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EU institutions fail to improve governance of EU regulatory agencies

28 March 2012

After a few years of negotiations, the EU recently adopted a Common Approach for improved governance of EU 31 regulatory agencies. However, the agreed text seems to fall short of the Commission's objectives of greater transparency and accountability.

Background

EU decentralised agencies are defined as "independent bodies, entrusted by the European Institutions with one or several tasks which they undertake under their own responsibility".[1]

In 2008, as the number of agencies and their resources kept growing, the European Commission issued a communication expressing the need for "a common understanding of these agencies" to help provide "clarity about [the agencies'] role, and about the mechanisms to ensure the accountability of these public bodies". [2]

Focusing on "regulatory agencies" as opposed to "executive" agencies (who fall under another Regulation with a more precisely defined mandate [3]), the Commission called for more transparency, accountability and legitimacy.

After a failed attempt to reach an inter-institutional agreement on common governance of agencies in 2006, the Commission encouraged the launch of an inter-institutional dialogue between the Parliament and the Council towards the adoption of a non-legislative decision, "whatever form it takes".

Evaluating agencies

An Inter-Institutional Working Group was established in 2009 to assess the existing agencies and submit proposals for them to increase their efficiency and improve their accountability. Several studies were conducted to provide the working group with substantial material on the state of play: a "meta-study", looking in depth into the rationale and functioning of 14 agencies, was carried out by the Commission itself; an overall study of the 26 decentralised was then commissioned and carried out independently by a consortium of three companies (Rambøll Management, Euréval, and Matrix ).[1]

The evaluation, an almost 500 page long document, identified major shortcomings in relation to the agencies' governance, especially:

- The merging or closure of agencies has hardly been considered in the past, with a majors focus on the survival of agencies although this may be counter-productive

- Insufficient weight given to users and stakeholders in the agencies' governance

- Too Member States-oriented a management which may, in some cases, under-weigh EU interests

- Underestimation of the agencies' political role in shaping policy-making

- The image of the agencies as being independent from EU institutions: this is not desirable in all agencies (the study identifies CEDEFOP, EASA, ECDC, ECHA, EEA, EFSA, EIGE, EMCDDA, EMEA, EU-OSHA, EUROFOUND, and FRA as potentially in need of having an independent image)

- Almost no performance reporting: the voting of the budget is often detached from performance measurement; the evaluation and monitoring is not based on any tangible output measurement (except for EUROPOL, EUROFUND and the EEA where the Court of Auditors looks into the performance aspects as well).

- "Directors are not really made accountable, except for with big regularity issues"

It is worth noting that agencies' relations with third parties, except with other EU decentralised agencies, were not part of the evaluations, although the external aspect of EU policies, in particular the external aspect of internal security, have gained prominence on the EU agenda in the past few years.[4]

A set of recommendations was proposed by the consortium, especially:

- Reconsidering agencies periodically, especially as regards the role of the Management Board which should avoid conflict of interests with individual Member States which are board members

- "Merging small agencies with larger ones where relevant"

- "Establishing an inter-agency audit and performance committee" where agencies would be accountable not only to regularity, as is currently the case, but also to performance

- Agencies "should become accountable for their role in shaping policy issues"

- "Better connect budget with performance information and evaluation"

A non-binding "joint statement and common approach" was adopted as a result of the negotiations in June 2012. [5] It is applicable to regulatory agencies operating in every field except Foreign and Security Policy but does not seem to include many of the evaluation's recommendations.

No improved accountability

The Commission's 2008 communication called for more transparency and accountability, which would seem to make necessary a strong role for the European Parliament as the only directly elected EU institution. However, even the timid proposals brought forward in the 2012 draft joint statement (see [5]) were challenged by the Council, which subsequently postponed the adoption of the agreement.[6] Whereas the initial submitted version suggested that the Management Board of agencies should comprise one or two members designated by the European Parliament, the Council refused to include more than one member. Similarly, a paragraph stating the Parliament's role in the appointment process of the Executive Director was deleted. The proposal initially envisioned that the Management Board "be invited to make a statement before the competent European Parliament committee(s) and to answer questions put by its/their members" about the selected, yet not appointed, candidate.

