9. Multilevel governance: The interface between the national level and the European Union
Chapter 9 assesses the interface between the EU and the national level of government in Croatia, which is a core element of effective regulatory management in all EU countries. The chapter describes and evaluates the processes in place for negotiating the national position, transposing EU directives into national law and ensuring consistency with national legislation in Croatia. The chapter also briefly addresses the mechanisms in place to prevent gold-plating. Finally, it gives recommendations for improvement of the multilevel regulatory governance set-up.
The 2019 Better Regulation Practices across the EU report (OECD, 2019[1]) highlights that the complexity of today’s environment means that governments cannot address regulatory challenges at the domestic level alone. The quality of laws and regulations in the EU also depends on the quality of the regulatory management systems, both in member states and in EU institutions. The benefits of European legislation can significantly be reduced if countries’ practices of negotiating and transposing EU directives into national law are not well designed and implemented. The regulatory management systems of the EU institutions and the EU Member States therefore need to be mutually reinforcing in order to be effective (OECD, 2019[1]). As the EU’s latest member, aligning national- and EU-level legislative processes is particularly important for Croatia.
Croatia in the European Union
When Croatia joined the European Union in 2013, the national co-ordination of EU affairs was established with the Ministry of Foreign and European Affairs (MFEA) appointed as the national co-ordinative body. The Croatian government set the legal framework and procedures for the national co-ordination of EU-affairs (OG 43/16) by adopting the Decision on the Establishment of the Inter-ministerial Working Group for European Affairs.
The MFEA is the national co-ordinative body for the transposition and implementation of the EU acquis and manages the EU-affairs database (IKOS EU Affairs) that enables automatic distribution of documents received from EU institutions and online co-operation among state institutions involved in the transposition process. The ministry also co-ordinates the drafting of the Annual Government Program on implementation and transposition of the EU acquis into Croatian law. The MFEA regularly reports on the implementation of the EU acquis to the permanent working bodies of the Government. As central contact point, the MFEA is responsible for notifying the EC on the progress of the transposition process via the electronic EC database.
Negotiation of the national position
The process for developing the national position of Croatia at the EU negotiation stage is co-ordinated by the MFEA.
An inter-ministerial EU-affairs working group is set up to discuss and approve the national position on items on the COREPER I and COREPER II agenda. The working group can also discuss other horizontal issues related to EU affairs. OG 43/16 stipulates that the working group consists of representatives of all ministries and governmental bodies and is set up and chaired by the MFEA. The inter-ministerial EU-affairs working group meets weekly.
The national framework positions on new legislative proposals as well as national positions for EU council meetings are discussed and approved by the government’s permanent working body on the Co-ordination of Foreign and European Policies and Human Rights, which is chaired by the MFEA. The working body is made up of EU co-ordinators or their deputies in the central government bodies responsible for the subject area. National positions for the EU Council meetings are in a last step adopted by the government. Competences and responsibilities of government bodies for the participation in the work of the Council Working Groups are laid out in the Conclusions of the Government of the Republic of Croatia. The MFEA decides in case of disputes over competences.
The working body can decide to include other competent authorities and key stakeholders to ensure stakeholder engagement in the decision-making process, however there is no requirement in place to do so. Stakeholders are also not systematically informed of the various opportunities to provide feedback on legislative proposals at the early stage of their development directly to the EC (see Box 9.1), as no single body is responsible for informing the general public.
The European Commission uses a range of different tools to engage with stakeholders at different points in the policy process:
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Timelines make it easy to track an initiative and to anticipate upcoming opportunities to provide input.
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Through roadmaps and inception impact assessments (IIA), the public has the possibility to provide feedback on the Commission’s policy plans at the initial stage of policy development.
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A 12-week public consultation is conducted through the “Have your say” portal allowing stakeholders to express their views on key aspects of the proposal and main elements of the impact assessment under preparation.
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Stakeholders can provide feedback to the Commission during an eight-week consultation period on its proposals and their accompanying final impact assessments once they are adopted by the College.
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At the end of the consultation work, an overall synopsis report should be drawn up covering the results of the different consultation activities that took place.
