in the EU. More in particular, the White Paper takes as one of its starting points that ‘[t]he Union must renew the Community method by following a less top-down approach and complementing its policy tools more effectively with non-legislative instruments’ and that ‘legislation is often only part of a broader solution combining formal rules with other nonbinding tools such as recommendations, guidelines, or even self-regulation within a commonly agreed framework’.8 The Lisbon European Council called on the institutions and the Member States to establish a coordinated strategy for the simplification and improvement of regulation, which was subsequently put forward by the Commission in June 2002 in its Action Plan on ‘Simplifying and improving the regulatory environment’.9 This Action plan deals with a broad range of modes of governance, including in particular the use of soft law (recommendations), co-regulation, voluntary sectoral agreements, benchmarking, peer pressure, networks and the open method of co-ordination. Next, the European Parliament, the Council and the Commission reached an agreement on the conclusion of the Interinstitutional Agreement on better law-making, which was adopted on 16 December 2003. This agreement also addresses the use of alternative methods of regulation. Of particular interest for our purpose is that it sets out, for the first time, the general framework and conditions for the use of co-regulation and self-regulation mechanisms within the EU context. Finally, the issue of simplification of the Union’s legal instruments was also put on the agenda of the European Convention, convened on the basis of the Declaration adopted by the European Council of Laeken.10 Concrete proposals have been made for a redefinition of these instruments in the Treaty establishing a Constitution for Europe,11 on which the EU leaders reached agreement at the European Summit of 17 June 2004 and which was signed in Rome on 29 October 2004.12 All these developments fit in with the more gradual development of a new legislative policy, set in motion already in the second half of the 1980s. Taking these recent developments as the point of departure, the main aim of this article is to provide a general insight into the meaning of self-regulation, co-regulation and 7 Whereby the Council and the EP decide upon a proposal from the Commission. 8 White Paper on European Governance, COM(2001) 428, pp. 4 and 20-22 in particular. 9 Communication from the Commission, Action plan ‘Simplifying and improving the regulatory environment’, COM(2002) 278 final, 5 June 2002, p. 7. 10 The Future of the European Union - Laeken Declaration, adopted on 15 December 2001, Bull. EU 12- 2001. 11 See its Articles I-33 to I-37, CIG 87/2/04, Rev 2, 29 October 2004. 12 The Treaty establishing a Constitution for Europe will enter into force only upon its ratification by all the parliaments of the Member States within a period of two years after the Treaty has been signed. In at least ten Member States a referendum will be held on the desirability thereof. See www.europa.eu.int/futurum/ratification_en.htm
ElectronicjournalofcomparatiVeLa,vol.9.1(january2005),<http://www.ejcl.org/ soft-law means and mechanisms within the context of the eu. and to see within what legal framework use is made thereof. It will also touch upon the effects of this framework in terms of legitimacy. This entails that the reasons why the ways in which and the conditions under which use is made of self-regulation, co-regulation and soft law are investigated(sections 3 and 4). The article also seeks to establish where these alternative modes of Europea governance meet, or, what connection can be established between the use of soft law, self regulation and co-regulation in the context of the EU (section 5). The article will start however, by considering more closely the main foundations of the legislative policy which the eu can be said to now conduct and the alternative modes of governance that fit into this policy(section 2 ). For it is against this background that the increasing use of self-regulation, co-regulation and soft law is to be regarded An observation that needs to be made at this point is that the focus will be on how self-regulation, co-regulation and soft law are used as instruments or modes of governance at the European level, not on how these are used at the national levels as a means of implementing European law into the national legal order. For instance, the question whether the use of national environmental agreements constitutes an appropriate means of mplementing an eC directive will not be dealt with here 2. The two pillars of the Unions legislative policy 2. 1 The development of a new legislative culture In an article published in 1986, Bruha and Kindermann concluded that EC legislation was still Terra incognita der Gesetzgebungslehre'. According to these authors, a specific Community theory of legislation or legislative policy had not even started to develop However, the mid-1980s can be seen as a turning point with regard to the way of thinking on European legislation. At that moment in time, the stagnation of the internal market, the national deregulatory tendencies and the criticism of both the quantity and the quality of the body of European legislation constituted a catalyst for the eC to reconsider its legislative task taking as its starting point the White Paper for the Internal Market of 1985 and the Single European Act of 1986. Further reflections on the existing body of European legislation and new legislation to be adopted and the burden it imposes on national authorities and companies have led