Analysing regulation can be done in a variety of ways. One could start at the macro level as was presented in the howtoregulate article “Regulatory architecture”. Alternatively, one could also begin analysing regulating at the micro level as this article will present. Although it would be more logical to analyse regulation step-by-step from the macro to the micro level, more can learned by presenting first the two poles before presenting regulatory techniques at the intermediate levels. The intermediate levels are better understood when one is familiar with the macro and the micro view on regulation.
The small scale building blocks of any regulation are the requirements and other provisions. Regulation consists mostly of requirements. However, we try our utmost to keep the following presentation open to other provisions.
In order to facilitate the communication, we start with a standard sentence which contains a condition on the left side and a consequence on the right:
“[When a citizen reaches the age of 16 (the condition)], s/he [must apply for an identity card.(the consequence)]”
In this howtoregulate article we will first analyse the condition side of requirements or other provisions, followed by an analysis of the consequence side. By analysing separately the condition and the consequence, we obtain an even deeper understanding of the molecules of regulation.
A. Conditions and characteristics used for establishing requirements or other provisions
Conditions cannot only be used to build requirements, it can also trigger other legal consequences. For example a certain privilege (such as access to a grant), a status change (such as marriage), a legal presumption (such as having to fulfill an obligation). Conditions are essential building blocks for any kind of legal provision, not just requirements.
Conditions and characteristics have the same function because they can be interchanged. For example the condition “If a house is higher than 5 metres, the house …” can be transformed into a fully equivalent characteristic “houses higher than 5 metres …”. The conditions and characteristics can inter alia refer to organisations, natural persons, geography / physical presence, objects or processes or a combination thereof
A.1 Organisational conditions and characteristics
“To be eligible as an external expert, applicants must be independent from any authority, company or other organisation.”
Though the condition is here on the left side, the sentence follows our classic pattern presented above: a consequence is based on a certain condition. This is even the case where the sentence is further shortened:
“Applicants must be independent from any authority, company or other organisation.”
This sentence should not be understood as a “requirement” in our terminology because nobody is obliged to become an external expert; we reserve the term “requirement” for provisions establishing an obligation or making such an obligation more concrete.
Within the group of organisational conditions, there is a particular subgroup: system conditions such as “Applicants must set up a quality management system.”. The verb “must set up” is a condition for approval, thus as such not a requirement. System conditions are often combined with a system obligation, see the following example: “Applicants must set up and maintain a quality management system.”. The verb “must maintain” establishes a continuous obligation which has nothing to do with the approval, hence it is a requirement. N.B.: The first verb and thus the entire sentence would become a requirement when concretising the obligation of manufacturers to undergo an application procedure1.
A.2 Personal conditions and characteristics
“4.1 In order to qualify and acquire a license to own and possess a firearm or firearms and ammunition, the applicant must be: a) a Filipino citizen; b) at least twenty-one (21) years old at the time of the filing of his/her written application …”2,
With regard to persons, various characteristics can be applied:
- residence (legal presence) or place of business,
- physical presence,
- education level,
- professional training,
- professional experience,
- having exerted another (non-professional) activity or function a certain number of times or for a certain time,
- economic and other functions,
- disposing of a recommendation (letter) by a trustworthy person or institution.
A.3 Geographic conditions and characteristics
“A high risk facility may not be authorised if located at a distance of 20 km or more from the next fire brigade.”
Geographic conditions and characteristics can refer to a stable state (a presence at a certain place) or a movement (somebody or something moves / is moved from one place to the other).
A.4 Physical conditions and characteristics
“Goods marked with the XYZ mark are deemed to fulfil the requirements set out in this regulation”.
Anything that describes the appearance or the interior including the performance with regard to certain criteria can become a physical condition or characteristic. Examples are: resistance to fire, maximum speed, composition of materials, inner structure, coating, components.
A.5 Legal conditions and characteristics
“Goods approved and marked by the XYZ authority are deemed to fulfil the requirements set out in this regulation”.