Moreover, agencies that interact or cooperate with third countries and/or international organisations have had the technical aspects of their role reinforced, further detaching both the agencies and the EU institutions from any political consequences their actions may have:

"This strategy and appropriate working arrangements with partner DGs in the Commission should ensure that the agencies operate within their mandate and the existing institutional framework, and that they are not seen as representing the EU position to an outside audience or as committing the EU to international obligations." (point 25.2)

Such a statement is highly problematic as it suggests that EU-funded bodies, created by EU law, do not represent the EU's position abroad and, even more concerning, do not engage the EU's responsibility to abide by international law.

Weak monitoring mechanisms

Despite the claimed objective of increased monitoring, the provisions outlined in June's joint statement and common approach fall short of making it systematic and independent.

A positive suggestion is made to regularly review agencies every five years (point 60), with the possibility to include, in an agency's mandate, "either a sunset or a review clause" (point 4). A sunset clause seemed to be preferable and more in line with 2009 as it would oblige to consider with more attention all alternatives and justify for the maintenance of agencies. Indeed, "the evaluation team understands that the solution to major relevance problems has almost always been sought in terms of survival (continuation with a smaller size or extension of the mandate) rather than in terms of closure or merging". In that sense, point 4 may read as a minimal interpretation of the recommendation made in the 2009 evaluation.

Despite the introduction of "tailored performance indicators" as proposed in the 2009 evaluation, no reference is made to external monitoring mechanisms, except for auditing. Reporting on and evaluating performances will be based solely on information shared in the Annual report and submitted to the Management Board, and the EU's institutions.

The earlier proposal for an "inter-agency audit and performance committee" was not referred to in the adopted agreement. As to the role of agencies in shaping EU policy, the introductory statements seem to clarify the fact that agencies "contribute to the implementation of important EU policies, thus helping all the institutions, in particular the Commission, to concentrate on core policy-making tasks". However, in practice, it remains that institutions base a lot on the agencies' input to shape their policies, and agencies' accountability in this respect is not clarified (transparency of consultations with agencies and parliamentary oversight on these consultations at all stages of the decision-making process, records of meetings with institutions, implementation of EU policies, review of practices and implemented policies, transparency and parliamentary oversight on relations with third parties especially third countries).

Finally, an "alert/warning system" is proposed, in the case of an agency undertaking practices that "may violate EU law or be in manifest contradiction with EU policy objectives." However, the common approach does not give the Commission any power to act decisively. Indeed, the only possibility for the Commission will be to "request the Management Board to refrain from implementing the contentious decision while the representatives of the three institutions are still discussing the issue." If violations of EU law are alleged, it would seem that more stringent measures would be required: for example, obligatory suspension of the implementation of the contentious decision until further examination of the issue.

Although the adoption of guidelines towards more accountability, coherence and transparency is welcome, it seems that the text will not significantly change the current practices originally identified as problematic. It remains to be seen whether and how the new provisions (e.g. inclusion of one member appointed by the European Parliament in the Management Board) will be implemented.

Sources

[1] Rambøll Management, Euréval , and Matrix (2009) Evaluation of the EU de-centralised agencies in 2009:
Final Report Volume I
Volume II
Volume III
Volume IV

[2] European Commission (2008) Communication from the Commission to the European Parliament and the Council: European agencies - the way forward, 11 March 2008, COM (2008) 135 final

[2] Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ L 11, 16.1.2003). For a Full list of EU agencies

[4] Council of the EU (2011) Fourth Implementation Report of the "Strategy for the External Dimension of JHA: Global Freedom, Security and Justice" by the Council Secretariat (JAIEX working party) - Period of Reference: January 2010 - June 2011, 4July 2011, 11678/11

[5] Council of the EU (2012) Evaluation of European Union agencies: Endorsement of the Joint Statement and Common Approach, 18 June 2012, 11450/12

[6] Council of the EU (2012) Evaluation of European Union agencies, 16 March 2012, 7727/12

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