Chapter 3. Ex ante assessment of regulation and stakeholder engagement in rulemaking in Argentina

This chapter describes the Government of Argentina´s practices to evaluate draft regulations and discusses the actions that it undertakes to engage with stakeholders in the process of rulemaking. The section starts with a brief description of the rulemaking process and the general legal framework.

    

The hierarchy of laws and regulation in Argentina

The legal system in Argentina is built on Roman tradition and based on Law 24.430 of the Constitution of Argentina, which dates back to 1853 (the last amendment was in 1994).

Figure ‎3.1. The hierarchy of laws and regulations in Argentina
picture

Source: Presidencia de la Nación (n.d.[1]), Constitución Nacional Argentina, https://www.casarosada.gob.ar/images/stories/constitucion-nacional-argentina.pdf (accessed on 25 July 2018).

According to Article 31, the constitution, foreign treaties and laws issued by the National Congress sit at the top of the legal hierarchy. According to Article 22, however, international treaties and the constitution are higher up the hierarchy than the laws. The next hierarchy level is held by presidential decrees. Furthermore, the heads of ministries and secretariats also have powers within their competencies to issue different regulatory instruments, which include resolutions. Subsequently, Argentina has legal instruments issued by undersecretaries and national directors. For more information on Argentina’s regulatory hierarchy, please see Figure ‎3.1.

Rulemaking process in Argentina

The rulemaking process in Argentina is based on the activity of the legislative and executive branches, which have powers to issue laws, regulations and decrees.

Legislative power

The National Congress holds the legislative power, including issuing regulation. The constitution indicates the lawmaking process and the roles of both chambers – deputies (Articles 39, 40 and 53) and senators (Articles 59, 61 and 75). Bills have three stages:

  • Draft presentation, made by both chambers.

  • Discussion in commissions: the draft regulation goes to one or more advisory commissions, which will issue an “opinion”. This step can be omitted depending on urgency or relevance.

  • Parliamentary debate: held in both chambers.

The chamber presenting the bill is denominated “home chamber”; the other is the “review chamber”, whose task is to approve, reject or return the draft in question for corrections (Figure 3.2).

Figure ‎3.2. Process to issue laws in the Argentinian Congress
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Source: Congreso de la Nación Argentina (n.d.[2]), Las Leyes, https://www.congreso.gob.ar/leyes.php (accessed on 10 July 2018).

After the chambers of the senate and deputies issue their opinion regarding the proposed legislation, the project goes to the executive branch and can pursue two routes:

  • Approve and issue the law: this can be carried out through a decree or promulgation in fact. Thus, if the president does not make any comments within ten business days of receiving the regulation, the project is automatically promulgated. In both cases, the law is issued in the official gazette and comes into force according to the legal terms set forth in the law enacted.

  • Total or partial veto: in case of a partial veto, the section that has not been vetoed can be partially promulgated if it does not undermine the spirit of the draft analysed by congress. If there is a full veto, the draft returns to the legislative branch, which may confirm the veto or push for approval. For the approval, both chambers must have two-thirds of the votes to impose their initial criteria and enact the law, despite not having the approval of the president. If the number of votes is not reached, the president’s veto remains and the draft law cannot be discussed in the sessions of the same year.

Judicial power

The regulatory powers of the judicial branch are limited to cases presented for its consideration on topics under its jurisdiction. Finally, the Supreme Court has sufficient powers to invalidate acts issued by government agencies.

Executive power

According to Article 99 of the Argentinian Constitution, the executive has the power to (Art. 99):

  • Issue instructions and regulations that are necessary for the enforcement of the laws.

  • Participate in drafting, issuing and publishing the laws set out in the constitution.

The ministers, on the other hand, may issue general administrative regulation according to their attributions.

Elements of ex ante assessment of regulation

Legal framework of ex-ante assessment

The government of Argentina has not adopted a standardised system for ex ante assessment of draft regulations. The regulatory framework, however, has instruments and mechanisms promoting regulatory quality. The instruments and practices of regulatory quality will be described below.