to deregulatory and self-regulatory tendencies also at the EC level Particularly since the early 1990s it has become clear that European legislative policy rests on two main pillars, which in a sense can be seen as each other's logical counterparts The first pillar represents the aim to make less use of the instrument of legislation and to reduce the existing body of European legislation. Improvement of the quality of European gislation is also a point of concern here. The second pillar represents the aim to make more use of other modes of governance or regulation, which are of a less compelling or non governmental nature. In short, such a policy thus aims, on the one hand, at less and better gislation and, on the other, at more diversified european governance mechanisms. This has T. Bruha and H. Kindermann, "Rechtsetzung in der Europa ische Gemeinschaft, Zeitschrift fuir Geset=gebung(1986)Heft 4, p. 293 4
Electronic Journal of Comparative Law, vol. 9.1 (January 2005), <http://www.ejcl.org/> 4 soft-law means and mechanisms within the context of the EU, and to see within what legal framework use is made thereof. It will also touch upon the effects of this framework in terms of legitimacy. This entails that the reasons why, the ways in which and the conditions under which use is made of self-regulation, co-regulation and soft law are investigated (sections 3 and 4). The article also seeks to establish where these alternative modes of European governance meet, or, what connection can be established between the use of soft law, selfregulation and co-regulation in the context of the EU (section 5). The article will start, however, by considering more closely the main foundations of the legislative policy which the EU can be said to now conduct and the alternative modes of governance that fit into this policy (section 2). For it is against this background that the increasing use of self-regulation, co-regulation and soft law is to be regarded. An observation that needs to be made at this point is that the focus will be on how self-regulation, co-regulation and soft law are used as instruments or modes of governance at the European level, not on how these are used at the national levels as a means of implementing European law into the national legal order. For instance, the question whether the use of national environmental agreements constitutes an appropriate means of implementing an EC directive will not be dealt with here. 2. The two pillars of the Union’s legislative policy 2.1 The development of a ‘new legislative culture’ In an article published in 1986, Bruha and Kindermann concluded that EC legislation was still ‘Terra incognita der Gesetzgebungslehre’. According to these authors, a specific Community theory of legislation or legislative policy had not even started to develop.13 However, the mid-1980s can be seen as a turning point with regard to the way of thinking on European legislation. At that moment in time, the stagnation of the internal market, the national deregulatory tendencies and the criticism of both the quantity and the quality of the body of European legislation constituted a catalyst for the EC to reconsider its legislative task, taking as its starting point the White Paper for the Internal Market of 1985 and the Single European Act of 1986. Further reflections on the existing body of European legislation and new legislation to be adopted and the burden it imposes on national authorities and companies have led to deregulatory and self-regulatory tendencies also at the EC level. Particularly since the early 1990s it has become clear that European legislative policy rests on two main pillars, which in a sense can be seen as each other’s logical counterparts. The first pillar represents the aim to make less use of the instrument of legislation and to reduce the existing body of European legislation. Improvement of the quality of European legislation is also a point of concern here. The second pillar represents the aim to make more use of other modes of governance or regulation, which are of a less compelling or nongovernmental nature. In short, such a policy thus aims, on the one hand, at less and better legislation and, on the other, at more diversified European governance mechanisms. This has 13 T. Bruha and H. Kindermann, ‘Rechtsetzung in der Europäische Gemeinschaft’, Zeitschrift für Gesetzgebung (1986) Heft 4, p. 293
ElectronicjournalofcomparatiVeLa,vol.9.1(january2005),<http://www.ejcl.org brought the European Commission to speaking of a new legislative culture,. 4 This culture is very much inspired by the notions of flexibility and differentiation The concept of flexibility was introduced into the EC Treaty and the EU Treaty in the form of provisions enabling closer cooperation between only a number of Member States. This means that not all the member States have to agree in order to move forward in respect of a certain matter. 