Legal conditions and characteristics describe an object or a person with regard to the legal definitions of the respective jurisdiction. These legal conditions and characteristics are as such not visible, but can be expressed by symbols: e.g. a ring can express a marriage.
One particular object condition or characteristic is price. On the condition side, regulation can refer a price agreed by contractual partners or to the price for which one natural or legal person offers a good or service. For example: “Where the rent is more than 20% higher than the average rent as fixed by XYZ index, the owner shall …”.
A.6 Process conditions and characteristics
“Medicines manufactured in accordance with the Good Manufacturing Practices laid down in …”
Frequently, technical regulation refers to the application of quality management standards such as ISO 9001. These quality management standards describe one comprehensive process which is composed of various individual processes. The condition “use of a certain standard” can have a positive legal consequence such as dispense from the obligation to undergo a certain conformity assessment procedure. But typically, the use of a certain standard is on the consequence side so as to establish an obligation. For more information about how to reference standards in regulation see our howtoregulate article “Referring to standards: never think there is no further alternative”.
A.7 Time-related conditions and characteristics
“Applications can be submitted from May 1 to June 30 of each year.”
In this example, we see simple fixed start dates and end dates. A “deadline” is the most common variant of an end date. But we also find conditions or characteristics which are not fixed, either because they are dynamic such as “submitted within three months after application” or because they are imprecise, subject to interpretation such as “submitted within due time”.
A.8 Behavioural conditions and characteristics based on circumstances
“Where a dog is biting a human or is about to bite a human, it may be killed.”
Behavioural conditions and characteristics are limited to beings that can move which includes some plants.
A.9 Logical links between conditions and characteristics
Conditions and characteristics may be interlinked by “and” or by two types of “or”: “A or B → C” usually means “If there is A or B or both A and B, there will be C”; “A or B” may exceptionally also mean “A or B but not A and B”. Conditions and characteristics may be formulated and linked as positive conditions and characteristics (A and B → C) or as partly positive and partly negative conditions and characteristics (A and not B → C) or just as negative conditions and characteristics (not A and not B → C).
An example of how different personal and geographic conditions/characteristics can be combined can be found in the following extract of the Canadian Customs Act – Accounting for Imported Goods and Payment of Duties Regulations:
Paragraphs 10.5(2) and (3):
“(a) if the importer is an individual, the importer ordinarily resides in Canada or the United States or, if the importer is a partnership, the importer has at least one partner who is an individual who ordinarily resides in Canada or the United States;
(b) if the importer is a corporation, the importer has its head office in Canada or the United States or operates a branch office in Canada or the United States;
10.5(3) (b) if the carrier is a corporation, the carrier has its head office in Canada or the United States or operates a branch office in Canada or the United States;”
B. The distinction between conditions and consequences
We have seen in subsection A.1 how thin the line between a condition and an obligation can be. Subject to the context, the same sentence can contain a condition (e.g. for achieving a positive status) or an obligation. Here another, voluntarily unclear formulated example to illustrate the distinction: “All majority-aged citizens must have at hand an identity card. Also minors from 16 years must obtain an identity card.” The second sentence can mean “Where a citizen has reached the age of 16, s/he may apply for an identity card and will receive it.” But it can also be understood as extending the obligation to apply for an identity card and to have it at hand to minors from the age of 16 upwards. Under the second assumption/interpretation, the question would arise how this obligation is to be enforced, a question that would never arise under the first assumption/interpretation. Furthermore, sanctions are at stake only under the second assumption/interpretation. Hence it is important to distinguish the two cases:
- Is a sentence or part thereof establishing a condition for a certain consequence to be drawn?
- Or is it creating an obligation or describing another consequence?
If a certain sentence is not clear in this respect, it is worthwhile reformulating it until it is clear for everybody.
B.1 Typology of consequences I: the descriptors
A first typology of various consequences can be developed in parallel to the conditions and characteristics. This typology looks at the descriptors used for determining a consequence.