Administrative Procedures Law

Law No. 19.549 of Administrative Procedures indicates the required elements that any administrative act must contain in order to be a legal document. The law refers to the protocols regarding the motivations of the act, the issuing processes and their objectives. Besides, it provides situations when the acts can be confirmed, nullified, revoked, voided and reformed.

Good practices in simplification

The main objective of Decree 891/2017 of Good Practices in Simplification is to introduce a quality assessment in the process to issue regulatory instruments by the national public sector. This means that the decree is mandatory for all public sector agencies. The decree does not, however, nominate an oversight body responsible for the implantation strategy for regulatory quality practices and tools. Thus, each agency in the regulation issuing process is responsible for adopting such practices.

The decree describes the main practices and tools that regulations must follow in order to be effective. It establishes, for instance, provisions for regulatory simplification, ex ante assessment of draft proposals, cost-benefit analysis of potential regulations, etc. The decree, however, does not provide indications, guidelines or references on how to implement practices and tools.

On the other hand, the decree establishes principles that must follow regulation instruments. For example, it indicates that regulations must be simple, clear and transparent, taking into account any administrative burdens.

Law for the defence of competition

Law No. 27.442 for the Defence of Competition sets the conditions for markets to operate efficiently. Furthermore, it details practices that may hamper, limit, restrict or distort the competition playing field, as well as impede access to free markets.

Law No. 27.442 creates the National Competition Authority, a decentralised and self-sufficient agency with wide-ranging national competency. The law also provides directions to create the National Tribunal for the Defence of Competition under the umbrella of the competition authority.

A relevant role assigned by the law to the Tribunal for the Defence of Competition, in the context of the assessment of regulations is to issue a non-binding opinion on the impact that laws, regulations and other instruments may have on competition in product markets (Law of Defence of Competition).

Procedure for ex ante assessment of draft regulation by the Ministry of Production and Labour

Resolution 229/2018 of the (former) Ministry of Production regarding the Procedure for Ex-ante Assessment of Draft Regulation establishes that all the units of the ministry, as well as its decentralised and deconcentrated bodies, must request the opinion of the Secretariat of Productive Simplification regarding the potential administrative burdens originated by draft regulations. In response, the secretariat will carry out an evaluation project, taking into account the objectives of the regulation, the potentially affected population, the alternatives to regulatory solutions and where appropriate a cost-benefit analysis.

Relevant practices on ex ante assessment adopted in Argentina

A number of government agencies have taken steps to improve the quality of regulation. This section will describe the relevant practices adopted in the executive branch to improve the quality of draft regulations.

Participation in international regulatory co-operation projects

The Federal Institute of Telecommunications from Mexico and the National Communications Agency signed a memorandum of understanding or MoU (ENACOM e IFT, 2017[3]). One of the objectives of this MoU is to promote international regulatory co-operation between both agencies. It is worth mentioning the collaboration efforts regarding good regulatory practices, particularly in the use and implementation of tools related to the regulatory impact assessment (RIA) system. Furthermore, as one of the avenues for collaboration, the MoU includes the elaboration of an assessment of the impact of the regulatory framework on the telecommunications industry.

Implementation of guidelines for economic evaluation

Under the Mercosur treaty, Peru published Resolution No. 25/15 Guide for Economic Evaluation Studies of Sanitary Technologies (MERCOSUR, 2015[4]). The guidelines provide a general description of the evaluation methodologies available to assess the economic impact of sanitary technologies. It covers a broad range of concepts including quantitative evaluations such as cost-benefit analysis or quality-adjusted life years and qualitative definitions as clinical trials, among others. Also, the document establishes the elements that must be included in the presentation of an economic evaluation study. The former should be written in a clear and detailed way; with a complete explanation of the methodology employed. It must also contain a short executive summary that can be understood by non-technical readers.

Adoption of international regulation

The Sub-Direction of Standards of the National Securities Commission is in charge of the preparation, revision and correction of CNV regulatory proposals. Moreover, the sub-direction is responsible for adapting the existing regulatory framework to international standards.

