More than five years after dealing with harmonised decision-making in the Handbook “How to regulate?”, we now re-visit the topic of this article in a more analytical way. We present six key components for a strategy leading to more harmonised decision-making (A). These key components can be integrated into an operational action plan and workflow.
A. Key components for a strategy
1. Structured information mechanisms
Structured information mechanisms seem to be the baseline of any strategy for more harmonised decision-making. These information mechanisms shall include enforcement authorities, other authorities involved in the application of the respective regulation, conformity assessment bodies, if any, and if so their designating authorities. The designating authorities influence often the conformity assessment bodies in a stronger way than other authorities as they are able to sanction. The mechanisms should be based on a common information infrastructure or means (only one, not several) and on clear rules on when to report about new interpretative questions arising in the application of a certain regulation. These mechanisms can be supported by artificial intelligence. Artificial intelligence is today capable of detecting recurring patterns (e.g. similar decision types) and deviating decisions. Evidently, the use of artificial intelligence should be carefully conceived to not make unjust decisions and for this reason any final decision in a workflow are best left to the human agent.
Once the architecture for the “internal” information mechanisms has been determined, one can, and should, think about permitting 3rd parties (citizens or economic operators) to raise interpretation questions. These questions should be filtered and, if pertinent, processed in a centralised way, meaning with validity for the entire network of authorities and conformity assessment bodies. A particular mechanism can be foreseen for situations where a 3rd party detects non-harmonisation.
2. Qualification of agents
We should not beat about the bush: ignorance is a key driving factor for wrong decisions, and there is no exception for authorities or conformity assessment bodies in this statement. Supposing that not all authorities and conformity assessment bodies decide in the wrong way, ignorance thus also leads to non-harmonised decision-making and ends in the limelight of our reflection.
Minimum qualification criteria for agents of enforcement authorities, of conformity assessment bodies and their designating authorities can both reduce the ignorance and prepare the ground for knowledge loopholes to be quickly closed. (Mandatory) training of agents of enforcement authorities, of conformity assessment bodies and their designating authorities can provide a second layer of knowledge. But training may not be available at the time when new agents are recruited. Hence online training modules or at least visual recordings of training courses should complement the live training courses.
3. Quantitative minimum requirements
A good part of non-harmonised decision-making is due to uneven or insufficient human resources. In technical fields, the lack of laboratory capacities also plays a role. Proportionate, parameter-based minimum resources of enforcement authorities, of conformity assessment bodies and their designating authorities could provide a solution for this insufficiency. This approach relates to the input.
Another approach relates to the output. One can also set up risk-based minimum verification programmes or to set up a binding catalogue of minimum control measures (see examples in Annex). Whereas programmes are rather abstract and control measures are more concrete. To really harmonise decision-making, it seems appropriate to start with the description of different types of control measures, quantify the measures, and aggregate them into programmes. However, this granular bottom-up method might not be viable in all situations.
4. Common interpretations and interpretation rules
In some jurisdictions, common interpretations can be provided in an informal way, but in others, empowerments are needed or interpretations fixed in a formal legal act are regarded as more valuable. Hence empowerments to adopt binding interpretations (also with regard to definitions that merit further precision).
Sometimes, there are too many interpretative questions in a legal text so that it is not possible to clarify them all. In these cases, empowerments to adopt interpretation rules might be a more appropriate tool (see examples in Annex).
Not in all cases common interpretations suffice to ensure harmonised decision-making, e.g. because additional contextual elements cannot be arranged by interpretation. Empowerments to adopt binding implementation rules (see examples in Annex) might then be considered.
In particular where interpretation might vary due to complex mathematical aggregation questions, decision-making can be favoured by offering or even imposing the use of certain software. As the software includes, in the latter casem mandatory interpretations, it might be needed to adopt a legal act to make the software mandatory.
5. Cultural elements and training
Soft factors can also favour harmonised decision-making. Thus it is useful that individual persons working for authorities and conformity assessment bodies do not hesitate to inform and ask peers of the same or of other authorities and conformity assessment bodies. Mistakes should not be regarded as a reason for shame or non-reporting, but as an occasion for common learning. All these elements flourish more easily where there is a feeling of common responsibility (indirectly: of unity / group feeling) and, at the end of the day, a common decision-making “culture”.
A common decision-making “culture” is probably easiest to be established by common training, e.g. on the basis of simulated cases. These trainings can also address proper cultural differences in a more narrow sense, e.g. diverging expectations as to how and in which pace decisions are to be taken. These cultural aspects are even more important where a jurisdiction is spread over different ethnic or religious zones or has integrated formerly independent geographic entities that still maintain a particular tradition.
Evidently, training favours also the spreading of knowledge. A common responsibility can be underlined and favoured by the attribution of shared roles. Roles could be shared according to knowledge and capacities.
6. Involvement of peers
When it comes to the decision-making itself, the following measures can be regarded as helpful, subject to the situation:
- Reporting on past decision-making practice and discussion thereof;
- Mandatory participation to meetings dealing with decision-making practice;
- Reporting on inspection planning (indirectly disclosing intended decision making);
- Peers or supervising authorities observe enforcement activities like audits and inspections of economic operators;
- Joint decision making of different authorities or conformity assessment bodies;
- Assessments or decision-making of different authorities or conformity assessment bodies with assistance of a formal or informal coordinating entity. That entity also ensures dissemination of information and promotes alignment of views amongst the authorities or conformity assessment bodies;
- Mandatory peer consultation in case of new interpretative questions, possibly to be combined with a standstill period for the time of clarification.