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The Commission also consults stakeholders as part of the ex post evaluation of existing EU regulation. Stakeholders can provide their views on existing EU regulation at any time on the “Have your say” website.
Sources: OECD (forthcoming): OECD Best Practice Principles on Stakeholder Engagement in Regulatory Policy, OECD Publishing, Paris; OECD Pilot database on stakeholder engagement practices in regulatory policy. http://www.oecd.org/gov/regulatory-policy/pilot-database-on-stakeholder-engagement-practices.htm. As cited in (OECD, 2019[1]), Better Regulation Practices across the EU, https://doi.org/10.1787/9789264311732-en.
According to the Law governing the Co-operation between the Parliament and Government in EU affairs (OG 81/13), the national framework positions on new EU legislative proposals are presented in the Parliamentary Committee for EU-affairs. Art. 7 stipulates that the Committee could ask for a full RIA (including public consultation on the initial RIA) to be conducted on draft EU documents to inform the national position, however in practice this has not happened yet.
In just more than half of OECD countries that are members of the EU, including in Croatia, there is no requirement to conduct an impact assessment at the EU negotiation stage (see Figure 9.1) even though this phase presents a strong opportunity for countries to directly amend the EU legislative proposal. There is, however, an obligation for administrative bodies responsible for drafting the national framework position in Croatia to indicate if the EU proposal will have an impact on the state budget and if amendments to the national legislation will be necessary.
While European Council and Parliament committed themselves to carry out impact assessments of substantial amendments to the Commission’s proposals, the impacts of these amendments on individual member states may not be adequately determined (OECD, 2019[1]). Assessing the impacts of EU legislative proposals at the negotiation stage could therefore prevent unnecessary regulatory burdens for Croatia and there are options available that require less resources than a full RIA. For example in Lithuania, policymakers are required to complete a “basic impact assessment” in reaching its negotiation position. Basic impact assessments examine objectives and options for implementation of draft legislation, including quantitative data whenever possible (Government of Lithuania, 2008[2]).
Note: Data is based on 28 EU Member States.
Source: Indicators of Regulatory Policy and Governance Survey 2017, http://oe.cd/ireg.
Transposition into national law
The process of transposition and implementation of EU directives in Croatia is standard and similar to many OECD countries that are members of the EU.
Regulations which transpose EU legislation into national law are drafted by the central government bodies according to their competences set out in the Act on Organisation and Scope of Ministries and other Central State Bodies (OG 93/16, 104/16) and Act on the State Administration System (OG 93/16, 104/16). Other agencies (with public authority) may participate in the drafting process if the content of the regulation relates to their competences. In case of disputes over competences, the decision is being made by the Government based on the recommendation of Ministry of Foreign and European Affairs, which is the national body responsible for the transposition and implementation of the EU acquis.
The body responsible for drafting the legislation is required to conduct a regulatory impact assessment at the transposition stage. The same requirements and processes apply as for regulations originating domestically. This is the case in most OECD countries (see Figure 9.1 right panel).
When drafting the legislation that transposes the EU directive, the competent body is obliged to consult all key stakeholders (NGOs, general public, business sector). Through the central government platform e-Savjetovanja stakeholders can submit their comments on the draft legislation in open public consultations.
The transposition of EU directives into national law can be challenging and limited guidance is available in Croatia. In the UK, the government published elaborate transposition guidance describing the steps to follow in order to effectively transpose EU directives into national law. The results are summarised in a so-called transposition checklist composed of 20 elements (Table 9.1) (Department of Business, Energy & Industrial Strategy (UK), 2018[3]).
The issue of gold-plating
The majority of EU member states include a specific assessment of provisions added at the national level which go beyond those established in the EU directive (Figure 9.2, left pane), so called “gold plating” (Box 9.2). By doing so, countries assess the total regulatory impacts of the legislation imposed by both the EU and the member state (at national level).