Ex ante assessment of draft regulation

The Ministry of Production and Labour, through the Secretariat of Productive Simplification, evaluates the regulatory projects of all instances of the ministry that entail burdens or generate costs for the regulated subjects. The secretariat analyses the draft regulations and issues a report, either a Regulatory Policy Analysis or a Good Practices Analysis. Both documents assess the general conditions of the regulatory proposal; the problems that give rise to the project; the general objectives that are pursued with the regulation and identify the regulated subjects. Furthermore, the analyses include a cost-benefit analysis and propose management indicators for the regulatory proposal. Finally, the secretariat evaluates if the draft proposal complies with good regulatory practices in matters of simplification (Decree 891/2017).

The assessment of the regulatory proposal under the scope of the principles proposed in Decree 891/2017 of Good Practices in Simplification is done on a case-by-case basis. Once the secretariat receives a draft regulation from any administrative area of the Ministry of Production and Labour, it will have ten business days to issue the corresponding report, which is mandatory for the requesting entity (Resolution 229/2018 of the Ministry of Production).

Technical reports

In order to be approved, every regulatory project must have a technical report attached. This is a common practice across the national government, but it is not a compulsory practice and the format is not standardised. The drafting of the report and its contents are not based on guidelines; thus, they depend on the entity in charge of the draft regulation.

The technical report, regardless of the specific legal analysis requested on the regulatory proposals, contains a legal evaluation to justify its technical feasibility. It may also contain specialised information on the regulated topic, a cost-benefit analysis and other types of assessments such as environmental, health, trade, poverty, economic, etc.

Stakeholder engagement in the process of rulemaking

Legal framework

In Argentina, the participation of civil society in the drafting of regulations was ruled and mandated in 2001, when Law No. 25.432 of Binding and Non-Binding Popular Consultation was issued by National Congress. It is only in the last few years, however, that this practice effectively began to be adopted by ministries and national government agencies. The main legal framework and practices for stakeholder engagement in rulemaking are presented below.

Law of Binding and Non-Binding Popular Consultation

Law No. 25.432 of Binding and Non-Binding Popular Consultation published in June 2001 establishes the conditions to carry out consultations for bills and other issues of general interest. For bills, the result of public consultation will be binding but not for general interest consultations. Therefore, for binding consultations, the bill will automatically become law, while non-binding bills will be incorporated into the work plan of the Chamber of Deputies. In any event, laws will be published in the Official Gazette and in high-circulation newspapers.

The consultation process described in the law is a relevant space for public participation, however; it does not allow for drafting counterproposals or expressing opinions, as the questions are in binary mode (yes/no).

Right to Access to Public Information 

Law No. 27.275 of Right to Access Public Information promotes transparency and stakeholder engagement by defining the legal framework for the disclosure of public information. In addition, the creation of the Agency for the Access to Public Information as the body in charge of overseeing the compliance of this law is an important step to increase trust in the government.

The law ensures its regulated subjects are “actively transparent”, meaning that entities have to facilitate the search and access to public information. Data must be available in digital formats that are easy to use and free of charge.

Decree 1.172/2003 of Access to Public Information emerges from the need to promote the relationship between the government and civil society, as well as the need for transparency and efficiency criteria. The decree contains five bylaws ruling public participation in the drafting of regulations and access to public information.

The Bylaw of Public Hearings specifies that any interested party can express his/her opinion on topics to be consulted by the executive power. A public hearing can be requested by citizens or legal persons, either public or private, from the authority with competency in the subject.

The Bylaw of Transparency in the Management of Interests in the National Executive Branch has the objective to promote transparency of public hearings through the establishment of a public registry with basic information.

The Bylaw for the Participative Drafting of Standards guides the process by which civil society is involved in the drafting of administrative directives and bills that will not be presented to congress by the executive power. The process described in this bylaw is similar to the public hearings with small differences, such as the prior registration of participants and specific formats to submit opinions.

The Bylaw of Access to Public Information for the Executive Power promotes effective public participation granting the rights of citizens to request and receive complete, adequate and truthful information from public entities of the executive power in due time.