B.2 Parallels between conditions and characteristics on one side and consequences on the other
The example of Subsection A.1 and the second example provided in Section B also illustrate another important point: all the subcategories of Section A are mirrored on the side of the obligations or other consequences. Obligations and other consequences can relate to:
- organisation: “Companies with a capital of … or more must have a controlling body.”;
- personal characteristics: “Manufacturers of medicines must employ at least one pharmacist with specialisation in good manufacturing characteristics.”;
- physical characteristics: “Products must be labelled with the XYZ mark.”;
- legal characteristics: “After declaring the loss of the passport at the next police station, the citizen must obtain a confirmation of his identity from the local administration of his place of residence.”;
- processes: “Service providers shall undergo annual auditing and appropriately reflect the findings of the audit in their day-to-day management.”;
- time: “The citizen shall apply for a new passport within three months.”;
- behaviour: “Employers shall refrain from directly or indirectly sanctioning employees who have used their right to … .”.
The reference to time in consequences can also take forms similar to the ones seen on the condition-side:
- A consequence may be timed: limit value X until … and limit value Y thereafter.
- Consequences and, therein, in particular obligations may be dynamic and evolve over time without any predetermination: examples of such conditions are clauses like “best available techniques”, “state-of-the-art”, and dynamic reference to documents under control of other institutions such as Codices elaborated by the United Nations.
- Time references within consequences can be voluntarily imprecise to provide a margin of interpretation to the administration.
B.3 Particular aspects of this typology
Consequences and in particular obligations can be formulated positively or negatively. The positive or negative formulation can (badly) interact with the logic links between different consequences. Generally, negative formulations should be avoided to the extent possible.
B.4 Logic links between consequences
Similar to conditions and characteristics, consequences may be interlinked by “and” or by two types of “or”. “A → B or C” can mean “If there is A, there will be B or C, but not B and C”. Example 1: “Applicants fulfilling the minimum professional training requirements may be nominated as X or as Z, subject to their professional experience.” In example 1, it is clear that the successful applicant cannot be nominated both as X and Z.
However, sometimes “or” is not excluding B and C together and thus means “If there is A, there will be B or C or both B and C”. Example: “The merit of veterans can be rewarded by a medal or by a 10% increase of their pension.” It would not make sense not to also give a medal to a veteran who has even merited a 10% pension increase. To avoid legal uncertainty, some international standardisers use in this situation the expression “and/or” which unequivocal.
B.5 Process versus procedural obligations
Process obligations (obligations based on a process characteristic) are not to be confused with procedural obligations that we will present in more detail in the next sub-section.
Section 10.B of the Implementing Rules and Regulations of the Anti-Bullying Act of 2013 of the Philippinescontains an interesting case of a procedural obligation that contains built-in process obligations and thereby illustrates the difference between procedural and process obligations:
Consistent with Sections 3 and 4 of the Act, all public and private kindergarten, elementary and secondary schools shall adopt procedures that include:
a. Immediate Responses
g. Due Process
In all cases where a penalty is imposed on the bully or offending student, the following minimum requirements of due process shall be complied with:
a) The student and the parents or guardians shall be informed of the complaint in writing;
b) The student shall be given the opportunity to answer the complaint in writing, with the assistance of the parents or guardian;
c) The decision of the school head shall be in writing, stating the facts and the reasons for the decision; and
d) The decision of the school head may be appealed to the Division Office, as provided in existing rules of the Department.”
B.6 Typology of consequences II: aspects of procedure and aspects of substance
In the following, we present a second typology of consequences. Therein, we distinguish mainly between consequences which are procedural and consequences which deal with aspects of substance. Both types of consequences are in practice mostly falling under the term of “obligation”, but for each obligation, we also find at least one other example which contains a consequence other than an obligation. Therefore, we illustrate the consequences mostly with obligations, whilst maintaining the abstract term “consequences” to remind us that consequences other than obligations might also be meant.