B. Action plan and workflow
In the following, we would like to outline which individual steps can be taken to promote harmonised decision-making. We thus leave the abstract, macro-management level of the previous Section A. and dive into a more micro-management perspective.
1. (Favourable, but not necessary for the following) Decision on which and how to deal with the previously mentioned strategic components; therein in particular: common culture / common trainings / sharing of roles in accordance with knowledge and capacities;
2. Clarification of communication mechanisms / principles of communication;
3. Establishing receptors for information on potential interpretative questions (e.g. websites on which economic operators or citizens can ask interpretative questions, screening of specialised discussion fora or social media, participation to conferences, evaluation of letters and emails);
4. Identification of interpretative questions within the bundle of information received by these receptors, possibly supported by artificial intelligence;
5. Communication of the interpretative questions to all conformity assessment bodies or authorities and, in certain cases, to the public;
6. Collection of possible interpretations;
7. Legal evaluation of interpretations:
- side-lining of too problematic interpretations, and
- evaluating legal risks linked to the other interpretations (as one of several decision making factors).
8. Analysis of impacts of the various interpretations in practical and economic terms;
9. Decision on preferred interpretation(s);
10. Communication of preferred interpretation(s) to conformity assessment bodies and authorities;
11. Possibly: testing of preferred interpretation(s) on the ground followed by a review of the decision; and
12. Communication of preferred interpretation(s) to the public.
Evidently, this micro-management action plan and workflow would not always need to be applied from A to Z. However, the list might be used to check what is needed in individual cases. It should help not to forget those steps which are crucial in the concrete case.
13. Well-structured archiving to build up a knowledge basis.
Annex: Extract of the Handbook “How to regulate?
8.2. Ensuring harmonised interpretation
Sometimes, questions of interpretation can even be clarified by simple definitions. To avoid diverging interpretations, regulation can furthermore contain interpretation guidelines or provide for an empowerment to adopt interpretation guidelines later on.
Commission Delegated Regulation EU/231/20131 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision contains, in its Article 56, an interpretation guideline:
„In the absence of specific interpretation given by ESMA or by the Joint Committee of the European Supervisory Authorities, the provisions of this Section shall be interpreted in a consistent manner with the corresponding provisions of Directive 2006/48/EC and with the Guidelines to Article 122a of the Capital Requirements Directive of 31 December 2010 issued by the Committee of European Banking Supervisors and their subsequent amendments.“
In some jurisdictions, it might be useful to establish as an “interpretative” or implementing rule that the law is to be applied in a strict way. See Section 18 of the Graphic Health Warnings Law of the Philippines2:
SEC. 18. Strict Compliance and Inspections. – Absolutely no extensions of time to comply with the provisions of this Act shall be granted to tobacco manufacturers and importers or any other affected party.
However, in some other jurisdictions, such a sentence could raise legal questions as to whether, in other cases, some leniency may be applied.
Sometimes the interpretation guidelines cannot be established in advance because it is, at the time of adoption of the regulation, not yet clear what questions will arise. In this case, it might be useful to provide for an empowerment to adopt interpretative measures. See as an example Regulation EU/228/20133 of 13 March 2013 laying down specific measures for agriculture in the outermost regions of the Union and repealing Council Regulation (EC) No 247/2006. This Regulation contains, in its Article 12, an empowerment for the Commission to adopt regulatory acts necessary to ensure the uniform application by the Member States of a certain article. It is noteworthy that it does not contain any specific condition except that the act must be necessary:
„3. The Commission shall adopt implementing acts regarding the measures necessary to ensure the uniform application by the Member States of this Article, specifically relating to the introduction of the system of certificates and the commitment undertaken by operators at the time of registration. Those implementing acts be adopted in accordance with the examination procedure referred to in Article 34(2).“
The designation, supervision and de-designation processes are the key leverage for influencing the Conformity Assessment Bodies’ work. The design of these processes also determines to what extent Conformity Assessment Bodies are compliant with legal requirements and with instructions given by the authorities. There are many variables for the designation process:
- How many different authorities shall be involved? Subject to the degree of impartiality and to the competence of the main authority, it may make sense to involve more authorities.
Shall there be a right to be designated once certain conditions are met or is the designation based on a discretionary decision which is not subject to full judicial control?
- Shall there be detailed documentation requirements for the application, e.g. in relation to the fulfilment of designation criteria?
- Shall there be an assessment in the premises of the conformity assessment body or in the premises of an economic operator being assessed by the conformity assessment body (so-called “observed audits”)?
- Shall the Conformity Assessment Body be periodically assessed?
- Shall there be unannounced surveillance assessments?
- Shall the designation be based on accreditation or not? The weaker the authorities and the stronger the respective accreditation bodies, the more accreditation makes sense. However, accreditation is usually judged against standards, not against requirements set up by regulation. If there is a mismatch between the requirements in the standards and the requirements in the regulation, accreditation is not extremely useful.
Besides the designation mechanism, there is a wide variety of other measures that can be used to strengthen and harmonise the work of Conformity Assessment Bodies (legal or paralegal control mechanisms, peer review, codes of conduct, informal co-ordination of decision making, etc.). The best example so far found in regulation: Commission Implementing Regulation (EU) No 392/2013 of 29 April 2013 amending Regulation (EC) No 889/2008 as regards the control system for organic production. This Regulation contains a detailed program for enforcement. The program foresees assistance by entrusted private bodies, supervision of entrusted private bodies, exchange of information between the entrusted bodies and authorities, and risk management. The program determines a minimum percentage of verifications and of unannounced verifications.
2 Republic Act No. 10643, published on July 15, 2014.