The Bylaw for Open Meetings of the Regulators of Public Services regulates the meetings convened by public-service regulators to allow citizens to attend and observe the decision-making process.

National Modernisation Plan

Decree 434/2016 approves the National Modernisation Plan with the objective to achieve a citizen-oriented public administration. In order to fulfil such an objective, the plan was divided into five areas. The fourth area of Government and Public Innovation focuses on four activities:

  • Encourage the active participation of citizens in decision-making processes, as well as in the design, implementation, monitoring and evaluation of public policies.

  • Promote the adoption of new technologies promoting citizen participation in government affairs.

  • Develop mechanisms, channels and platforms aiming to facilitate participative drafting of standards.

  • Simplify the procedures and holding public hearings.

Relevant practices in stakeholder engagement

Extending stakeholder engagement through the Public Consultation Platform   

On May 2016, the Ministry of Modernisation introduced the Public Consultation Platform – https://consultapublica.argentina.gob.ar/. This platform is expected to gather all public consultations carried out by institutions of the executive branch of the government (Decree 87/2017). The website has been used by the Ministry of Interior, the Anticorruption Office and ENACOM.

Public agencies must fill in a template with a list of criteria before they carry out a consultation. The former guarantees the correct management of information that is gathered on the platform. Moreover, citizens have to register to access the website and issue their comments or proposals on the initiatives.   

Increasing availability of public information through digital repositories 

On January 2016, the former Ministry of Modernisation introduced the Open Data Plan which compels the institutions of the executive branch of the government to publish their data assets (Decree 117/2016). Each entity had 180 days to submit a plan with a defined chronogram of gradual publication.

The Open Data Plan website – https://datosgobar.github.io/pad/ – is an intuitive and user-friendly platform, which includes detailed data points from the ministries of the national executive branch. However, information is not available for the year 2018 (Decree 87/2017).

Good Practices in Simplification

Decree No. 891/2017 for Good Practices in Simplification establishes the guidelines that must be observed by government entities to increase citizen participation in the issuance of their regulation, as well as promoting the exchange of ideas, consultation and collaboration. The decree promotes the use of new information technologies to facilitate the understanding of recent regulations and to acknowledge the impacts that they will generate in citizens and in the economy.

Citizen Dialog

The Secretariat of Public Communication promotes the linkage between the national government and citizens, especially through the use of technological tools as instruments. Some of the activities that the secretariat carries out are aimed at promoting communication of the activities of the national government and disseminating them through the official website and different social networks, thereby strengthening transparency in the government performance. On the other hand, through citizen engagement, methodologies are also implemented to establish a direct dialogue with citizens in order to provide a communication solution to each social problem in particular.

Case study: Stakeholder engagement in rulemaking by the National Securities Commission

The National Securities Commission (NSC) is an independent body that was created in 1968 with Law 17.811 of Public Offer. Nowadays its operation is determined in Law 26.831 of the Equity Market of 2012. Although its relations with the executive power are maintained through the Ministry of Finance, the NSC has no obligation to consult the ministry for the preparation of its own regulations. The regulation of the NSC is issued through general resolutions, but it can participate in the issuance of ministerial resolutions, the competency of the Ministry of Finance.

Even though the commission is an independent body and has autonomy to issue the regulation, in 2017 – in line with best international practices – it started to engage with stakeholders in the process. However, in November 2017, it published on its website a press release to perform a public consultation of three relevant projects for the equity market. The NSC indicated the channel via which to receive opinions or proposals from stakeholders, the participation deadline and the regulatory projects subject to this.

Derived from the good results of this exercise, in particular in a regulation related to the formulation of a new definition of “Independent Director”, the NSC decided to adjust its internal normative framework for the adoption of tools that promote the participation of stakeholders in the normative production process. The process is regulated by Law 19.549 of Administrative Procedures, its decree and Decree 336/2017.

Therefore, by a Board of Directors decision, the application of the Reglamento for Participatory Drafting of Standards of Decree 1172/2003 of Access to Public Information for all regulatory projects of the NSC was implemented at the end of 2017.