Gold plating is a term specifically used in the EU context and describes over-implementation of an EC Directive through the imposition of national requirements going beyond the actual requirements of the Directive. Directives allow Member States to choose how to meet the objectives set out in the Directive, adapting their approach to their own institutional and administrative cultures. Moreover, many directives are minimum directives allowing Member States to go beyond their requirements. It is therefore often at this stage that additional details and refinements, not directly prescribed by the Directive, are introduced. These can go well beyond the requirements set out in the Directive, resulting in extra costs and burdens (OECD, 2009[4]).
Source: (OECD, 2019[1]), Better Regulation Practices across the EU, https://doi.org/10.1787/9789264311732-en.
Note: Data is based on 28 EU Member States.
Source: Indicators of Regulatory Policy and Governance Surveys 2014 and 2017, and the extension to all EU Member States, http://oe.cd/ireg.
In Croatia, a specific assessment of gold plating is not included in the RIA that is conducted at the transposition stage. A specific assessment of these impacts during the RIA conducted at the transposition stage helps to identify and avoid unnecessary regulatory burdens. Considering the high level of burdens for businesses in Croatia, this could be particularly relevant. Lithuania’s European Law Department laid out a series of steps that can be taken to prevent gold-plating (see Box 9.3).
During the negotiation phase at EU-level, the responsible national institutions should:
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Clarify the objectives of the draft EU legislation; evaluate subsidiarity of the initiative; conduct impact assessment and describe the data provided to the European Commission for the EU level impact assessment; compare the data of the EU level and national level impact assessments; identify potential issues and raise these issues during the negotiation process.
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Start preparations for the transposition stage; identify necessary measures for the transposition of the draft EU legislation and consult on them with relevant stakeholders.
During the transposition stage, responsible national institutions should:
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Always start from the position that over-implementation must be avoided; evaluate the stock of existing regulations first, to avoid the flow of new regulations wherever possible; use derogations or alternative ‘lighter regimes’ wherever possible; conduct comparative linguistic analysis of the EU law; use technology based measures; use better regulations principles to choose smart and least burdensome implementing solution;
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If necessary, perform additional impact assessment to complement the existing one. Consult with end-users of the legislation.
At the post-transposition stage, the responsible institutions should:
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Include a statutory duty/clause for an ex post review or enter the duty into the legislation review plan.
Source: The European Law Department, Lithuania in (OECD, 2015[5]).
Ensuring consistency of national legislation with EC Regulations
The procedure ensuring compliance of national legislation with the acquis communautaire is laid out in the Decision on the Instruments for Alignment of the Legislation of the Republic of Croatia with the acquis (OG 44/2017). The decision obliges the competent authorities (i.e. those responsible for drafting the legislation) to ensure the alignment of domestic legislation with the acquis during the preparation of the draft legislation and sets forth the appropriate instruments.
Competent authorities, when preparing the draft legislation, are required to prepare the instruments for alignment of legislation (the “Table of Concordance of the Provisions of the EU Acts with the Draft Legislation” and the “Statement of Compatibility of the Draft Legislation with the acquis”) and submit them to the MFEA for approval via the IKOS – EU affairs online platform. After the Ministry of Foreign and European Affairs approves both instruments for alignment of the legislation, the competent authority submits the draft legislation together with a Statement of Compatibility to the MFEA for official verification and confirmation of alignment. In case the act is adopted under regular legislative procedure, a second reading will have to be conducted following the same procedure. The MFEA then determines if the draft legislation has been aligned with the acquis.
The MFEA can return the draft legislation to the competent authority for revision in the following cases:
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1. the competent authority did not prepare the instruments for alignment of the legislation;
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2. the instruments for alignment of the legislation were not prepared correctly;
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3. the information in the instruments for alignment of the legislation are contradictory to the draft legislation;
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4. the Ministry of Foreign and European Affairs determined that the draft legislation has not been aligned with the acquis.
Once all instruments have been prepared correctly and the MFEA determines that the draft legislation is in line with the acquis, the competent authority submits the draft legislation to the Government (no later than four months before the deadline for notification of national transposition measures determined by the EU directive with which the draft legislation is being aligned).