B.7 Procedural consequences
There are many types of procedural consequences. We only list a few of the commonly used ones:
a) Registration: One typical obligation both for citizens and economic operators is to register. Registration is often used by regulators as a first, low-level step towards control. Registration ensures that the authorities can contact the citizen or the economic operator and that they obtain some essential information which might indicate a need to act or not. Registering as a consequence other than obligation, occurs where regulation foresees that the authority needs to register a person or a fact.
b) Consultation: Consultation procedures go a step beyond registration in so far as they give the occasion to react, thus the possibility of a feedback. The feedback must at least be taken note of. To make a consultation procedure more meaningful and effective, regulators can stipulate that deviations from the opinion given must be justified. Thereby a consultation procedure becomes a semi-coercive tool, in-between simple registration and the following more severe procedural consequences.
c) Agreement: Below the level of a formal authorisation procedure, the simple agreement of an authority can be made mandatory by regulation. Likewise, some administrative decisions might require the agreement of another authority, often of the supervising authority. But it is also possible that regulation foresees the mandatory agreement of another natural or legal person.
d) Authorisation: A formal authorisation procedure is the most severe procedural obligation that can be imposed on citizens and economic operators. The procedure can be beefed-up with additional agreements to be obtained within the authorisation procedure, e.g. the agreement of a specialised committee can be required. In particular where various aspects with different competent authorities need to be verified, some harmonisation agreements are a suitable solution to avoid several parallel authorisation procedures that would reduce the overall burden on citizens or economic operators.
e) Certification by entrusted bodies: This can be seen as a variant of the authorisation procedure. However, there are important differences where we deal with this legal tool separately. Where economic operators or, in some cases, citizens, have a choice between different entrusted bodies, the certification is often less severe. There are two reasons for this: First, unless it is explicitly excluded, there is a second or third chance for unsuccessful applicants. Second, the competition between the certification bodies easily leads to a spiral downwards in stringency. Complex mechanisms are needed to avoid this spiral downwards and to establish, in more general terms, harmonised decision making, see our article How to harmonise decision-making of authorities and conformity assessment bodies. We heard from the CEO of India’s National Accreditation Board for Certification Bodies that India has, for some products, taken another path: the responsible certification body is centrally attributed so that economic operators do not have a choice but to undergo the procedure with the body attributed to them. Hence the certification body loses its commercial interest in pleasing the economic operator. Instead it is interested in pleasing the entity which decides on the attribution. This is a major improvement.
f) Information: On a completely different level and independently from all the above, there are many types of information obligations in particular for economic operators. It starts from the simple information obligation to inform authorities about certain facts, e.g. incidents. Information obligations exist vis-à-vis the authorities or third parties. For the latter some frequent sub-types are labelling, instruction for use, the obligation to establish a website containing certain information. This brings us to a special information sub-type: the publication.
Publication can occur in official or in unofficial media. It can be the subject of an obligation or just be a consequence to be provided by the authorities. In some cases, it is up to an authority to provide a certain information. Hence information consequences are not limited either to obligations. Finally, we note that information obligations or other information consequences can be part of an authority procedure or have an authority procedural role, but they can also relate to or constitute a simple process which is not in relation to an authority procedure.
g) Training: One step ahead is the obligation to provide or to undergo (quality controlled) training. Obligations of this type should be clearly distinguished from the condition to have undergone training, e.g. in order to obtain a licence, which is not the topic here. Here we refer only to independent training obligations. These are pure processes, not related to any procedures.
h) Quality management: Equally on a purely process-side we find the obligation of economic operators to apply a quality management system or a simplified form of quality management. As quality management might also be necessary for authorities, quality management can also be the topic of a consequence other than an obligation, e.g. in the field of airspace surveillance / flight control.
I) Verifications: When prolonging the line for “quality management system” to “simplified form of quality management”, we come to specific verifications which might both be relevant within administrations and for economic operators or even citizens. Again, obligations and other consequences can relate to verifications. When it comes to the question “What is to be verified?”, we touch the thin line between a process of consequences and consequences of substance. A sentence can contain a process consequence and a consequence of substance at the same time. It does so where the consequence of substance is presented / introduced together with the verification. Example: “The authority shall verify at least every three months whether its IT safety is state of the art.” If, however, a consequence of substance is only referred to whilst being presented / introduced elsewhere, the sentence would qualify as pure process consequence. Example: “The fulfilment of Articles 7, 8 and 9 is to be verified on a periodic basis, at least three-monthly.”