This Reglamento empowers natural or legal persons to participate in issuing the regulation of the commission. Although the comments received are not binding, it promotes dialogue between NSC and civil society, and citizen participation on the drafting of regulation and transparency. In addition, with this, standards align with international principles in the drafting procedure for the equity market field.

The procedure was performed through the commission’s website (https://aif.cnv.gov.ar/consultaPublica/) and included the following steps:

  1. 1. Issuance of an administrative act, in which is stated:

    • The authority in charge of the process.

    • Text and legal basis of the normative proposal.

    • The channel through which opinions and/or proposals can be presented.

    • Format to send opinions and/or proposals.

    • Deadline to present opinions and/or proposals.

      This administrative act is published in the Official Gazette and on the commission’s website (www.cnv.gob.ar).

  2. 2. Evaluation of the opinions and/or proposals received. In the legal basis of the final decision of the regulation should be recorded the opinions and/or proposals submitted and the changes that were made to the text as a result of this process.

  3. 3. Publication of the regulations in the Official Gazette and on the NSC website.

In addition to this tool, the commission also carries out other activities to involve stakeholders in the issuance of its regulations, such as fora, specific consultations and working groups, among others.

References

[2] Congreso de la Nación Argentina (n.d.), Las Leyes (The Laws), https://www.congreso.gob.ar/leyes.php (accessed on 10 July 2018).

[3] ENACOM e IFT (2017), Memorándum de Entendimiento entre el Instituto Federal de Telecomunicaciones de los Estados Unidos Mexicanos y el Ente de Comunicaciones de la República de Argentina, (Memorandum of Understanding between the Federal Institute of Telecommunications of the United Mexican States and the Communications Agency of the Republic of Argentina), http://servicios.infoleg.gob.ar/infolegInternet/anexos/275000-279999/279085/res891.pdf (accessed on 8 February 2019).

[4] MERCOSUR (2015), Guía para Estudios de Evaluación Económica de Tecnologías Sanitarias (Guide for Studies of Economic Evaluation of Health Technologies), https://normas.mercosur.int/simfiles/normativas/RES_025-2015_ES_Guia%20Eval%20Economica%20Res%203_13.pdf (accessed on 8 February 2019).

[5] OECD (2018), OECD Regulatory Policy Outlook 2018, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264303072-en.

[6] OECD (2017), OECD Economic Surveys: Argentina 2017: Multi-dimensional Economic Survey, OECD Publishing, Paris, https://dx.doi.org/10.1787/eco_surveys-arg-2017-en.

[7] OECD (2015), OECD Regulatory Policy Outlook 2015, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264238770-en.

[13] OECD (2015), Regulatory Policy in Perspective: A Reader’s Companion to the OECD Regulatory Policy Outlook 2015, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264241800-en.

[11] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, OECD Publishing, Paris, https://doi.org/10.1787/9789264209022-en.

[8] OECD (2011), Regulatory Policy and Governance: Supporting Economic Growth and Serving the Public Interest, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264116573-en.

[12] OECD (2009), Regulatory Impact Analysis: A Tool for Policy Coherence, OECD Reviews of Regulatory Reform, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264067110-en.

[9] OECD (2008), Building an Institutional Framework for Regulatory Impact Analysis: Guidance for Policy Makers, OECD, Paris, http://www.oecd.org/gov/regulatory-policy/buildinganinstitutionalframeworkforregulatoryimpactanalysisriaguidanceforpolicymakers.htm (accessed on 9 February 2019).

[10] OECD (2008), Introductory Handbook for Undertaking Regulatory Impact Analysis (RIA), OECD, Paris, http://www.oecd.org/gov/regulatory-policy/ria.htm (accessed on 9 February 2019).

[1] Presidencia de la Nación (n.d.), Constitución Nacional Argentina (Argentine National Constitution), https://www.casarosada.gob.ar/images/stories/constitucion-nacional-argentina.pdf (accessed on 25 July 2018).

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