5 More interesting for our purposes, however, is that there is an ambition to arrive at flexibility and differentiation not only from a substantive point of view, but also from an institutional or instrumental one, i.e. when it comes to the modes or instruments by which European integration is to be given shape. More generally, the Treaty establishing a Constitution for Europe now states in its Article I-8 that the motto of the Union is"United in diversity. When we look more closely at the purpose of European legislation, it also becomes very clear that uniformity is not always aimed at and that the aim is rather to establish harmonisation or alignment of national law and policy as far as necessary(in particular with a view to realising the internal market ) Increasingly, it now appears that such bind ing harmonisation legislation may not even be considered necessary, but only-non binding -coord ination of national policies The pillars of this new legislative policy are also firmly rooted in the principles of subsid arity and proportionality, laid down in Article 5 EC. The Edinburgh European Council Conclusions, adopted in 1992, demonstrate this, as will be further explained in subsection 2.3 2.2 The first pillar: Do less in order to do bette When we look more closely at the way in which the first foundation of the Unions legislative policy has developed, it becomes clear that simplification and deregulation are the key words for putting the device do less in order to do better into practice. 16 This was underlined already in the Molitor Report, 7 according to which simplification must be taken to mean".. that it is essential to ensure that regulation imposes the least constraint on competitiveness and employment whilst maximizing the benefits of direct government intervention. Deregulation is taken to mean .. in some instances, an unavoidable extension of simplification will be the reduction or removal of government regulations, where such regulations are no longer necessary, or where their objectives can be achieved more effectively through alternative mechanisms. There are thus in fact two sides to this first pillar a drafting aspect and a policy aspect See the Report on Implementation of the Commission's work programme for 1996, European Commission, Brussels, 16 October 1996, p 10 See Article 1 l EC and Title vil of the EU Treaty. The EC Treaty also conta ins direct applications of this concept, in particular concerning the visa and asylum policy and the emu provisions, which allow forno- participation or later participation of some Mem ber States See the Commission opinion Reinforcing political union and preparing for enlargement, Office for Official Publications of the European Communities, 1996, p. 13. See also the Council Resolution of 8 July 1996 on legislative and administrative simplification in the field of the internal market, OJ 1996, C 224/5 COM(95)288
Electronic Journal of Comparative Law, vol. 9.1 (January 2005), <http://www.ejcl.org/> 5 brought the European Commission to speaking of a ‘new legislative culture’.14 This culture is very much inspired by the notions of flexibility and differentiation. The concept of flexibility was introduced into the EC Treaty and the EU Treaty in the form of provisions enabling closer cooperation between only a number of Member States. This means that not all the Member States have to agree in order to move forward in respect of a certain matter.15 More interesting for our purposes, however, is that there is an ambition to arrive at flexibility and differentiation not only from a substantive point of view, but also from an institutional or instrumental one, i.e. when it comes to the modes or instruments by which European integration is to be given shape. More generally, the Treaty establishing a Constitution for Europe now states in its Article I-8 that the motto of the Union is ‘United in diversity’. When we look more closely at the purpose of European legislation, it also becomes very clear that uniformity is not always aimed at and that the aim is rather to establish harmonisation or alignment of national law and policy as far as necessary (in particular with a view to realising the internal market). Increasingly, it now appears that such binding harmonisation legislation may not even be considered necessary, but only - nonbinding - coordination of national policies. The pillars of this new legislative policy are also firmly rooted in the principles of subsidiarity and proportionality, laid down in Article 5 EC. The Edinburgh European Council Conclusions, adopted in 1992, demonstrate this, as will be further explained in subsection 2.3. 2.2 The first pillar: ‘Do less in order to do better’ When we look more closely at the way in which the first foundation of the Union’s legislative policy has developed, it becomes clear that simplification and deregulation are the key words for putting the device ‘do less in order to do better’ into practice.16 This was underlined already in the Molitor Report,17 according to which simplification must be taken to mean ‘. . . that it is essential to ensure that regulation imposes the least constraint on competitiveness and employment whilst maximizing the benefits of direct government intervention’. Deregulation is taken to mean ‘. . . in some instances, an unavoidable extension of simplification will be the reduction or removal of government regulations, where such regulations are no longer necessary, or where their objectives can be achieved more effectively through alternative mechanisms’. There are thus in fact two sides to this first pillar: a drafting aspect and a policy aspect. 14 See the Report on Implementation of the Commission’s work programme for 1996, European Commission, Brussels, 16 October 1996, p. 10. 15 See Article 11 EC and Title VII of the EU Treaty. The EC Treaty also contains direct applications of this concept, in particular concerning the visa and asylum policy and the EMU provision s, which allow for nonparticipation or later participation of some Member States. 16 See the Commission opinion ‘Reinforcing political union and preparing for enlargement’, Office for Official Publications of the European Communities, 1996, p. 13. See also the Council Resolution of 8 July 1996 on legislative and administrative simplification in the field of the internal market, OJ 1996, C 224/5. 17 COM(95) 288