The MFEA as national co-ordinative body is responsible for monitoring the process and reports on the progress to the Government annually, proposing measures for advancement of its implementation.
Assessment and recommendations
Croatia has successfully put in place a government structure for co-ordinating the interface between EU- and national level. The MFEA as national co-ordinative body oversees the process of negotiating and transposing EU directives and individual line ministries are responsible for drafting positions in their areas of competence. For the purpose of enabling distribution of documents received from EU institutions and co-operation among state institutions involved in the transposition process the IKOS EU Affairs database has been set up.
While the institutional set-up works well, Croatia focuses its efforts on the later stage of the EU legislative process and rarely uses regulatory management tools to inform the national position during the negotiation phase. The negotiation phase presents a strong opportunity for Member States to directly amend European Commission proposals (as introduced to Council and the European Parliament) before they become EU legislative acts. It is therefore important that the relevant stakeholders get an opportunity to express their views on the EU legislative proposal and that its impacts for Croatia are adequately assessed at this stage. Like in many other EU countries, there is no requirement in Croatia to consult relevant stakeholders and assess impacts of the draft legislation when developing the national position on the EU draft legislation and in practice this rarely happens.
The public is not systematically informed of opportunities to provide their input at EU-level. The Commission uses a range of different tools to engage with stakeholders at various points during policy development. These present opportunities for EU countries and their citizens to participate, provide evidence, and improve EU laws including at early stages of their development. Currently, Croatia does not systematically inform stakeholders of the opportunity to provide input in order to facilitate the early engagement of its citizens to get engaged on EU level early in the legislation making process. This represents a lost opportunity for affected parties to have their views heard directly at EU level.
Croatia should ensure that a proportionate analysis of impacts is carried out and relevant stakeholders are involved in the process of preparing national positions to draft EU legislation. Criteria for when such assessment is necessary should be set by a Government resolution. In addition to applying regulatory management tools on national level when negotiating the national position and transposing EU directives into national law, Croatia should use the results of regulatory management tools (e.g. RIA) conducted at EU level to inform the process. While the European Council and Parliament carry out impact assessments for substantial amendments to the Commission’s regulatory proposals, the impacts of these amendments may not adequately assessed by individual member states, which could cause unnecessary burdens for individual countries. The impact assessments conducted on both EU- and national level should therefore inform the development of the national position for the negotiation phase in EU council.
When assessing the impacts of legislation, an assessment of “gold-plating” should be included. Provisions added at the national level that go beyond those in the EU directives can add significant costs and burdens to businesses and citizens. A specific assessment of these impacts during the RIA conducted at the transposition stage helps to identify and avoid unnecessary regulatory burdens. In addition, there are several other steps that can be undertaken to avoid gold-plating (see Box 9.3).
Croatia could consider centralizing the responsibility for raising awareness of consultations happening on EU-level. The responsibility to inform the general public of consultations conducted on EU-level currently lies with line ministries. It could be considered to centralise the responsibility for awareness raising for EU-consultations in the MFEA to ensure the public is informed systematically. The MFEA would notify the public of upcoming consultations on EU-level by posting on the e-consultation portal.
References
[3] Department of Business, Energy & Industrial Strategy (UK) (2018), “Transposition guidance: how to implement EU Directives into UK law effectively”, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/682752/eu-transposition-guidance.pdf (accessed on 11 December 2018).
[2] Government of Lithuania (2008), Resolution No.21 of 9 January 2004 Official Translation 22 July 2008, http://www.oecd.org/gov/regulatory-policy/46272075.pdf.
[1] OECD (2019), Better Regulation Practices across the European Union, OECD Publishing, Paris, https://doi.org/10.1787/9789264311732-en (accessed on 13 March 2019).
[5] OECD (2015), Regulatory Policy in Lithuania: Focusing on the Delivery Side, OECD Reviews of Regulatory Reform, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264239340-en.
[4] OECD (2009), Better Regulation in Europe: An OECD Assessment of Regulatory Capacity in the 15 Original Member States of the EU. Project Glossary, http://www.oecd.org/dataoecd/32/54/34227698.pdf (accessed on 22 November 2018).