C. Consequences of substance
There are other consequences than procedural ones. We call them here consequences of substance. They can be further subdivided into quantitative and qualitative consequences of substance.
C.1 Quantitative consequences
Mostly, the consequence will be an obligation for a natural or legal person. However, there can also be consequences other than obligations. Whilst we will not show examples for consequences other than obligations for all the following sub-types, we illustrate it with the first.
a) Minimum values: An obligation containing a minimum value is, e.g., the obligation not to drive below a certain speed on the motorway. A consequence other than an obligation could be: the pension authority shall automatically increase the pension to the level of minimum social aid where the pension as such would be lower.
b) Maximum values: A speed limit or a maximum radiation limit can be cited as examples for consequences containing maximum values.
c) Bandwidths: if there is both a minimum and a maximum value, e.g. for speed, the consequence contains a bandwidth.
d) Average values spread over time: They are often used in environmental law, in addition to maximum values. E.g., where a certain substance is immediately toxic only with a high value, whilst medium-term toxicity starts a lower level with exposure during a certain time, it might be useful to fix both a maximum value for short-term exposure and another, lower one, for average medium-term exposure. Evidently, average values can also refer to minima. You may wish to read the howtoregulate article “The art of setting multi-dimensional limit values in regulation” for further information about values over time and the use of two or more parameters, that may involve trade-offs, in regulation.
e) Balance values or ratios: Balance values or ratios are defined by two or more values for which, jointly, a minimum or maximum is fixed. The values can be linked by any kind of mathematical formula or symbol (+, -, x, :, …).
C.2 Qualitative consequences
Qualitative consequences have no quantitative descriptor. E.g.: “Where s/he prescribes medicine X, the physician shall inform on the most likely side-effects and verify that the patient has fully understood the information.”
C.3 Combined qualitative / quantitative consequences
Evidently qualitative and quantitative consequences can be combined. E.g.: “The physician shall not prescribe more than a dose of 20 mg per day and shall inform on the most likely side-effects and verify that the patient has fully understood the information
C.4 Semi-quantitative consequences
We distinguish from combined qualitative/quantitative consequences the semi-quantitative consequences. Semi-quantitative consequences describe or target a quantitative consequence, but they do so by words that do not define a precise quantity. E.g.: “The physician shall limit the dose of medicine X to the minimum necessary to reduce the pain to an acceptable level.”
C.5 Logic links between various consequences
Both quantitative and qualitative consequences can be interlinked with any logic function such as and, or, if, if not. Drafters do this of course instinctively. However, we deem it appropriate to invite you to consciously analyse the logic functions between different consequences. Sometimes the conscious analysis detects inconsistencies, redundancies or other possibilities for simplification.
Looking at regulation under the microscope we start to understand how requirements and other provisions can be construed: which elements can be part of them and how these elements can be interlinked. Understanding the requirements and provisions at such a molecular level makes it easier for the regulator to fine-tune them in a fit-for-purpose way, avoiding ambiguities and making them sharper and thus more compelling At the end of the day, both the citizens and the authorities take profit from sharpened and thus clearer provisions.
1 See as examples Sections 93 to 97 of the Canadian Food and Drugs Act, Blood Regulations, P.C. 2013-1065 October 9, 2013 or Sections 6.1 to 6.6 of the Canadian Regulations Amending the Onshore Pipeline Regulations, 1999, P.C. 2013-308 March 21, 2013. The latter is slightly more comprehensive than the first, but still manageable.
2 Section 4 of the Philippine Implementing Rules and Regulations of Republic Act No. 10591 (the “Comprehensive Firearms and Ammunition Regulation Act”), published on December 7, 2013.